IP Law Daily, PATENT—E.D. Va.: Constitutional challenge to PTO reexaminations dismissed; no jury or due process violation found, (Feb 19, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Patent owner failed to state viable Seventh or Fifth Amendment claims arising from ongoing ex parte reexaminations during parallel § 1498 litigation.

The federal district court in Alexandria, Virginia, has dismissed a patent owner’s constitutional challenge to the U.S. Patent and Trademark Office’s (PTO) ongoing ex parte reexaminations of two asserted patents, holding that the proceedings did not violate the patent owner’s Seventh Amendment right to a jury trial or the Fifth Amendment right to due process. The court concluded that patent validity determinations fall within the public-rights doctrine and may be assigned to an administrative agency, and that the patent owner had no jury-trial right in its separate infringement action against the United States in the Court of Federal Claims. The court also found no constitutionally intolerable risk of bias and denied requests for a stay and for leave to amend (Factor2 Multimedia Systems, LLC v. U.S., No. 1:25-cv-00790-LMB-WEF (E.D. Va. Feb. 17, 2026)).

Background. The plaintiff, Factor2 Multimedia Systems, LLC, is a technology company that owns patents directed to authentication systems. It previously filed suit in the U.S. Court of Federal Claims under 28 U.S.C. § 1498(a), alleging that the United States, acting through various federal agencies, infringed six of its patents. The only named defendant in that action was the United States.

After a third party, Unified Patents, LLC, requested ex parte reexamination of two of Factor2’s patents, the PTO instituted reexamination proceedings. Factor2 petitioned the PTO to stay at least one of the reexaminations, arguing that the agency could not act impartially while the United States was defending an infringement suit involving the same patents. The PTO denied the petition and continued the reexaminations.

The dispute concerned U.S. Patent Nos. 9,870,453 (the ’453 patent) and 10,083,285 (the ’285 patent), both titled “Direct Authentication System and Method Via Trusted Authenticators.” The PTO issued both patents in 2018.

In May 2025, Factor2 filed the present action in the Eastern District of Virginia, asserting that the PTO’s continuation of the ex parte reexaminations violated its Seventh Amendment right to a jury trial and its Fifth Amendment right to due process. It sought declaratory and injunctive relief, seeking to prevent the PTO from proceeding. The government moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

Seventh Amendment claim. The district court first addressed the jury-trial claim. Citing SEC v. Jarkesy, 603 U.S. 109 (2024), and Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), the court explained that the Seventh Amendment preserves a right to jury trial only in suits at common law involving private rights. Matters involving public rights may be assigned by Congress to non-Article III tribunals.

Relying on Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U.S. 325 (2018), the court held that the grant and reconsideration of patents constitute matters of public rights. The Supreme Court in Oil States characterized a patent as a public franchise and upheld administrative reconsideration of patent validity. The district court further cited Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985), and Joy Technologies, Inc. v. Manbeck, 959 F.2d 226 (Fed. Cir. 1992), both of which rejected Seventh Amendment challenges to ex parte reexamination.

Accordingly, to the extent Factor2 challenged the constitutionality of the ex parte reexamination regime itself, the claim failed as a matter of law.

The court also rejected the alternative theory that the reexaminations deprived Factor2 of a jury right in its pending infringement action. Actions under 28 U.S.C. § 1498(a) against the United States proceed in the Court of Federal Claims without a jury. Citing Return Mail, Inc. v. U.S. Postal Service, 587 U.S. 618 (2019), the court emphasized that patent owners suing the federal government are limited to bench trials. Because Factor2 had no right to a jury in its § 1498 action, the PTO’s reexamination could not have infringed such a right.

Due process claim. The court next addressed the Fifth Amendment claim, which alleged that the PTO could not serve as an impartial decisionmaker while the United States was defending an infringement suit involving the same patents.

Applying Mathews v. Eldridge, 424 U.S. 319 (1976), the court explained that due process requires a showing of actual bias or a constitutionally intolerable probability of bias. Not all allegations of institutional overlap rise to that level.

The court found no disqualifying interest. The defendant in the infringement action was the United States, not the PTO as a separate litigant. Moreover, any damages award would be paid from the Judgment Fund under 28 U.S.C. § 2517(a), not from the PTO’s operating budget. Citing Tumey v. Ohio, 273 U.S. 510 (1927), the court held that any agency interest was remote and insufficient to establish unconstitutional bias.

The court also rejected the assertion that ex parte reexamination would “unilaterally affect” the outcome of the infringement suit. Adverse reexamination decisions are appealable to the Patent Trial and Appeal Board and then to the Federal Circuit under 35 U.S.C. §§ 134(b) and 141(b). Citing In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008), the court noted that the Federal Circuit reviews legal issues de novo, ensuring Article III oversight.

Even assuming a cognizable conflict arguendo, the court invoked the rule of necessity. Because the PTO is the only body authorized to conduct ex parte reexaminations, it must proceed notwithstanding alleged institutional overlap.

Stay and amendment. Factor2 sought a stay pending its interlocutory appeal from the denial of a preliminary injunction. The court denied the request, finding concerns about judicial economy too speculative and noting the absence of demonstrated hardship.

The court also denied leave to amend. Citing Johnson v. Oroweat Foods Co., 785 F.2d 503 (4th Cir. 1986), it held that the amendment would be futile, particularly because the plaintiff failed to attach a proposed amended complaint and conceded that no new legal theories would be added.

Disposition. Thus, the district court granted the government’s motion to dismiss in full and declined to enjoin the PTO’s ongoing ex parte reexaminations of the ’453 and ’285 patents. The decision leaves the reexamination proceedings to continue in parallel with the patent owner’s § 1498 infringement action in the Court of Federal Claims.

The Case is No. 1:25-cv-00790-LMB-WEF.

Judge: Brinkema, L.

Attorneys: Kendal Meredith Sheets (Dnl Zito Castellano PLLC) for Factor2 Multimedia Systems, LLC. Rebecca S. Levenson, U.S. Department of Justice, for the U.S.

Companies: Factor2 Multimedia Systems, LLC

Cases: Patent VirginiaNews