Standing to Appeal a PTAB Determination

Standing to Appeal a PTAB Determination: Injury-In-Fact?

Kenneth R Adamo and Eugene Goryunov, Kirkland & Ellis LLP

Any person who is not the patent owner may challenge a patent at the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR). The petitioner is not required to show that it has suffered an injury-in-fact before challenging a patent. After an IPR concludes, any party dissatisfied with the PTAB’s final written decision “may appeal . . . [and] shall have the right to be a party to the appeal” at the US Court of Appeals for the Federal Circuit (Federal Circuit). Even though the statute gives a party an appellate right, however, that party (the party initiating the appeal) must still have Article III standing to maintain the appeal at the Federal Circuit. 

Background on Article III Standing

In Consumer Watchdog v Wisconsin Alumni Research Foundation, Consumer Watchdog (CW) filed a request for inter partes re-examination against a patent owned by Wisconsin Alumni Research Foundation (WARF). CW argued the patent allowed WARF to preempt all uses of human embryonic stem cells. CW was unsuccessful in the re-examination and filed an appeal to the Federal Circuit. The court, however, concluded that CW lacked Article III standing and dismissed the appeal. 

CW is a not-for-profit organisation and was not involved in research or commercial activities that could serve as the basis for an infringement claim, nor did it have any intention to engage in such activities. The court started its analysis by noting that US federal courts may only adjudicate, as an initial matter or on appeal, Article III “cases” and “controversies”. A party must establish it has proper standing, which involves showing that it has suffered an “injury-in-fact” that is both concrete and particular, and actual or imminent. The injury must be fairly traceable to the challenged action and a favourable judicial decision must be likely redress the injury. The Article III standing requirements “apply with equal force to appeals from administrative agencies”, such as the PTAB. 

CW attempted to establish standing by relying on the denial of its re-examination request. This was, however, insufficient, as the denial “did not invade any legal right conferred by the inter partes reexamination statute”. The statute “did not guarantee a particular outcome”; it merely permitted CW to challenge the patent and participate in the reexamination proceeding. The court also concluded that, despite the statute permitting appeals in general, the statute “does not eliminate the requirements of Article III”. The procedural right to appeal granted by statute did not eliminate the requirement that CW have a particularised, concrete stake in the outcome of the re-examination. Estoppel from re-examination concerns also did not convince the court. CW did not establish that it was engaged in any activity that would give rise to a potential infringement suit or that it would file another request to cancel claims of the patent. CW had nothing more than “a general grievance” with the patent that does not give rise to Article III standing. 

The Federal Circuit predictably extended Consumer Watchdog to IPRs. In Phigenix v ImmunoGen, Phigenix initiated an IPR that resulted in a final written decision where the PTAB found the challenged claims not obvious. Phigenix appealed. On appeal, ImmunoGen argued that Phigenix lacked standing and the Federal Circuit agreed, finding that Phigenix did not offer sufficient proof to establish it has suffered an injury-in-fact. 

Phigenix did not contend that it faced a risk of infringing ImmunoGen’s patent, that it was an actual or prospective licensee of the patent, or that it otherwise planned to take an action that would implicate the patent. Phigenix, instead, argued that it had suffered actual economic injury because the patent increased competition between it and ImmunoGen. The court found these arguments unsubstantiated; while it was possible that invalidation of the patent may impact competition, there was no record evidence supporting this proposition. Section 315 estoppel resulting from the IPR also did not result in an injury-in-fact, in this case, because Phigenix was “not engaged in any activity that would give rise to a possible infringement suit”. Finally, the Section 319 right to appeal did not negate the need for Article III standing. Phigenix was, in fact, permitted to file its appeal, but “the exercise of its right to appeal does not necessarily establish that [Phigenix] possesses Article III standing”. 

Evidence Necessary to Demonstrate an Injury-In-Fact

In Phigenix, the Federal Circuit set out the legal standard for demonstrating standing in an appeal from the PTAB. The “summary judgment burden of production applies in cases where an appellant seeks review of a final agency action and its standing comes into doubt”. As to what evidence is needed to meet the burden, the court explained:

In some cases, an appellant’s standing to seek review of administrative action is self-evident; no evidence outside the administrative record is necessary for the court to be sure of it. Self-evident standing typically arises when an appellant is an object of the action (or forgone action) at issue. When the [appellant’s] standing is not self-evident, however, the [appellant] must supplement the record to the extent necessary to explain and substantiate its entitlement to judicial review. In so doing, an appellant may submit arguments and any affidavits or other evidence to demonstrate its standing. Taken together, an appellant must either identify record evidence sufficient to support its standing to seek review or, if there is none because standing was not an issue before the agency, submit additional evidence to the court of appeals, such as by affidavit or other evidence. 

An appellant “must identify the relevant evidence demonstrating its standing ‘at the first appropriate’ time, whether in response to a motion to dismiss or in the opening brief” because standing involves threshold questions over a court’s authority to hear the case. 

Evaluating the Evidence

The question then, in view of Phigenix, is what evidence is sufficient to establish Article III standing to maintain an appeal of an IPR final written decision. Review of the Federal Circuit’s most recent cases addressing Article III standing is instructive on the point.

In PPG Industries v Valspar Sourcing (9 February 2017), PPG did not have a commercial product, one that could expose it to a charge of infringement, at the time of the IPR. It launched such a product, however, by the time it filed a notice of appeal from the PTAB’s final written decision. The Federal Circuit held that PPG had standing to maintain the appeal. That PPG received at least one customer enquiry about a potential infringement accusation by Valspar confirmed the court’s conclusion. Here, the court found that PPG “had a legitimate concern that its manufacture and sale of its [product] would draw an infringement action” by Valspar. 

In JTEKT Corp v GKN Auto (3 August 2018), JTEKT did not have a product on the market at the time of the appeal. Its planned product was still in development and could not be analysed for potential infringement. The Federal Circuit noted that lack of a commercial product does not automatically eliminate standing. JTEKT was required to, nevertheless, “establish that it has concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement”. It is not enough to confer standing where the parties are “competitors generally”. Now, to be sure, “IPR petitioners need not concede infringement to establish standing to appeal”. But, actual products or products in development must create a concrete and substantial risk of infringement or likelihood that they would lead to claims of infringement. Since JTEKT did not have a final product, and its planned product could not be analysed for infringement, the court concluded that JTEKT only established that the general features of its product justified filing an IPR to negate any potential risk. This is insufficient to establish Article III standing. 

In EI DuPont de Nemours & Co v Synvina CV (17 September 2018), EI DuPont had not yet been sued for infringement of the patent at issue. It submitted documents in the appeal, however, that it had publicly announced a plan to build a plant to produce products using a process that could potentially expose it to an infringement charge. This demonstrated that DuPont, an “avowed competitor” of Synvina, “has taken and ‘plans to take . . . action that would implicate’” the subject patent, and that these plans included “significant ‘involvement in research and commercial activities involving’ the claimed subject matter” of the subject patent. This, taken together with Synvina’s refusal to grant DuPont a covenant not to sue, confirmed for the court that DuPont’s “risk of liability is not ‘conjectural’ or ‘hypothetical’”. 

In Google v Conversant Wireless Licensing (20 November 2018), Conversant Wireless sserted a patent against Google and then withdrew it from a co-pending litigation without prejudice. The Federal Circuit found that Google had sufficient standing to maintain its appeal. Conversant Wireless’s infringement contentions exchanged in the litigation clearly identified Google’s products and Conversant Wireless refused to grant Google a covenant not to sue on the patent at issue. The court also found convincing that Google would possibly be estopped from making certain anticipation and obviousness arguments if it were to be sued on the patent in the future. These facts justified a finding of standing. 

In Amerigen Pharmaceuticals v UCB Pharma (11 January 2019), Amerigen was blocked from releasing a product that could potentially infringe UCB’s Orange Book-listed patent until the patent expired or was invalidated. According to the Federal Circuit, this does not negate standing. On the contrary, standing was established “because the launch of [Amerigen’s] tentatively approved drug [was] blocked [by the patent], and invalidation of the patent would advance [Amerigen’s] drug’s launch”. Amerigen’s abbreviated new drug application had already received tentative approval and final approval could be obtained in short order if the patent at issue were invalidated. Without invalidation, Amerigen’s product would be blocked until the patent expired in approximately three years. The court also rejected UCB’s argument that there was no standing because, under the Hatch-Waxman Act, Paragraph IV certification is required before parties litigate an Orange Book-listed patent in an Article III court. According to the court, this case did not arise under the Act, and “causes of action available under that Act do not necessarily control the standing inquiry in an appeal for an IPR decision.” Here, causes of action under the Act did not have control because Amerigen did “not rely on a risk of infringement liability as a basis for injury in fact; rather it contend[ed] that the mere listing of the [patent] in the Orange Book inflict[ed] a concrete commercial injury redressable by this court”. 

In Momenta Pharmaceuticals v Bristol-Myers Squibb (7 February 2019), Momenta had a product that could have exposed it to an infringement allegation under the patent at issue. Momenta, however, withdrew the product after it failed Phase 1 clinical trials. The Federal Circuit found that the act of withdrawing the product deprived Momenta of standing to maintain its appeal. While a statutory grant of judicial review may “relax” the Article III requirement, “judicial review of agency action remains subject to the constitutional foundation of injury-in-fact, lest the court occupy only an advisory role”. Momenta spent millions of dollars to develop its product. But, upon abandoning further development, Momenta had “no legally protected interest in the validity of the [patent], and there is no ‘real need to exercise the power of judicial review’”. The court rejected Momenta’s estoppel argument because estoppel “cannot constitute an injury-in-fact when [appellant] ‘is not engaged in any activity that would give rise to a possible infringement suit’”. Indeed, it is of no major relevance that Momenta was, in fact, engaged in potentially infringing activity when the proceedings began because “jurisdiction must exist throughout the judicial review, and an intervening abandonment of the controversy produces loss of jurisdiction.” 

Practitioners must remember that Article III standing, not required to institute or maintain an IPR, or even to file an appeal to the Federal Circuit, is still required for appellate review. Under the current state of the law, Article III standing requires a showing that the appellant engages or will likely engage in some activity that would give rise to an infringement lawsuit or have some other contractual right that would be effected without judicial review. Competitor status, by itself, does not appear to be enough to confer Article III standing. An appellant must have an actual product, or concrete future plans for a product, that can trigger an infringement lawsuit.

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