Resurrecting the Public Voice: the Expansion of Standing in Patent Litigation

• Publication year: 2016

Resurrecting the Public Voice: The Expansion of Standing in Patent Litigation

Roderick Blevins

RESURRECTING THE PUBLIC VOICE: THE EXPANSION OF STANDING IN PATENT LITIGATION

Abstract

The Federal Circuit's dismissal of Consumer Watchdog's appeal in 2014 illustrates a systemic shortcoming of standing in patent law. More specifically, the current implementation of the federal standing doctrine in patent litigation prevents public interest organizations from litigating the validity of patents. This shortcoming appears in spite of the fact that the patent system exists as a public endorsement of a private right in exchange for a purported social contribution on the part of the inventor and her invention.

Instead of constructing an ill-fated legislative solution, this Comment suggests that the shortcoming may be overcome through action at the Patent Office. More specifically, the Patent Office, in promulgating rules relating to its internal operation, may establish a committee to recognize certain public interest organizations for membership in a special program. That program would offer those select organizations—chosen on the basis of meritorious criteria and for a limited term—the opportunity to submit themselves to monetary penalty upon losing an inter partes reexamination. The monetary loss then constitutes an injury in fact, the baseline requirement for appeal from administrative action.

Indeed, this proposal not only meets the reduced requirements of an appeal from the agency but also arguably fulfills all the constitutional, prudential, and policy considerations inherent in the federal standing doctrine. Thus, this Comment proposes an immediately viable method for resurrecting the public voice in patent litigation, further allowing the public to speak out regarding its will in social and technological development.

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Introduction

In 2013, Consumer Watchdog, "a nonprofit organization dedicated to providing an effective voice for taxpayers and consumers,"¹ challenged a patent sought by the Wisconsin Alumni Research Foundation (WARF) through inter partes reexamination² at the U.S. Patent and Trademark Office (PTO).³ Despite its interference, the PTO ruled in favor of WARF and granted the patent, a ruling which Consumer Watchdog appealed to the Court of Appeals for the Federal Circuit.⁴

The injury cited by Consumer Watchdog changed during the course of litigation. The patent itself involved developments surrounding embryonic stem cell research, so initially Consumer Watchdog was primarily concerned that "the '913 patent allowed WARF to completely preempt all uses of human embryonic stem cells, particularly those for scientific and medical research."⁵ In its appeal, though, Consumer Watchdog cited "a severe burden on taxpayer-funded research in the State of California where [Consumer Watchdog] is located."⁶ Finally, in the course of pretrial filings, the organization decided that its injury flowed from being barred from further inter partes reexaminations as a result of the Board of Patent Appeals and Interferences' (BPAI) ruling.⁷

Addressing Consumer Watchdog's assertion, the Federal Circuit quickly decided that this final cited injury was inadequate to establish Article III standing:

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Consumer Watchdog is not engaged in any activity that would give rise to a possible infringement suit. Nor does Consumer Watchdog provide any indication that it would file another request seeking to cancel claims at the Patent Office. In any event, as Consumer Watchdog only has a general grievance against the '913 patent, the "conjectural or hypothetical' nature of any injury flowing from the estoppel provisions is insufficient to confer standing . . . .⁸

This rejection conveys the principles of standing both in patent law and in federal jurisdiction more broadly.⁹ In deciding to dismiss, the Federal Circuit gave no weight to the fact that the plaintiff was a public interest organization, albeit a self-proclaimed one, and simply relied on the fact that Consumer Watchdog did not identify "a particularized, concrete interest in the patentability of the '913 patent, or any injury in fact flowing from the [BPAI]'s decision."¹⁰

Consumer Watchdog's nearly comical carousel of cited injuries constitutes the organization's legitimate attempts to overcome a shortcoming in federal jurisdiction as it relates to patent law. Indeed, WARF is the latest in a line of cases demonstrating a growing interest on the part of public interest organizations in patent litigation.¹¹ This trend should both please and benefit the public for reasons aptly demonstrated by a somewhat absurd hypothetical. Consider a circumstance in which a U.S. pharmaceutical company, Pharmacorp, develops a drug that cures every ailment from HIV to gout to stage fright, all with a single oral dose. Naturally trying to capitalize on its miraculous invention, Pharmacorp applies for a patent and intends to charge over $1,000,000 per dose. The public has a vested interest in access to this miracle drug, but at such an immense price, the availability of its benefits will be severely limited until the patent term expires. As a result, a public interest organization may choose to challenge the validity of the patent, first at the PTO and, if unsuccessful there, in federal court.

As demonstrated in WARF, no such appeal would be available to a public interest organization, the inter partes challenge of which fell short. In patent

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law, courts have interpreted the broadly defined federal standing doctrine to practically¹² require infringing activity and threat of suit in order to establish standing.¹³ This narrow interpretation effectively precludes public interest organizations from satisfying the standing requirement in patent cases. In the above hypothetical, no public interest organization engages in the research, development, and production of pharmaceuticals such that it could infringe on Pharmacorp's patents for the purposes of federal standing. Such organizations currently try to avoid the standing issue by encouraging companies in the same industry to bring suits and thereafter join those suits.¹⁴ However, most companies have a very strong incentive to forgo such challenges. consider DrugCo, a competitor of Pharmacorp, challenging the patentability of the miracle drug based on the argument that the drug's immense social benefit somehow takes it beyond the realm of patentable subject matter. This social-benefit argument would likely spell trouble for DrugCo's own patents. Companies may actively shirk socially beneficial challenges to patents because of this risk. As a result, public interest organizations, and transitively the public generally, are denied recourse to defend the interests of the populous beyond the walls of the PTO following a loss before the BPAI.¹⁵ Further, due to the above-described corporate self-interest, certain worthwhile patent challenges may be underrepresented as companies try to protect their own patent portfolios, weakening the patent system as a whole.

This Comment proposes a system whereby the PTO may resurrect the public voice in patent litigation by expanding standing to include public

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interest organizations. To do so, the PTO should recognize a handful¹⁶ of public interest organizations that may voluntarily subject themselves to potential monetary injury by challenging patents through inter partes reexamination. The monetary injury flowing from a failed challenge would confer standing to challenge the ruling of the BPAI—as opposed to directly challenging the validity of the patent itself—allowing the issue of validity to be transitively litigated once more.¹⁷ Part I of this Comment introduces the current application of the standing doctrine in challenging patents and discusses the underlying policies of patent law. In so doing, Part I introduces the shortcomings of the current standing doctrine and identifies the pillars of patent law principles on which any modifications to the current doctrine must be constructed. Part II then explores the legal frameworks implicated in such a proposal, namely federal standing doctrine and issues in administrative law relating to the expansion of the PTO's capabilities. Part III outlines the proposed system in detail and discusses its potential implications with respect to the underlying concerns of federal standing and patent law. This Comment then concludes by discussing the viability of this proposal, its potential impact on the patent system, and its societal effects.

I. Patent Law, Standing, and the Need for Change

This Comment presents a proposal for creating standing in patent litigation specifically for public interest organizations. While the proposal does not implicate a change to patent law per se, a discussion of some basic principles of patent law will help facilitate an understanding of the motivation and significance of the proposed change. This Part provides the necessary background for such an understanding. First, section A explains the current application of the standing doctrine in patent law, emphasizing the lack of standing afforded to public interest organizations. Then, section B explores the role of public interest in patent law and its underlying policy to lend further

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strength to the argument—first for change generally and second for the worthiness of the specific change proposed herein.

A. Limited Standing in Current Patent Litigation

This Comment sets out to establish standing for public interest organizations to challenge the validity of patents in federal court. Generally speaking, plaintiffs in patent law seek declaratory judgments in such challenges, so the present discussion of standing in patent law will be limited to standing relating to patent cases seeking declaratory judgments. In these cases, the relevant precedent largely flows from decisions of the Court of Appeals for the Federal Circuit.¹⁸

The Federal Circuit...