Standing to Appeal IPR Decisions of the PTAB: Article III and the Federal Circuit

AuthorRichard J. Stark
Published in Landslide® magazine, Volume 12, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Article III and the Federal Circuit
By Richard J. Stark
Standing in inter partes review (IPR) appeals has
become a hotly contested issue. As the Patent
Trial and Appeal Board (PTAB or Board) is an
administrative tribunal, there is no issue of Arti-
cle III standing in IPRs. Any person (other than
the patent owner) may le an IPR petition.1 But
in the Federal Circuit, as in any other Article III
court, the appellant has the burden, if challenged, to establish its
constitutional standing.2 Generally, this boils down to showing
sufcient injury in fact. Recently, the Federal Circuit has decided
a substantial body of cases illuminating how and when appel-
lants may establish, or fail to establish, injury in fact.
Consumer Watchdog
The Federal Circuit rst addressed the issue of Article III standing
in appeals from U.S. Patent and Trademark Ofce administrative
proceedings in Consumer Watchdog v. Wisconsin Alumni Research
Foundation, a case involving the now superseded inter partes reex-
amination procedure.3 Consumer Watchdog, a not-for-prot public
charity, challenged a patent concerning human embryonic stem
cell cultures before the PTAB. The Board conrmed the patent-
ability of the challenged claims of U.S. Patent No. 7,029,913, and
Consumer Watchdog appealed.4
On appeal, the patent holder challenged Consumer Watch-
dog’s standing. The Federal Circuit began its analysis by
explaining that the requirement of Article III standing has
three prongs. The appellant must demonstrate that (1) it suf-
fered an “injury in fact”; (2) the injury is “fairly traceable to
the challenged action”; and (3) it is likely that “a favorable
judicial decision will redress the injury.5 Where Congress
has provided a right to appeal, as was the case for inter partes
reexaminations (and is true today for IPRs), the “traceabil-
ity” and “redressability” requirements “may be relaxed.”6
But “injury in fact” remains as the “hard oor of Article III
jurisdiction.”7 In other words, “the party invoking federal
jurisdiction must have ‘a personal stake in the outcome.’”8
Applying these principles, the court found that Consumer
Watchdog did not allege any injury aside from the denial of
cancellation of the at-issue claims, and that such denial was
insufcient for Article III standing.9 While Congress may cre-
ate rights, the invasion of which would confer standing, the
only rights created with respect to inter partes reexamination
were to request reexamination, and if reexamination were
granted, to participate in the process.10 Consumer Watchdog
was not denied either of those rights. Rather, it was dissat-
ised with the outcome of the process. “The statute did not
guarantee a particular outcome,” and “the Board’s denial of
Consumer Watchdog’s request did not invade any legal right
conferred upon Consumer Watchdog.11
Consumer Watchdog attempted to argue that the statutory
estoppel arising from inter partes reexamination was sufcient
to confer standing upon it. The Federal Circuit rejected this
argument, holding that, at least as to Consumer Watchdog, the
estoppel provisions “do not constitute an injury in fact for Arti-
cle III purposes.”12 Consumer Watchdog did not claim to be
involved in any activity that could lead to a possible infringe-
ment suit, nor did it claim that it intended to le another
request to cancel the patent claims at issue. As such, the estop-
pel could work no concrete injury upon Consumer Watchdog.13
In sum, Consumer Watchdog “only alleged a general griev-
ance concerning the ’913 patent” and failed to “identif[y] a
particularized, concrete interest in the patentability of the ’913
Published in Landslide® magazine, Volume 12, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Phigenix attempted to argue in the alternative that it had
an injury in fact based on the statutory estoppel that applies
after a party has invoked the IPR process. The Federal Circuit
rejected this argument, relying on its decision in Consumer
Watchdog concerning the analogous estoppel provision under
the inter partes reexamination system.31 The court found
(again) that the estoppel did not create an injury in fact where
the appellant “is not engaged in any activity that would give
rise to a possible infringement suit.”32 The Federal Circuit
dismissed Phigenix’s appeal.
Altaire Pharmaceuticals
In 2018, the Federal Circuit encountered two cases where it
found that the appellants established Article III standing. The
rst of these was Altaire Pharmaceuticals, Inc. v. Paragon Bio-
teck, Inc., a bitter dispute between erstwhile partners.33 Altaire
and Paragon had a contractual arrangement to develop and
market phenylephrine, a drug used to dilate patients’ pupils.
Altaire was the manufacturer of the compound, and Paragon
had responsibility for preparing and submitting new drug appli-
cations to the Food and Drug Administration (FDA). During
the course of that relationship, Paragon led an application for
a patent covering phenylephrine and methods of using it—not-
withstanding Altaire’s objection and assertion that its CEO was
the actual inventor of the claimed subject matter. The applica-
tion issued as U.S. Patent No. 8,859,623.34
Subsequently, Altaire led actions in federal court against
Paragon for breach of a nondisclosure provision of their con-
tract and for a declaratory judgment of invalidity of the ’623
patent. Altaire also led a petition with the PTAB for post-
grant review of the ’623 patent. Paragon responded with
claims of its own for breach of the parties’ agreement, seek-
ing the right to terminate it.35
The Board instituted the post-grant review. But in its nal
written decision, the Board concluded that Altaire had not
proved the claims of the ’623 patent obvious.36 Altaire appealed.
In the appeal, Altaire argued that it had Article III standing
because it faced “an imminent risk of suit on the ’623 pat-
ent.”37 Paragon argued that, due to the agreement between the
parties, Altaire was not engaging in infringing activities, and
any future plans Altaire might have could not give rise to an
imminent risk of suit.38
The critical facts were provided in a declaration of
Altaire’s general counsel, who testied that Altaire intended
to le an abbreviated new drug application (ANDA) with the
FDA and “resume marketing its proprietary formulation” of
phenylephrine if the agreement between the parties were ter-
minated early (as requested by Paragon).39 If the agreement
were not terminated early, it would end by its terms in 2021,
and Altaire would proceed with its ANDA at that time.40
Altaire had a proven ability to produce and market the drug.
Richard J. Stark is a partner in the Litigation Department of
Cravath, Swaine & Moore LLP in New York, New York. His broad
litigation practice encompasses multifaceted and multijurisdictional
business disputes in the realms of intellectual property, antitrust,
securities, and general commercial litigation, as well as arbitration.
He can be reached at
patent, or any injury in fact owing from the Board’s deci-
sion.”14 The Federal Circuit dismissed the appeal.
Three years after Consumer Watchdog, the Federal Circuit
had its rst occasion to grapple with the issue of appel-
late standing in the context of the current IPR procedure in
Phigenix, Inc. v. ImmunoGen, Inc.15 Phigenix, a “for-prot
discovery stage biotechnology, pharmaceutical, and biomedi-
cal research company,” requested an IPR of ImmunoGen’s
U.S. Patent No. 8,337,856.16 The patent related to methods
of using specic antibodies to treat certain cancers. Phigenix
sought review, not because it faced any risk of infringement
litigation, but rather because the existence of the ’856 pat-
ent purportedly “encumbered” Phigenix’s efforts to license its
own patent portfolio, while “ImmunoGen receives millions
of dollars in license revenue.”17 The Board found the subject
claims nonobvious.18 Phigenix led an appeal.
After reviewing the three elements of Article III stand-
ing, the Federal Circuit addressed for the rst time “the legal
standard for demonstrating standing in an appeal from a
nal agency action.”19 First, the court discussed the “burden
of production” (i.e., “[a] party’s duty to introduce enough
evidence on an issue to have the issue decided by the fact-
nder”).20 After reviewing several cases, the court concluded
that the appellant’s burden is “the same as that of a plaintiff
moving for summary judgment in the district court.”21
Second, the court turned to the evidence that will sufce to
meet that burden. If the appellant’s standing is not “self-evident”
from the administrative record, the court held, the appellant may
submit arguments and “afdavits or other evidence.22
Third, the court addressed when an appellant should pro-
duce its evidence. The court held that “an appellant must
identify the relevant evidence demonstrating its standing ‘at
the rst appropriate’ time, whether in response to a motion to
dismiss or in the opening brief.”23 In other words, if there is
no evidence to support standing in the administrative record,
the appellant must produce it “at the appellate level at the ear-
liest possible opportunity.24
With these procedural issues decided, the court considered
Phigenix’s appellate standing. As in Consumer Watchdog, the
critical issue was injury in fact.25 Phigenix’s only purported
injury was the supposed barrier that ImmunoGen’s ’856 pat-
ent posed to Phigenix’s efforts to license its own patents.26 In
substance, Phigenix contended that if the ’856 patent were inval-
idated, some of the licensing revenue earned by ImmunoGen
would inure to Phigenix. Phigenix attempted to support this
claim with a declaration stating that “[t]he existence of Immu-
noGen’s ’856 patent has . . . encumber[ed] Phigenix’s licensing
efforts” and a letter from Phigenix’s attorney to ImmunoGen
asserting that Phigenix “believes that it has a strong patent port-
folio.”27 However, Phigenix presented no evidence that it had
licensed its patents to anyone. The Federal Circuit held that such
“conclusory statements” did not meet the standard for support-
ing a motion for summary judgment.28 Federal Rule of Civil
Procedure 56 requires declarations setting out facts, not legal
conclusions.29 Phigenix failed to demonstrate the existence of
any facts that would establish a concrete injury.30
Published in Landslide® magazine, Volume 12, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
The general counsel testied that the ’623 patent stood as an
impediment to the approval of Altaire’s expected ANDA. He
further testied that “Altaire believes that Paragon will inevi-
tably sue Altaire for patent infringement upon Altaire ling
an [ANDA] with the FDA.41 At oral argument of the appeal,
Paragon declined to stipulate that it would not bring an action
against Altaire for infringement of the ’623 patent.42
On this record, the Federal Circuit held that Altaire had estab-
lished an injury in fact. The court relied on the testimony that
the ’623 patent was an obstacle to the approval of its anticipated
ANDA.43 It also bears noting (though the court did not explain
this) that under the Hatch-Waxman Act, Altaire’s ling of an
ANDA would constitute an act of infringement entitling Para-
gon to sue and invoke an automatic 30-month stay of approval
of Altaire’s application.44 Based on the testimony, the court held
that Altaire’s injury was “concrete and particularized.45
The court also found that the injury was imminent. On this
issue, the court distinguished between a mere “fear of future
harm,” which is not sufcient to support an injury in fact, and a
“threat of future injury,” which “may be sufcient to establish
injury in fact.”46 Because (1) the parties were actively litigating,
with Paragon seeking the right to terminate their agreement;
(2) the agreement would terminate by 2021 in any event; (3)
Altaire’s general counsel testied that the company intended to
le an ANDA and market its version of the drug; and (4) Para-
gon refused to stipulate that it would not sue Altaire for patent
infringement, the court found that Altaire faced an imminent—
indeed “inevitable”—threat of litigation.47
Intriguingly, the court also found that “Altaire’s injury
is compounded by the likelihood that it would be estopped
from arguing that the ’623 patent would have been obvi-
ous.”48 Acknowledging that it had previously rejected such
arguments, the court held that in this case Altaire faced an
imminent threat of suit rather than a mere general grievance.
Under such circumstances, the risk of estoppel supported the
nding of an injury in fact. The court was careful to state,
“we do not decide whether this potential estoppel effect is
sufcient independently to establish standing.”49
For all these reasons, the Federal Circuit denied Paragon’s
motion to dismiss the appeal. And on the merits, the court
ruled in favor of Altaire.50
This was, however, a split decision. The dissenting judge,
Judge Schall, reasoned that with the expiration of the par-
ties’ agreement potentially three years away and the outcome
of the parties’ contract litigation uncertain, “we do not know
what will happen.”51
E.I. DuPont de Nemours & Co. v. Synvina C.V. was the sec-
ond recent case in which the Federal Circuit found that
an appellant successfully demonstrated standing.52 Syn-
vina owned U.S. Patent No. 8,865,921, relating to a method
of synthesizing a certain chemical compound used as a
“building block” for “high-value bio-based chemicals or
materials.”53 DuPont, a competitor of Synvina, sought an
IPR of the ’921 patent. The PTAB held the patent claims not
unpatentable, and DuPont appealed.
Synvina argued that DuPont did not have standing
to appeal. Because no action for infringement had been
led against DuPont, Synvina argued that any injury was
DuPont countered that a “specic threat” of suit was not
required for standing, and a “signicant risk of infringe-
ment liability” sufced.55 DuPont contended that it faced a
signicant risk because (1) it had built a plant to produce
the relevant compound; (2) the plant was capable of operat-
ing according to the specic conditions of the manufacturing
method claimed in the ’921 patent; (3) DuPont and Synvina
were competitors; and (4) Synvina refused to grant DuPont a
covenant not to sue.56
The Federal Circuit agreed with DuPont. An appellant/
petitioner “need not face ‘a specic threat of infringement lit-
igation by the patentee’” but rather “must generally show a
controversy ‘of sufcient immediacy and reality’ to warrant
the requested judicial relief.”57 Article III standing existed in
this case because DuPont had constructed and was operating
“a plant capable of infringing the ’921 patent.”58 DuPont pro-
vided declarations of three scientists showing that the “plant
uses the same reactants to generate the same products using
the same solvent and same catalysts as the ’921 patent,” under
the same temperature and pressure conditions.59 Further, the
Federal Circuit found that “Synvina’s allegations of copying
before the Board and its refusal to grant DuPont a covenant
not to sue further conrm that DuPont’s risk of liability is not
‘conjectural’ or ‘hypothetical.’”60 The court concluded that
DuPont had standing because it had “concrete plans” that
create “a substantial risk of future infringement” or would
“likely cause the patentee to assert a claim of infringement.”61
In a third 2018 case, JTEKT Corp. v. GKN Automotive Ltd., the
Federal Circuit again found that injury in fact (and hence Arti-
cle III standing) was lacking.62 JTEKT, a manufacturer of car
parts, sought an IPR of GKN’s U.S. Patent No. 8,215,440, which
concerned a drivetrain for four-wheel drive vehicles. GKN dis-
claimed some of the claims, and the PTAB found some of the
claims obvious. But the Board also held that JTEKT had not
shown claims 2 and 3 to be obvious.63 JTEKT appealed.
The Federal Circuit noted that “typically in order to dem-
onstrate the requisite injury in an IPR appeal, the appellant/
petitioner must show that it is engaged or will likely engage
‘in an[] activity that would give rise to a possible infringe-
ment suit.’”64 However, the court also noted that an appellant/
petitioner may have standing if it “has contractual rights
that are affected by a determination of patent validity.65 The
court pointed out that U.S. Supreme Court precedent does not
require a plaintiff to “bet the farm” “before seeking a declara-
tion of its actively contested legal rights.66
In this case, JTEKT did not claim to have any product on
the market. That fact did not in itself bar JTEKT from stand-
ing. But the Federal Circuit held that in a case where there is
no currently infringing activity and only “potential infringe-
ment,” the appellant “must establish that it has concrete plans
for future activity that create[] a substantial risk of future
infringement or [will] likely cause the patentee to assert a
claim of infringement.”67

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