Seeking judicial review of an IPR decision can be a trap for the unwary. Section 319 permits a “dissatisfied” party to appeal. And while the language may seem simple, it can lead parties astray. This post, which is the first in a series about judicial review of IPR, addresses the first trap for the unwary: the constitutional requirement of standing.
Although Section 319 might be misread to allow any “dissatisfied” party to appeal, the party must still have standing to appeal. Thus, in Droplets v. E*TRADE, 887 F.3d 1309 (Fed. Cir. 2018), the Federal Circuit held that a petitioner that won but was “dissatisfied” with the PTAB’s reasoning still could not appeal. And in SkyHawke v. Deca, 828 F.3d 1373 (Fed. Cir. 2016), a potentially analogous decision concerning reexamination, the court rejected an appeal by a winning patent owner that wanted a different claim construction.
Most appeals are by losing parties, of course, but merely losing the IPR is not always enough to have standing to appeal. This is a particular concern for petitioners since, as we previously discussed, petitioners must show harm resulting from the challenged patents before the Federal Circuit will hear their appeals. Such a harm is required because the Constitution only permits the courts to hear “Cases” or “Controversies.” As the Federal Circuit recently reiterated in Grit Energy v. Oren, 957 F.3d 1309 (Fed. Cir. 2020), the harm needed to demonstrate a “Case” or “Controversy” can be a threat of a “possible infringement suit.”
Standing because of actual or threatened litigation is the most common basis for standing in the IPR context—petitioners are typically defendants in district court litigations involving the challenged patents or have received threats of action from the patent owner—but such litigation harm is not required. In Samsung v. Infobridge, 929 F.3d 1363 (Fed. Cir. 2019), for example, the Federal Circuit found standing because cancellation of the patent would mean that the petitioner would get a larger share of the royalties paid to a patent pool.
Even appealing parties with a tenable argument for standing may nonetheless stumble by failing to provide sufficient evidence supporting the argument. In General Electric v. United Technologies, 928 F.3d 1349 (Fed. Cir. 2019), the court instructed appealing parties to introduce evidence of standing during the appeal, if the evidence was not introduced during the IPR. Either way, as Fisher v. ResMed, 789 F. App’x 877 (Fed. Cir. 2019), recently reiterated, failing to provide sufficiently detailed evidence of standing can doom the appeal.
Further adding to the appealing party’s burden, standing at some point during the appeal is not sufficient if standing does not exist throughout the entire appeal. In Pfizer v. Chugai, 812 F. App’x 979 (Fed. Cir. 2020), the appealing party asserted that it was likely to be sued, but it did not demonstrate that it faced that risk at the time it initially appealed. And in Momenta v. Bristol-Myers Squibb, 915 F.3d 764 (Fed. Cir. 2019), the petitioner ceased the potentially infringing activity during the appeal. Thus, the court found no standing in either case.
Parties considering IPR should assess standing to appeal even before the petition is filed. Petitioners that face actual or threatened litigation often have a straightforward path to establish standing. But patent owners should not neglect to test the sufficiency of the petitioners’ evidence of standing, including the evidence that the potentially infringing conduct has continued throughout the appeal. The Federal Circuit continues to clarify the standing requirement in the context of IPR appeals, and some alternative bases for standing based on competitive and economic harms remain to be fully tested.