Source: https://www.ipwatchdog.com/2018/12/26/supreme-court-asked-aia-creates-standing-ptab/id=104158/
Timestamp: 2019-04-22 22:48:56+00:00

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On Monday, December 10th, Japanese manufacturer JTEKT Corporation filed a petition for writ of certiorari with the U.S. Supreme Court asking he nation’s highest court to determine whether federal statutes governing appeals from the Patent Trial and Appeal Board (PTAB) create a right for PTAB petitioners to have an appellate court review adverse final written decisions. If the case is taken by the Supreme Court the question will be whether the AIA creates standing for any dissatisfied party to appeal a PTAB final decision. The Court of Appeals for the Federal Circuit’s had decided JTEKT did not prove an injury in fact for the purposes of determining the existence of Article III standing in its appeal.
The Federal Circuit’s panel decision in this case came out in early August where it determined that JTEKT lacked Article III standing to appeal a final written decision in an inter partes review (IPR) proceeding that upheld two challenged claims from a patent owned by GKN Automotive, a competitor of JTEKT, over an obviousness challenge from JTEKT. While JTEKT engineers had submitted declarations to the Federal Circuit that there was a chance that a product being developed by JTEKT might be the target of patent infringement claims based on the challenged patent, it was impossible to quantify the risk of infringement at the product’s current state of development.
“By limiting standing to definitive patent-inflicted injury associated with an infringement suit, the Federal Circuit risks creating overly-narrow, patent-specific standing jurisprudence that does not consider the broader law necessary to address standing in appeals from all agency actions,” JTEKT’s petition for writ reads. Although it couldn’t quantify the risk of infringement based upon the current state of its product development, JTEKT argued that it did have standing based upon its economic injury resulting from development costs. JTEKT also argued that it suffered an injury in fact under the estoppel terms of 35 U.S.C. § 315(e) preventing its ability to raise its arguments about the validity of the surviving claims if those claims are asserted in a later district court proceeding.
JTEKT’s petition argues that the Federal Circuit’s jurisprudence on definitive patent-based injuries being the only injury sufficient to confer standing in PTAB appeals conflicts with Supreme Court precedent on Congress’ power to create Article III standing by statute. By passing the America Invents Act which enacted 35 U.S.C. § 319, which gives any party dissatisfied with a PTAB decision the right to appeal, and 35 U.S.C. § 141, which governs PTAB appeals to the Federal Circuit, Congress intended to confer Article III standing to parties wanting to appeal final written decisions of the PTAB. Citing to Supreme Court decisions in SAS Institute v. Iancu (2018) and Cuozzo Speed Technologies v. Lee (2016), JTEKT notes that there is a “strong presumption” in favor of judicial review of PTAB decisions which can only be overcome by “clear and convincing” indications that Congress intended to bar judicial review. JTEKT further cites to Spokeo, Inc. v. Robins (2016) to show that the Supreme Court has previously found Congress’ role in determining an injury in fact via statute to be important.
JTEKT also suffered an injury in fact through an invasion of its private right to request a cancellation of patent claims under 35 U.S.C. § 318, the statute governing PTAB final written decisions, and 35 U.S.C. § 311, which enables parties to petition for IPR proceedings at the PTAB. “The losing IPR petitioner is injured when it doesn’t get what the statute requires—not just the right to a decision, but the right to an error-free decision,” JTEKT’s petition reads. A further injury in fact was created by estoppel provisions found in 35 U.S.C. § 315 preventing JTEKT from raising similar arguments in district court proceedings if an infringement suit on the surviving patent claims is commenced by GKN Automotive.
Finally, JTEKT argues that its case merits review because the issue affects numerous IPR petitioners, especially operating companies attempting to perform due diligence before finalizing product development. JTEKT cites a study of IPR filings showing that 20 percent of IPRs are petitioned to challenge patent claims which haven’t been asserted in district court. This issue also affects third-party petitioners like RPX Corporation and the petition notes that the issues in this case are similar to those raised in RPX Corp. v. ChanBond LLC, another case regarding Article III standing for appeals of IPR decisions and JTEKT argues that its petition should be considered along with that case. Baker noted that the Supreme Court had invited the U.S. Solicitor General to submit a memo on RPX Corp. “Often, whatever the Solicitor General opines, the Supreme Court follows,” Baker said.
Color me NOT impressed with the assertions (from affected counsel) that Congress could knowingly create a hybrid two-fora system and then choose to knowingly NOT invoke Article III standing for the first of the two fora, and want to bootstrap into the Article III system when no such standing exists for that first part.
Congress knows full well how to draft a law that provides for actual (not clearly bootstrapped) Article III standing throughout a process.
There is a clear (and clearly unsupportable) corollary to the counsel’s arguments: anyone would have Article III standing to challenge patent validity, whether or not real (current) Article III standing is met (think Lujan being decided in the opposite manner than it was).
The Dowd/Stroud article is a bit misaimed (true competitors and the notion of Competitor Standing) is not at issue with the bootstrapped Article III from non-Article III standing mechanism at issue with the AIA item.
You should also probably realize that the authors (Dowd/Stroud) are not objective independent observers of the situation here, as they are principles of an organization whose business model is directly impacted with the standing issues (including whether or not agency principles may be in effect).
Since my article is discussed, I’ll reply. First, I’m not a “principle of an organization whose business model is directly impacted with the standing issues,” as you stated. I have my own private law firm. See https://www.dowdscheffel.com.
Second, we don’t argue that “‘competitor standing’ ALONE suffices for ALL types of Article III standing.” The competitor standing analysis, as proffered in the short piece, relates primarily to the injury-in-fact analysis, which is only one aspect of the overall standing analysis. This explains why there may be standing to appeal from the PTAB based on competitor standing, but not standing to file a declaratory judgment action.
Third, it seems the following sentence is being taken out of context: “does the agency action, i.e., the grant of a competitor’s patent, confer an improper marketplace advantage on the competitor?” That sentence is written with the understanding that, in some cases, the issued patent is invalid (or more precisely, will be ultimately deemed invalid), notwithstanding the presumption of validity. Thus, if a party is considering a situation where a competitor has a patent–and that patent when properly assessed is actually invalid–then that (invalid) patent confers an improper competitive advantage in the marketplace, even absent infringement by the party.
Finally, it seems that JTEKT is essentially arguing competitor injury to establish standing to appeal from the PTAB. It seems to me that this issue will be one of interest to the Supreme Court for several reasons, one of which is that the Federal Circuit seems to have taken an overly narrow view of injury-in-fact when assessing standing to appeal. The point of the article is to highlight some of the non-Federal Circuit case law on this point.
I’m interested in the Patent Infrigment Cases involved with Cyber Security Firm StrikeForce Technologies vs DUO (DUO recently aquired by Cisco Systems) on StrikeForce’s Patents on Out-of-Band Muli-Factor Authentication. A host of other companies are included in this case being litigated by StrikeForce Technologies Counsel Ropes & Gray and Blank Rome .
Court Dockets are not meant for the Layman to dissect. Numerous IPR’s by the PTAB validate StrikeForce’s Utility Patents. Yet the case goes on and on.
Was wondering if you Mr. Bachmann might review this case and give a Summation of events..
Out-of -Band Multifactor Authentication (OBBA MFA) is becoming the Standard by which Goverments & Corperations are making Mandatory to ensure Cyber Security.
The NIST and PCI Security Standards Council Credit Card Security have Mandated OBBA MFA.
My apologies for the association, as I had pulled that from memory (rather than any current checking). Were you at any time associated with the business venture of Stroud? If not, the error is mine.
That being said, you have associated with Mr. Stroud in the writing of articles, and those articles DO associate with Mr. Stroud’s line of business. Thus, in that manner, you are NOT operating at an arms reach away from the issues. My error – if present – is de minimus.
Your second point in reply really does not distinguish from the point that I made: if other attributes of Article III standing are present, then there is no issue, BUT that is not the issue at point here, which is the attempted pure bootstrap of an entity without otherwise proper Article III standing.
To that end, your third comment about “seems out of context” is most definitely NOT out of context. My point there is directly on point. And the attempt then to diminish (or not add to the context the legal presence and level of the presumption of validity IS a type of kicking up dust on the very issue at hand.
Much like your reply omits another aspect that is very much in context: the Lujan case.
That case already is on point for what is being attempted here. I “get” that you “feel” that the Supreme Court “may be interested” to take up the present issue – and my post is to flesh out that present issue with MORE of the case law on point, without over-reaching on a generalized notion of “competitor standing” in order to bootstrap between two very different fora.
To the extent then — as I have already shown, that there is Article III implications between competitors, NONE of that is at issue in THIS case. TO double down (again) and advance the notion that the Federal Circuit took a “too narrow” view is not a correct recapture of what is going on HERE. Your own admission of “ we don’t argue that “‘competitor standing’ ALONE suffices for ALL types of Article III standing.”” appears to conflict with your final attempted takeaway. Those items that are outside of a “too narrow” view are not in play. Keeping focus on what IS in play — and, for example, the case law of Lujan — paints a much better (and clearer) picture.
Anon, my last comment on this. I think you’re reading something into our previous articles that isn’t there. See https://www.americanbar.org/groups/intellectual_property_law/publications/landslide/2017-18/may-june/brave-new-law/ and https://scholarship.law.edu/lawreview/vol67/iss4/7/.
As for the Lujan case, it is useful only to the extent the allegations or analogous. As with most standing and injury-in-fact case, much depends on alleged facts advanced to support standing.
An excerpt from Lujan that was adopted by the full Court follows. Happy New Year!
We shall assume for the sake of argument that these affidavits contain facts showing that certain agency-funded projects threaten listed species—though that is questionable. They plainly contain no facts, however, showing how damage to the species will produce “imminent” injury to Mses. Kelly and Skilbred. That the women “had visited” the areas of the projects before the projects commenced proves nothing. As we have said in a related context, “`Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.’ ” Lyons, 461 U. S., at 102 (quoting O’Shea v. Littleton, 414 U. S. 488, 495-496 (1974)). And the affiants’ profession of an “inten[t]” to return to the places they had visited before—where they will presumably, this time, be deprived of the opportunity to observe animals of the endangered species—is simply not enough. Such “some day” intentions—without any description of concrete plans, or indeed even any specification of when the some day will be—do not support a finding of the “actual or imminent” injury that our cases require. See supra, at 560.
565*565 Besides relying upon the Kelly and Skilbred affidavits, respondents propose a series of novel standing theories. The first, inelegantly styled “ecosystem nexus,” proposes that any person who uses any part of a “contiguous ecosystem” adversely affected by a funded activity has standing even if the activity is located a great distance away. This approach, as the Court of Appeals correctly observed, is inconsistent with our opinion in National Wildlife Federation, which held that a plaintiff claiming injury from environmental damage 566*566 must use the area affected by the challenged activity and not an area roughly “in the vicinity” of it.
Your comment does not seem to have any nexus to the points that I have presented.
Quit in fact, your long (and uncommented upon) citation from the Lujan case appears on its own to support my comments. It is the holding of the Lujan case (and NOT just whether or not an “analogous facts” situation can be made) that is important. That’s how case law works. A case creates a holding. That holding then is applied to a different fact situation of a different case. Yes, certainly, when facts are directly analogous, the holding is easily applied. But the holding is also applied when facts may be different.
Here, just because the question present (the two step fora with a knowingly NON-Article III forum step one coupled with a knowingly Article III forum step two does NOT mean that the Article III standing requirement may be bootstrapped from the step one NON-Article III environment.
There IS an anology to Lujan, and that analogy is as I have presented. Much like as if Lujan HAD been decided in an opposite manner, then for patent challenges in an Article III forum, no “real” Article III standing would ever be required.
So, I have to ask, are you agreeing with my views (without stating so)…?

References: § 315
 § 319
 § 141
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 § 318
 § 311
 § 315
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