Source: http://www.ip-watch.org/2018/06/18/rethinking-article-iii-standing-ipr-appeals-federal-circuit-us/
Timestamp: 2019-02-16 07:28:27
Document Index: 297473451

Matched Legal Cases: ['§ 319', '§ 214', '§306', '§ 319', '§ 315', '§ 1', '§ 552', '§ 315', '§ 311', '§ 319', '§ 315']

Rethinking Article III Standing In IPR Appeals At The Federal Circuit (US) - Intellectual Property Watch
By Charles R. Macedo and Chandler Sturm, Amster, Rothstein & Ebenstein LLP
James Howard, Askeladden L.L.C.
In January 2018, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit in RPX Corp. v. Chanbond LLC issued a non-precedential order dismissing an appeal by RPX (as a dissatisfied petitioner) of an adverse final written decision in an inter partes review (“IPR”) proceeding initiated in response to RPX’s petition.[1] In particular, by applying is prior precedential decisions in Consumer Watchdog v. Wisconsin Alumni Research Foundation,[2] and Phigenix Inc. v. Immunogen, Inc.,[3] the court concluded “that RPX lacks Article III standing to appeal the Board’s decision affirming the patentability of claims 1-31 of the ’822 patent.”[4]
RPX represents the latest in a series of decisions by the Federal Circuit misapplying the law of standing in the context of an appeal by a statutorily authorized petitioner in a post-issuance proceeding before the Patent Office, who meets the statutorily defined injury-in-fact (e.g., being “dissatisfied”) with an adverse decision (e.g., “final written decision”) by the Patent Office (e.g., Patent Trial and Appeals Board, “PTAB”).
For a detailed discussion of how the Federal Circuit law has departed from the relevant Supreme Court authority (as well as is contrary to other circuits, like the D.C. Circuit), see our white paper, “Rethinking Article III Standing in IPR Appeals at the Federal Circuit” recently published on June 11, 2018, at http://www.patentqualityinitiative.com/-/media/pqi/files/articles/rethinking-article-iii-standing-in-ipr-appeals.pdf.
RPX and Other Federal Circuit Decisions Are Based on Misplaced Rationale and Should Be Reversed
RPX Order bases its analysis upon a flawed understanding of the statutory structure governing any parties’ right to bring a petition for IPR, participate in such petition, and, if denied and dissatisfied, appeal. In particular, the Court explained its understanding of the rights granted to RPX by quoting from Consumer Watchdog, as follows:
“The statute at issue here allowed any third party to request [review], and, where granted, allowed the third party to participate.” Consumer Watchdog, 753 F.3d at 1262. “The statute did not guarantee a particular outcome favorable to the requestor.” Id. RPX “was permitted to request [review] and participate once the PTO granted its request. That is all the statute requires.” Id.[5]
As the emphasized language makes clear, the Court’s analysis ignores the rights granted to RPX as a “dissatisfied” petitioner as set forth in Section 319 of the statute:
A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.[6]
In other words, the statute (through Section 319) requires more than the Federal Circuit recognizes, as it also requires that “a party dissatisfied with the final written decision” of the PTAB in an IPR, which RPX is indisputably such a party, “may appeal the decision” (as it did).
The Supreme Court recognized this broad congressional grant in Oil States:
A party dissatisfied with the Board’s decision can seek judicial review in the Court of Appeals for the Federal Circuit. § 319. Any party to the inter partes review can be a party in the Federal Circuit. Ibid.[7]
This congressionally defined right is significant because, not only does it give a procedural right to appeal and a process by which RPX was entitled to do it, it also describes the legislative choice of the type of “intangible” harm, giving RPX the substantive right to invoke this procedure.
This congressional choice is significant, for as the Supreme Court explained in Spokeo, Inc. v. Robbins:
“In addition, because Congress is well positioned to identify intangible harms that meet minimum Article III requirements, its judgment is also instructive and important. Thus, we said in Lujan that Congress may “elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.” 504 U. S. at 578, 112 S. Ct. 2130, 119 L. Ed. 2d 351. Similarly, Justice Kennedy’s concurrence in that case explained that “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” Id., at 580, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (opinion concurring in part and concurring in judgment).[8]
Spokeo’s recognition that Congress can define what type of intangible injury is sufficient to give a party to a proceeding standing to participate in a challenge to an adverse decision from such proceeding is well supported in a long line of Supreme Court cases going back 45 years.[9]
Even this past term, the Supreme Court in SAS Institute, Inc. v. Iancu chastised the Federal Circuit for failing to sufficiently recognize the intentional choices Congress made in adopting a different statutory structure and role for petitioners in IPRs from prior ex parte reexamination proceedings. Specifically, Congress provided in the ex parte reexamination statute that only the patent owner involved in a reexamination proceeding can seek judicial review by the Federal Circuit.[10] If Congress had wanted to confer standing to only limited types of parties to IPR proceedings, “it knew exactly how to do so–it could have simply borrowed from the statute next door.”[11] The fact is that it did not and instead explicitly provided in the IPR statute that “[a]ny party to the inter partes review shall have the right to be a party to the appeal [in the Federal Circuit].” [12] As Justice Gorsuch cautioned in SAS, “Congress’s choice to depart from the model of a closely related statute is a choice neither [the Court] nor the agency may disregard.”[13]
Yet, in RPX, as well as the prior standing cases relied upon by the panel in RPX, Section 319 and the intangible harm defined therein (being “dissatisfied”) are completely disregarded.
Congressional grant of the right not only to petition the government for a relief, irrespective of whether there is a judicially cognizable injury in the absence of the statute, but also to bring an appeal when that party suffers the intangible harm of being “dissatisfied” with the government’s decision, is an example of the simple case that Lujan v. Defenders of Wildlife recognized should “ordinarily” present “little question” that a petitioner who did not receive requested relief has been injured.[14] The fact that an estoppel further is attached,[15] which cannot be later challenged, only emphasizes that a real injury in fact has occurred.
A Petitioner’s right to participate when its petition to have the Patent Office take a second look at a previously issued public franchise and determine whether such previously issued claims should be found invalid, are much like other petitions to the Government, in which the denial of such petition is sufficient to give standing to such petitioners to challenge such denials in Court. For example, the Supreme Court confirmed that “[its] decisions interpreting the Freedom of Information Act have never suggested that those requesting information under it need show more than that they sought and were denied specific agency records.”[16]
In another example, the Supreme Court has recognized similar rights under the Federal Advisory Committee Act:[17]
“As when an agency denies requests for information under the Freedom of Information Act, refusal to permit appellants to scrutinize the ABA Committee’s activities to the extent FACA allows constitutes a sufficiently distinct injury to provide standing to sue.”[18]
Likewise, other courts have recognized similar rights under the Government in the Sunshine Act,[19] and under § 214(d) of the Foreign Relations Authorization Act, Fiscal Year 2003,[20] to allow a petitioner to have a specific country designated on his passport as his place of birth.[21]
The Federal Circuit’s effort to distinguish this very on-point law in Consumer Watchdog is simply misplaced. According to the Federal Circuit, both FOIA and FECA created substantive legal rights to access certain government records that, if denied, would lead to a concrete and particularized injury-in-fact.[22] Here, the Court explained, Consumer Watchdog was not denied anything to which it was entitled since it was permitted to request reexamination and to participate once the PTO granted its request.[23] This distinction simply makes no sense. A petition to cancel a public franchise is no less a substantive legal right than a petition to get information. The denial of each of these petitions has been defined by Congress to be an injury-in-fact and should give rise to standing under the statute and Article III in view of statute.
Indeed, the harm that a “dissatisfied” petitioner to an adverse final written decision in an IPR suffers is greater than the harm that a FOIA petitioner suffers in not getting the information requested. If the IPR proceeds to a final written decision, the petitioner is estopped from requesting or maintaining a proceeding (e.g., another IPR) before the Patent Office, or asserting invalidity in a federal district court action or an ITC proceeding, based on any grounds that were, or reasonably could have been, raised during the first review.[24]
The Federal Circuit has tried to soften the edges of its prior rulings. More recent decisions have recognized that, at least in some instances, the fact that a dissatisfied petitioner who was not currently subject to a patent infringement charge would suffer an estoppel from an adverse final written decision in the future, was enough of an injury in fact to create standing.[25] However, the risk that such an estoppel will exist in every proceeding should be enough to create Article III standing, even if the congressionally defined intangible harm of being “dissatisfied” is not enough.
The fact that the Federal Circuit has started to issue nonprecedential decisions like RPX, perpetuating its improper analysis, reflects the fact that further debate at the Federal Circuit has ceased, and it is time for the Supreme Court to address the issue, as was the case in Oil States.
If the Federal Circuit will not correct its misplaced jurisprudence, then it is time for the Supreme Court to correct course, and bring into line the Federal Circuit’s IPR standing to appeal jurisprudence, with the Supreme Court’s (and other Circuits’) more forgiving law of allowing petitioners whose petitions are denied, to challenge such denials, particularly when Congress has set forth reasonable conditions, like Section 319, upon which such challenge is to occur.
In the AIA, Congress gave any person other than the patent owner the substantive right to petition the government to take a second look at a previously issued patent franchise in an IPR proceeding.[26] Congress further expressly provided that a party dissatisfied with the Board’s decision in such a proceeding can seek judicial review by the Federal Circuit and be a party in such an appeal.[27] Congress also placed the very real downside of an estoppel upon a failed petitioner,[28] which if not promptly addressed in appeal, would remain in effect throughout the remainder of the life of that patent.
Thus, Congress created a statutory right (the right to file a petition and if instituted obtain a proper final written decision), which if deprived confers standing on the petitioner, even if the petitioner “would have suffered no judicially cognizable injury in absence of the statute.”[29] The Federal Circuit’s holdings in Consumer Watchdog, Phigenix and RPX to the contrary are wrong and should be reversed.
Charles R. Macedo is a Partner at Amster, Rothstein & Ebenstein LLP, where he advises and litigates in all areas of intellectual property law, including patent, trademark and copyright law, with a special emphasis in complex litigation. He also assists clients in obtaining, maintaining and enforcing patent and trademark portfolios. He has successfully recovered domain names registered to others using clients’ trademarks. Mr. Macedo is also the author of the book, The Corporate Insider’s Guide to U.S. Patent Practice, originally published by Oxford University Press.
James Howard is Associate General Counsel of Askeladden L.L.C., where he supports all of Askeladden’s Patent Quality Initiative efforts, and Vice President and Associate General Counsel of The Clearing House Payments Company. Before joining The Clearing House, Jim was in private practice where he represented a variety of companies, including technology and financial services companies, in patent litigation and patent prosecution matters.
[1] Order, RPX Corp. v. Chanbond LLC, No. 17-2346 (Fed. Cir. Jan. 17, 2018) (non precedential) (“RPX Order”).
[2] 753 F.3d 1258 (Fed. Cir. 2014).
[3] 845 F.3d 1168, 1171 (Fed. Cir. 2017).
[4] RPX Order at 6.
[5] RPX Order at 5 (emphasis added).
[7] Oil States Energy Servs. LLC v. Greene’s Energy Group LLC, 584 U.S. ___ (slip op. at 4) (2018).
[8] Spokeo Inc. v. Robbins, 136 S.Ct. 1540, 1549 (2016).
[9] See, e.g, Lujan v. Defenders of Wildlife, 504 U.S. 555, 561-62, 112 S. Ct. 1735, 118 L. Ed. 2d 352 (1992)(“When the suit is one challenging the legality of government action or inaction, the nature and extent of facts that must be averred (at the summary judgment stage) or proved (at the trial stage) in order to establish standing depends considerably upon whether the plaintiff is himself an object of the action (or forgone action) at issue. If he is, there is ordinarily little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress it.” (emphasis added)); Warth v. Seldin, 422 U.S. 490, 514, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975) (“Congress may create a statutory right or entitlement the alleged deprivation of which can confer standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the absence of statute.”); Linda R.S. v. Richard D., 410 U.S. 614, 617 n.3, 93 S. Ct. 1146, 35 L. Ed. 2d 536 (1973) (“Congress may enact statutes creating legal rights, the invasion of which creates standing, even though no injury would exist without the statute.”).
[10] See 35 U.S.C.§306.
[11] SAS Institute Inc. v. Iancu, 138 S. Ct. 1348, 1355, 200 L. Ed. 2d 695 (2018).
[12] 35 U.S.C. § 319.
[13] SAS, 138 S. Ct. at 1355.
[14] Lujan, 504 U.S. at 561-62.
[15] 35 U.S.C. § 315(e)
[16] Public Citizen v. U.S. Dep’t of Justice, 491 U.S. 440, 449-450 (1989). See, e.g., Department of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749 (1989); Department of Justice v. Julian, 486 U.S. 1 (1988); United States v. Weber Aircraft Corp., 465 U.S. 792 (1984); FBI v. Abramson, 456 U.S. 615 (1982); Department of Air Force v. Rose, 425 U.S. 352 (1976).
[17] 5 U.S.C. app. §§ 1- 16.
[18] Pub. Citizen, 491 U.S. at 449.
[19] 5 U.S.C. § 552(b). See Rushforth v. Council of Econ. Advisers, 762 F.2d 1038, 1039 n.3 (D.C. Cir. 1985).
[20] Pub. L. No. 107-228, 116 Stat. 1350, 1365-66 (2002).
[21] See Zivotofsky v. Secretary of State, 444 F.3d 614, 617-619 (D.C. Cir. 2006).
[22] Consumer Watchdog, 753 F.3d at1262.
[24] 35 U.S.C. § 315(e).
[25] See, e.g., Altaire Pharmaceuticals, Inc. v. Paragon Biotek, Inc., No. 2017-1487, 2018 U.S. App. LEXIS 12358, at *15 (Fed. Cir. May 2, 2018).
[26] 35 U.S.C. § 311(a); see also Oil States, slip op. at 2.
[27] 35 U.S.C. § 319; see also Oil States, slip op. at 4.
[28] 35 U.S.C. § 315(e).
[29] See, e.g., Spokeo, 136 S.Ct. at 1549; Lujan, 504 U.S. at 561-62; Warth, 422 U.S. at 514; Linda R.S., 410 U.S. at 617 n.3.
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Steven Sereboff says
Thanks for sharing your opinion. Your article suffers from several serious flaws. First, the authors have neglected to disclose their bias. Second, they fail to disclose that Congress never imagined an industry of third party IPR petitioners like Askeladden or RPX. Third, they fail to address how RPX would have had something to appeal if RPX had complied with Section 315.