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Further Update on the Standing Requirement for an Appeal to the Federal Circuit

We previously reported on the Federal Circuit’s recent precedential opinion in JTEKT Corporation v. GKN Automotive Ltd.  In that case, the Federal Circuit found that the appellant did not have standing to appeal a PTAB Final Written Decision to an Article III court such as the Federal Circuit, because the appellant did not prove a concrete and particularized injury in fact.  Practically speaking, the Federal Circuit's opinion in JTEKT means that a party considering challenging a patent at the PTAB, such as by an inter partes review, but that is not currently involved in or threatened with an infringement lawsuit by the patent owner, must take into account that an appeal of an adverse final written decision by the Board may not be available.

The Federal Circuit has now further applied the standing requirements set forth in the JTEKT decision.  In E.I. du Pont de Nemours & Company, Archer Daniels Midland Company v. Synvina C.V. decided September 17, 2018 (Federal Circuit Docket No. 2017-1977), the Federal Circuit ruled that appellant DuPont did have standing to appeal a PTAB final decision, despite not being accused of infringement by patent owner Synvina.  Appellant DuPont and patent owner Synvina are competitors in the production of FDCA.  DuPont challenged Synvina’s patent (U.S.P.N. 8,865,921) directed to a method of producing the chemical compound FDCA in an IPR proceeding.  At the conclusion of the IPR, the PTAB issued a final written decision finding that the claims of the ‘921 patent were non-obvious and therefore patentable.  DuPont appealed the Board’s decision to the Federal Circuit, and Synvina asserted that DuPont did not have standing to appeal because DuPont had not suffered an actual or imminent injury in fact.  However, in contrast to its conclusion in the JTEKT decision, the Federal Circuit found that DuPont did satisfy the injury in fact requirement, and therefore did have standing to appeal.  Specifically, the Federal Circuit noted that an appellant need not face “a specific threat of infringement litigation by the patentee” but rather an appellant must generally show a controversy “of sufficient immediacy and reality” such as “concrete plans” for activity that create a substantial risk of infringement or that are likely to cause the patentee to assert a claim of infringement.  Since DuPont had built a demonstration plant capable of producing FDCA under conditions that overlap the claimed ranges in the ‘921 patent, and since the plant was planned to go operational (and had gone operational by the time of the oral arguments), the Federal Circuit found that DuPont had taken action that would implicate the ‘921 patent.  Thus, DuPont’s activities created a real and sufficient controversy that satisfied the Article III standing requirement.

From the du Pont decision, one can see the Federal Circuit has made a fine distinction between activity that is sufficient for standing and activity that is not sufficient for standing to appeal from an AIA review by the PTAB.  While JTEKT was engaged in developmental activity that could have implicated the contested patent in the future, JTEKT did not make a product that could possibly infringe the patent.  Also, JTEKT’s future plans, while potentially infringing the patent, were not finalized and could have changed such that they no longer would implicate the patent.  In contrast, DuPont had actually gone as far as building a demonstration plant that was capable of infringing the patent, DuPont had specific plans to begin operating the plant, and by the time of oral argument at the Federal Circuit, DuPont had in fact begun operating the plant.

Hence, at this time, for a party to have standing to appeal an IPR decision from the PTAB, the party need not be threatened with or engaged in infringement litigation with the patent owner.  However, the party must at least have set and unchanging plans that would ultimately infringe the challenged patent, or be engaged in actual activity that could infringe the patent.

In any event, the requirements for standing to appeal an AIA review from the PTAB may yet be relaxed.  The Supreme Court should decide in the near future whether to grant certiorari in RPX Corporation v. ChanBond LLC (Supreme Court Docket No. 17-1686).  Petitioner RPX Corporation essentially has argued that the statutory grant of a right to appeal an adverse final written decision in an AIA review to the Federal Circuit is sufficient to convey Article III standing.  In other words, since the right to appeal to the Federal Circuit is provided by statute, RPX Corporation contends that a party need not be engaged in any activity that could infringe the challenged patent.  If the Supreme Court grants cert and takes up the RPX case, then the Federal Circuit’s JTEKT decision and its progeny may be overturned.

A copy of the du Pont decision may be accessed at http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-1977.Opinion.9-17-2018.pdf.

A copy of the RPX petition for certiorari may be accessed at https://www.supremecourt.gov/DocketPDF/17/17-1686/50441/20180618135448957_RPX%20v%20Chanbond%20-%20Cert%20Petition%20Brief.pdf.

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