Federal Circuit Turns Down Competitor Standing Argument for IPR Appeals
V&E IP Insights, May 14, 2019
On May 13, 2019, the Federal Circuit held that an IPR petitioner may not use the competitor standing doctrine to establish Article III standing in an appeal of a PTAB decision where the petitioner has no present or nonspeculative interest in engaging in conduct covered by the patent claims at issue.
In AVX Corp. v. Presidio Components, Inc., AVX appealed a PTAB final written decision upholding certain claims in a Presidio patent relating to single-layer ceramic capacitors. AVX and Presidio are competitors in the electronic components market, and the companies have been involved in several infringement lawsuits over the past decade. Here, although AVX had a statutory right to appeal the PTAB’s decision under 35 U.S.C. §§ 141, 319, Presidio argued that AVX had not established an injury in fact for Article III standing.
In 2018, the Federal Circuit stated that “in IPR appeals, an appellant must . . . supply the requisite proof of an injury in fact when it seeks review of an agency's final action in a federal court, by creating a necessary record in this court, if the record before the Board does not establish standing.” JTEKT Corp. v. GKN Auto. Ltd., 898 F.3d 1217, 1220 (Fed. Cir. 2018) (internal quotations omitted). AVX presented two arguments for Article III standing and relied on a declaration from its general counsel that it submitted with its opening brief on appeal to substantiate its injury in fact arguments.
First, AVX argued that it was injured by the Board’s rejection of its obviousness challenges to the upheld claims because the statutory estoppel provision, 35 U.S.C. § 315(e), would prevent it from asserting the same challenges if Presidio asserted those claims against AVX in the future. The Federal Circuit cited its holding in Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1175−76 (2017), that estoppel under 35 U.S.C. § 315(e) does not constitute an injury in fact in the absence of activity that would give rise to a possible infringement suit. The court also noted that it has not decided whether § 315(e) would have an estoppel effect when an IPR petitioner lacked Article III standing to appeal the Board’s decision in Federal Court, and expressly left that question for another case.
Second, AVX argued that the Board’s decision to uphold the challenged claims reduces AVX’s ability to compete with Presidio. The Federal Circuit noted that in the cases in which Article III standing rests on competitive harm, “the challenged government action nonspeculatively threatened economic in-jury to the challenger by the ordinary operation of economic forces.” In contrast, the “government action [in this case] is the upholding of specific patent claims, which do not address prices or introduce new competitors, but rather give exclusivity rights over precisely defined product features.” Because AVX failed to show that it is engaging in, or has nonspeculative plans to engage in, conduct covered by the upheld claims, the Federal Circuit determined that AVX failed to establish competitive harm.
What it Means for You
This decision may raise the stakes for bringing an IPR ahead of litigation for petitioners who are not currently using the claimed features of the challenged patent or concretely planning to do so. There may be no Article III standing for a petitioner—even a competitor—to appeal an adverse PTAB decision in those circumstances. Litigants may also want to keep in mind, however, that whether the patent statute’s IPR estoppel provisions will apply in a later proceeding to a petitioner that did not have an opportunity to appeal due to a lack of Article III standing is still an open question.
To read the full opinion, click here.
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