Blog | 01/23/2017

Federal Circuit Rules That Not All Petitioners Have Standing to Appeal Adverse IPR Results


The Federal Circuit recently dismissed an appeal from an inter partes review proceeding where the appellant/petitioner failed to establish that it had constitutional standing to maintain an appeal. Phigenix, Inc. v. Immunogen, Inc., No. 2016-1544, 2017 WL 74762 (Fed. Cir. Jan. 9, 2017). The appeals court ruled that a IPR petitioner must demonstrate constitutional standing with some admissible evidence in order to appeal an adverse PTAB result, and established the standard for meeting that burden.

Every litigant must have, at a minimum, constitutional standing to bring an action in federal court. In appeals, constitutional standing requires three elements: an appellant “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [appellee], (3) that is likely to be redressed by a favorable judicial decision.” Slip op. at 4, quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).

The Federal Circuit ruled that although a petitioner may have the capacity to initiate review under the AIA, that did not automatically provide standing to appeal an adverse result to the Federal Circuit:

[A]lthough Article III standing is not necessarily a requirement to appear before an administrative agency,” Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014) (citation omitted), an appellant must nevertheless supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court, . . Indeed, the Supreme Court has recognized that not every party will have Article III standing in an appeal from a PTAB final written decision. See Cuozzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131, 2143–44 (2016) (explaining that, although a party that initiated an inter partes review “need not have a concrete stake in the outcome,” it “may lack constitutional standing” to sue in federal court).

Slip op. at 5-6. This remains true even though the AIA specifically provides that parties to an IPR may appeal to the Federal Circuit. See, e.g., 35 U.S.C. §§ 319 (“Any party to the inter partes review shall have the right to be a party to the appeal.”); 141(c).  Quoting Raines v. Byrd, 521 U.S. 811 (1997), the Federal Circuit noted that “Congress cannot erase Article III’s standing requirements by statutorily granting the right to sue to [an appellant] who could not otherwise have standing.”

The appeals court then established for the first time ground rules for applying the standing test: the burden of production of evidence relating to standing, the evidence necessary to sustain the burden, and the time when the appellant must demonstrate standing.

As to the burden of production, the court noted that “the Supreme Court has held that each element is ‘an indispensable part of’ an appellant’s case and ‘must be supported in the same way as any other matter on which the [appellant] bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.’” Slip op. at 7, quoting Lujan v. Defs. of Wildlife, 504 U.S. at 561. The Federal Circuit concluded that “the summary judgment burden of production applies in cases where an appellant seeks review of a final agency action and its standing comes into doubt.” Id.

As to the second requirement, the evidence that will satisfy the burden, the court held that “an appellant ‘must either identify … record evidence sufficient to support its standing to seek review or, if there is none because standing was not an issue before the agency, submit additional evidence to the court of appeals,’ such as ‘by affidavit or other evidence.’” Id., quoting Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002).

As to the third requirement, the point in time at which the appellant must demonstrate standing, the court held that “an appellant must identify the relevant evidence demonstrating its standing ‘at the first appropriate’ time, whether in response to a motion to dismiss or in the opening brief.” Id. at *4, quoting Sierra Club, 292 F.3d at 900. The court noted that:

Imposing on an appellant the dual obligations of producing the evidence and producing the evidence early in the litigation comports with the reality that such evidence is necessarily peculiar to the appellant and ordinarily within its possession. Thus, if there is no record evidence to support standing, the appellant must produce such evidence at the appellate level at the earliest possible opportunity.

Id. (quotation omitted).

Applying these requirements to the petitioner/appellant in Phigenix, the court ruled that it failed to establish standing. The petitioner stated that it was “a for-profit discovery stage biotechnology, pharmaceutical, and biomedical research company” conducting research in a product area related to the patent under review. It contended generally that the patent under review harmed its ability to compete, and damaged the license value of its own patent. However, the court ruled that the PTAB record and the petitioner’s appellate briefs failed to establish that it had standing. “Phigenix does not contend that it faces risk of infringing the ’856 patent, that it is an actual or prospective licensee of the patent, or that it otherwise plans to take any action that would implicate the patent.” Slip op. at 9. In addition, the petitioner failed to present any affidavits with admissible evidence establishing that it had actually licensed its own patent, or had any other injury. The court dismissed the petitioner’s affidavits with “conclusory statements” about a “hypothetical licensing injury” as insufficient.

Thus, the court dismissed the appeal without discussing the merits.


Keep Reading