Constitutional Challenge to Administrative Patent Review – Part IV

By Dennis Crouch

Although the parties are ostensibly focused on whether WARF’s “replicating in vitro cell culture of human embryonic stem cells” constitutes patentable subject matter, the Federal Circuit is instead directing its attention to the issue of whether the patent challenger – Consumer Watchdog – has standing to file its patent appeal.

Consumer Watchdog v. Wisconsin Alumni Research Foundation (WARF) (Fed. Cir. 2013)

The Patent Act allows any party to file a post-grant administrative challenge and, if “dissatisfied” the results of the change, to appeal an adverse PTO ruling. Despite the statutory promise of appeal-rights, in Part I, I raised a concern as to whether a third-party challenger who loses at the PTO would necessarily have Article III standing. Within days, of that posting, the Federal Circuit ordered that Consumer Watchdog and WARF brief the issue of whether Consumer Watchdog has standing under Article III.

In Monday’s oral arguments, the court focused entirely on the issue of standing and would hear no arguments regarding the substantive appeal. Dan Ravicher (for Consumer Watchdog) and Kara Stoll (for WARF) both handled themselves very well, but Ravicher noted that the PTO should be at the table since Consumer Watchdog’s complaint is with the PTO for wrongfully issuing the patent and then wrongfully confirming patentability in the reexamination. Chief Judge Rader, Judge Prost and newly enrobed Judge Hughes participated fully in the questioning, although each of indicated some difficulty buying into Ravicher’s argument that Congress created a potential injury-in-fact with its “dissatisfied” language and that the injury was realized when the PTO rejected Watchdog’s case.

However, following Ravicher’s suggestion, the Court has now requested that “the United States Patent and Trademark Office and the United States” provide briefs in the case and particularly brief “whether Consumer Watchdog has standing to pursue its appeal to this court.” Recognizing the recent tension in briefing between the USPTO and the DOJ, the court wrote that “The PTO and the United States may submit a joint brief, if they so choose.”

Although the court does not explicitly welcome other amicus briefs, I am confident that several will be forthcoming. Briefs are due January 6, 2014.

18 thoughts on “Constitutional Challenge to Administrative Patent Review – Part IV

  1. The Federal Circuit has held in cases such as In re Tech. Lic. Corp., 423 F.3rd 1286 (Fed. Cir. 2005) that patent validity enjoys a 7th Amd. right to a jury trial in actions at law. This fairly overrules Patlex Corp. v. Mossinghoff, 758 F.2d 594, 225 USPQ 243, modified on rehearing, 771 F.2d 480, 226 USPQ 985 (Fed. Cir.1985) that patent validity was a public right. No one has a right to a trial by jury for a public right. One of the remaining potential justifications for the constitutionality of IPRs is that the PTO is operating under the adjunct jurisdiction of an Art. III court pursuant to Crowell v. Benson — although this theory was severely undercut by the recent case of Stern v. Marshall (2011), which held that an agency does not have adjunct jurisdiction if its decisions are final and do not require a court order to become effective.But assuming arguendo that the courts were to eventually approve PTO adjunct jurisdiction, the PTO would be operating under the jurisdiction of the courts. Obviously this means that any petitioner would have to have conventional Art. III standing.

  2. Also consider this: https://www.docketnavigator.co…where apparently the customer of an offshore manufacturer (or its acquiring parent) brought an interpartes reexamination, but where the foreign manufacturer funded and probably controlled the reexamination. The obvious purpose was to avoid estoppels.During the litigation itself, the manufacture refused to respond to discovery requests regarding the relationship to its customer and went so far as to commit perjury as so found by the court. The law firm representing the customer did not identify the manufacturer as a real party in interest even though they were apparently sending their bills to the offshore manufacturer and sending drafts of responses to them.What does this say about the ethics let alone the legality of what was going on?

  3. On should consider this case as a poster boy of what could be the future without standing:http://interpartesreviewblog.c…Imagine that the big boys could form LLCs to challenge patents thereby avoiding estoppels if they lose and bars such as 315(b) because being LLCs, they would never sell products and never be sued. Also, look at the number of patents challenged – 7. It would be interesting to know whether Apple was ever accused of infringing all of them.

  4. This recalls earlier points I made on this board about whether or not BPAI proceedings were adversarial.BTW Dennis why are old comments no longer available, and will they be made available at some future date?

    1. (sigh)Pedantic as usual, eh 6?First, it is a blog and perfect grammer/language is neither required nor expected. Second, even if you were to purposefully misread the sentence out of context, you would realize that the ownership would be Congress owning its law it passed.

  5. “I raised a concern as to whether a third-party challenger who loses at the PTO would necessarily have Article III standing. Within days, of that posting, the Federal Circuit ordered that Consumer Watchdog and WARF brief the issue of whether Consumer Watchdog has standing under Article III. “You so pimp d.

  6. If a third party challenger doesn’t have any chance to appeal, I don’t see why anyone would want to challenge a patent at the USPTO. After all, if they allowed it improperly the first time I wouldn’t have much confidence that they would get it right the second time.

    1. Because they do have a chance to appeal if there is an injury in fact or whatever. In other words, if they’re getting threatened or whatever then they’d have standing to appeal in such a situation. These guys aren’t getting threatened, and iirc don’t even practice the invention or plan to. No standing to appeal. And they always may win at the PTO if they are convincing. Then the opponent would have to appeal and standing would be np for them.

    2. Abstraction, 6 is right. If one has DJ standing, one has standing to appeal an IPR. However, this WILL put a crimp in it for those who are challenging patents they do not like, or that they might want to infringe. It will put a crimp in the abusive practice of harassing the small patent owner with inordinate expense by filing multiple IPRs against as many of his patents as possible.Standing is essential in the US to prevent abuse.

      1. Standing is still not required for IPRs Ned, and thus your statement is not fully true, as abuse (or the potential for abuse) remains for those actions (which may or may not be abusive) under the executive branch.

            1. anon, see my discussion of how In re Tech. Lic. overrules Patlex, leaving only adjunct jurisdiction as possible for IPRs. The real jurisdiction in the case of adjunct jurisdiction is under Art. III, case and controversies, and that requires standing.

              1. anon, consider that IF IPRs are constitutional only IF they are adjunct to the courts, their Art I location is formal because jurisdiction and standing are provided by Art. III.

              2. Ned,You are again confusing yourself and assuming the conclusion you need to prove.IPRs are NOT held in Article III courts. Thus, there is no standing requirement for IPRs.Now the issue changes if you want to pursue an appeal of an IPR decision in an Article III court – but that is clearly a distinction that you need to maintain awareness of.

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