Federal Circuit: In order to appeal USPTO post-grant decision, third party requestor must show “injury in fact”

By Dennis Crouch

Consumer Watchdog v. WARF and USPTO (Fed. Cir. 2014)

The Patent Act provides for a variety of administrative review proceedings that can be filed by any third party wanting to challenge the validity of an issued patent. The statute also provides the third-party requester with a right to appeal any adverse judgment to the Court of Appeal for the Federal Circuit. Following these statutory guidelines, Consumer Watchdog requested review (inter partes reexamination) of WARF’s patents covering human embryonic stem cells. When the USPTO sided with WARF, Consumer Watchdog appealed. But Consumer Watchdog has a major problem with its appeal – standing. Consumer Watchdog is a public interest group who is not being directly impacted by WARFs patents other than the general indignity felt by all of us.

As the appeal was pending, the Supreme Court decided Already v. Nike and reminded courts that, under the Constitution, they only have power over actual cases and controversies. At Patently-O, we used that case as a springboard for questioning whether the statutory appellate authority was sufficient to satisfy the demands of the Constitution, and the Court immediately called for Consumer Watchdog and WARF to brief the question of standing.

Now, the Federal Circuit has dismissed the appeal – holding that Consumer Watchdog’s appeal cannot stand because the non-profit “has not established an injury in fact sufficient to confer Article III standing.” In essence, the court rules that the right of appeal granted by statute is unconstitutionally broad and the cure is to narrow the right in order to conform with Constitutional requirements of standing.

Regarding injury-in-fact, all parties agreed that the standing requirements mandate such injury. [T]he “requirement of injury in fact is a hard floor of Article III jurisdiction that cannot be removed by statute.” Summers v. Earth Island Inst., 555 U.S. 488 (2009). Consumer Watchdog argued that its injury was cemented and particularized after it filed for inter partes reexamination and had its case rejected by the USPTO. However, the Federal Circuit has rejected that argument:

Here, the Board’s disagreement with Consumer Watchdog did not invade any legal right conferred by the inter partes reexamination statute. The statute at issue here allowed any third party to request reexamination, and, where granted, allowed the third party to participate. The statute did not guarantee a particular outcome favorable to the requester. Consequently, the Board’s denial of Consumer Watchdog’s request did not invade any legal right conferred upon Consumer Watchdog.

For this reason, Consumer Watchdog’s analogy to the Freedom of Information Act (FOIA) and the Federal Election Campaign Act (FECA) are unpersuasive. These acts create substantive legal rights – access to certain government records – the denial of which inflicts a concrete and particularized injury in fact. . . [Here,] Consumer Watchdog was not denied anything to which it was entitled.

One result here is another set of USPTO actions for which there is no appeal.

Dan Ravicher is the key individual behind the Consumer Watchdog case. It was Ravicher who also pushed forward the Myriad case. In similar fashion, it appears to me that he has a good shot at having this case now heard by the Supreme Court.

138 thoughts on “Federal Circuit: In order to appeal USPTO post-grant decision, third party requestor must show “injury in fact”

  1. I think that the comments below miss something quite important. NWPA has touched on it some, but here’s how I see it.

    The comparison to Lujan is not on all fours as some below have insinuated. The procedural postures are different. In Lujan the SCOTUS denied standing for a district court action requesting redress for a right arising out of a regulatory scheme. Here, the Fed. Cir. is denying standing to appeal an administrative body’s action. CW’s analogy to FOIA is spot on and the Fed. Cir. is going too far to require some literal physical rights that FOIA brings that an IPX might not. (One can certainly argue that an IPX does confer rights with real physical consequences — like the potential invalidity of a patent, a physical document.)

    Congress conferred the right for third parties to bring requests to challenge the validity of patents. The simple fact that the administrative body denied the challenge provides standing.

    A DJ action for invalidity here would not have standing, but the appeal here does not alone allege that the patent is invalid, but that the administrative body came to an incorrect decision in determining whether the patent is invalid. It’s an important distinction. It’s an appeal of a determination, not an original request to determine validity.

    If there were no standing, then the IPX action itself would lack due process afforded to the challenging party and should be disallowed. (Usually this due process argument is made to protect the patent owner — I know, kind of odd.) In fact, the SCOTUS has said that Congress must provide an opportunity to appeal to Article III courts for any regulatory decision to maintain due process. That’s what Crowell v. Benson is all about.

    Therefore, the implications raised by Crowell v. Benson seem much closer to the point (to me) than the standards set by Lujan.

    Another thing to consider is that, as MM has hinted at, validity is a different type of injury than infringement. The question of infringement or non-infringement is always personal, but the question of validity of a patent has other broader implications. For example, a consumer may pay more for a product due to an invalid patent. Such a person with an ancillary grievance would lack standing to challenge the validity of a patent in district court, but Congress provided just such a person a mechanism to challenge the validity in
    an administrative action. The outcome of such a challenge must have judicial oversight.

    This situation is also different than Hollingsworth. There, some third parties tried to appeal a decision on behalf of those that had declined to appeal. They claimed standing because they were original proponents of the state constitutional amendment. But there, they didn’t have standing because their standing only existed to enforce the amendment – - once it was declared unconstitutional, the enforcement question was eviscerated.

    I could sum up my argument crudely by saying that the SCOTUS has established that Congress can (and must) provide standing to appeal a regulatory decision, but Congress cannot manufacture standing to sue under a regulatory scheme. This case is like the former and due process trumps.

    One interesting inconsistency in the opinion that sets the question up all wrong:

    These constitutional requirements for standing apply
    on appeal, just as they do before district courts. Hollingsworth,
    133 S. Ct. at 2661. Accordingly, these requirements
    apply with equal force to appeals from
    administrative agencies, such as the U.S. Patent and
    Trademark Office (PTO), to the federal courts.”

    but then in the next paragraph:

    That said, where Congress has accorded a procedural
    right to a litigant, such as the right to appeal an administrative
    decision, certain requirements of standing—
    namely immediacy and redressability, as well as prudential
    aspects that are not part of Article III—may be relaxed.

    That doesn’t sound like applying as “equal force” to me.

      1. (the point being that Congress cannot de facto fabricate a pass to the Article III courts)

        You are missing that aspect from the separation of powers doctrine. That’s not a small miss.

        1. It seems like you’ve flipped the separation of powers aspect of standing on its head. Standing in that aspect is a limit on the courts to not usurp the other branches of government; it’s not a limit on Congress. You can’t just go to the court to have a law declared unconstitutional or an executive order declared illegal unless you’re personally affected by it.

          Here, the question is more on the “case or controversy” test as a limitation on justiciability to prevent the restriction on the courts to offer advisory opinions.

          If these two parties were also litigants in a district court case involving the same patent, the appeal for the IPX would be just fine.

    1. TLG, Crowell was all about legal, private rights where agencies have the primary role in fact finding and adjudication. There must be a right of review by the Art. III court, there a right of trial de novo.

      But with a reexamination, the petitioner has no legal right to challenge the patent, just a procedural right ask the government to do so, and to participate. Thus, no legal rights held by the petitioner are involved.

      IPRs are different. The government is not involved. There may be a legal right, but the statute itself says no appeal.

    2. TLG In fact, the SCOTUS has said that Congress must provide an opportunity to appeal to Article III courts for any regulatory decision to maintain due process. That’s what Crowell v. Benson is all about.

      I’m not familiar with the case (yet) but this seems important. Can the Board, after allowing the third party to proceed, simply state that it doesn’t like the way the third party’s hair looks and decide the case against the third party? End of discussion …. because Article III?

      Doesn’t seem right.

      If that’s not the case, then who decides when a reasonable decision has been made, if not the Board?

      1. MM,

        Crowell v. Benson, 285 U.S. 22, 52 S. Ct. 285, 76 L. Ed. 598 (1932). link to scholar.google.com

        The case holds that congress can create new private rights, can assign to administrative agencies fact a fact finding role, but that the fundamental jurisdictional facts and legal correctness of the agency must still be reviewable by an Art. III court.

        Crowell was not about the public rights doctrine – which is a doctrine about the government acting in its sovereign capacity. There, the government has sovereign immunity. Cases that fall into this character are military court martials, diplomatic questions, political questions, normal functions of government like the post office, and regulatory functions. A public right at a minimum is a right held by government against others, or by others against the government.

        With a pubic right, government can act completely without court review except perhaps for fundamental constitutional rights. See, e.g., Hamdan v. Rumsfeld, 548 US 557 (2006), particularly the discussion of the Yamashita case where the Japanese commanding general was tried, convicted and executed for crimes he did not commit.

      2. TLG: In fact, the SCOTUS has said that Congress must provide an opportunity to appeal to Article III courts for any regulatory decision to maintain due process. That’s what Crowell v. Benson is all about.

        That’s a pretty broad reading of Crowell v. Benson. That case involved an administrative proceeding that could impose financial liability on employers. It’s fair to say that the case stands for the proposition that Congress can’t provide for an administrative quasi-judicial process that awards damages from one party to another without also providing for an appeal, but I don’t think it says much about the question of constitutional standing.

        I’m not familiar with the case (yet) but this seems important. Can the Board, after allowing the third party to proceed, simply state that it doesn’t like the way the third party’s hair looks and decide the case against the third party? End of discussion …. because Article III?

        The concept of standing already allows for the fact that some wrongs might go uncorrected – that’s not unique to the PTO or even to the administrative law context. The “bigger” issue, under the cases and controversy clause, is whether the courts should get involved in cases where one party has no skin in the game. Legal precedent says no.

        So, the answer to your question is “yes, the Board can do that,” at least with respect to petitioners that aren’t actually injured by the outcome. Of course, the courts are not the only recourse if the people think an administrative process is being carried out unfairly.

    3. Thanks TLG. I think the SCOTUS may take cert on this one. Can the other side of this argument give an example that is similar to these facts where the petitioner to an administrative agency does not have the right to appeal to an Article III court?

      1. One reason why they may not take cert is that the case pertains factually to an IPX — so applicability is limited.

        I’m almost persuaded by Ned’s distinction – “But with a reexamination, the petitioner has no legal right to challenge the patent, just a procedural right ask the government to do so, and to participate. ”

        There are two thoughts that prevent me from adopting this view.
        First, it’s not so clear (to me) that Congress has not given a “legal right to challenge the patent.” You pay the fee and prepare the papers. You present a substantial new question of patentability. You have a right to participate. Although the process starts before an examiner, you have quasi-judicial oversight before the Board. You have the right to appeal to the Board.
        Second, Congress has given a “procedural right” to appeal to an Article III court.

        See the quote from above:

        That said, where Congress has accorded a procedural right to a litigant, such as the right to appeal an administrative decision, certain requirements of standing—namely immediacy and redressability, as well as prudential aspects that are not part of Article III—may be relaxed.

        So as to the first, the Fed. Cir. disagrees. That’s fine. But as to the second, the Fed. Cir. agrees. It seems to me that given the second may tip in favor of providing standing and that the first provides at least some valid arguments in favor of standing, you would err on the side of redress rather than disenfranchisement. I struggle with why the right of participation would not be bound up with the right to appeal.

        It’s a bit of a farce to hold otherwise. At the heart of the standing requirement is that the parties must actually be in opposition. Here, the parties clearly are in opposition and the issue can be decided.

        1. It’s a bit of a farce to hold otherwise.

          Actually, it is a bit of a farce the way that you have “read into” the law rights that are not there.

          You have assumed the conclusion you want, and then turned around and said, “Gee, it’s odd that my conclusion is not reached.”

          The heart of standing is not merely “in opposition.” See Lujan. Being in opposition just is not good enough and you need more.

    4. I disagree that it’s like FOIA. In FOIA, Congress has given a substantive right to access and created an injury in fact when that is unlawfully applied. As the Court has said, Congress has some latitude to create an injury in fact. Thus, appeals in FOIA are okay.

      The difference here is that Congress hasn’t really created a new injury, it’s created an alternative venue for challenging a patent’s validity at a lower cost than district court litigation. In an IPR, the dispute is between the two parties and the PTO is essentially uninvolved. Thus, it makes sense that the same standing requirements apply to an IPR appeal as an invalidity DJ.

  2. A purely procedural question:
    Since the IPR statute providing for appeals to the Fed. Cir. for all parties has been declared unconstitutional here by the Fed. Cir. for any party not having a personal injury, can this Fed. Cir. decision trigger a direct appeal to the Sup. Ct. (28 U.S.C. § 1252) rather than only by cert petition?

  3. However, the ‘requirement of injury in fact is a
    hard floor of Article III jurisdiction that cannot be removed
    by statute.’

    Hmm, sounds like exactly what I stated.

    Another court that has no problem understanding what I post.

    1. This is about administrative law not patents. The question is whether or not one has the right to appeal what the administrative agency has done in response to a right granted by the statute. I am not sure what the administrative law says about this or even which are the closest cases, but the only answer for justice is yes you should be able to appeal. Your injury in fact is not getting what the statute said you would get and you lost money and time.

      Again, under this holding the PTO can simply write: “You don’t have the right to appeal, so we are not granting your petition, but thanks for the money. So long sucker.”

      1. Yes, you are correct in so far as this is a question of administrative law (hence the taking aspect that I have posted upon previously comes into play).

        But you still seemed confused as to what the law provides and what the law does not provide. You seem confused as to what the statute actually gives you, and that is the right to ask for a hearing – not the right to have the hearing go your way. Under administrative law, you cannot manufacture injury in fact (gener@11y) by pure legislative writing. You need to have injury in fact from some other avenue.

      2. Yes, you are correct in so far as this is a question of administrative law (hence the taking aspect that I have posted upon previously comes into play).

        But you still seemed confused as to what the law provides and what the law does not provide. You seem confused as to what the statute actually gives you, and that is the right to ask for a hearing – not the right to have the hearing go your way. Under administrative law, you cannot manufacture injury in fact typically by pure legislative writing. You need to have injury in fact from some other avenue.

        (the moderation filter needs to be moderated as to which words trigger the filter)

    2. This is about administrative law not patents. The question is whether or not one has the right to appeal what the administrative agency has done in response to a right granted by the statute. I am not sure what the administrative law says about this or even which are the closest cases, but the only answer for justice is yes you should be able to appeal. Your injury in fact is not getting what the statute said you would get and you lost money and time.

      Again, under this holding the PTO can simply write: “You don’t have the right to appeal, so we are not granting your petition, but thanks for the money. So long $ucker.”

      1. Not even close. This is a “generalized grievance” with the PTO – you’re angry that they granted a patent and say it’s against the public interest. One of the clearest standing rules is that you can’t sue the government for a generalized grievance. Allowing this run-around through the post-grant review process/reexam process would eviscerate those Article III rules.

          1. I can see it all now. Consumer Watchdog filing suit against the Government for allowing patents on otherwise patentable subject matter because it believes patents in that area inhibit free access to stuff they like.

            Now, just why should we allow such a thing?

            Think of Grokster for a moment. Could they have standing to object to copyright protection just because they like to download music?

            1. They are simply saying that Congress created a right for them to pay an administrative agency to do something and the administrative agency did not do what they were paid to do.

            2. Ned’s post makes me chuckle: ‘on otherwise patentable subject matter because it believes patents in that area inhibit free access to stuff they like.

              Compare that to all of the protests and QQ and curse-sades against business methods and software – and otherwise patentable subject matter because [those with agendas] believe patents in those areas inhibit free access to stuff they like.

              The irony is fantastic.

            3. anon, There is a distinction:

              I would hardly favor a bunch of banks filing suit against the government for issuing patents on business methods, but they just might have standing to do so.

              Stuff they like is not the same thing, IMHO.

          1. You paid to have the PTO consider whether or not you’ve raised sufficient grounds for an IPR (or PRG, when the time comes). The PTO says, you haven’t. You got what you paid for. CAFC just said, you don’t necessarily have a right to appeal. If you’re actually adversely affected by the patent, you still have other routes to take (including re-submitting a request for IPR, or submitting a request for IPR on different grounds).

            1. Heebie – you really need to review those cases again. The denials of institution in every case was not based on insufficient grounds, but upon 315 in its various flavors, including that the petitioner was served more than a year prior with a complaint for infringement.

              Now think about that for a moment. The PTO applies an incorrect legal standard in its denial under 315 and the petitioner cannot appeal?

            2. The injury in fact is that the PTO did not consider the petition properly and thus you lost your money and time.

              Again, under this holding the PTO could write: “Thanks for the bucks. Petition denied. So long.”

            3. Are you trying to make a distinction between result and abuse of process…?

              You would do better then to NOT focus on the result in your arguments.

          2. Is that any different from having to pay to file a suit where you don’t have Article III standing/there isn’t a “case or controversy”? I don’t see the difference. In each case, you file, and you lose – losing your money doesn’t create an injury for standing purposes.

            1. The injury Guest is with the PTO not the underlying patent. I am not sure why you think this is not an Article III injury in fact. Your injury is that you didn’t get what you paid for.

            2. “Your injury is that you didn’t get what you paid for.”

              Repeating it over and over isn’t going to make it true. They paid for a review of the patent, and they got a review. So they got what they paid for. The fact that the review didn’t turn out the way they wanted the review to turn out doesn’t change that.

            3. The filing fee cannot be an injury in fact for Article III purposes – if it were, it would eviscerate any meaningful limits on justiciability that Article III imposes.

              You’re saying there should be different tests for justiciability for the two alternate pathways to challenge a patent (IPR is the administrative remedy that bars you from suing the USPTO in district court under the APA’s jurisdictional grant). In a DJ action, you have to show an injury in fact. Likewise, in an appeal from an IPR, you have to show injury in fact. It’s pretty clear that Consumer Watchdog would fail to prove that there is a “case or controversy” if they filed a DJ action in district court. So why should they have standing from the alternative path to a DJ that has the same effect? The answer is simple – they shouldn’t. The same rules apply to both kinds of actions.

            4. “The injury Guest is with the PTO not the underlying patent. I am not sure why you think this is not an Article III injury in fact. Your injury is that you didn’t get what you paid for.”

              If they think the PTO violated upon the APA or whatev then they should bring an action agin the PTO, not try to appeal.

  4. “Consumer Watchdog is a public interest group who is not being directly impacted by WARFs patents other than the general indignity felt by all of us.”

    Speak for yourself. I for one am not indignant that WARF got a patent. I save my indignation for real PTO boners, like granting a TM registration on the letter pi.

    1. I thought that was a bit of sarcasm on Dennis’ part (also probably an accurate description of how Consumer Watchdog perceives its role … or wishes it was perceived to be by “all of us”).

  5. As John Cage might have said, Oh puh-leez! CW has plenty of other remedies left, if it ever gets sued (or is threatened with a suit): it can raise an invalidity defense at trial; it can try to IPR again and if it loses, appeal, this time with standing b/c it’s being sued; it can bring a DJ action under the lowered standard of Medimmune. I don’t see cert being granted on this one.

  6. Yes, but what about the right to fair trial? The injury is at least the money you paid. What if the PTO wrote, “the party filing the request for review doesn’t have an injury in fact from the patent, and we are rather busy this week so we are just going to take their money. All claims affirmed.”

    1. The money you voluntarily paid is the same whether you receive an adverse decision or not. That’s not an injury caused by the patent or by the administrative action.

      1. So if I purchase a t.v. and it turns out it is really just a cardboard box, I am not injured?

        I think you are injured if you did not receive what the statute says you are going to get.

      2. It is ludicrous to say that you are not injured if you do not receive a fair decision. You put your labor and money into filing the petition. The statute says you will get a trial. The presumption must be that the trial will be a fair trial—the converse of this is simply ludicrous. To contemplate that any old trial is fine is silly. And, I’d have to brush up on my administrative law, but I cannot imagine that you would pay for a trial and then have no recourse no matter what the administrative agency does. That is simply bad law to have no policing of the government. And again your injury is your time and money and the promise of a fair trial granted by the statute.

        I think this may be taken up by the SCOTUS.

        1. Are you really paying for a TV, or are you paying for a chance at a TV…?

          You pay (or get) the right to a petition, and not a certain result of that petition, right?

          1. You get the right to a fair consideration of your petition. Your injury is not getting a fair consideration, which is your right under the statute. That is the key. Again, under your reasoning the PTO could say, “we see you have no right to appeal and–ha ha–we are therefore going to deny your petition for ’cause we are busy.”

            1. I don’t think so anon. I am clearly saying they did not get their process. They are saying legally the result is wrong so they did not get the process.

        2. I think this may be taken up by the SCOTUS.

          I doubt it. But let’s say it does – do you think the present court is going to vote to give consumer watchdog groups increased access to the courts?

          1. Not necessarily so 6.

            Then again, you have shown little appreciation of any legal concept that may actually be brought to bear, and your own “opinion” is of no consequence.

            But you do have both a right to have an opinion and the ability to express your opinion, no matter how banal that opinion is.

        3. “It is ludicrous to say that you are not injured if you do not receive a fair decision”

          Maybe bring a due process claim agin the PTO?

      3. It is an injury if the administrative action taken is wrong….as in making final rules without following proper procedure, such as having a required comment period and the like….

  7. For this reason, Consumer Watchdog’s analogy to the Freedom of Information Act (FOIA) and the Federal Election Campaign Act (FECA) are unpersuasive. These acts create substantive legal rights – access to certain government records – the denial of which inflicts a concrete and particularized injury in fact. . .

    Interesting.

    A couple questions. Is it necessary for standing when filing an appeal of a denial under the FOIA or FECA for the requesting party to actually want or need the documents for its own purposes? Does the requesting party need to show that it itself will sustain a “concrete and particularized injury” if the information isn’t produced?

    As for this:

    These acts create substantive legal rights

    The reexam statute created the right to challenge a patent which was unlawfully granted without facing the added burdens and costs presented by the presumption of validity. Why isn’t that a “substantive legal right”?

    1. The reexam statute created the right to challenge a patent which was unlawfully granted without facing the added burdens and costs presented by the presumption of validity. Why isn’t that a “substantive legal right”?

      They were given the right to participate in a challenge the patent. The Board ruled contrary to how they would have liked, but they were given all the rights accorded to them by the statute.

      1. DanH The Board ruled contrary to how they would have liked, but they were given all the rights accorded to them by the statute.

        Fair enough … but how does that differ from the situation where a “public interest” group is denied an FECA or FOIA request?

        1. Fair enough … but how does that differ from the situation where a “public interest” group is denied an FECA or FOIA request?

          The FECA and FOIA statutes grant the requester access to certain documents, not just a right to have an administrative body deliberate about whether you should receive the documents. If your request is improperly denied, the injury-in-fact is that you don’t have the documents. In the present case, Consumer Watchdog got exactly what the statute promised – participation in the reexam process.

          1. DanH In the present case, Consumer Watchdog got exactly what the statute promised – participation in the reexam process.

            You make a good argument, DanH.

            Would the analysis change if victorious third party re-exam requesters were given a piece of paper that said “The government of the United States has determined that the following subject matter is not worthy of a patent”? That seems like valuable information …

          2. The statue gives you the right to challenge the validity of a patent. The injury is that the administrative body did not arrive at the right decision. The took your money and did not provide the promised service.

            1. Their argument is that the decision to affirm the claims is faulty. This business of that it only gives you the right to participate is nonsense. It gives you the right to participate in a fair trial. If the trial is not fair–which is essentially what they argued–then you have been injured for at least your money.

            2. As above the promised service is not a decision one way or another, but the mere promise of going through the motions and making a decision.

              Buyer beware…

            3. Anon, I think you are wrong. I think they have an obligation to not just go through the motions but to arrive at a decision that is not legally wrong.

    2. You conflate a few things.
      1) the “right” is a right to petition or challenge – nothing more.
      2) the “right” is not attached to a presumption (or lack thereof) of validity.

      1. Anon, they are tied together. Your right to petition has not been granted if the PTO arrives at a legally wrong decision.

        1. Not so NWPA – you have conflated having a hearing and wanting a certain result of having a hearing – that just does not reach.

    3. MM, consider IPRs for a moment.

      An accused infringer files an IPR that the Board finds would otherwise provide a basis under 314(a) for trial. But the board denies institution because of 315, but in doing so, applies he wrong legal standard — committing an error of law.

      Has the petitioner been denied a legal right?

        1. Well, anon, if a person has been denied a legal right, he or she has an action of last resort, mandamus, even if there is no appeal. But the Feds denied mandamus even under these circumstances. Mandamus are the writ of last resort, when nothing else is available. But the Feds denied even that writ.

          I believe what is going on here is a denial of a legal right. I believe that Congress never intended to deny appeals of IPR trial denials based on 315, but if they did, then there is a legitimate constitution question as to whether they have the power to deny judicial review.

          What do you think?

          Consider Crowell v. Benson. The SC held there that congress can create new statutory rights, but they could not cut the courts out as a matter of constitutional law to determine whether decisions made by the agency were in accordance with the law.

            1. (and do we have yet another hole in the good ship AIA Titanic below the sea level line – with the AIA Titanic constructed not to have proper bulkhead construction below deck….?)

            2. anon, it is so easy here to construe the law to allow judicial review, so I don’t believe there is a real problem with the statute.

              But for G*ds sake, I hope that at least some of the adversely affected petitioners take this issue en banc and bring the court’s attention to Crowell v. Benson.

            3. I disagree fully with you Ned on the ability to re-write the law to allow judicial review – that is not even close to being there in an implicit manner.

              You do know the difference between reading a map and writing a map, right?

            4. But, anon, 314(d) denies appeals from decisions in this section, meaning 314. It says nothing about decisions in 315.

              Nothing.

              This is the mistake of the Federal Circuit. They construed the statute unnecessarily and in an unconstitutional manner.

            5. Ned – you are missing the point here – it is not that the statute is misconstrued – it is that the statute is tragically (and yes perhaps fatally) defective.

              Stop trying to blame everything on the CAFC.

              You only show your bias – and that is most unhelpful to the conversation.

  8. ” [Here,] Consumer Watchdog was not denied anything to which it was entitled. ”

    Well, I have to disagree. Isn’t Consumer Watchdog alleging that it is being denied free access to the claimed subject matter by an inappropriate decision of the PTO?

    1. Isn’t Consumer Watchdog alleging that it is being denied free access to the claimed subject matter by an inappropriate decision of the PTO?

      No, it is not alleging that:

      Consumer Watchdog does not allege that it is engaged in any activity involving human embryonic stem cells that could form the basis for an infringement claim. It does not allege that it intends to engage in such activity. Nor does it allege that it is an actual or prospective licensee, or that it has any other connection to the ’913 patent or the claimed subject matter. Instead, Consumer Watchdog relies on the Board’s denial of Consumer Watchdog’s requested administrative action—namely, the
      Board’s refusal to cancel claims 1–4 of the ’913 patent.

      The only “injury” they’re alleging is that they lost in front of the Board.

      I agree with Ned – I think the Federal Circuit got it right.

      1. I don’t think they have to allege that they want access to the claimed subject matter to nevertheless be denied access to it.

        If the gates to the beach are locked, they are locked whether I want to go in or not. Why I am denied is access.

        1. ” [Here,] Consumer Watchdog was not denied anything to which it was entitled. ”

          Didn’t the statute entitle them to a fair trial? They are alleging they did not receive a fair trial.

          1. “Didn’t the statute entitle them to a fair trial? They are alleging they did not receive a fair trial.”

            Interesting, on what grounds would the entitlement to a fair trial then entitle one to an appeal?

        2. I don’t think they have to allege that they want access to the claimed subject matter to nevertheless be denied access to it.

          Well, then your complaint is with the Supreme Court, not the Federal Circuit. Lujan made it crystal clear that a hypothetical injury is not sufficient to create standing. Arguing that you’re denied access to something that you don’t want, but that you could want if you wanted to, is the epitome of a hypothetical injury.

          1. Yes, but what about the right to fair trial? The injury is at least the money you paid. What if the PTO wrote, “the party filing the request for review doesn’t have an injury in fact from the patent, and we are rather busy this week so we are just going to take their money. All claims affirmed.”

          2. First of all, if they were only hypothetically injured, why are they spending real money to get redress?

            Second of all, the list of my complaints with the Supreme Court gets longer every few months.

            1. First – ask the parties involved in Lujan as your argument was already tried unsuccessfully there.

              Second – the Royal Nine seem to still be enthralled with their tailors and have not yet heard the question from the little boy.

              link to en.wikipedia.org

    2. Apparently not, unless and until WARF files (or threatens to file) an infringement suit against Consumer Watchdog (at which point it’s too late for this case).

      Maybe Consumer Watchdog can induce someone to infringe, to force WARF’s hand, and get themselves some standing that way.

      1. Maybe Consumer Watchdog can induce someone to infringe, to force WARF’s hand, and get themselves some standing that way.

        What’s the point of allowing third parties to initiate re-exam if they have to infringe or induce infringement in order to appeal an unfavorable decision?

        1. What’s the point of allowing third parties to initiate re-exam if they have to infringe or induce infringement in order to appeal an unfavorable decision?

          What’s the point of allowing someone to initiate a re-exam who can’t find a partner who can aver that they at least plan to practice the claimed subject matter?

          I appreciate very much the work that public interest groups do, but I’m not sure that they are the best parties to pursue invalidity cases.

          1. What’s the point of allowing someone to initiate a re-exam who can’t find a partner who can aver that they at least plan to practice the claimed subject matter?

            I thought it was too minimize the amount of junky patents (which negatively impact everybody’s freedom in a manner more directly than a “lack of information”) by broadening access to the patent granting system at a juncture where the presumption of validity does not apply.

            I appreciate very much the work that public interest groups do, but I’m not sure that they are the best parties to pursue invalidity cases.

            The great advantage of such groups seems to be that they are more likely to make certain kinds of arguments than a party “in the art” who is often conflicted (e.g., the argument could damage the party’s own patent portfolio).

            1. I thought it was too minimize the amount of junky patents (which negatively impact everybody’s freedom in a manner more directly than a “lack of information”) by broadening access to the patent granting system at a juncture where the presumption of validity does not apply.

              Hah! I don’t like junky patents either, but I think non-transparent governance (i.e., “a lack of information”) is a bigger threat to freedom.

              In any case, access to the patent procedure is broadened. Economically interested parties do get a right to appeal, and non-economically-interested parties (like Consumer Watchdog) at least presumptively get a transparent, if not always correct, review process.

            2. Hah! I don’t like junky patents either, but I think non-transparent governance (i.e., “a lack of information”) is a bigger threat to freedom.

              I don’t disagree at all with that. But when a junky patent issues I know that my rights are adversely affected due to a governmental error. I don’t need any additional information to make that determination.

              non-economically-interested parties (like Consumer Watchdog)

              But the people who are being denied information from the government don’t need to have some “economic interest” for doing so. It seems the more important distinction is not whether the requesting party’s “economic interests” are being affected but whether the statute provides a right that is being wrongfully denied to the requester.

              The thing about patents is that, when wrongfully granted, the rights of everybody can be presumed to be diminished. Before the patent was wrongfully granted, I had the right to do X. Now I don’t have that right.

              I’m not denying the existence or necessity of a requirement to show some sort of standing. If the Federal Government passed an irrational speeding ordinance applicable only to cars with solid gold hood ornaments, it seems that I would need to first buy such a car, drive it illegally and then get arrested before I have standing to challenge the Constitutionality of the law. Is that reasonable? Reasonable minds can differ on that question, I suppose, and probably always will.

          2. What’s the point of allowing someone to initiate a re-exam who can’t find a partner who can aver that they at least plan to practice the claimed subject matter?

            Assuming that this would have changed the outcome, what kind of evidence would be required to satisfy this test? I don’t mean the obvious, like getting sued for alleged infringement – I mean, how much planning do you need to show that you’ve done in order to show that you “plan to practice the claimed subject matter”?

            1. The concurrence in the Lujan case suggested that buying an airline ticket to an area affected by an EPA action would have been sufficient to give the Defenders of Wildlife standing to appeal the action. So, I think the answer is probably “not much” -a sworn affidavit avering an intent to practice the patented technique might do it. But, I think this is an open question. Dennis’ original post on this subject discusses this issue.

            2. In the big picture of Lujan, do you really think that buying an airplane ticket would have sufficed?

              It may have, but I have my doubts as to the sufficiency of such.

            3. The concurrence in the Lujan case suggested that buying an airline ticket to an area affected by an EPA action would have been sufficient to give the Defenders of Wildlife standing to appeal the action. So, I think the answer is probably “not much” -a sworn affidavit avering an intent to practice the patented technique might do it.

              Not much indeed!

  9. Supreme Court? Do you really believe that 4 Justices would give a whoot about Consumer Watchdog’s hypothetical standing?

    The Federal Circuit got it right here. Bravo for them.

    Cert. denied.

    1. That might be the case for a normal patent, but could the subject matter here of, allegedly, “patents covering human embryonic stem cells” possibly create enough of a media storm to get the Supreme Court’s attention?

    2. So, can the PTO just do whatever it wants at the trial if you don’t have an injury in fact from the patent?

      1. According to statute – the director of PTO could put herself on your panel – and pick the other two APJ – and announce a policy – that decides the issue. So the AIA ‘court’ in the universe of Art I ‘courts’ is hardly a court at all. Think of it more like a star chamber.

        1. It is commonly understood in administrative law contexts that the “objectivity” of an Agency Article I court is a function of how separate that court is from general agency control.

          Your comment does highlight the fact that the Article I court that operates in the USPTO is the least likely administrative agency court to be found to be able to be objective. Such a situation indicates far less judicial weight and authority should be accorded this particular Article I court’s rulings.

          Other administrative agencies have endeavored to separate their agency court from even the possibility or mere appearance of impropriety.

          Add to this equation the fact that there is no actual vetted director of the agency, and the appearance of impropriety cannot be denied.

    3. Exactly. As a matter of Article III requirements it’s hard to find any injury in fact to Consumer Watchdog. The administrative law implications of this are far more important than the patent law implications (if the Court grants cert), frankly.

      1. Um why do you feel as you do?

        Obviously you feel strongly, and yet you offer no support or insight as to why you feel so strongly.

        1. Because allowing standing here would grossly expand public interest standing in opposition to administrative agency action. If you ask any law student in Federal Courts, they can explain that this was a simple case. This is no more than a generalized grievance against the PTO’s grant – it’s no different from suing the PTO in court to prevent issuance of a patent you are opposed to. It’s just a different vehicle for the same claim.

          One of the bedrock principles of Article III standing is that you cannot sue the government for a generalized grievance – that’s part of the injury-in-fact requirement (“concrete and particularized” and “actual or imminent”). Lujan was a case where Congress granted a very broad statutory right to sue to enforce environmental law, and the Court said that the citizen suit provision went beyond Article III. This is essentially a citizen suit provision. I’d also add that if you want to call this a “procedural” injury, the Court in Lujan rejected the idea that merely a procedural injury is enough to grant standing.

          The facts of this case wouldn’t even be a particularly good Federal Courts exam question – it’s pretty clear from the Court’s precedent that there’s no standing here, and there isn’t a lot of room to disagree.

          1. Guest, assume an accused infringer files a petition for an IPR and proves sufficient prior art that the board says it would have authorized trial but for 315(b) that bars an IPR by one served with a complaint for infringement more than a year prior. The bar extends to privies and real parties in interest.

            The PTO applies a wrong legal standard and determines the accused infringer is barred under 315(b).

            Does Congress have the power to deny the accused infringer a right of appeal or mandamus to determine whether the correct legal standard applied?

            Consider Crowell v. Benson.

            1. That’s a different situation from what you have hear. I’d say that yes, Congress does have the right to deny appeals on public rights cases from agencies (of course, if they deny the right of appeal, they’d be hard-pressed to allow any kind of estoppel/preclusion, but that’s a different issue). That’s what they did for all VA decisions until the 70s or 80s – no appeals at all – and that was permissible. Then they made the current rule where you can appeal on issues of law or constitutional application only.

              If you go read Lujan, which is the case most on point here, it discusses how Congress can create an injury to some extent, but they can’t simple legislate away the Article III requirements to create a “case” or “controversy.” That’s exactly what Congress tried to do here. While Consumer Watchdog doesn’t have standing, an accused infringer almost certainly would have standing to appeal an adverse IPR proceeding.

            2. Guest, the right involved here is a private right.

              Public rights are limited to rights held by the government against others or by the public against the government.

              Public rights are as aspect of sovereign immunity — the government acting in its sovereign capacity.

            3. I would argue that patents are really hybrids between public and private rights. We call them property, but they are as much a contract with the government as a property right (there’s a very interesting article about that by Orin Kerr). While patent disputes between two parties are certainly private rights, patent disputes with the PTO are more like public rights – you are trying to get a right (or property) from the government you believe they are obligated to provide. In that sense, they are not significantly different from VA benefits to which people believe they are entitled.

              I think it’s quite easy to imagine how Congress could constitutionally bar review of agency action (although removing all review, such as mandamus from the Supreme Court, might be more problematic). Lower courts are courts of limited jurisdiction and there is no requirement that agency action be entirely reviewable – with the exception that constitutional violations must be reviewable (I forget the case name but it was about the VA). I don’t see how a USPTO decision about patents is that different from a VA decision about veterans’ benefits, for those purposes.

            4. I would argue that patents are really hybrids between public and private rights.

              I would counter that you are dead wrong.

              Patents are property – personal property – by law.

              Look back at history and note exactly how patents (and the ability to fully and freely alienate them) and the patent system were constructed.

              Lastly, consider as well the Quid Pro Quo (and you would do well to avoid any of the claptrap of “Entitlement Program” CRP that 6 and company spout).

            5. Guest, legal rights are not by definition public rights.

              See, e.g., Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 15 L. Ed. 372, 15 L. Ed. 2d 372 (1856) where the doctrine was spawned. The court went through an historical analysis to determine that one receiving title of land sold under a warrant from the treasury secretary had good title where the owner of the land sold was a customs official who failed to pay over $1.34 million (1854!) in customs duties he had collected in New York. The court looked to England and determined that when the government was acting in its sovereign capacity to deal with its tax collectors and the like, that historically the government has plenary power that was not reviewable in the common law courts. Political questions, and the like were also discussed.

              Thus, when the government is acting in its sovereign capacity where it has immunity, its actions are not reviewable by the courts. It can allow courts to review its actions, but it does not have to.

              A patent cannot be a public right because it is a legal right held by the patent owner against others. It is not a right OF GOVERNMENT.

              You might also review Marbury v. Madison, where legal rights were deemed subject to court review and not subject to administrative cancellation by the executive.

            6. Guest, VA benefits are distinctly different. These 1) military where the government historically can act without court review; and 2) involve actions against government to receive a benefit. Actions against government are subject to sovereign immunity and are quintessentially public rights.

          2. Well stated Guest.

            Corollary question for you:

            The act of law that institutes this mechanism rejected an amendment under consideration of the law as a whole so as to immunize one section being held unconstitutional to not affect the rest of the law.

            That amendment was expressly rejected – indicating that Congress wanted to make the whole package a do-or-d1e, too-big-to-fail single law.

            You point out that the IPR section has (arguably – and for the sake of this discussion, take it for fact) a constitutional infirmity of broaching the bedrock Article III standing requirement.

            What then of the entire AIA package?

            (Ned, – your question is moot, given the rejected ability to remove any one section that would violate the constitution)

            1. This isn’t a problem for the AIA’s constitutionality. This is a case where the appeal provision is unconstitutional as applied to the circumstances of this case, but it’s clearly constitutional in other cases – especially where it’s an accused infringer or potential/actual DJ plaintiff. It’s an as applied challenge vs. a facial challenge. If it’s facially unconstitutional, the Court has to determine if the unconstitutional provision is severable. If it’s unconstitutional as applied, there’s no issue (at least where freedom of speech isn’t involved and there are other potential issues).

            2. the Court has to determine if the unconstitutional provision is severable

              Ahh – but the point that I am making is that such an option is not available to the Court based on the history of the AIA itself.

              The AIA outright rejected ANY such severability. The Court cannot read into the law an express rejection that the law itself considered.

              The constitutional infirmity is NOT one of a freedom of speech nature – the “as applied” notion will not save you.

              Congress expressly rejected those below-sea-line bulkhead designs in constructing the good ship AIA Titanic. The Court cannot retrofit the ship after a hole is ripped into the hull.

            3. That’s not really correct, anon. The IPR has a constitutional infirmity as applied to the circumstances of this case – specifically, the provision giving a right of appeal for adverse decisions. I don’t think anyone would dispute that the provision is facially constitutional (that is, in all applications). If a provision is simply unconstitutional as applied rather than facially, then there does not need to be a severability analysis to determine if the rest of the AIA stands on its own.

              Again, this is no different than Lujan – one of the environmental protection laws gave a right to sue which was beyond Article III’s limits in certain applications. None of the Justices believed that invalidated the entire act, it simply meant that the citizen suit provision (like the right to appeal from an adverse IPR) is not as broad as statutorily written because it is constrained by constitutional limits.

            4. Guest,

              You are not making the connection you need to make.

              There can be NO court separability analysis with the AIA.

              None.

              The people who wrote the AIA saw to that – they rejected (as in took a deliberate and affirmative step) the possibility of separability.

              The ship (the US AIA Titanic) has sailed – and there can be no retrofit to put in any such bulkheads as you may wish to put in.

              (and that really is correct)

              As to “facially or as applied,” we will want to distinguish whether or not a constitutional violation is present in the law itself or in how the law is applied.

              Here, it appears that the flaw is in the law, rather than in any application of the law.

              I would be more than willing to hear you make a case to distinguish the infirmity as being only in the application.

              The floor is yours.

            5. (btw, great conversation Guest – a pleasure discussing law with someone who appears to grasp the nuances without an agenda to spin and twist the conversation)

            6. anon – the reason the flaw is with the application is because the provision giving the right of appeal allows appeals in situations where there is no case or controversy within Article III’s limitations. There’s no doubt that, in certain situations, the provision gives a right to appeal where there is a case or controversy.

              Generally, when a statute is only unconstitutional as applied, courts don’t strike them down in whole (there’s some different rules where freedom of speech is concerned). Instead, they only carve out exceptions, which this seems to be.

              I’d actually say it’s not that the provision itself is unconstitutional, it’s that the jurisdictional statute is implicitly limited by Article III’s constraints – much like the citizen suit provision in Lujan. This just isn’t necessarily a case where Congress passed an unconstitutional law, it’s a case where the jurisdictional/cause of action provisions have to be interpreted to remain within the bounds of the constitution.

              Also – it turns out that this was a pre-AIA IPR. It was filed back in 2006, and so it’s covered by the pre-AIA statutes. I was wondering why the 2006 US Code was cited, and that’s obviously why.

            7. Guest you have erred: “because the provision giving the right of appeal allows appeals in situations where there is no case or controversy within Article III’s limitation

              This very case points out that the legislative provision does NOT in fact allow an appeal in a situation where there is no case or controversy within Article II’s limitations.

              That is precisely the constitutional point being missed by those scratching their heads. Congress just does not have the authority to abrogate the constitutional Article III position.

              It’s as easy as that.

              Dithering about where the breakdown happens may or may not be important.

              If that breakdown is in the law, then yes, because Congress acted brashly and negated any possibility of severability, then the entire AIA may sink. If that breakdown is not in the law (and just in trying to apply the law, the ship may still be afloat (on this issue).

              I still would like to see some justification from you as to how this is not in the law as written. I am not seeing that.

              Interesting point as to being pre-AIA – that may (or may not) excuse the result in this case, and our discussion may then still be illuminating as to how the powers that be want to tread when the US AIA Titanic takes to the seas.

            8. I’m not saying that the constitutional flaw isn’t in the law – at least in certain applications of it/certain situations. But I think the reality is that, with jurisdictional provisions, instead of striking them down, courts just construe the jurisdictional/cause of action provisions in accordance with Article III requirements such that there’s no jurisdiction when there’s no “case or controversy.”

              In that sense, it’s somewhat different from, say, when a cause of action is part of a law that exceeds enumerated Article I powers (think of US v. Morrison – Commerce Clause case). In that case, a law might be struck down because it exceeds enumerated Article I powers and essentially no application is within the Commerce Clause. What you have here is a case where Congress has created a right, created a right of appeal, but that has to be limited (that is, the statute is implicity construed in a limited way) by Article III. A literal reading of any general grant of federal question jurisdiction is broad, but the Courts have limited their own authority to rule based on Article III’s “case or controversy” requirement.

              This isn’t a situation where Congress exceeded its enumerated powers by passing the law, it’s a situation where the court would be exceeding its own powers by ruling because there’s no real “case” or “controversy” between the parties. The two are treated differently – the statute isn’t seen as unconstitutional, but rather the court is seen as not having jurisdiction.

            9. I’m not saying that the constitutional flaw isn’t in the law

              It is or it is not.

              As far as “construction,” that too has its limits. Prof. Hricik had a nice link on his side of the blog a little while back discussing how a court (or Court) cannot use “construction” when that amounts to re-writing the law (especially in the area of patent law which operates under a strict separation of powers doctrine.)

              In the immediate case, you cannot have the Court conjure up such a meaty part of the law that is (fatally) flawed.

              So to the extent that the court (rightfully) finds that Article III standing is still a baseline requirement, we are happy together. But the moment you try to say that the law itself – as written by Congress – trumps that, then we DO have a constitutional problem, and not a small one, given that that the good ship AIA (with that same flaw) does not have the proper below sea-level bulkhead design (on purpose).

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