Personal Audio v. Electronic Frontier Foundation (EFF) (Fed. Cir. 2017)
On appeal, the Federal Circuit has sided with the USPTO — affirming the IPR final judgment of unpatentability of Personal Audio’s US Patent No. 8,112,504. The patent claims a system for “disseminating media … episodes in a serialized sequence.”
The most interesting question addressed by the court is whether the original Inter Partes Review (IPR) Requester – EFF – has standing to to participate as a party. The problem for standing is that EFF is a public-interest organization that promotes online civil liberties. EFF was not threatened by the ‘504 patent, but instead filed the IPR petition as part of its general public interest campaign against “stupid patents.” EFF thus doesn’t appear to meet the “case or controversy” standard required by Article III of the U.S. Constitution.
The Federal Circuit decided a somewhat similar standing question in Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753 F.3d 1258 (Fed. Cir. 2014). Consumer Watchdog also involved a public-interest organization challenging a patent via AIA-Trial. Standing wasn’t a problem for the trial itself since the PTAB is not an Article III court – and so the constitutional requirement didn’t apply. However, the Federal Circuit dismissed Consumer Watchdog’s appeal (it lost the case at the PTAB) on standing grounds.
EFF case has a slightly different posture since it won at the PTAB – with the patent being held invalid. The appellant Personal Audio clearly has standing since its patent has been judged unpatentable, and the question is whether EFF has standing to participate as an appellee despite its lack of a direct interest in the outcome. For the Federal Circuit, that posture makes the difference:
Here, the party invoking judicial review is Personal Audio; it is apparent that Personal Audio, on cancellation of its patent claims by the PTAB, has experienced an alteration of “tangible legal rights . . . that is sufficiently ‘distinct and palpable’ to confer standing under Article III.” Virginia v. Hicks, 539 U.S. 113, 121 (2003) (internal citations omitted). With Article III satisfied as to the appellant, EFF is not constitutionally excluded from appearing in court to defend the PTAB decision in its favor.
The court then went on to side with EFF and PTAB on the merits – confirming the claims as unpatentable.
I would suggest that the Federal Circuit’s decision on the standing issue here does not fully explore the somewhat complex precedent on the standing issue. In particular, the court wrongly focuses its standing decision on the position of the appellant. The Supreme Court has explained several times that all parties must have an ongoing case-or-controversy:
[T]he opposing party also must have an ongoing interest in the dispute, so that the case features “that concrete adverseness which sharpens the presentation of issues.”
Camreta v. Greene, 131 S. Ct. 2020, 2028 (2011) (quoting Los Angeles v. Lyons, 461 U.S. 95, 101 (1983)). I’ll note here that my reading of Camreta and Lyons is that both are addressing the Constitutional requirement – thus the AIA statutory statement allowing parties to appeal is inapplicable.
The Federal Circuit relied upon another line of Supreme Court cases – notably ASARCO Inc. v. Kadish (1989). In that case we similar situation where the petitioner was clearly harmed by a lower state-court decision but the respondent probably did not itself have sufficient case-or-controversy standing. In its decision on the case, the Supreme Court began with a recitation of standing – noting that the petitioner’s harm was sufficient: “We determine that petitioners have standing to invoke the authority of a federal court and that this dispute now presents a justiciable case or controversy for resolution here.” ASARCO. The problem with this holding is that it speaks only to the case as a whole rather than standing of the particular party.