Standing to Appeal: When does a petitioner have Standing to Appeal?

by Dennis Crouch

My prior post on DuPont v. Synvina focused on the obviousness of a claimed range in the context of inter partes review (IPR) proceedings.  The decision also raises a question of standing — whether the patent challenger DuPont had standing to appeal the IPR decision favoring the patentee Synvina.

E.I. DuPont de Nemours v. Synvina C.V. (Fed. Cir. 2018)

The patent act provides a couple of limits on who may file a petition to institute an IPR. The petitioner must be “a person” and may not be either the patent owner nor a person (or privy) who was sued for infringing the patent more than 1-year before the petition filing date.* Notably absent – the IPR statute does not require the petitioner to have any reason for challenging the patent or any actual dispute with the patentee.

Courts are different – a lawsuit cannot be filed by just any person.  Rather, the plaintiff must have “standing” — a an actual case or controversy that the lawsuit can resolve.  Standing is required at every stage of court litigation. This creates a bit of a difficulty for IPR proceedings: Although no standing is required for a patent challenger to pursue an IPR proceeding — standing is required once the case goes to the Federal Circuit on appeal.  In this situation, the patentee always has standing — their patent is under risk of being cancelled.  However, the patent challenger needs to show that it has an actual stake in the outcome of the decision — even though the Patent Act appears to provide a right-of appeal to any “party dissatisfied” with the IPR outcome.

In a 2016 decision in Spokeo, the Supreme Court explained that standing requires that a plaintiff must have:

(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.

Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).  When a harm has already occurred, the injury-in-fact is easy to find. However, in pre-injury declaratory situations — the injury requirement may be met by a potential injury “of sufficient immediacy and realty.” ABB Inc. v. Cooper Indus., LLC, 635 F.3d 1345 (Fed. Cir. 2011).  In Consumer Watchdog, however, the Federal Circuit noted in dicta that the immediacy requirement “may be relaxed” in situations like this “where Congress has accorded a procedural right to a litigant, such as the right to appeal an administrative decision.”  Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014).

Here, DuPont – the patent challenger – has (apparently) never been accused of infringing the Synvina patent; does not believe that it presently infringes the patent; and is not paying any royalties based upon the patent’s validity.  However, the Federal Circuit identified a controversy based upon the fact that DuPont’s factory has the capability of infringing:

Such a controversy exists here because DuPont currently operates a plant capable of infringing the ’921
patent.

I’ll note here that the court appears to have written this as a broad statement that could apply in many untold situations, including declaratory judgment actions.  However, later courts may cabin-in the holding to the specific facts of this case.

If you remember my prior post, the patent at issue covers a method of making a “green” plastic-precursor known as FDME from plant sugars (fructose).  In reaching its decision, the court walked through several bits of evidence that all come together to show that the DuPont plant has the capability use the claimed invention in its factory:

According to DuPont’s declarations, the process conducted at its plant uses the same reactants to generate the same products using the same solvent and same catalysts as the ’921 patent. Likewise, the temperature and PO2 ranges used at the plant overlap with those claimed in the ’921 patent. At the very least, this indicates that DuPont “is engaged or will likely engage in an activity that would give rise to a possible infringement suit.”  Quoting JTEKT

In its decision, the Federal Circuit also noted two additional facts that it saw as supporting standing:

  1. At the Board Synvina argued that DuPont had copied elements of Synvina’s invention and put them in a DuPont application (the board found this not compelling).
  2. Synvina has refused to grant DuPont a covenant not to sue.

Together, these “further confirm that DuPont’s risk of liability is not conjectural or hypothetical.”

With the standing requirement met, the Federal Circuit was able to hear DuPont’s argument and agreed that the claims are obvious.

Burden Shifting at the PTAB and the Obviousness of Ranges

 

11 thoughts on “Standing to Appeal: When does a petitioner have Standing to Appeal?

  1. 3

    This was a surprisingly easy standing case. Usually, these IPR appeals involve a disatisfied party urging that they “might” practice the claimed invention or “could” practice it, at some unspecified time in the future. Here, the appellant had already built the plant and could verify that the plant operated at all of the relevant operating parameters at various times (although, it was just unclear enough as to whether they were doing them all at the same time, so as to avoid a clear case for infringement).

    I am sure that—going forward—many IPR challenger appellants will try to boot strap from this case to establish standing for their own appeals, but if they do not have such good facts, I expect that they will not convince anyone that they deserve a DuPont outcome instead of a Consumer Watchdog outcome.

    1. 3.1

      Consumer Watchdog is not supported by the U.S. Supreme Court’s probabilistic standing line of cases; the classic/first modern area case was: Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 152 (1970) (7:2) (finding Competitor standing based on possible loss of profits and the disruption of relationships which seem to have been in the negotiation stage. On the basis of the allegations alone, the Court found that “there can be no doubt that the petitioner plaintiffs had satisfied this [injury in fact] test.”); more recent:Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc., 528 U.S. 167 (2000) (7-2) (Ginsburg, J. joined by Rehnquist, Stevens, O’Connor, Kennedy, Souter, and Breyer, JJ. Stevens and Kennedy, JJ each filed a concurring opinion. Scalia, J. wrote a dissenting opinion, which was joined by Thomas, J. (Laidlaw’s reasonable concerns test) (finding standing) or Monsanto Co. v. Geertson Seed Farms, 130 S.Ct. 2743, 2746–47 (2010) (7:1) (Alito, J.) (Court clearly allows plaintiffs to bring suit for injuries that have not yet occurred); most recently: Susan B. Anthony List v. Driehaus, 134 S.Ct. 2334 (2014) (9:0) (Thomas, J. for an unanimous Court joined by Roberts, Scalia, Kennedy, Ginsburg, Breyer, Alito, Sotomayor and Kagan, JJ.) (finding that petitioners had standing to challenge an Ohio law criminalizing false statements made in connection with political campaigns based on a “credible threat” of enforcement).

      1. 3.1.1

        Jonathan, how did Consumer Watchdog meet prong (2)? Did the patented refused to grant a covenant not to sue, like in this case?

        1. 3.1.1.1

          For constitutional standing and after Lexmark, there is no longer a second step, i.e., prudential standing inquiry; it is all about injury in fact; and the second step is statutory interpretation;

    2. 3.2

      if they do not have such good facts, I expect that they will not convince anyone that they deserve a DuPont outcome instead of a Consumer Watchdog outcome.

      I haven’t been following all these cases (perhaps some of them end up being Rule 36’d). But do you really think DuPont sets a floor for showing standing? Seems to me the facts were over the top.

      If I think a patent is obvious cr @p and I am in the process of setting up a company to practice exactly what is claimed in that patent, then that patent represents more than a “hypothetical” “injury.” It’s literally blocking me from freely doing what I am entitled to do. The IPR regime was created exactly for the purpose of fixing this situation because this situation was deemed (correctly) to be an abomination.

      Note also that the above set of facts is very different from the facts in Consumer Watchdog (and a reminder re the holding in that case: “[T]he immediacy requirement “may be relaxed” in situations like this “where Congress has accorded a procedural right to a litigant, such as the right to appeal an administrative decision.” Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014)).

      1. 3.2.1

        I do *NOT* think E.I. DuPont de Nemours v. Synvina C.V. should be the floor. On remand from the Supreme Court, the Ninth Circuit in Robins v. Spokeo, Inc., 867 F.3d 1108 (9th Cir. 2017) (“Spokeo II”), cert. denied, 138 S. Ct. 931 (2018), adopted Strubel v. Comenity Bank, 842 F.3d 181 (2d Cir. 2016) understanding of Spokeo as “instructing that an alleged procedural violation [of a statute] can by itself manifest concrete injury where Congress conferred the procedural right to protect a plaintiff’s concrete interests and where the procedural violation presents a risk of real harm to that concrete interest.” Spokeo II, 867 F.3d at 1113 quoting Strubel, 842 F.3d at 190). I recall the Fourth Circuit implicitly follows Strubel v. Comenity Bank, 842 F.3d 181 (2d Cir. 2016) as well; as Spokeo said “risk of harm” is enough. In a similar context: ASARCO Inc. v. Kadish, 490 U.S. 605, 617-619 (1989) (holding that, although Article III standing requirements do not apply in state-court litigation, a person who seeks this Court’s review of a state-court judgment must demonstrate injury resulting from that state judgment). The current line of Federal Circuit cases on appellate standing from an agency adjudication is not supported by S.C. cases.

        1. 3.2.1.1

          J: I do *NOT* think E.I. DuPont de Nemours v. Synvina C.V. should be the floor.

          Good to know, Jonathan. For the record, I was addressing Greg’s statements, not yours.

    3. 3.3

      In Lujan, at least Justices indicated that a plane ticket to see the endangered species that were threatened by a possible intepretation of a Federal regulation would have been “concrete” enough to confer standing on a conservation group.

      Those two Justices (Kennedy and Souter) are gone but I feel confident that, in the right case, a bunch of the current Justices would be on board with a similarly low bar for “injury.” And we all know how the Supreme Court feels about junk patents (but do we all know why they feel that way?)?

  2. 2

    There are two distinct line of cases: first, Congress may enact statutes creating legal rights, invasion of which creates standing; in other words: the Legislature/Congress create rights. Invasions of those rights are injuries-in fact. The second line of cases stands for the preposition that there is “a hard floor of Article III jurisdiction that cannot be removed by statute”. Both lines of cases go back to the early 1910s. Until Spokeo, the most famous case which brought both lines in direct conflict was in First American Financial Corp. v Edwards, (2012). Seven months after its oral argument, the Court dismissed the case as improvidently granted. There were rumors that it was “dismissed” because the assigned opinion writer for the majority was Scalia, who had just died. To attempt to ease that long and standing tension between these two lines of cases, the Court’s opinion in Spokeo v. Robins introduced a new emphasis; courts needed to focus on asking whether the statutory injury was “concrete.” The word “concrete” had appeared in the Court’s Art. III standing cases before. Lujan had described an Art. III “injury in fact” as being “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” So did Summers. But the word “concrete” had not before been given any independent definition or distinct meaning in the Court’s Art. III standing doctrine. The Supreme Court’s opinion in Spokeo first explained that “concreteness . . . is quite different from particularization.” Prior cases had used these two terms interchangeable. The Spokeo Court goes on to say that not all (legal) injuries-in-fact, and not all injuries to defined statutory rights, were per se concrete. A statutory right required something more, so Alito. But as to what more, exactly, was required, the Spokeo Court was very unclear. Citing dictionaries, Alito for the Majority said that to be “concrete” an injury “must actually exist,” and be “‘real,’ and not ‘abstract.’” But then the Alito goes on say the harm could also nonetheless be “intangible” or based only on the “risk of real harm.” (A brief but important nod to the probalistic standing line of cases). Alito did not explain why some statutory rights are not “real,” especially when some intangible harms apparently can be. This appears to be a little bit of a circular definition. In respect to IPRs Spokeo seems to indicate that no tangible harm has to exist at the time of the notice of appeal; “risk of real harm” is enough. I think with the “concreteness” requirement the court was thinking about data privacy or pure procedural (i.e., due process) violations. The wonderfully understated dissent by Notorious RBG (joined by Justice Sotomayor) noted correctly that the Court’s prior Art. III standing decisions “do not discuss the separate offices of the terms ‘concrete’ and ‘particularized.’” One last thought about Spokeo’s “concreteness” requirement, may be the Court wanted to reign-in on class action law suits, and Spokeo suggests that no class should be certified unless each member has met the “concreteness” requirement of each class member’s standing.

    1. 2.1

      Nice writing. Thank you.

  3. 1

    However, in pre-injury declaratory situations — the injury requirement may be met by a potential injury “of sufficient immediacy and realty.” ABB Inc. v. Cooper Indus., LLC, 635 F.3d 1345 (Fed. Cir. 2011). In Consumer Watchdog, however, the Federal Circuit noted in dicta that the immediacy requirement “may be relaxed” in situations like this “where Congress has accorded a procedural right to a litigant, such as the right to appeal an administrative decision.” Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014).

    I’m mulling that over.

    I’m seeing a slippery slope wherein the “Congress afforded a procedural right” edges into the forbidden territory of removing the “To establish a case or
    controversy, an appellant must meet “the irreducible constitutional minimum of standing,” – which was the lead in for the CAFC to use the quote from Consumer Watchdog

    I am seeing an effort to equate “Congress afford a procedural right” — in and of itself — as THE establishment of the Art. III Case & Controversy position (U.S. Const. Art. III, Section 2) – page 12 of the decision.**

    As the late Ned Heller vociferously pointed out, such is NOT a power of Congress.

    I also note that a direct path of the “afford a procedural right” is NOT what DuPont itself is claiming. At that same page 12, DuPont asserts items to reach the legal conclusion that “facts are sufficient to prove an actual or imminent injury in fact.

    This “relaxing” thing reminds me of an adage from my Uncle Ben (not his most famous adage, mind you):

    “It’s great to have an open mind. But do not have your mind so open that your brain falls out.”

    ** It should be stressed that it is Congress that has bungled the situation in how they poorly constructed the AIA by creating a dual-zone mechanism. In one of those two zones, the Article III standing need not be present. In and of itself, there is nothing wrong with that. HOWEVER, Congress cannot “bootstrap” and effectively eliminate Article III standing in the second zone, by attaching that second zone to a first part in the first zone. That path then would eliminate having that requirement, as ANY issue for such a requirement could be “made into” a non-required zone item first.

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