Moot on Appeal: Patentee’s Infringement Disclaimer Remove’s Challenger’s Ability to Appeal IPR

ABS Global, Inc. v. Cytonome/ST, LLC (Fed. Cir. 2021).

In a split opinion, the Federal Circuit has dismissed ABS Global’s appeal of its failed IPR trial — finding the appeal moot. U.S. Patent No. 8,529,161.

The simple story here is that Cytonome sued ABS for infringement of the ‘161 patent but lost on summary judgment of non-infringement.  ABS Cytonome did not pursue an appeal, and expressly “disclaim[ed] such an appeal.”

Meanwhile ABS had filed an Inter Partes Review proceeding that resulted in most of the claims being cancelled.  The PTAB did side with the patentee on two of the claims — finding that they had not been proven obvious.  ABS wanted all of the claims invalidated and so appealed to the Federal Circuit.

Appellant must have Standing to Appeal: Although the Patent Act provides a right to appeal to all parties of an IPR, the Federal Circuit also requires standing — a “concrete” and “particularized” harm associated with the patent’s existence — an actual case or controversy.  This is akin to ordinary declaratory judgment jurisdiction, but a bit lighter because of participation in the PTAB trial and the express statutory right.  Mootness is also wrapped-up in the standing discussion.  A court has no jurisdiction over a moot controversy.

When ABS appealed its IPR (partial) loss, the patentee (Cytonome) responded with an argument that the case was moot because Cytonome lost its infringement lawsuit already and expressly abandoned any right to appeal.  Going forward, claim & issue preclusion would prohibit Cytonome can sue ABS for infringement of the ‘161 patent (at least for the same infringement that ABS was already doing).

ABS argued that the case is not truly moot because Cytonome might sue ABS for a modified version of its product.  The viability of those claims creates a cloud for the company.   On appeal, the Federal Circuit asked whether ABS had any plans — concrete plans — in connection with products that might infringe the patent.  ABS had none and so the court concluded that the case has become moot.

Cytonome’s disavowal therefore estops Cytonome from asserting liability against ABS for infringement of the ’161 patent claims in connection with the accused products, thereby allowing ABS to make, use, and sell those products freely. [Under the Kessler doctrine]. Cytonome’s disavowal would also bar a future suit for infringement of the ’161 patent claims covering ABS products that are “essentially the same” as ABS’s currently accused products. [Under Brain Life’s extension of Kessler]. . .

ABS acknowledged during oral argument that there was no evidence in the record that ABS engaged in or had concrete plans to engage in activities not covered by Cytonome’s disavowal. . . . Here, the evidence in the record fails to establish that ABS had a “particularized, concrete stake in the outcome” of its IPR appeal.

Dismissed as Moot.

The dissent by Chief Judge Prost does not dispute the mootness, but argues that the court should have taken the second step of vacatur:

Time and again the Supreme Court has explained that vacatur is in order when the prevailing party below unilaterally moots an appeal. The Majority today departs from that established practice, concluding that dismissal is the proper course here. It is not.

In particular, the dissent would have vacated (essentially marked-out) the challenged portion of the Board’s decision.  That would seemingly eliminate the potential estoppel effect of IPR determinations.

17 thoughts on “Moot on Appeal: Patentee’s Infringement Disclaimer Remove’s Challenger’s Ability to Appeal IPR

  1. 6

    So let me get this right.

    (1) A patent owner can deprive an IPR petitioner of standing to appeal an adverse PTAB decision by providing a PARTIAL admission only covering current products.

    (2) The IPR petitioner in the future can release new products not covered by the patent owner’s partial admission, and thus, can get sued for infringement based on those products.

    (3) The defendant’s invalidity defense in the new lawsuit gets curtailed or limited by AIA estoppel under Section 315(e), because of the PTAB decision it was prohibited from appealing.

    Yeah, (3) seems unjust and unfair, and ABS should consider a request for panel rehearing asking for exactly what Judge Prost suggested, i.e., vacating the challenged portion of the PTAB decision so AIA estoppel does not attach. ABS would still be barred from filing another IPR petition on the challenged patent (as the statute of limitation would have long expired), but at least ABS would be able to present a full invalidity defense in district court in the event of future suit.

    1. 6.1

      I think that your 3) is not as expansive as you may want to portray, and must have some nexus with the current situation/facts.

      The notion of lacking standing is limited to the actual cases of…

      …lacking standing.

      If a future product is made that does invoke standing, then the circumstances will have changed to a (necessarily) significant manner.

    2. 6.2

      Yeah, (3) seems unjust and unfair…

      Two points:

      (1) The equities here are not clear. Both sides won something in the PTAB, so a vacatur both helps and hurts each side to some extent. If the petitioners are losing something from the lack of vacatur, well, they are also gaining something.

      (2) As the majority notes, the petitioner never asked for vacatur until their reply brief—i.e., after the patentee had no opportunity to respond. If the petitioner’s lawyer had done the job right and asked for vacatur up front, this might all have turned out differently. I am less sympathetic to the inequity allegedly being worked to the petitioners who cannot be troubled to ask for the relief to which they are legally entitled.

      1. 6.2.1

        Maybe it was not (really) argued because maybe it was not (really) desired.

  2. 5

    ABS did not pursue an appeal, and expressly “disclaim[ed] such an appeal.”
    I think this means to say that Cytonome disclaimed an appeal.

  3. 4

    Dennis, this is the kind of case that could be used to inspire your students to draft imaginary cert petition questions written to be more effective legal advocacy.* E.g., something roughly like this only better:
    1. Even though the statute does not require any standing for an IPR, and provides for Fed. Cir. appeal, may a patent owner deprive any patent suit defendant of any IPR defense appeal simply by making a non-infringement admission as to only part of the subject patent claims and only as to current products?

    *Your blog has illustrated a surprising number of unappealing cert appeal questions over the years.

    1. 4.1

      … only better, indeed.

      You railed the other day about “dishonesty,” and the question you present here cloaks the fact that Congress set up a two-fora system.

      That type of obfuscation of the controlling legal point should NOT be taught. At all (much less as any type of advocacy).

  4. 3

    [The simple story here is that Cytonome sued ABS for infringement of the ‘161 patent but lost on summary judgment of non-infringement. ABS did not pursue an appeal, and expressly “disclaim[ed] such an appeal.”]

    Why would ABS have appealed a summary judgement that it doesn’t infringe? You don’t generally appeal victories.

    1. 3.1

      It seems like a misstep in summarizing the decision. The decision (link below) says toward the top of p. 3 that “Cytonome … disavowed its ability to challenge the district court’s summary judgment that ABS did not infringe the ‘161 patent claims[.]” So I think he meant to write Cytonome, not ABS. Otherwise I agree it doesn’t make all that much sense.

      link to cafc.uscourts.gov

  5. 2

    Does this also remove the time bar under 315(b)?

    1. 2.1

      It’s a good question, but I’m not seeing how it would. There’s not even a single mention of the time bar in the decision, let alone any discussion.

      I assume you’re thinking of a hypothetical future complaint asserting the same patent, but accusing a newly-developed version of the product. Then, just going by the timing and the text of the statute, it seems like the time bar would arise because the prior complaint was back in 2017, which at any future point would be well more than 1 year ago. It also wouldn’t seem to matter if the future complaint accused a different production version, because the statute only speaks in terms of which patent is asserted, not which product is accused. But I’ll confess that I don’t know if any case-law has addressed that particular scenario.

      Your question also raises the issue of why the time bar wasn’t even mentioned at all in the decision. It seems like something that would bear at least some discussion in the dissent if nowhere else, especially because the estoppel point came up. Maybe it didn’t occur to any of the judges. The majority in particular did seem to view the possibility of any future suit on a new product as being quite remote.

      1. 2.1.1

        Would not any conjecture about future projects be just that: conjecture, and thus not merit inclusion?

        1. 2.1.1.1

          You’re certainly right that it’s conjectural, but then I would argue so is the discussion of estoppel that’s already in the opinion.

          And on a relative basis I don’t think it would be a whole lot more conjectural either.

          Finally, on an absolute basis, it doesn’t really involve a great deal of conjecture. I don’t think it’s a huge amount of speculation to point out that, if sued on the same patent for a new product, ABS would certainly be in a situation where it was served with a complaint for the same patent way more than 1 year ago.

    2. 2.2

      > Does this also remove the time bar under 315(b)?

      No.

  6. 1

    Not sure that you am following the leap to “That would seemingly eliminate the potential estoppel effect of IPR determinations

    How would the advance to vacatur remove estoppel (and if estoppel were to be removed, then the threat may become real enough to provide standing and that would then turn around and provide basis for pursing in the Article III forum).

    1. 1.1

      To your main question, maybe I’m missing something, but given that estoppel requires an IPR that ends in a FWD, doesn’t vacating the FWD–in cases like this, where the PO took deliberate actions to moot the IPR appeal–then eliminate any potential estoppel?

      As for the follow-on question, wouldn’t the argument be that standing is created when the risk of estoppel *exists*? But in this case we’re talking about *eliminating* that risk (through vacatur), so doesn’t that also eliminate the argument for standing?

      1. 1.1.1

        Yes; this case raises / leaves unanswered . . . as many questions as it (tries to) answer.

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