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.