by Dennis Crouch
The recent Federal Circuit decision in Platinum Optics v. Viavi Solutions focuses attention once again on the case-and-controversy requirement derived from Article III of the U.S. Constitution, which extends federal judicial power to “Cases” and “Controversies.”
The seemingly simple phrase has been the subject of extensive judicial jockeying in the development of the doctrine we know as “standing.” The Supreme Court has repeatedly held that federal courts may only decide actual, ongoing controversies between adverse parties, and may not issue advisory opinions addressing hypothetical disputes. In Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), the Court articulated the now-familiar three-part test for standing: (1) the plaintiff must have suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent; (2) the injury must be fairly traceable to the challenged action of the defendant; and (3) it must be likely, rather than merely speculative, that the injury will be redressed by a favorable decision. In Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), the Court emphasized that the injury must be both concrete and particularized, clarifying that “concreteness” is distinct from “particularization” and requires the injury to be “real,” not abstract.
A unique feature of the PTAB trials under the America Invents Act, is that a losing party to an inter partes review (IPR) proceeding has a statutory right to immediately appeal the final written decision to the Court of Appeals for the Federal Circuit. Under 35 U.S.C. § 319, any party to an IPR proceeding “who is dissatisfied with the final written decision … may appeal” On its face, this appears to grant a broad right of appeal to any unsuccessful IPR petitioner. However, as the Federal Circuit has repeatedly held, Article III of the Constitution imposes additional requirements that limit which parties can pursue such appeals in federal court.
The tension created by the IPR statute stems from our Federal Governmental hierarchy that places constitutional limits above that of statutory rights. In other words, Congress does not have the power to statutorily authorize something that the Constitution prohibits. This principle, rooted in the foundational concept of constitutional supremacy, means that even though Congress has granted a broad statutory right to appeal PTAB decisions, this right cannot override or circumvent the constitutional case-or-controversy requirement. As a result, parties who have actively participated in IPR proceedings and received an unfavorable decision may find themselves having a clear statutory right to appeal but lacking the constitutional standing necessary to exercise that right.
The tension here is generally one-sided, because a patentee with a negative outcome (loss of patent rights) always has standing to appeal because invalidation of the patent is seen as a concrete and particularized injury satisfying the Lujan test. On the other hand, an IPR petitioner who lost the IPR must make a showing to the Federal Circuit that they had sufficient justification for challenging the patent’s validity. It appears that the injury requirement to maintain an appeal after losing at the PTAB is less than what would be required for a declaratory judgment invalidity action in district court. However, there typically needs to be evidence that the petitioner is currently acting in a way that risks claims of infringement or has “concrete plans for [such] future activity.” JTEKT Corp. v. GKN Auto. LTD., 898 F.3d 1217 (Fed. Cir.
2018) (requiring more than speculative plans or general concerns about the patent’s existence).
The dispute in Platinum Optics centers around U.S. Patent No. 9,354,369, owned by Viavi Solutions and covering optical filters that include layers of hydrogenated silicon with specific optical properties (a high refractive index and a low extinction coefficient over a wavelength range of 800 nm to 1100 nm). These optical filters are described as being particularly suitable for use in sensor systems such as proximity sensors, 3D imaging systems, or gesture-recognition systems. The IPR petition argued that the claims were obvious over a combination of references, but the PTAB rejected those arguments and confirmed patentability. Platinum Optics appealed, but was stopped short. The Federal Circuit refused to adjudge the merits – finding that the appellant-petitioner lacked standing to move the case from the administrative agency into an Article III court.
Prior Infringement Lawsuit Asserting Challenged Patent is Insufficient Here: Of importance, Platinum Optics had previously been sued for infringement of the ‘369 patent in two civil actions. Those cases were dismissed with prejudice — meaning that under the Federal Circuit’s expanded Kessler doctrine the products previously accused of infringement cannot be re-accused (or such re-accusation should be dismissed as improper). Note here that the court did not entirely foreclose the argument that a petitioner could show standing in this situation — just that the petitioner has the burden of showing standing and that it failed here. The court explained that PTOT’s argument failed to adequately address the impact of thes dismissals with prejudice. This holding aligns with the Federal Circuit’s prior decision in Apple Inc. v. Qualcomm Inc., 992 F.3d 1378 (Fed. Cir. 2021), that also concluded previous infringement suits that were dismissed with prejudice did not create a basis for standing.
New Products Not Concrete Enough: The Kessler doctrine (a patent-specific form of res judicata) would not apply to bar infringement suits against new products developed and sold by petitioner. Here, however, the court found that petitioner failed to provide sufficiently specific information about its plans for new products. The court quoted from a declaration submitted by petitioner:
As a part of PTOT’s on-going effort to improve its bandpass filters, PTOT continues to work with its existing customers in Asia to develop new models of bandpass filters and anticipates selling the new models of the bandpass filters to PTOT’s existing customers within the next few years.
As you might surmise, the court found this statement “vague and conclusory,” lacking the specificity necessary to establish concrete plans for product development that might create a risk of infringement. The court noted that the declaration did not “identify the material of the new models or any of their relevant properties” (i.e., whether they might be accused of infringing) or otherwise explain how the new models might relate to the patent at issue.
One important strategic feature here is that a showing of standing is only needed at the point when the appeal is filed to the Federal Circuit. While the best course of action is to win at the PTAB, a risk-averse petitioner could take some steps to ensure standing during the course of the IPR. This need not be large-scale, recognizing that even one act of infringement is still infringement and may be concrete enough to generate standing.
To discuss Article III federal judicial power limitation to “Cases” and “Controversies” one needs to also consider the recent Supreme Court decisions strrengthening that very requirement in overruling the 5th Circuit and its support of a rogue Texas D.C. judge-shopped by right wing organizations, not directly injured parties.
Please clarify.
The particular new SCT case is probably more applicable to industry organizations seeking to challenge a patent, rather than a specific accused infringer that actually made an accused product and then sought to challenge the patent in an IPR.
Food and Drug Admin. v. Alliance for Hippocratic Medicine, 602 U.S. 367, 379-94, 144 S. Ct. 1540, 1554-64 (2024) (dismissing APA action brought by several pro-life doctors and associations against the FDA challenging the FDA’s approval of an abortion drug, the court ruling that the doctors and associations failed to demonstrate any personal injury-in-fact to support standing, the court explaining that, for standing, “[t]he injury [] must be particularized; the injury must affect ‘the plaintiff in a personal and individual way’ and not be a generalized grievance,” thus “citizens and doctors do not have standing to sue simply because others are allowed to engage in certain activities—at least without the plaintiffs demonstrating how they would be injured by the government’s alleged under-regulation of others,” also rejecting the argument that by voluntarily spending money on studies to challenge the FDA’s approval of the abortion drug, the medical associations suffered an injury-in-fact, the court instructing that “an organization that has not suffered a concrete injury caused by a defendant’s action cannot spend its way into standing simply by expending money to gather information and advocate against the defendant’s action”)
One of the Federal Circuit’s earliest IPR standing cases addressed the standing of an industry organization seeking to challenge a patent.
Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753 F.3d 1258, 1261-63, (Fed. Cir. 2014) (dismissing for lack of constitutional standing an appeal of a PTO decision upholding claims in an inter partes reexamination because the appellant, a public interest group, lacked standing where it was not a competitor or potential licensee of the patentee, was not involved in any work in the same technology area as the patent, but allegedly only had an interest in its belief that the patentee’s manner of asserting the patent was putting a burden on tax payers, the court noting that while the Patent Act permitted the public interest group to file the reexamination without requiring constitutional standing at the PTO level, and provided a statutory route of review to the Federal Circuit, the requirements of constitutional standing still had to be met, and here they were not, the court concluding that a “general grievance” against the patentee did not make the dispute justiciable)
FDA v. Alliance essentially re-enforces the conclusions reached by the Federal Circuit in Consumer Watchdog.
It does not need clairification. 3.1.1 had no difficulty. Anyone interested but uninformed can do a simple search like “standing and Supreme Court” for and read the more recent decisions and legal reports.
anyone have any intelligence or tea leaves on the terminal disclaimer rules?
This falls to the “and water is still wet” category.
During the processing of the AIA, it was discussed whether or not post grant review challengers should have the same minimum standing requirement as necessary in Article III courts
Congress expressly said, “No.”
Congress expressly created a bifurcated system and one cannot bootstrap standing when it is well-known that the first half of the two-part system does not require standing.