United States: Supreme Court Asked To Review Standing In Stem Cell Challenge

The Public Patent Foundation and Consumer Watchdog (collectively "CW") petitioned the U.S. Supreme Court on October 31, 2014, seeking reversal of the Federal Circuit's dismissal of its appeal from a decision of the USPTO that upheld the validity of Wisconsin Alumni Research Foundation's (WARF's) patent regarding in vitro cultured human embryonic stem cells. The case will decide if a third party challenger, lacking a specific injury related to the underlying dispute, has standing to challenge the USPTO's inter partes reexamination decision in the courts.

WARF's Inter Partes Review

Many in the industry have been following the dispute because CW on appeal to the Federal Circuit raised the issue of whether WARF's embryonic stem cell claims remain patentable subject matter after the U.S. Supreme Court's recent patent-eligibility decisions. The patent in suit is U.S. Patent No. 7,029,913, entitled "Primate Embryonic Stem Cells" (the '913 patent) issued to Dr. James A. Thomson (and his assignee, WARF). CW initially challenged the patent in an inter partes reexamination (No. 95/000,154) alleging the claims were unpatentable for failing to satisfy 35 U.S.C. § 102 (novelty) and 35 U.S.C. § 103 (non-obviousness). After the initial reexamination decision in favor of WARF, CW appealed and added a challenge to patent-eligibility of the claims, alleging that they failed to satisfy 35 U.S.C. § 101 ("patent-eligible subject matter").

During a December, 2013 hearing, the Federal Circuit on its own initiative asked the U.S. government and the USPTO to brief the issue of whether CW, as a third party requester, had standing to seek review of the USPTO's affirmation of the '913 patent claims. The U.S. government and the USPTO in a joint brief stated that in their view, CW lacked standing and urged the court to dismiss CW's appeal. CW argued that it had standing because WARF's enforcement of the '913 patent allegedly put a severe burden on taxpayer funded research in the State of California where Consumer Watchdog is located, and because the parties were concerned that the '913 patent allowed WARF to preempt all uses of human embryonic stem cells, particularly those for scientific and medical research.

The Federal Circuit disagreed and held that CW lacked Article III standing. To invoke federal jurisdiction, the Federal Circuit explained, a party must demonstrate that: (1) it has suffered an "injury in fact" that is both concrete and particularized, and actual and imminent; (2) the injury is fairly traceable to the challenged action; and (3) it is likely, rather than merely speculative, that a favorable judicial decision will redress the injury. These constitutional requirements, the Federal Circuit noted, apply with equal force to appeals from administrative agencies, such as from the USPTO, to the federal courts.

The Federal Circuit also noted that CW did not allege any injury aside from the USPTO's denial of the particular outcome it desired in reexamination – that of canceling the '913 patent claims. The court also rejected CW's argument that as a third party requester, it has a procedural right to appeal decisions favorable to patentability, on the ground that the statutory grant of a procedural right, e.g., the right to appeal, does not eliminate the Article III standing requirements.

CW's Point of View

On the same day CW filed its petition for certiorari, the parties issued a press release announcing that the Federal Circuit's holding is a clear violation of the express language of statutes passed by Congress and signed by the President. CW also alleged that the Federal Circuit's decision conflicts with the clear intent of Congress and the President to empower the public to seek revocation of invalid patents.

Winning the Battle and Losing the 101 War

Even if the Supreme Court were to grant certiorari and reverse the Federal Circuit's dismissal, CW may not be able to challenge the '913 Patent on the ground that the claims fail to satisfy 35 U.S.C. § 101. In the briefs below, CW argued Section 101 patent-eligibility is a threshold issue to be addressed before subordinate questions such as those related to anticipation and obviousness.

Historically, only questions related to Sections 102 (novelty) and 103 (non-obviousness) based on prior art patents and printed publications, or compliance with Section 112 requirements for new or deleted matter, are allowed by statute or regulation in such a proceeding. In addition, CW may be barred from raising a Section 101 challenge because CW did not raise it during the PTO reexamination proceedings.

A copy of the petition for certiorari is attached Consumer Watchdog Petition for Cert. The underlying dispute is reviewed in my prior posts of June 15, 2014; February 3, 2014; December 8, 2013; December 1, 2013; September 5, 2013; and July 8, 2013.

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