United States: Federal Circuit Dismisses Appeal Where IPR Petitioner Lacked Standing To Appeal

Last Updated: May 24 2017
Article by Jennifer Burnette

In Phigenix, Inc. v. ImmunoGen, Inc., No. 2016-1544 (Fed. Cir. Jan. 9, 2017), the Federal Circuit dismissed, for lack of standing under Article III of the Constitution, a petitioner-appellant's (Phigenix) appeal of a PTAB final written decision that refused to cancel claims challenged in an IPR. The court's decision demonstrates that statutory right of appeal from a PTAB final written decision in an inter partes review does not necessarily establish Article III standing for the appeal.

"A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board . . . may appeal the Board's decision only to the United States Court of Appeals for the Federal Circuit." 35 U.S.C. § 141(c). Article III requires that in order to have standing an appellant must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [appellee], and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).

While standing may be self-evident in some cases, such as when the appellant is the object of the action, in other cases the appellant must demonstrate its standing. In such cases, the appellant must supplement the record as necessary to explain and substantiate its entitlement to judicial review. In particular, the Phigenix court concluded that an appellant's burden of production for establishing standing is the same burden required for summary judgment. Further, the court determined that any evidence establishing standing must be produced at the earliest possible opportunity, such as in response to a motion to dismiss or in the opening brief. Phigenix at 7-8.

Our review of Lujan and the Supreme Court's subsequent decisions leads us to conclude that the summary judgment burden of production applies in cases where an appellant seeks review of a final agency action and its standing comes into doubt.

In view of this background, the court concluded that Phigenix, the IPR petitioner, failed to establish an injury in fact and thus dismissed its appeal. The court was not persuaded by Phigenix's argument of economic injury based on what the court termed "a hypothetical licensing injury," or by Phigenix's arguments that the injury in fact resulted from the statutory basis to appeal PTAB final written decisions or the estoppel effect of such decisions.

Phigenix does not manufacture any products and made no contentions that it faced risk of infringing the patent at issue, that it was an actual or prospective licensee of the ImmunoGen patent, or that it otherwise planned to take any action that would implicate the patent. Instead, Phigenix asserted that it suffered an actual economic injury because the ImmunoGen patent, which was exclusively licensed to Genentech, encumbered Phigenix's ability to commercialize its own patent.

In support of its contention, Phigenix submitted a declaration that stated that the ImmunoGen patent encumbered Phigenix's licensing efforts and a letter Phigenix's attorney sent to ImmunoGen indicating that Phigenix believed that it has a strong patent portfolio and that the ImmunoGen patent was invalid. Phigenix, however, did not allege that it had ever licensed its patent to anyone, much less that it licensed its patent to the entities that also licensed the ImmunoGen patent.

The court concluded that the supporting evidence submitted by Phigenix was insufficient and amounted to nothing more than conclusory statements regarding a hypothetical licensing injury. Phigenix at 10-11. In reaching its conclusion, the court noted that an injury-in-fact may have been established if Phigenix demonstrated that it had licensed its patent to the same parties to which ImmunoGen had licensed the patent at issue, as the invalidation of the Immunogen patent might have increased Phigenix's revenues.

The court also dismissed Phigenix's argument that it had sufficient injury in fact because 35 U.S.C. § 141(c) provides a statutory basis for appeal; concluding that Phigenix was permitted to file its appeal, but that the exercise of its right to appeal did not necessarily establish standing. Phigenix further argued, to no avail, that it suffered an injury in fact resulting from the estoppel effect of the PTAB final written decision and its adverse impact on Phigenix's ability to provide a contractual warranty. Citing Consumer Watchdog v. WARF., 753 F.3d 1258 (Fed. Cir. 2014), the Court concluded that estoppel does not constitute an injury in fact where the appellant is not engaged in any activity that would give rise to a possible infringement suit.

This post originally appeared in PTABWatch

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