Chemical Company Developing Industrial Process Had Standing To Appeal

In E.I du Pont de Nemours & Co. v. Synvina C.V., No. 2017-1977 (Fed. Cir. Sept. 17, 2018), the Federal Circuit determined that the IPR petitioner, DuPont, had Article III standing to appeal an IPR final decision, although it had not been accused of infringement of patent owner Synvina's patent, or engaged in activity that could be accused of infringement. The court explained that a controversy of sufficient immediacy and reality existed because DuPont, an avowed competitor of the patent owner, had taken and planned to take "action that would implicate" the patent under review. Specifically, DuPont had standing because it had built a manufacturing plant capable of operating within the parameters of the patent under review and had planned to engage in activities that could be accused of infringement. The court also noted that the record showed that DuPont had a non-hypothetical risk of infringement liability because the patent owner had refused to grant DuPont a covenant not to sue, and had argued before the PTAB that DuPont copied its patented process.

DuPont had filed an IPR petition challenging Synvina's patent for a chemical process for producing 2,5-furan dicarboxylic acid (FDCA), which is of commercial interest because it can be produced from a natural-sugar starting material, and used as a building block for polymeric materials such as polyesters. DuPont was engaged in developing an industrial process for producing FDCA, and sought a covenant not to sue from its competitor Synvina. When Synvina refused to provide a covenant, DuPont filed an IPR petition challenging claims of Synvina's patent, and then appealed the PTAB's final decision upholding the challenged claims.

As we have discussed, although standing under Article III of the Constitution is not required to file an IPR petition, a party appealing a final decision of the PTAB must have Article III standing. If questioned on appeal, an appellant may have to demonstrate its standing, which may require supplementing the record as necessary to explain and substantiate its entitlement to judicial review.

For example, in JTEKT Corp. v. GKN Automotive Ltd., No. 2017-1828 (Fed. Cir. Aug. 3, 2018), the Federal Circuit determined that petitioner JTEKT, who had challenged claims of GKN's patent directed to a drivetrain for four-wheel-drive vehicles, lacked standing to appeal a PTAB decision that upheld some of the challenged claims. JTEKT lacked standing because it had not been accused of infringement, and although it was in the process of developing a commercial product, it had not yet developed a final product that could be analyzed for infringement.

Although an appellant must satisfy Article III standing, there is no such requirement for an appellee defending a PTAB judgment. As the Federal Circuit explained in Personal Audio, LLC v. Electronic Frontier Found., No. 2016-1123 (Fed. Cir. Aug. 7, 2017), standing to appeal is required only for the party "seeking entry to the federal courts for the first time in a lawsuit." Accordingly, petitioner Electronic Frontier Foundation did not have to establish standing to defend a PTAB decision after patent owner Personal Audio appealed an IPR decision canceling its challenged claims.

These recent cases illustrate that a petitioner that has not been accused of infringement may lack standing to appeal an IPR final decision, unless the petitioner can demonstrate that a controversy of sufficient immediacy exists, such as by showing that it has engaged in activity that creates a substantial risk of infringement or a charge of infringement.

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