This week, the Supreme Court left open the question of Article III standing with regards to appealing a final written decision from the Patent Trial and Appeals Board (“PTAB”) that is favorable to the patent owner. On Monday, the Supreme Court denied two petitions for certiorari that sought to appeal final written decisions (“FWD”) adverse to the petitioner in an inter partes review proceeding, in that the PTAB declines to cancel all claims under review. In both cases, the petitioner had the right under the America Invents Act to petition for inter partes review, but the Federal Circuit concluded that petitioners did not have Article III standing to continue pursuing the matter on appeal.
The first petition, filed by RPX in RPX v ChanBond, sought review of the Federal Circuit’s decision that patent management company RPX Corporation, which is not engaged in infringing activities, does not have standing to appeal an unfavorable PTAB final written decision. The case stemmed from RPX’s petition for inter partes review of a ChanBond patent. Though RPX’s petition was instituted, the PTAB ultimately determined that the challenged claims were patentable. RPX attempted to appeal this decision to the Federal Circuit, arguing it had standing to appeal based upon injury to its statutory rights, injury to its standing relative to competitors, and injury to its reputation of successfully challenging wrongfully issued patent claims. However, the Federal Circuit rejected each of these bases for standing, ruling that as defensive patent aggregator which does not make, use, or sell any products, RPX does not have standing to appeal the decision. The Supreme Court denied review of this question without commentary, as is customary.
The second denied petition, JTEKT Corp. v. GKN Auto. Ltd., sought review of the Federal Circuit’s decision that an automobile parts manufacturer did not have standing to appeal an unfavorable outcome in a final written decision where the potential infringing product was still under development. JTEKT successfully petitioned for inter partes review of GKN Automotive’s patent, and the PTAB found two claims invalid as obvious but that the remaining challenged claims were valid. JTEKT sought review of the final written decision as it related to the claims found to be valid. However, the Federal Circuit determined that JTEKT did not show risk of accusations of infringement sufficient to establish standing to appeal the PTAB’s final written decision. The Federal Circuit so held despite the fact that JTEKT’s potentially infringing product is expected to be released in 2020. Though unable to say definitively whether the product would infringe the patent at issue, JTEKT argued that its product contains features similar to the patent and that the patent posed a risk to future development of its products. Again as is customary, the Supreme Court denied review of this question without commentary.
At least for now, the Federal Circuit’s restrictions on standing for an appeal from the PTAB are the definitive statements on the matter. Practically, the denials ensure that the more than 150 appeals heard annually by the Federal Circuit stemming from proceedings at the PTAB will not dramatically increase in number. Moving forward, non-practicing entities (and practicing entities in some contexts) who petition for inter partes review need to be cognizant of the likelihood that they will be unable to appeal any unfavorable outcomes. Moreover, practicing entities and competitors need to consider what evidence exists of an actual risk of infringement allegations should a final written decision uphold the patentability of the challenged claims.