United States: Federal Circuit Dismisses IPR Petitioner's Appeal Of Final Written Decision For Lack Of Standing

Earlier this month, the Federal Circuit dismissed for lack of standing an appeal filed by an inter partes review (IPR) petitioner of a final written decision issued by the Patent Trial and Appeal Board (PTAB) that held two instituted claims not unpatentable.

Appellant JTEKT Corporation filed an IPR petition challenging the patentability of seven claims of a patent owned by appellee GKN Automotive LTD. In a final written decision, the PTAB held (as applicable here) that JTEKT failed to establish that Claims 2 and 3 were obvious in view of two prior art references. JTEKT appealed, and GKN moved to dismiss for lack of standing.

By statute, any person or entity may file an IPR petition—there is no requirement that the petitioner have Article III standing. See 35 U.S.C. § 311(a). The statute also provides that an unsuccessful petitioner may appeal an unfavorable final written decision to the Federal Circuit. See 35 U.S.C. § 141(c). However, the Federal Circuit has previously held that the statute does not remove the Article III injury-in-fact requirement for appeal. Thus, to establish standing on appeal from an IPR, a petitioner/appellant must show that it is engaged, or will likely engage, in an activity that would give rise to a possible infringement suit or has contractual rights that are affected by a determination of validity.

Here, JTEKT argued that, although it did not have a product on the market at the time of the appeal, it possessed standing because it was developing a product that faced potential infringement liability. However, the declarations that JTEKT submitted in support of its argument conceded that the product was still in development and, more importantly, would continue to evolve and change. In fact, JTEKT admitted that there was no final product that could be analyzed for infringement and that the potential risk of infringement was currently impossible to quantify.

The Federal Circuit held that, because JTEKT failed to show any concrete and substantial risk of infringement, or that its planned product will likely lead to claims of infringement, it lacked standing to appeal the PTAB's final written decision. Although the court made clear that "IPR petitioners need not concede infringement to establish standing on appeal," they must still meet the Article III injury-in-fact requirement to appeal a final written decision to the Federal Circuit.

Practice Tip: It is important to carefully consider the case timeline when filing an IPR petition. The benefits of filing a petition early (e.g., while a potentially infringing product is still in development) should be balanced with the risk of having no standing to appeal an adverse final written decision from the PTAB.

JTEKT Corp. v. GKN Automotive LTD., No. 2017-1828 (Fed. Cir. Aug. 3, 2018)

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