January 9, 2015
By Erika Harmon Arner; Daniel C. Cooley; J. Derek McCorquindale; Jason L. Romrell
Authored by Erika H. Arner, Daniel C. Cooley, J. Derek McCorquindale, and Jason L. Romrell
In 1972, the Supreme Court determined that the Sierra Club lacked constitutional standing to sue to prevent the construction of a ski resort.1 The Court noted that there was no allegation that any of the Sierra Club's 78,000 national members had even used the mountain trails of Mineral King Valley, Calif.2 This doomed the "injury-in-fact" prong of the standing analysis, reportedly causing Justice White to privately lament: "Why didn't the Sierra Club have one goddamn member walk through the park and then there would have been standing to sue?"3
This anecdote echoes more than 40 years later. The U.S. Court of Appeals for the Federal Circuit decided in Consumer Watchdog v. Wisconsin Alumni Research Foundation that Consumer Watchdog—a self-described "not-for-profit public charity dedicated to providing a voice for taxpayers and consumers"—had no standing to appeal the Patent Trial and Appeal Board's (PTAB) decision affirming the patentability of certain claims in U.S. Patent No. 7,029,913 (the '913 patent).4 The court dismissed the case because the appealing third-party requesters could not meet the constitutional "injury-in-fact" condition for jurisdiction in federal court. Notwithstanding the relative brevity of the opinion, it was a strong reminder of Article III's limits, even in the face of a statute that gives Consumer Watchdog a procedural right to appeal to the Federal Circuit.
The '913 patent, generally directed to human embryonic stem cell cultures, is owned by Wisconsin Alumni Research Foundation (WARF). In 2006, Consumer Watchdog requested inter partes reexamination of the claims of the '913 patent. Under 35 U.S.C. §§311-318 (2006), Consumer Watchdog was permitted, as a third-party requester, to seek such reexamination and participate upon institution. When the PTAB refused to cancel the claims of the '913 patent, Consumer Watchdog appealed to the Federal Circuit, invoking, inter alia, 35 U.S.C. §§141, 315 and 28 U.S.C. §1295(a)(4) as a jurisdictional basis.
The version of Section 141 applicable to the case was the pre-America Invents Act (AIA) version, stating in relevant part:
[A] third-party requester in an inter partes reexamination proceeding who is in any reexamination proceeding dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.
Similarly, Section 315(b)(1) provided prior to the AIA that
[a] third-party requester . . . may appeal under the provisions of section 134, and may appeal under the provisions of sections 141 through 144, with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent . . .
Consumer Watchdog contended that these statutory provisions were sufficient to allow a third-party requester in inter partes reexamination proceedings before the PTAB to appeal decisions favorable to patentability. After a typical round of briefing before the Federal Circuit, however, the court sua sponte ordered additional briefing on the issue of whether Consumer Watchdog had standing to pursue the appeal. Before its order, the court had apparently never addressed the issue of standing in this context.
Significantly, the court also asked the government (including the U.S. Patent and Trademark Office) to provide an amicus brief on the standing issue. The government argued that the requirement of an injury-in-fact is the "hard floor of Article III jurisdiction" such that Consumer Watchdog was not able to appeal the adverse PTO decision to the Federal Circuit.5 The government emphasized that the reexamination statute guaranteed to Consumer Watchdog only the opportunity to ask the PTO to reexamine the patentability of the '913 patent. The government further recognized that this "was undoubtedly a significant opportunity," as WARF amended its claims and made statements on the record about the scope of the claims.6 But, the government continued, the ability to seek reexamination at the PTO does not alter the fact that Consumer Watchdog itself lacks any personal interest in the outcome of the PTO proceeding other than a generalized interest in ensuring that the patent laws were correctly applied.
Though not directly relevant to the facts of the case, the government prospectively suggested to the Federal Circuit that, in the context of the new post-grant proceedings under the AIA, the robust estoppels might rise to the level of constitutional injury-in-fact: "[T]he AIA's estoppel provisions may have the practical effect of converting a future infringement risk into a present injury."7 The government urged that "[i]n a close case, . . . the Court may conclude that the AIA's estoppel provisions bear on the Article III analysis."8
In its opinion, the Federal Circuit recognized that the statutes invoked by Consumer Watchdog appear to provide at least a procedural right to appeal the administrative decision at issue before the court.9 The court nevertheless held that it is not "enough that the inter partes reexamination statute allows a third party requester to appeal decisions favorable to patentability."10 Rather, it said, "A statutory grant of a procedural right, e.g., right to appeal, does not eliminate the requirements of Article III."11
Foremost among these constitutional requirements, wrote the court, Consumer Watchdog had to show an "injury in fact" that is "both concrete and particularized, and actual or imminent (as opposed to conjectural or hypothetical)."12 The court noted that even if Article III imposes no limitation on the authority of federal agencies to administer proceedings such as reexamination proceedings before the PTO, when the requester later seeks judicial review in an Article III court, "the constitutional requirement that it have standing kicks in."13
The Federal Circuit found that Consumer Watchdog had "not alleged any involvement in research or commercial activities involving human embryonic stem cells," nor "that it is an actual or prospective competitor of WARF or licensee of the '913 patent."14 The court concluded that Consumer Watchdog did not identify any alleged injury "aside from the Board denying . . . the particular outcome it desired in reexamination, i.e., canceling the claims of the '913 patent."15 The court found that the denial alone was insufficient to confer standing, particularly because 35 U.S.C. §§311-318 do not guarantee a favorable outcome for the requester.16 Accordingly, while Consumer Watchdog was permitted to request reexamination at the PTO, nothing overcame the Article III deficiencies in this case—a mere "general grievance" for all taxpayers "concerned about the potential preemptive reach of the '913 patent and the alleged burden it places on taxpayer-funded research in the State of California" was not constitutionally sufficient for jurisdiction, according to the court.17
Further, the Federal Circuit held that the estoppel provisions in the reexamination statute were not sufficient in this case to constitute an injury-in-fact for Article III purposes because "Consumer Watchdog is not engaged in any activity that would give rise to a possible infringement suit. Nor does Consumer Watchdog provide any indication that it would file another request seeking to cancel claims at the Patent Office."18 On whether the determination would be the same in other cases or under the new inter partes review statute, the court refused to comment, leaving the question to future cases.19
In sum, the Federal Circuit has offered some suggestions on what might suffice for standing in comparable circumstances: for example, alleging some possible activity that could give rise to an infringement suit against the requester, or some level of involvement in research, or some commercial activities involving the claimed technology challenged. But Consumer Watchdog had none of that.
While the jurisdictional analysis is case-by-case, the Consumer Watchdog case makes clear that the statute at issue here—which states that the requester of the inter partes reexamination may appeal any dissatisfactory decision—requires the parties to additionally show the constitutional requirement of an injury-in-fact to have standing in an Article III court.20
Endnotes
1 Sierra Club v. Morton, 405 U.S. 727 (1972).
2 Id. at 735 & n.8 ("Nowhere in the pleadings or affidavits did the Club state that its members use Mineral King for any purpose, much less that they use it in any way that would be significantly affected by the proposed action of the respondents.").
3 Bob Woodward & Scott Armstrong, The Brethren 164 n.* (1979).
4 Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1260, 111 U.S.P.Q.2d 1241 (Fed. Cir.2014) (88 PTCJ 374, 6/6/14) (citation omitted).
5 Brief for the United States as Amicus Curiae at 1, Consumer Watchdog v. Wis. Alumni Research Found., No.2013-1377 (Fed. Cir. Jan. 17, 2014) (quoting Summers v. Earth Island Inst., 555 U.S. 488, 497 (2009)), available at http://www.bloomberglaw.com/public/document/Consumer_Watchdog_v_Wisconsin_Alumni_Research_Docket_No_1301377_F/8.
6 Id. at 12.
7 Id. at 2.
8 Id. at 16.
9 See Consumer Watchdog, 753 F.3d at 1262.
10 Id. (citing 35 U.S.C. §315(b)).
11 Id. (citing Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1386, 109 U.S.P.Q.2d 2061 (2014) (87 PTCJ 1223, 3/28/14)).
12 Id. at 1260-61 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).
13 Id. at 1263 (quoting Sierra Club v. E.P.A., 292 F.3d 895, 899 (D.C. Cir. 2002)).
14 Id. at 1260.
15 Id. at 1261.
16 Id. at 1262.
17 Id. at 1263.
18 Id. at 1262.
19 Id. at 1263.
20 On Oct. 31, 2014, Consumer Watchdog filed a petition for certiorari in the Supreme Court. See Petition for Writ of Certiorari, Consumer Watchdog v. Wis. Alumni Research Found., No. 14-516 (Oct. 31, 2014), available at http://pub.bna.com/ptcj/14A162petition.pdf (89 PTCJ 14, 11/7/14) (presenting the question: "Does a statute that expressly provides a requester of agency action a right to appeal any dissatisfactory decision of the agency on her request to the courts provide sufficient Article III standing for the appeal, or must additional requirements be satisfied above and beyond the statute?").
Supreme Court of the United States (SCOTUS), United States Court of Appeals for the Federal Circuit (CAFC), America Invents Act (AIA)
Reproduced with permission from BNA's Patent, Trademark & Copyright Journal, Vol. 89, No. 639, 01/09/2015. Copyright © 2015 The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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