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IP Alert: Estoppel and Reduction in Ability to Compete Not Enough to Confer Appellate Standing to a Noninfringing IPR Petitioner

May 20, 2019

Petitioners appealing adverse Patent Trial and Appeal Board (PTAB) decisions must show that they are engaged in, or have nonspeculative plans to engage in, conduct potentially covered by the challenged claims to have sufficient standing for the Federal Circuit to have jurisdiction over the appeal. On May 13, in AVX Corp. v. Presidio Components, Inc., the Federal Circuit clarified the requirements for standing. The court also stated that a petitioner who lacked standing to appeal might not face the estoppel that normally attaches to a challenger after a final decision in the PTAB.

AVX challenged its competitor Presidio’s patent directed to ceramic capacitors in an inter partes review (IPR), and the PTAB found some, but not all, of the challenged claims unpatentable. AVX appealed the decision with regard to the upheld claims. The Federal Circuit had previously found that “in IPR appeals, ‘an appellant must . . . supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court,’ by creating a necessary record in this court, if the record before the Board does not establish standing.” Presidio argued that AVX has not established an injury in fact, and thus lacked Article III standing to appeal the decision.

First, AVX argued that an injury in fact was established by the PTAB’s rejection of its obviousness challenges to the upheld claims because the statutory estoppel provision, 35 U.S.C. § 315(e), would prevent AVX from asserting the same challenges if the upheld claims were asserted against it in the future. The Federal Circuit disagreed. Specifically, the court found that estoppel under § 315(e) does not constitute an injury in fact when the petitioner is not engaged in activity that would give rise to a possible infringement suit.

Notably, the court also declined to decide whether § 315(e) even has an estoppel effect when an IPR petitioner lacks Article III standing to appeal. The court did not decide this issue because the estoppel question was not before the court.

Second, AVX argued that an injury in fact was established by the PTAB’s decision upholding certain claims because it reduced AVX’s ability to compete with Presidio under the competitor standing doctrine. Under this doctrine, the Federal Circuit stated that the appealing party must show that “the challenged government action nonspeculatively threatened economic injury to the challenger by the ordinary operation of economic forces.” The court previously held that IPR petitioners lacked standing where they had no “concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.” Here, the court found that AVX had not shown that it was engaging in, or had plans to engage in, any conduct covered by the upheld claims. As a result, the court dismissed the appeal for lack of jurisdiction.

This decision is relevant to any party who is considering challenging a patent in an IPR but does not currently practice, or have any plans to practice, any claims of the patent. Under those circumstances, petitioners may not have standing to appeal an adverse decision from the PTAB and may wish to reconsider whether to proceed with filing an IPR. Conversely, as noted above, the Federal Circuit has not yet addressed whether the § 315(e) IPR estoppel provisions will apply in a later proceeding.

For more information on this decision, please contact Fitch Even partner Paul B. Henkelmann, author of this alert.

Fitch Even associate Evan Kline-Wedeen contributed to this alert. 

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