Appellate Standing Archives

Show Your Work: PTO Director’s Procedure for Issuing Instructions Is Reviewable

by Rodney Swartz, PhD | Mar 23, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed the district court’s finding under the Administrative Procedure Act (APA) that the substance of the US Patent & Trademark Office (PTO) Director’s instructions is unreviewable but reversed the finding that the cloak of unreviewability extended to the procedure used in issuing the instructions. Apple v. Vidal, Case No. 22-1249 (Fed. Cir. Mar. 13, 2023) (Lourie, Taranto, Stoll, JJ.)

The creation of the inter partes review (IPR) program opened new avenues for reviewing the validity of patents following issuance. Since the program’s inception, Congress has recognized that there is a possibility of parallel proceedings at the Patent Trial & Appeal Board and in the district court, that such proceedings could result in conflicting decisions and reduced efficiency in the system. However, Congress left it to the discretion of the two branches to work out such situations among themselves.

As one lever to overcome these issues, Congress provided the Director with unreviewable discretion in deciding whether to institute an IPR. Recently, the Director attempted to leverage this power to increase efficiencies and reduce gamesmanship by instructing the Board on what to consider when instituting an IPR.

Apple and four other companies challenged these instructions in the district court. Apple argued that the Director’s instructions violated the APA by being contrary to the IPR provisions, arbitrary and capricious, and issued without the notice-and-comment rulemaking required under the APA.

Following a motion to dismiss, the district court concluded that Apple’s challenges were directed at the Director’s actions, making them unreviewable by the court. Apple appealed.

On appeal, the Federal Circuit considered all three of Apple’s APA challenges to the instructions, along with whether Apple had standing to bring the suit. The Court agreed with the district court that the question of whether an instruction violates the APA by being contrary to the IPR provisions or by being arbitrary and capricious is directed to the substance of the Director’s action and is not reviewable: “§ 314(a) invests the Director with discretion on the question whether to institute review . . . : The determination by the Director whether to institute an inter partes review . . . shall be final and nonappealable.” As the Federal Circuit noted, this conclusion rests on the well-supported need for the PTO Director to give guidance to delegatees on how to make institution determinations.

The Federal Circuit disagreed that the announcement procedure the Director used for issuing the instructions to the Board was unreviewable, however. As the Court noted, the procedure employed by an agency to announce guidelines is “quite apart” from the substance of those guidelines. Given this distinction, the Court concluded that the procedure the Director used to announce the instructions was reviewable: “The government here has not shown that anything in § 314(d) or elsewhere in the IPR statute supplies clear and convincing evidence that there was to be no judicial review of the choice of announcement procedure, a matter for which generally applicable standards exist.”

The [...]

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Shots Fired: Challenger Must Have Requisite Standing Before Appealing Unfavorable IPR Decisions

by Paul Devinsky | Dec 16, 2021 | Patents

The US Court of Appeals for the Federal Circuit found, in the context of an appeal from an inter partes review (IPR) decision, that the appellant had Article III standing and affirmed a Patent Trial & Appeal Board (Board) decision, holding the challenged claims unpatentable as obvious. ModernaTX, Inc. v. Arbutus Biopharma Corporation, Case No. 20-2329 (Fed. Cir. Dec 2, 2021) (Lourie, J.)

Arbutus owns a patent pertaining to “stable nucleic acid-lipid particles (SNALP) comprising a nucleic acid (such as one or more interfering RNA), methods of making the SNALP, and methods of delivering and/or administering the SNALP.” Moderna petitioned for IPR of the patent, asserting three grounds:

Moderna alleged that all claims of the challenged patent would have been anticipated and/or obvious in light of International Pat. Publ. WO 2005/007196 (‘196 PCT) or US Pat. Publ. 2006/0134189 (‘189 publication).
Moderna alleged that all claims of the challenged patent would have been obvious over a combination of the ‘196 PCT, the ‘189 publication, Lin and Ahmad.
Moderna alleged that all claims of the challenged patent were anticipated by US Pat. Publ. 2006/0240554 (‘554 publication), and alternatively that the claims would have been obvious over the ‘554 publication.

The Board rejected each of Moderna’s allegations, finding that the claims were not unpatentable as obvious. Moderna appealed.

Before addressing Moderna’s appeal on its merits, the Federal Circuit addressed whether Moderna had proper standing to challenge the Board’s decision. The Court stated that well-established precedent dictates that an appellant seeking review of a Board decision in an IPR must have suffered an injury in fact that is fairly traceable to the challenged conduct of the appellee and is likely to be redressed by a favorable judicial decision. The Court underscored that under IPR statute, there is no standing requirement for petitioners to request institution of IPR by the Board, meaning that a requester need not have a concrete stake in the outcome. Additionally, where the statue itself grants judicial review (such as in the case of an IPR), standing criteria of immediacy and redressability may be “relaxed.” Nonetheless, the Court explained that a party’s participation in the underlying IPR alone does not confer standing on that party to appeal the Board decision before an Article III court such as the Federal Circuit. The party seeking review (in this case Moderna) must show that it possesses requisite injury for standing to appeal.

Moderna asserted that substantial risk existed that Arbutus would bring an infringement suit against Moderna based on Moderna’s COVID-19 vaccine if the challenged patent was to remain valid. In support, Moderna submitted a declaration from its senior vice president and deputy general counsel that Moderna was working to harness proprietary mRNA technology and planned on releasing and applying for emergency use authorization for a COVID-19 vaccine in December 2020. The declaration also described how Arbutus’s conduct created a substantial risk that it would bring subsequent infringement action against Moderna. An example of such conduct was a series of public statements [...]

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“Seams” Like Activity Giving Rise to Infringement Risk Supports Appellate Jurisdiction

by McDermott Will & Emery | Jul 8, 2020 | America Invents Act, Patents

Adding to its body of jurisprudence on standing to challenge an adverse final written opinion in inter partes review (IPR) proceedings, the US Court of Appeals for the Federal Circuit found a petitioner had constitutional standing to appeal where it showed it engaged in activity that would give rise to a possible infringement suit. Adidas AG v. Nike, Inc., Case Nos. 19-1787; -1788 (Fed. Cir. June 25, 2020) (Newman, J.).

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“Non-Limiting” Prior Art Claims Support Obviousness After Standing Is Established

by Mandy H. Kim | May 14, 2020 | Patents

Addressing the issue of Article III standing and obviousness in an appeal of an inter partes review (IPR) decision, the US Court of Appeals for the Federal Circuit found that the petitioner had standing to appeal because past activities created a controversy between the parties. Grit Energy Solutions, LLC v. Oren Techs., LLC, Case No. 19-1063 (Fed. Cir. Apr. 30, 2020) (Prost, CJ) (Newman, J., concurring in part, dissenting in part).

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Article III Standing Required to Appeal Final Decisions by the PTAB

by Mandy H. Kim | May 7, 2020 | Patents

Addressing the issue of Article III standing in an appeal of an inter partes review (IPR) decision, the US Court of Appeals for the Federal Circuit dismissed the appeal because the party appealing failed to establish an injury sufficient to confer standing. Argentum Pharms. LLC v. Novartis Pharms. Corp., Case No. 18-2273 (Fed. Cir. Apr. 23, 2020) (Moore, J.).

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