Article III Standing a Rare Concern at PTAB

Last week, the Court of Appeals of the Federal Circuit (CAFC) determined that public interest groups challenging patents at the USPTO must demonstrate Article III standing to appeal failed challenges to the Court. In Consumer Watchdog v. WARF, Consumer Watchdog  appealed  a determination of the Patent Trial & Appeal Board (PTAB) to uphold claims of WARF patent 7,029,913 directed to stem cell cultures (inter partes reexamination 95/000,154). (here). In dismissing the appeal, the Court explained that while Consumer Watchdog was provided a procedural right to appeal by the inter partes reexamination statutes, an “injury in fact” was necessary to confer Article III standing. That is, such appeals require “a particularized, concrete stake in the outcome of the reexamination.”  Consumer Watchdog’s status as an entity that does not compete with the patent owner was strongly emphasized in the decision. The court left “it to future panels to decide whether, under other circumstances, the preclusive effect of the estoppel provisions could constitute an injury in fact.”

While an interesting decision, such public interest challenges were exceedingly rare in inter partes patent reexamination (discontinued by the AIA in 2012). On the other hand, Inter Partes Review (IPR) has seen a fair amount of activity from such entities. For this reason, some have speculated that this decision may have a chilling effect on such filings going forward. However, since IPR challenges are not governed by reexamination procedural practices, such filings are likely to continue.

While the right of appeal from an IPR may also be interpreted as a “procedural right” only (i.e., and pose the same Article III issue for consumer agencies), unlike patent reexamination, additional parties may join an IPR. In fact, as I have explained in the past, there is often times a strong motivation for joinder. It would seem highly unlikely that a consumer agency would target a patent that was not of great concern to many entities with standing. So, any such filing (if accepted by the PTAB, and demonstrating strong positions) could be joined by a party with standing for appeal. to avoid the issue. (Note: as CBM essentially requires Article III standing this is solely an IPR/PGR issue).

Of course, there is also the practical reality that many appeals will be from patentees given the challenger friendly standards of the PTAB.

Finally, might there be a situation in the future where a party that is not a public interest group (i.e., just looking to clear the competitive landscape) would be challenged on standing? Probably, but given that most IPRs are forced by litigation and or threat of litigation, those situations will be uncommon. Likewise, as estoppel is effective at the time of written decision, such an adverse result could be persuasively argued to confer standing for appeal. (estoppel is not effective under the old inter partes reexamination system until after all appeals are exhausted)