Article III Standing for PTAB Appeals Once Again Revisited by Federal Circuit

Last month, the Federal Circuit made clear that Article III standing is necessary for petitioners to appeal from adverse decisions in AIA trial proceedings in Phigenix, Inc. v. ImmunoGen, Inc. (here)  The Phigenix decision follows an earlier decisionConsumer Watchdog v. Wisconsin Alumni Research Foundation (Warf) finding the same Article III standing requirement for the now defunct inter partes patent reexamination.

Yesterday, in PPG Industries, Inc., v. Valspar Sourcing, Inc., the Federal Circuit again addressed the issue of standing in appeals from the Patent Trial and Appeal Board (PTAB). At issue in these consolidated appeals was whether PPG Industries, Inc. (“PPG”) had standing to appeal the PTAB’s decisions in two inter partes reexaminations where the patent owner Valspar Sourcing, Inc. (“Valspar”) was the prevailing party. Showcased in this appeal is evidence deemed to satisfy Article III standing for an appeal from the PTAB.

In finding that PPG did have original standing to bring the appeals, the Court shed some light onto the types of evidence that would be accepted for Article III standing. Namely, the Court held that PPG’s standing evidence demonstrated that it had “a particularized, concrete interest in the patentability” of the patents at issue, which were directed to food and beverage can coatings. Specifically, the Court held that PPG presented evidence that “(1) by the time PPG filed its notice of appeal in this case, it had already launched a commercial can-interior coating for the beverage can industry; and (2) PPG had received at least one inquiry from a customer suggesting that Valspar intended to pursue infringement litigation against PPG related to its can-interior coating.” The Court further noted that PPG’s interest in the outcome of the reexaminations was “enhanced” by the estoppel provisions contained in the inter partes reexamination statute. The Court also pointed out that PPG’s concerns over being sued by Valspar were warranted because Valspar sued PPG on related patents after PPG filed its appeals of the PTAB’s reexamination determinations.

That is, the Court looked to the time of the appeal itself (rather than the underlying PTAB proceeding) as the relevant timeframe to determine Article III standing. Next, the court found that actual business interest within the scope of the patent(s) was a significant consideration when considered alongside the tangible threat of an infringement case. Whether or not statutory estoppel and the business interest alone would have been enough (absent the threat/actual suits) was left for a future case.

Next the court turned to subsequent events, in particular a covenant not to sue on the patents. This covenant was provided from Valspar (unilaterally) to PPG as part of its additional briefing on Article III standing, the covenant recited:

[Valspar] covenant[s] not to sue PPG Industries, Inc. or any of its subsidiaries or customers (collectively,“PPG”) for infringement of any claim of [U.S. Patent No. 7,592,047] or [U.S. Patent No.8,092,876] as of the date of this Covenant Not To Sue based on PPG’s manufacture, importation, use, sale and/or offer for sale of any currently existing products or use of methods and of prior existing products or prior use of methods.

While the Court found that PPG had Article III standing to bring the appeals at the time of their filing, the Court ruled that PPG’s appeals were mooted on appeal because of the covenant.  The Court reasoned that the breadth of the covenant not to sue “necessitate[d]” its conclusion that the case was moot.