Article III Injury-in-Fact Required to Appeal PTAB Final Written Decision in IPR
Addressing the legal standard for demonstrating standing in an appeal from a final agency decision, the US Court of Appeals for the Federal Circuit concluded that petitioners must have Article III standing to appeal a Patent Trial and Appeal Board (PTAB) decision. Phigenix, Inc., v. Immunogen, Inc., Case No. 16-1544 (Fed. Cir., Jan. 9, 2017) (Wallach, J.).
Genentech had an exclusive license to practice an ImmunoGen patent, which it uses to produce Kadcyla®, a cancer-treatment drug. Phigenix claimed to have a patent that covers essentially the same subject matter as claimed in the ImmunoGen patent. Phigenix filed an inter partes review (IPR) with respect to the ImmunoGen patent, the validity of which was upheld. Phigenix then appealed to the Federal Circuit, and Immunogen filed a motion to dismiss for lack of standing.
Citing Spokeo, the Court reiterated that to have Article III standing, the appellant “must have (1) suffered an injury-in-fact, (2) that is fairly traceable to the challenged conduct of the [appellee], (3) that is likely to be redressed by a favorable judicial decision.” Although Article III standing is not necessarily a requirement to appear before an administrative agency (such as the PTAB in an IPR proceeding), “an appellant must nevertheless supply the requisite proof of an injury-in-fact when it seeks review of an agency’s final action in a federal court.”
To that end, the Federal Circuit set forth the legal standard for demonstrating standing in an appeal from a final agency action, addressing (1) burden of production, (2) requisite evidence to meet that burden, and (3) when evidence must be produced. First, the Court stated that the burden of production standard at summary judgment applies in the present scenario. Second, an appellant “must either identify . . . record evidence sufficient to support its standing to seek review or, if there is none because standing was not an issue before the agency, submit additional evidence to the court of appeals,” such as “by affidavit or other evidence.” Third, the appellant must identify the relevant evidence demonstrating its standing “at the first appropriate” time and at the earliest possible opportunity, whether in response to a motion to dismiss or in the opening brief.
Phigenix submitted evidence that it believed demonstrated standing. However, none of those documents even suggested that it faced a risk of infringing the ImmunoGen patent, that it was an actual or prospective licensee of the patent, that it had suffered an actual economic injury because the patent increased competition between itself and ImmunoGen, or that it otherwise planned to take any action that would implicate the patent. Moreover, the supporting declaration and attorney letter were found to be insufficient to demonstrate an injury-in-fact because they lacked supporting facts. As the Federal Circuit made clear, conclusory statements in the declaration and letter as to the hypothetical licensing injury did not satisfy standing requirements.
Finally, Phigenix argued that “the estoppel effect of the [PTAB]’s decision adversely impacts Phigenix’s ability to provide a contractual warranty” because 35 USC §315(e) precludes a petitioner in an IPR that results in a final written decision from asserting that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during the IPR. Relying on Consumer Watchdog, the Federal Circuit explained that an estoppel provision is not an injury-in-fact. The Court therefore dismissed Phigenix’s appeal.
Practice Note: In addition to collecting facts supporting injury-in-fact for standing purposes, companies that are neither involved in an infringement action nor threatened with one should take into account their limited appeal opportunities as well as the estoppel effect under 35 USC § 315(e) before filing an IPR.