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Easy to Start, Potentially Hard to Finish: Considerations for Retailers in Appealing an IPR Decision

For many companies, including retailers, filing an inter partes review (“IPR”) is a highly popular avenue to challenge patent validity before the U.S. Patent Office and outside of federal district court. An IPR is often a faster and easier way to challenge a patent than in district court.

Among the IPR’s important procedural benefits is a relaxed standing requirement. Whereas district courts require a party to show an injury in fact (i.e., constitutional or Article III standing), an IPR at the Patent Office has no injury requirement. Any person or entity (except the federal government) can file an IPR petition, regardless of whether litigation involving the challenged patent is underway or threatened. Companies are free to challenge a patent for any reason, including if the patent would present a problem to a currently available product, an unreleased product, or a product that remains under development, or for other strategic concerns.

However, a threat remains. If a petitioner loses their IPR, the Federal Circuit is the only option for appeal. Moreover, the Federal Circuit does require an injury-in-fact from every petitioner. More specifically, to appeal an IPR final decision, an appellant must have legal standing (even though it is not required to initiate the IPR).[1] Thus, many IPR petitioners may find themselves unable to appeal an adverse decision.[2]

Therefore, it is important to understand the injury-in-fact requirement on appeal. To establish an injury-in-fact, a petitioner must show that there is a “substantial risk of infringement,”[3] with more specific evidence of potential infringement increasing the likelihood the court will find an injury-in-fact. For example, one retailer was able to demonstrate imminent injury with a diligent account of the product: the specific investments made toward the product, its intention to sell the product, and its stated expectation that the product would infringe the patent.[4] Contrastingly, the Federal Circuit rejected another retailer’s appeal from a final IPR decision for lack of standing because it failed to state it would actually make, use, or sell products accused of infringement – namely, smart phones.[5]

So how can a would-be retailer-appellant show an injury-in-fact worthy of standing to appeal?

One way is to reference a product already on the market. If the retailer does not have a product on the market but does have a product in development, an imminent injury can be shown by providing a final design or prototype for the record – or better yet, when that design has already been submitted as part of a bidding process.[6] (However, the Federal Circuit has found no substantial risk of infringement where there is no finalized product design on the record.[7])

A retailer should also explicitly state its expectation that the patent subject to IPR will be infringed. This can be accomplished by a sworn statement from IP counsel, or whoever is the most knowledgeable about the product. In past cases, such statements have had varying degrees of success.[8] Failure to plainly state expectations of infringement, or the use of weak language like “potential” risk of infringement,[9] is likely not enough to establish an imminent injury.[10]

Finally, timing may be important. The Federal Circuit has said that if there is no record evidence of an injury-in-fact, new evidence must be produced at the earliest possible time at the appellate level.[11] So, even if no record of injury is made during the IPR proceeding, a retailer-appellant can bolster the record when its opening appeal brief is due, e.g., with evidence to demonstrate a substantial risk of infringement. This means that designs, prototypes, and declarations should be prepared ahead of the appeal brief and be considered as early as the preparation of the IPR petition or even when deciding to pursue an IPR.

If an IPR ends with a finding of validity and an appeal is needed, retailer-appellants should lean on the side of thoroughness. Explicit disclosure of facts, such as the final designs of the product, how much money was spent to design and sell the product, and how likely it is that the product will infringe the patent, will bolster the case for an injury-in-fact. The less left to the imagination, the better the chance of establishing standing to appeal.


[1] JTEKT Corp. v. GKN Auto. Ltd., 898 F.3d 1217 (Fed. Cir. 2018).

[2] JTEKT Corp. v. GKN Auto. Ltd., 139 S. Ct. 2713 (2019) (denying cert.).

[3] General Electric Co. v. Raytheon Techs. Corp., 983 F.3d 1334, 1341 (Fed. Cir. 2020).

[4] General Electric, 983 F.3d at 1342-43.

[5] Apple v. Qualcomm, 992 F.3d 1378, 1384-85 (Fed. Cir. 2021).

[6] General Electric, 983 F.3d at 1342.

[7] See, e.g., JTEKT, 898 F.3d at 1221.

[8] See General Electric, 983 F.3d at 1342-1343; Apple, 992 F.3d at 1384; and JTEKT, 898 F.3d at 1221.

[9] General Electric, 983 F.3d at 1342.

[10] The benefits of such statements should be balanced against their impact on ongoing or future litigation.

[11] Apple, 992 F.3d at 1382.

Copyright © 2021, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume XI, Number 295
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About this Author

Andrew Kasnevich, Andrews Kurth Law Firm, Patent Litigation Attorney
Associate

Andrew focuses his practice on patent litigation before federal courts and the International Trade Commission and patent prosecution and post-grant proceedings before the U.S. Patent and Trademark Office. He has experience with a wide range of technologies in the automotive, electrical, and pharmaceutical arts, including automotive electronics, hybrid vehicle control strategies, immunosuppressant drugs, injection molding, LCD and LED displays and lighting, medical devices, non-imaging optics, pharmaceutical polymorphism, semiconductor structure and fabrication, software...

202-662-2770
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