Proppant Express Investments, LLC v. Oren Technologies, LLC, IPR2018-00914, Paper 38 (PTAB March 13, 2019) PrecedentialRead more
June 20, 2019
What Do We know?
1. On June 17, 2019, the Supreme Court denied certiorari in JTEKT Corp. v. GKN Auto. Ltd., 898 F.3d 1217 (Fed. Cir. 2018), petition for cert. filed Dec. 7, 2018 (No. 18-750) and RPX Corp. v. ChanBond LLC, CAFC-17-2346 (Fed. Cir. Jan. 17, 2018), petition for cert. filed June 28, 2018 (No. 17-1686).
2. In JTEKT, Petitioner is developing a four-wheel drivetrain product that is “similar enough” to the patented features to warrant filing an IPR. JTEKT, 898 F.3d at 1221. PTAB instituted review and found two of four claims not unpatentable. Petitioner appealed and patent owner opposed, arguing that petitioner lacked Article III standing to appeal PTAB’s final written decision.
3. The Federal Circuit dismissed JTEKT’s appeal for lack of standing. The court acknowledged that a petitioner “need not concede infringement to establish standing to appeal” (citing MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 134 (2007)) but found petitioner’s product was not sufficiently developed to create “a concrete and substantial risk of infringement.” JTEKT, 898 F.3d at 1221.
4. RPX involves a petitioner not in competition with patent owner but who challenges patents in IPR proceedings as part of its business model. The Federal Circuit granted patent owner’s motion to dismiss the appeal for lack of standing, finding that the estoppel provision of Section 315(e)(1) “did not constitute an injury in fact when the appellant ‘is not engaged in any activity that would give rise to a possible infringement suit.’” RPX, CAFC-17-2346 at 4-5 (citing Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1175-76 (Fed. Cir. 2017)).
5. The question presented to the Supreme Court was whether the statutory provisions providing for (i) a right to compel cancellation of invalid claims (35 U.S.C. § 318), (ii) a right to appeal an adverse PTAB ruling (35 U.S.C. §§ 319, 141), and (iii) petitioner estoppel after an adverse ruling (35 U.S.C. § 315(e)) satisfy the Article III standing requirement for an injury in fact sufficient to support a petitioner’s appeal to the Federal Circuit.
Observations and Practice Tips:
1. The Supreme Court refused to disturb the “concrete and substantial risk of infringement” test for petitioners to maintain an appeal of an adverse PTAB final written decision.
2. Petitioners in JTEKT’s position, i.e. those developing a potentially infringing product, should consider whether they can provide sufficient evidence of an imminent infringement risk to maintain an appeal of an adverse PTAB final written decision.
3. The Federal Circuit decision in JTEKT must be reconciled with its later decision in E.I. DuPont de Nemours & Co. v. Synvina C.V, 904 F.3d 996 (Fed. Cir. 2018). The court in DuPont emphasized that petitioner DuPont “currently operates a plant capable of infringing the ’921 patent,” and that patent owner refused to grant DuPont a covenant not to sue, to support its finding that DuPont had standing to appeal. Id. at 1004-05. In contrast, the court found that although JTEKT had engaged in significant development activity, JTEKT’s product development was not yet finalized, which was insufficient to establish an imminent risk of patent infringement.
4. JTEKT presents a close call, with similar facts to those in Momenta Pharms., Inc. v. Bristol Myers Squibb Co., CAFC-17-1694 (Fed. Cir. argued Dec. 5, 2017) (dismissed as moot Feb. 7, 2019). The noted factual differences from DuPont are important in determining whether a sufficient injury in fact has been shown by a petitioner potentially at risk of patent infringement. See also Altaire Pharms., Inc. v. Paragon Bioteck, Inc., 889 F.3d 1274, 1283 (Fed. Cir. 2018) (“Altaire’s injury is imminent, whereas Consumer Watchdog ‘only alleged a general grievance concerning’ the challenged patent,  and the appellant in Phigenix only alleged its aspirations of licensing its patent portfolio.”).
5. In the Hatch-Waxman context, a petitioner/appellant had standing because its Abbreviated New Drug Application had received “tentative approval” by the FDA and the patent’s listing in the Orange Book was delaying the launch of its generic product. Amerigen Pharms. Ltd. v. UCB Pharma GmbH, No. CAFC-17-2596 (Jan. 11, 2019).