Guest Post by Sam Thacker
Case of interest: JTEKT Corporation v. GKN Automotive Ltd.,
Appeal No. 2017-1828 (Fed. Cir. Aug. 3, 2018)
If you plan to appeal a PTAB decision to the Federal Circuit, then you had better make sure you have injury-in-fact, Article III standing. In JTEKT Corporation v. GKN Automotive Ltd., the Federal Circuit dismissed the patent challenger’s appeal from an inter partes review (IPR) because the Court found that the patent challenger lacked Article III standing.
The issue of standing never comes up during prosecution of a patent application because an Applicant’s right to appeal a PTAB decision is guaranteed by federal statute – and for good reason. See 35 U.S.C. § 141. An Applicant’s injury if his/her application is refused is self-evident: the Applicant is unable to enforce or protect his/her intellectual property (IP).
However, a patent challenger’s injury is less certain. This is because nearly any third party can file an IPR, even uninterested third parties that have nothing to gain or lose from the IPR. See 37 C.F.R. § 42.101.
The Article III, injury-in-fact standing requirement mandates that the petitioner have an injury that is “concrete and particularized.” To demonstrate this “concrete and particularized” injury, a petitioner must show that “it is engaged or will likely engage ‘in an activity that would give rise to a possible infringement suit.’” The injury does not need to have already occurred; standing is not precluded just because the injury has not been suffered. Future injury can also satisfy the standing requirement, so long as the petitioner can “establish that it has concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.”
In JTEKT, the patent challenger (JTEK) was planning on producing a product that would compete with the patent owner’s product. However, JTEK could not prove that its planned product would create a substantial risk of infringing the competitor’s patent because its planned product was not finalized. JTEK’s own declarations admitted that “the risk of infringement … [would be] impossible to quantify” because “[t]he concept will continue to evolve and may change until it is completely finalized.” Thus, the Federal Circuit found that JTEK had failed to establish that its product would create “a concrete and substantial risk of infringement or [would] likely lead to claims of infringement.”
The lesson here is that if you are seeking to invalidate a competitor’s patent (e.g., through an IPR, PGR, etc.) and want to be able to appeal an unfavorable PTAB decision to the Federal Circuit, then you had better make sure your product is at least finalized to a point where you can establish that it (1) creates a concrete and substantial risk of infringing the challenged patent or (2) is likely lead to claims of infringement by the patent owner. In other words, your product must have a substantial risk of infringing the challenged patent, and the parts of your product that create this “substantial risk of infringement” must be finalized.