The Court of Appeals for the Federal Circuit today held that, in order to appeal a final decision from an inter partes review (IPR) proceeding, an IPR petitioner must prove Article III standing, including an injury in fact—and moreover must do so by a burden of proof equal to that required for a summary judgment motion in a federal district court.
In IPR2014-00676, petitioner Phigenix challenged the validity of Immunogen’s U.S. Patent 8,337,856, which relates to antibody-maytansinoid conjugates for the treatment of cancer. The ‘856 patent is licensed exclusively to Genentech in connection with the production of the drug Kadcyla®.
Phigenix describes itself as a “for-profit discovery stage biotechnology, pharmaceutical, and biomedical research company.” While Phigenix does not make products, it purports to have an extensive intellectual property portfolio, including U.S. Patent No. 8,080,534, which Phigenix alleges covers Genentech’s activities relating to Kadcyla®. Phigenix asserts that it “was forced” to challenge ImmunoGen’s ‘856 patent in IPR2014-00676 after Genentech refused to license Phigenix’s ‘534 patent. The Patent Trial and Appeal Board (PTAB) in that IPR proceeding ultimately found ImmunoGen’s ‘856 patent valid. Phigenix appealed the PTAB’s decision to the Federal Circuit.
The Federal Circuit dismissed Phigenix’s appeal for lack of standing under Article III of the United States Constitution. In dismissing the appeal, the Federal Circuit first reiterated the minimum requirements for Article III standing: an appellant must have (i) suffered an injury in fact (ii) that is fairly traceable to the challenged conduct of the appellee, and (iii) that is likely to be redressed by a favorable judicial decision.
Next, the Federal Circuit held that when one such as Phigenix appeals a final agency action to the Federal Circuit, one must prove those three factors by a burden of proof that is “the same as that of a plaintiff moving for summary judgment in the district court.” The Federal Circuit noted that, in some instances—such as where the appellant is the object of the action in question—standing will be “self-evident,” but that in instances where standing is not “self-evident,” the appellant must supplement the record with arguments, affidavits or other evidence “to the extent necessary to explain and substantiate its entitlement to judicial review.” Moreover, “if there is no record evidence to support standing, the appellant must produce such evidence at the appellate level at the earliest possible opportunity.”
The Federal Circuit then found that Phigenix had provided insufficient evidence of the first Article III factor: an injury in fact. The Federal Circuit observed that Phigenix “does not contend that it faces risk of infringing the ‘856 patent, that it is an actual or prospective licensee of the patent, or that it otherwise plans to take any action that would implicate the patent.” Instead, Phigenix claimed that it had suffered an economic injury “because the ‘856 patent increases competition between itself and ImmunoGen,” and that the ‘856 patent “encumber[ed]” Phigenix’s efforts to license its ‘534 patent. The Federal Circuit rejected Phigenix’s claims of economic injury as conclusory, noting that Phigenix had never alleged that it had licensed its ‘534 patent to anyone, “much less that it licensed the ‘534 patent to entities that have obtained licenses to the ImmunoGen ‘856 patent.”
The Federal Circuit also rejected Phigenix’s argument that it had suffered an injury in fact in view of 35 U.S.C. § 141(c), which states that a party to an IPR who is dissatisfied with the PTAB’s final decision “may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.” The Federal Circuit reasoned that “Phigenix cannot base its injury in fact upon a violation of § 141(c) because it has been permitted to file its appeal, and the exercise of its right to appeal under that statute does not necessarily establish that it possesses Article III standing.”
Last, the Federal Circuit rejected Phigenix’s argument that it had suffered an injury in fact in view of 35 U.S.C. § 315(e), under which a final IPR decision will estop an IPR petitioner from proceeding in federal court, the United States Patent and Trademark Office or the International Trade Commission on grounds that were raised, or reasonably could have been raised, in the IPR. The Federal Circuit noted that such estoppel does not constitute an injury in fact where—as was the case with Phigenix—an appellant is not engaged in activity that would give rise to a possible infringement suit.