The Federal Circuit has on several occasions taken the opportunity to address (and in doing so, flesh out) the requirements for Article III standing to appeal an adverse determination in a post-grant review proceeding (post-grant review, inter partes review, and covered business method patent review) against a Petitioner (loss of patent claims typically provides sufficient injury for a Patent Owner to have standing). See, for example, Consumer Watchdog v. Wisconsin Alumni Research Foundation; Phigenix, Inc. v. ImmunoGen, Inc.; E. I. du Pont de Nemours & Co. v. Synvina C.V.; and most recently, Amerigen Pharmaceuticals Ltd. v. UCB Pharma GmbH. But the Court has not had a clearer factual basis for deciding that a failed Petitioner did not have standing under Article III than in Momenta Pharmaceuticals v. Bristol-Myers Squibb, decided today.
The case involved a inter partes review (IPR) brought by Momenta against all claims of U.S. Patent No. 8,476,239 having claims reciting "specific fluid formulations of the protein molecule CTLA4Ig (cytotoxic T-lymphocyte associated protein 4 immunoglobulin)." These formulations were used to treat, inter alia, rheumatoid arthritis, having the generic name abatacept and sold by BMS as Orencia®. The PTAB instituted but sustained the patentability of all claims. This appeal followed.
However, certain additional facts outside the basis for the PTAB's decision were relevant to the decision reached by the panel. While not needing to establish standing to petition for IPR, Momenta at that time was pursuing research for the development of a biosimilar version of Orencia®. However, during the course of the IPR trial, Momenta's biosimilar candidate failed clinical testing and was withdrawn by Momenta from FDA review. BMS moved to dismiss the appeal on the grounds that these actions deprived Momenta of standing, insofar as there was no prospect of injury if Momenta was not pursuing its biosimilar. The Court heard argument on the motion as well as the merits and retired to confer.
While conferring, Momenta brought two other facts to the Court's attention. First, on October 18, 2018 (after oral argument), Momenta filed a Letter to the Court (permitted under Fed. R. App. P. 28(j)) along with a press release, informing the Court that Momenta had "has initiated discussions with its collaboration partner, Mylan, to exit its participation in the development of its other five biosimilar programs including M834, a proposed biosimilar to ORENCIA® . . . ." This prompted the Court to issue an Order to Show Cause (on October 23rd) why the Court should not dismiss the appeal. Ten days later Momenta responded that:
As of today, the companies continue to be jointly responsible under that agreement for product development and for sharing the costs of that development, which are substantial. And because of BMS's patent and the Board's decision upholding it, Momenta and its partner Mylan still face the same fork in the road about the commercial formulation for their biosimilar product—they must decide whether to proceed with the current formulation or switch to a more expensive and potentially less commercially viable option. That decision and the costs associated with it still turn on the outcome of this appeal.
Momenta's response was supported by a declaration from its Chief Business Officer that the parties had not reached a decision whether to terminate the Orencia® biosimilar development program. In addition, Momenta asserted its "economic interest" in any Orencia® biosimilar that might be developed by Mylan, which included "potential right to royalties." A little more than a month later, on December 10th, Momenta filed another letter with the Court, informing the panel of a Preliminary Prospectus Supplement and Form 8-K filed with the Securities and Exchange Commission four days before, which notified the SEC and prospective investors that:
We have elected to terminate our collaboration agreement with Mylan with respect to the development of . . . M834, a proposed biosimilar to ORENCIA® . . . . On November 19, 2018, we delivered a formal notice of this partial termination to Mylan, as provided in the collaboration agreement.
Momenta made no response to BMS's further argument that the appeal was mooted by these developments, nor did the company withdraw its appeal.
Judge Newman rendered the Court's decision, joined by Judges Dyk and Chen. Calling the "constitutional limitation of federal-court jurisdiction to actual cases or controversies" the most fundamental principle defining the judiciary's proper role, citing Raines v. Byrd, 521 U.S. 811, 818 (1997), the opinion addressed Momenta's argument that the requirement for standing for judicial review of agency decisions was "relaxed" relative to district court litigation. These requirements are that an appellant must have "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)). The panel recognized that some relaxation has been recognized, for example in Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) and Massachusetts v. E.P.A., 549 U.S. 497, 517–18 (2007). Indeed, the Supreme Court has held that "[p]arties that initiate the [Inter Partes Review] proceeding need not have a concrete stake in the outcome; indeed, they may lack constitutional standing" in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131, 2143–44 (2016).
But that relaxation does not extend to the requirement of "injury in fact," which is a hard floor of Article III jurisdiction that cannot be removed by statute, citing Summers v. Earth Island Institute, 555 U.S. 488 (2009). The basis for this "hard floor, according to the opinion, is that without it courts would be reduced to writing advisory opinions. Congress does not have the power to do so by statute, as recognized in Consumer Watchdog v. Wis. Alumni Research Found. and Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 100 (1979). Under the facts as they had developed, Momenta was unable to show "'an invasion of a legally protected interest' that is 'actual or imminent, not conjectural or hypothetical'" as required under the Supreme Court's Lujan decision.
Momenta's alternative argument, that the estoppel provisions of IPR proceedings under 35 U.S.C. § 315(e), were similarly unavailing in the face of evidence that Momenta was not longer engaging in activity that could lead to infringement liability. The argument that Momenta might be injured "at some future time" if Mylan developed an Orencia® biosimilar from the sale of which Momenta would be entitled to royalties was too attenuated to provide injury-in-fact, the opinion citing Clapper v. Amnesty Int'l USA, 568 U.S. 398, 414 n.5 (2013), that a plaintiff "cannot rely on speculation about the unfettered choices made by independent actors" not before the court. Momenta's position was contrary to several Federal Circuit decisions on standing for appealing PTAB decisions, including Consumer Watchdog, Phigenix, Inc. v. Immunogen, Inc., and RPX Corp. v. ChanBond LLC, No. 17–2346, ECF 39 (Fed. Cir. Jan. 17, 2018). In cases where lacking a product on the market was not enough to preclude Article III standing, the petitioner had "concrete plans for future activity that creates a substantial risk of future infringement," JTEKT Corp. v. GKN Automotive Ltd., 898 F.3d 1217, 1220–21 (Fed. Cir. 2018), or the parties were "direct competitors and were in commercial dispute" and the petitioners faced "a significant risk of patent infringement in their demonstration plant that was entering into operation," E.I. DuPont de Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1005 (Fed. Cir. 2018). None of these facts were present here.
And while recognizing that "[s]tanding and mootness may not be coextensive in all cases," none of the exceptions ("when the issue has avoided review and is likely to be repeated, or when the defendant voluntarily ceased the challenged activity and the plaintiff seeks to preserve its win") applied here. Accordingly, the Court dismissed the appeal as moot.
Momenta Pharmaceuticals, Inc. v, Bristol-Myers Squibb Co. (Fed. Cir. 2019)
Panel: Circuit Judges Newman, Dyk, and Chen
Opinion by Circuit Judge Newman
