Did AVX Suffer A Constitutionally Recognizable Injury?

AVX did not need Article III standing to file its IPR petition with the PTO because the PTAB is not an Article III tribunal. Further, the AIA provides that “a party dissatisfied with the final written decision of the [Board] . . . may appeal the decision” to the Federal Circuit. 35 U.S.C. § 319; see also 35 U.S.C. § 141. But, in order to maintain the appeal before the Federal Circuit, the party that brought the appeal must have Article III standing. Such standing requires (1) an “injury in fact,” (2) “a causal connection between that injury and the conduct complained of,” and (3) a likelihood that “the injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The injury in fact must be “a legally protected interest which is (a) concrete and particularized” and “(b) actual or imminent, not conjectural or hypothetical.” Id. at 560. The question in this case was whether AVX had suffered a legally sufficient “injury in fact.”

No Injury Based Solely On IPR Estoppel – and a Hint at the Federal Circuit’s Reading of IPR Estoppel?

AVX argued that it was injured by the Board’s decision because it will be estopped from arguing (in later litigation) that the remaining sixteen claims are unpatentable based on any ground it “raised or could have reasonably raised” in the IPR. See 35 U.S.C. § 315(e). In essence, AVX argued that the IPR was its one shot to invalidate these claims and it has been injured by the Board’s decision not to do so.

The Federal Circuit rejected this argument for two reasons. First, in two previous appeals, the Federal Circuit had found that IPR estoppel alone was not a basis for standing, and saw no reason to deviate from this precedent. Second, the court specifically questioned whether estoppel would actually prevent AVX from arguing the claims were invalid in a later litigation. The court noted that the application of the IPR estoppel provision was still an open question. In fact, the court suggested that the “traditional preclusion principle” – that preclusion does not apply when the decision at issue is not subject to appellate review – might mean that AVX would not be estopped from arguing invalidity in future litigation. Slip opn. at 8. While this is arguably dicta, it suggests that at least this Federal Circuit panel sees some limitations on the IPR estoppel provisions when entities lack standing to appeal.

Competitor Standing – Upholding A Patent Claim Does Not Necessarily Harm A Competitor

Relying on “competitor standing” precedent, AVX also argued that it was injured because the Board’s decision to uphold Presidio’s patent claims reduces AVX’s ability to compete with Presidio. But, the court again disagreed – finding that AVX competitive injury was speculative.

The court found that upholding a patent claim does not, in all cases, injure a competitor. See Slip Opn. at 11 – 12. The court first noted that, in all the cases it reviewed regarding competitor standing, the governmental action at issue “nonspeculatively threatened economic injury to the challenger by the ordinary operation of economic forces.” The court then found that upholding a patent claim is not such a government action. Id. at 12 (not invalidating a patent claim “does not, by the operation of ordinary economic forces, naturally harm a . . . competitor in the same market.”). Certainly, upholding a patent claim could harm a competitor if it were using, or planning to use, the claimed features. But, the court reiterated that “we have repeatedly insisted that such interest in using the claimed features be nonspeculative.” Id. Because AVX had “not pointed to a capacitor in any stage of development that might implicate the upheld claims of the ʼ639 patent … [it] lack[ed] the current or nonspeculative interest in practicing those claims.” Id. at 13.

Competing Interests For Patent Challengers

Thus, a party may be unable to appeal the PTO’s decision if it lacks the required legal injury. But, the same party may not be prevented by the AIA estoppel provisions from later challenging the same patent in a separate proceeding.

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