Last week, the Federal Circuit had the occasion to address anew the requirements for standing to appeal an adverse decision of the Patent Trial and Appeal Board in an inter partes review proceeding under Article III of the Constitution, in Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corp.
The appeal arose over U.S. Patent No. 9,187,405, with several parties having filed inter partes review petitions, for which the PTAB granted joinder under 35 U.S.C. § 315 (c). These parties included Apotex Inc. and Apotex Corp. (who filed the first granted petition); Sun Pharmaceutical Industries, Ltd., Sun Pharmaceutical Industries, Inc., and Sun Pharma Global FZE (collectively, Sun); Teva Pharmaceuticals USA, Inc. and Actavis Elizabeth LLC; and Argentum Pharmaceuticals LLC. The PTAB determined that the petitioners had not demonstrated unpatentability under 35 U.S.C. § 314(a); petitioners appealed. However, before the Federal Circuit could render a decision, all petitioners except Argentum settled with Novartis and withdrew their appeals.
Novartis filed a motion to dismiss Argentum's appeal, on the grounds that Argentum lacked standing. Anyone (other than the patent holder) has standing to petition for inter partes review under the Leahy-Smith America Invents Act. Paradoxically, petitioners who fail to establish that at least one challenged claim is invalid do not automatically have standing to appeal. Here this was not an issue initially, because only one party to an appeal needs to have standing and it was undisputed that the other petitioners did so. Once those unsuccessful petitioners settled, however, only Argentum remained in the appeal. As argued by Novartis, the question of Argentum's standing was a threshold issue that the Court was required to settle before reaching the merits, citing Phigenix, Inc. v. Immunogen, Inc.
The Federal Circuit held that Argentum did not have standing, in an opinion by Judge Moore, joined by Judges Lourie and Reyna. The test for standing is that the putative appellant has "(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," citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). This requirement for appeals from PTAB decisions was established by the Federal Circuit in Consumer Watchdog v. Wis. Alumni Research Foundation. The quantum of injury-in-fact requires a showing that the appellant has "suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical'" the opinion states, citing Spokeo.
Argentum argued three bases for injury-in-fact. The first was a "reasonable and imminent threat of litigation" because it is pursuing a generic version of Novartis's Gilyena® product and was "in the process of filing an ANDA" with its manufacturing partner, KVK-Tech. Novartis argued in response that KVK, not Argentum, would be filing any such ANDA and thus Argentum could not rely on this risk of suit for standing (and in addition litigation was conjectural because neither party had filed any such Gilyena®-targeting ANDA). Argentum countered with the Federal Circuit's Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., 889 F.3d 1274, 1282–83 (Fed. Cir. 2018), decision for the principle that an ANDA did not need to have been filed to confer standing. The Court found Argentum's arguments "unavailing" with respect to Altaire, stating that in that case the company asserting standing was the company that planned to file the ANDA, unlike the case here. There "the threat of litigation was 'real' and 'imminent' and Altaire was affected 'in a personal and individual way,'" according to the opinion.
Argentum's second argument was that it would incur "significant economic injury" ("$10-50 million per year in lost profits once the FDA grants provisional approval to the ANDA; italics added) if subject to a "looming infringement action by Novartis." Novartis responded that this argument was entirely speculative. The Court concluded that "Argentum has not provided sufficient evidence to establish an injury in fact through economic harm," citing General Electric Co. v. United Techs. Corp., 928 F.3d 1349, 1353–54 (Fed. Cir. 2019), for analogous circumstances. The opinion also concluded that Argentum had not established that it had an investment in KVK's generic Gilyena® product nor ANDA, characterizing Argentum's allegations as "generalities" and its assertions regarding the economic costs as "conclusory and speculative." This, the Court held, was not "concrete and particularized" nor "actual and imminent" injury-in-fact.
Finally (with regard to the arguments the Court entertained), Argentum argued that it would be estopped under 35 U.S.C. § 315(e) from raising patentability and validity issues should Novartis eventually sue them for infringement under 35 U.S.C. § 271(e)(2). But Phigenix held that potential IPR estoppel was not sufficient to establish standing and thus this argument also failed to persuade the panel.
The Court having found no standing, it dismissed the appeal, costs to Novartis.
Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corp. (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Moore, and Reyna
Opinion by Circuit Judge Moore
