Non-Infringing Parties May Be Able to Challenge a Patent in an IPR, but Not Appeal the Result

By Brandon Scruggs. A member of our Litigation Practice Group

A recent court decision leaves some patent challengers using the inter-partes review (IPR) process facing a conundrum: They may be allowed to challenge a patent’s validity in an IPR, but not to appeal an adverse result.

The IPR is a procedure for challenging the validity of a U.S. patent on the basis of it being either anticipated or obvious in light of prior art.  A challenge can be made by any third party who requests the Patent Trial and Appeal Board (PTAB) to initiate an IPR.  The PTAB will initiate the IPR if it believes that there is a reasonable likelihood that the challenger will prevail with respect to at least one challenged claim.

Phigenix, Inc. sought an IPR of a U.S. patent owned by ImmunoGen, Inc. covering methods for treating certain cancers. Phigenix alleged that certain claims were unpatentable as obvious over various prior art references.

The PTAB instituted an IPR and eventually issued a final decision that the claims are valid and non-obvious. When Phigenix appealed, the Federal Circuit dismissed the appeal for lack of standing.

One of the elements of standing, a constitutional requirement for federal court, is “injury in fact.” This means that a party appearing in federal court must point to an injury that exists or is imminent and is particularized (i.e., that it affects that party in an individual way).  By contrast, to appear before an administrative agency like the PTAB, constitutional standing is not necessarily a requirement.

In Phigenix, Inc. v. ImmunoGen, Inc., the Federal Circuit addressed the legal standard for demonstrating standing in an appeal from a final agency action, something the court had not done in the 35 years of its existence.

First, the court decided that where a party seeks review of a final agency action and its standing comes into doubt, the party must supply good evidence of specific facts to support its standing.  Second, a party who appeals an IPR must demonstrate standing at the earliest opportunity, generally in response to a motion to dismiss the appeal or in its opening brief.

A party’s standing can be “self-evident” in some cases, said the court, like when the patent owner has accused the party of infringement. Otherwise the party pursuing an appeal must demonstrate its standing.  To do so, it may proffer arguments, affidavits or other evidence, whether already in the record in the IPR or supplied during the appeal itself.

Did Phigenix have standing to appeal?  Phigenix admitted it did not manufacture any products, so it could not claim that it faced any risk of infringing ImmunoGen’s patent.  Indeed, Phigenix could point to no business plans that would involve the patent. (More...)