On Monday, December 10th, Japanese manufacturer JTEKT Corporation filed a petition for writ of certiorari with the U.S. Supreme Court asking he nation’s highest court to determine whether federal statutes governing appeals from the Patent Trial and Appeal Board (PTAB) create a right for PTAB petitioners to have an appellate court review adverse final written decisions. If the case is taken by the Supreme Court the question will be whether the AIA creates standing for any dissatisfied party to appeal a PTAB final decision. The Court of Appeals for the Federal Circuit’s had decided JTEKT did not prove an injury in fact for the purposes of determining the existence of Article III standing in its appeal.
The Federal Circuit’s panel decision in this case came out in early August where it determined that JTEKT lacked Article III standing to appeal a final written decision in an inter partes review (IPR) proceeding that upheld two challenged claims from a patent owned by GKN Automotive, a competitor of JTEKT, over an obviousness challenge from JTEKT. While JTEKT engineers had submitted declarations to the Federal Circuit that there was a chance that a product being developed by JTEKT might be the target of patent infringement claims based on the challenged patent, it was impossible to quantify the risk of infringement at the product’s current state of development.
“By limiting standing to definitive patent-inflicted injury associated with an infringement suit, the Federal Circuit risks creating overly-narrow, patent-specific standing jurisprudence that does not consider the broader law necessary to address standing in appeals from all agency actions,” JTEKT’s petition for writ reads. Although it couldn’t quantify the risk of infringement based upon the current state of its product development, JTEKT argued that it did have standing based upon its economic injury resulting from development costs. JTEKT also argued that it suffered an injury in fact under the estoppel terms of 35 U.S.C. § 315(e) preventing its ability to raise its arguments about the validity of the surviving claims if those claims are asserted in a later district court proceeding.
“Congress intended that any party dissatisfied with a final written decision from the PTAB to appeal that decision, statutorily conferring an injury in fact to support standing,” said Lisa Mandrusiak, an attorney with Oblon, McClelland, Maier & Neustadt and counsel representing JTEKT in this case. This sentiment was echoed by Todd Baker, partner at Oblon and lead counsel representing JTEKT. “The statutory framework alone supports our decision,” Baker said. “An injury was created when the Patent Office issued a weak patent that JTEKT, as a competitor, is trying to remove from the landscape.”
JTEKT’s petition argues that the Federal Circuit’s jurisprudence on definitive patent-based injuries being the only injury sufficient to confer standing in PTAB appeals conflicts with Supreme Court precedent on Congress’ power to create Article III standing by statute. By passing the America Invents Act which enacted 35 U.S.C. § 319, which gives any party dissatisfied with a PTAB decision the right to appeal, and 35 U.S.C. § 141, which governs PTAB appeals to the Federal Circuit, Congress intended to confer Article III standing to parties wanting to appeal final written decisions of the PTAB. Citing to Supreme Court decisions in SAS Institute v. Iancu (2018) and Cuozzo Speed Technologies v. Lee (2016), JTEKT notes that there is a “strong presumption” in favor of judicial review of PTAB decisions which can only be overcome by “clear and convincing” indications that Congress intended to bar judicial review. JTEKT further cites to Spokeo, Inc. v. Robins (2016) to show that the Supreme Court has previously found Congress’ role in determining an injury in fact via statute to be important.
JTEKT also suffered an injury in fact through an invasion of its private right to request a cancellation of patent claims under 35 U.S.C. § 318, the statute governing PTAB final written decisions, and 35 U.S.C. § 311, which enables parties to petition for IPR proceedings at the PTAB. “The losing IPR petitioner is injured when it doesn’t get what the statute requires—not just the right to a decision, but the right to an error-free decision,” JTEKT’s petition reads. A further injury in fact was created by estoppel provisions found in 35 U.S.C. § 315 preventing JTEKT from raising similar arguments in district court proceedings if an infringement suit on the surviving patent claims is commenced by GKN Automotive.
Finally, JTEKT argues that its case merits review because the issue affects numerous IPR petitioners, especially operating companies attempting to perform due diligence before finalizing product development. JTEKT cites a study of IPR filings showing that 20 percent of IPRs are petitioned to challenge patent claims which haven’t been asserted in district court. This issue also affects third-party petitioners like RPX Corporation and the petition notes that the issues in this case are similar to those raised in RPX Corp. v. ChanBond LLC, another case regarding Article III standing for appeals of IPR decisions and JTEKT argues that its petition should be considered along with that case. Baker noted that the Supreme Court had invited the U.S. Solicitor General to submit a memo on RPX Corp. “Often, whatever the Solicitor General opines, the Supreme Court follows,” Baker said.