Standing to Appeal PTAB Decision to Federal Circuit is Measured for the Appellant, Not the Appellee

Written by Jordan M. Cox and Nathanael Luman, Ph.D.

The Federal Circuit determined that Article III standing was not necessary for an appellee to participate in a judicial appeal of an IPR final written decision because the appellant had Article III standing in Personal Audio, LLC v. Electronic Frontier Foundation, Case No. 2016-1123 (Fed. Cir. August 7, 2017).  Due to Article III standing being satisfied by the appellant-patent owner, the Federal Circuit determined that the appellee-petitioner was not constitutionally excluded from defending the PTAB’s decision.

Electronic Frontier Foundation (EFF) filed a petition for IPR challenging certain claims from a patent owned by Personal Audio.  The PTAB issued a final written decision holding the challenged claims unpatentable as anticipated and/or obvious.  Personal Audio appealed the PTAB’s decision.

The Federal Circuit requested briefing from the parties on whether EFF had standing to participate in the appeal in view of Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753 f . 3d 1258 (Fed. Cir. 2014), which held that a PTAB petitioner that does not meet the Article III case-or-controversy requirement does not have standing to invoke federal judicial power, and thus does not have standing to appeal a PTAB decision on inter partes reexamination.  Here, the Federal Circuit explained that although Article III standing is not a requirement to file an IPR petition at the USPTO, the party seeking review of a PTAB decision in a federal court must have Article III standing. 

In this appeal, EFF would itself not have standing to appeal because they are a non-profit organization “defending civil liberties in a digital world” without any economic or other recognizable stake in the validity of Personal Audio’s patent.  But in this case, Personal Audio, not EFF, was the party that sought federal judicial review of the PTAB’s decision.  Personal Audio lost patent rights due to the PTAB’s decision, which is a sufficient alteration of its legal rights to confer standing under Article III.  Therefore, Article III standing for this appeal was satisfied by Personal Audio acting as the appellant, and the Federal Circuit determined that EFF was not constitutionally excluded from defending the PTAB’s decision as the appellee.

This case provides a further refinement of the standing requirement for appealing an IPR decision.  Earlier this year, the Federal Circuit determined that an IPR petitioner lacked standing to appeal a final written decision upholding patentability because the petitioner had not suffered an injury in fact due to the PTAB’s decision.  See Phigenix, Inc. v. Immunogen, Inc. 845 f . 3d 1168, 1173–76 (Fed. Cir. 2017).  In Phigenix, the appellant-petitioner had not been sued for infringement, was not an actual or prospective licensee of the patent in the IPR, and had never licensed its own patent to competitors having licenses to the patent in the IPR.  Thus, the PTAB’s decision had not caused an injury in fact to the appellant-petitioner.  In contrast, the appellant in Personal Audio was the patent owner that had suffered an injury in fact due to the PTAB’s decision of unpatentability.