Do-Gooders Need Not Apply

By Alicia Palladino, Ph.D. and Tom Engellenner
According to its mission statement, Consumer Watchdog is a non-profit entity “dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics” – and they apparently also challenge patents in their spare time.

In 2006 Consumer Watchdog filed a request for inter partes reexamination under the old pre-AIA rules, challenging certain patent rights to stem cells that had been granted by the USPTO to the Wisconsin Alumni Research Foundation. When this public interest group failed to get the WARF patent thrown out last year, they exercised their statutory right to appeal. Section 141(c) of the U.S. Patent Laws provides that a party to a USPTO administrative proceeding who is dissatisfied with the Patent Office’s final written decision may appeal to the U.S. Court of Appeals for the Federal Circuit. (35 U.S.C. § 141.)

However, like Dikembe Mutombo swatting away a lay-up, the Federal Circuit recently told Consumer Watchdog: Not in my house! Chief Judge Radar writing for a unanimous three-judge panel rejected the appeal out of hand because the public interest appellant simply lacked standing. According to the Federal Circuit opinion, to invoke federal jurisdiction, the petitioner must meet the minimum requirements of Article III. Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1260 (Fed. Cir. 2014).

Although the decision arose under the old inter partes reexamination rules, the Federal Circuit’s reasoning appears to be equally applicable to the new AIA mechanisms for challenging patents, such as inter partes review (“IPR”), post grant review (“PGR”) and covered business method (“CBM”) review. Like the reexamination rules, all of these new procedures are available to any member of the general public wishing to challenge a patent and provide a statutory right of appeal to any petitioner that loses at the Patent Trail and Appeal Board (“PTAB”).

The Federal Circuit in the Consumer Watchdog case explained its dismissal of the appeal for lack of standing by stating that “a statutory grant of a procedural right may relax the requirements of immediacy and redressability, and eliminate any prudential limitations, which distinguishes the present inquiry from that governing declaratory judgment action.” However, the court found that Consumer Watchdog did not have standing because it had “not identified a particularized, concrete interest in the patentability of the [patent at issue], or any injury in fact flowing from the Board’s decision.” Id. at 1263.

The Federal Circuit’s decision in the Consumer Watchdog case leaves many questions unanswered. There will clearly be instances in the future, where an unsatisfied petitioner is not just a public interest group but instead a third party that has some interest in the outcome – even if it does not rise to the classic “case or controversy” standard that has traditionally governed declaratory judgment actions. What if the petitioner had been a company making a competitive product or hoping to develop a product in the space covered by the patent in question? Would a petitioner in one of these situations have standing to appeal after losing at the PTAB during an IPR? Certainly an argument can be made that Congress intended to create a robust system, like the European opposition practice, where private parties would able to weed out as many as possible of the patents that issued by mistake.

It appears that the Federal Circuit did leave some wiggle room in its Consumer Watchdog opinion for exactly these situations. During the court’s discussion of why Consumer Watchdog did not have standing, it stated that Consumer Watchdog was “not engaged in any activity that would give rise to a possible infringement suit,” and that it “only ha[d] a general grievance against the [patent at issue].” Id. at 1262.

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Pepper Hamilton's blog all about challenging and defending patents after issuance: inter partes review, post grant review, reexams & foreign oppositions.
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