By Reza Mollaaghababa
In the case of Phygenix, Inc. v. ImmunoGen, Inc., the Court of Appeals for the Federal Circuit (CAFC) held that the petitioner (Phygenix) that had unsuccessfully challenged certain claims of ImmunoGen’s U.S. Patent No. 8,337,856 (“the ‘856 patent”) in an inter partes review (IPR) lacked standing to appeal a Patent Trial and Appeal Board (PTAB) decision that affirmed the validity of the challenged claims because Phigenix had “not offered sufficient proof establishing that it has suffered an injury in fact…” Although the Federal Circuit has required appellants to demonstrate standing in other proceedings, the Phygenix case is the first time this doctrine has been applied to bar an appeal of a final written decision in an IPR proceeding.
ImmunoGen owns the ‘856 patent, which is directed to an antibody-maytansinoid conjugate that is purportedly useful in combating a variety of cancers. Genentech has a worldwide exclusive license to the ‘856 patent for producing the drug Kadcyla®. Phigenix in turn owns U.S. Patent No. 8,080,534 (“the ‘534 patent”). Phigenix alleged that the ‘534 patent covers Genentech’s activities relating to Kadcyla and hence the subject matter claimed in the ‘856 patent.
The America Invents Act (AIA) provides that “a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent.” 35 U.S.C. 311(a). The AIA does not impose a standing requirement for a challenger to request the institution of an inter partes review (IPR) of a patent. However, the patent appellate court recently held that an IPR petitioner must have standing in order seek the appellate review of a PTAB’s final decision.
Phigenix sought inter partes review of the claims of the ‘856 patent based on an obviousness challenge. The PTAB initiated a trial but ultimately found the challenged claims to be nonobvious. Following the final written decision, Phigenix appealed the PTAB’s decision to the CAFC. In response, ImmunoGen filed a motion to dismiss arguing that Phigenix lacked standing to appeal the PTAB’s decision. A single judge of the CAFC denied ImmunoGen’s motion but requested that the parties file briefs addressing the standing issue.
Phigenix provided declarations in support of its standing to appeal the PTAB’s decision and argued that ImmunoGen’s ‘856 patent increases competition between itself and ImmunoGen and increased competition represents a cognizable injury. In particular, Phigenix argued that “[t]he existence of ImmunoGen’s ‘856 patent has … encumber[ed] Phigenix’s licensing efforts while ImmunoGen receives millions of dollars in licensing revenue.” Phigenix did not, however, contend that it faced the risk of infringing the ‘856 patent, or that it was an actual or prospective licensee of the ‘856 patent, or that it planned to take any action that would implicate the ‘856 patent.
The CAFC emphasized that a party’s standing to sue is a doctrine that is rooted in the case or controversy requirement of Article III of the U.S. constitution. In particular, in order to have standing, an appellant “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [appellee], (3) that is likely to be redressed by a favorable judicial decision.” Further, the CAFC stressed that although Article III standing is not necessarily a requirement to appear before an administrative agency, “an appellant must nonetheless supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court.”
The CAFC did not find Phigenix’s evidence and arguments convincing. With regard to the Phigenix’s argument that the ‘856 patent deprived it of potential licensing revenue, the CAFC indicated that “… there is simply no allegation here that Phigenix has ever licensed the ‘534 patent to anyone, much less that it licensed the ‘534 patent to entities that have obtained licenses to the ImmunoGen ‘856 patent.”
The CAFC further explained that Phigenix cannot base its injury in fact on a violation of the statutory provision (§141(c)) that provides a party to an inter partes review the right to appeal the PTAB’s decision to the CAFC because Phigenix has been permitted to file its appeal, and “the exercise of its right to appeal does not necessarily establish that it possesses Article III standing.”
Finally, the CAFC addressed Phigenix’s argument that “the estoppel effect of the [PTAB]’s decision adversely impacts Phygenix’s ability to provide a contractual warranty.” The estoppel provision of §315(e)(1) provides that a petitioner may not request or maintain a proceeding before the USPTO, the U.S. International Trade Commission, or a federal district court with respect to a claim of a patent on any ground that petitioner raised or reasonably could have raised during the inter parties review of that claim. The CAFC, however, held that this estoppel provision does not constitute an injury in fact when the appellant “is not engaged in any activity that would give rise to a possible infringement suit.”