Standing Up to Bad Patents: Allowing Non-Infringing Direct Competitors to Satisfy the Article III Standing Requirements Appealing an Adverse Inter Partes Review Decision to the Federal Circuit

By Ryan Fitzgerald. Full Text. 

In 2011, through the America Invents Act, Congress created a new administrative procedure, inter partes review (IPR), to allow third parties to challenge issued patents before the Patent Trial and Appeal Board (PTAB). It did so in recognition “that questionable patents [were] too easily obtained and [were] too difficult to challenge.” IPR challenges may be filed by any third party to invalidate a patent that does not meet one or more of select statutory patentability requirements. After a final decision at the PTAB, the losing party may appeal the decision to the Federal Circuit. But because any third party may file an IPR, the appealing party must meet the Article III standing requirements and establish its actual injury.

In most IPR appeals, patent challengers easily satisfy the actual injury requirement because they are already subject to an infringement suit. But in cases in which the challenger is not actively infringing the patent, establishing actual injury is more difficult. Through its several recent decisions, the Federal Circuit has restricted the ability of non-infringing competitors to satisfy the standing requirements beyond the Supreme Court’s precedent. This Note explores how non-infringing competitors may satisfy the Article III standing requirements on appeal of an IPR decision to the Federal Circuit.

This Note begins by exploring the patent application process and how it can result in the issuance of invalid patents. It then details the Supreme Court’s Article III standing jurisprudence with particular emphasis on its patent cases and discusses how the Federal Circuit’s recent decisions are overly restrictive on non-infringing direct competitors. Finally, this Note proposes a solution, the Direct Competitor Standing Test, which better aligns with the Court’s precedent and recognizes the unique injuries and interests at stake in patent cases.