May 13, 2019

Another IPR Petitioner Had No Standing to Appeal; Does Estoppel Apply to Such Petitioners?

In AVX Corp. v. Presidio Components, Inc., [2018-1106] (May 13, 2019), the Federal Circuit dismissed the appeal of a PTAB Final Written Decision because the Petitioner/Appellant lacked judicial standing to appeal.

The Federal Circuit noted that because the Constitution limits its grant of the “judicial power” to “Cases” or “Controversies,” U.S. Const., Art. III, § 2, any party that appeals to it must have standing under Article III before it can consider the merits of the case. Thus, in IPR appeals, an appellant must supply the requisite proof of an injury in fact when it seeks review of a Final Written Decision.

AVX argued that it is injured by the Board’s rejection of its obviousness challenges to the upheld claims because of the statutory estoppel provision, 35 U.S.C. § 315(e). The Federal Circuit rejected this argument because it has previously used estoppel as a sufficient basis for standing, and because it has yet to decide whether estoppel applies to Petitioners who lack Article III standing to appeal.

AVX also argued that it was injured by the decision because it reduces its ability to compete with the patent owner, citing decisions that, in non-patent contexts, have found “competitor standing” to challenge certain government actions. The Federal Circuit noted that in all the cases in which standing rested on competitive harm, the challenged government action non-speculatively threatened economic injury to the challenger by the ordinary operation of economic forces.

The Federal Circuit found the government action in an IPR was quite different. The Federal Circuit said that government action in an IPR is the upholding of specific patent claims, which does not address prices or introduce new competitors, but rather give exclusivity rights over precisely defined product features.

The Federal Circuit said a patent claim could have a harmful competitive effect on a would-be challenger if the challenger was currently using the claimed features or nonspeculatively planning to do so in competition, i.e., if the claim would block the challenger’s own current or nonspeculative actions in the rivalry for sales. However, taking all of AVX’s allegations as true, the Federal Circuit concluded that AVX has not shown that it is engaging in, or has nonspeculative plans to engage in, conduct which could arguably be covered by the upheld claims of the ʼ639 patent.

The Federal Circuit therefore dismissed the appeal.


The Federal Circuit’s suggestion that estoppel might not apply to IPRs where the petitioner lacks standing to appeal does give one pause. If this turns out to be the case, a patent challenger might be better off concealing its plans to make a competitive product, so that it can take a “free swing” at the patent before the PTAB without incurring the cost of estoppel from an adverse decision.