Lack of Constitutional Standing to Appeal Makes Section 315(e) Estoppel Questionable

By Suzanne Lecocke


Does 35 U.S.C. § 315(e) estoppel apply when a party has no constitutional standing to appeal, even though it has a right to appeal under 35 U.S.C. § 319?  In AVX Corp. v. Presidio Components, Inc., Appeal No. 18-1106 (Fed. Cir. 2019), the Federal Circuit dismissed an appeal by AVX of a Final Written Decision ofthe U.S. Patent Trial and Appeal Board (PTAB) for lack of Article III standing.

AVX had filed a Petition for Inter Partes Review (IPR) challenging all claims of Presidio’s U.S. Patent No. 6,661,639 on several obviousness grounds. The PTAB found some claims patentable and some non-patentable.  AVX appealed the merits of the PTAB’s decision as to the patentable claims; Presidio did not appeal the PTAB’s decision as to the non-patentable claims.  In its appellate brief, AVX asserted it had standing to appeal, evidenced by a supporting affidavit; Presidio responded that although AVX had a statutory right to appeal (35 U.S.C. §§ 141(c), 319), AVX had not established constitutional Article III standing to appeal.  The Federal Circuit agreed with Presidio and did not reach the merits of the PTAB’s Final Written Decision.

Section 141(c) of Title 35, United States Code, provides:

A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) or 328(a) (as the case may be) may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.

Section 319 of Title 35, United States Code, states:

A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.

AVX did not contend that the statutory right to appeal established constitutional standing and the Federal Circuit has indeed previously held that constitutional standing cannot be based solely on a statutorily-created right to sue/appeal.[1]

Constitutional standing to appeal requires more.  It is established when a party shows (1) an ”injury in fact,” (2) “a causal connection between the injury and the conduct complained of,” and (3) a likelihood that “the injury will be redressed by a favorable decision.”[2]  An injury in fact is “a legally protected interest which is (a) concrete and particularized” and “(b) actual or imminent, not conjectural or hypothetical.”[3]  Constitutional standing is not required at the PTAB, but is required in federal court.  To appeal a PTAB final written decision, a party must either establish constitutional standing when it files the IPR petition or, if not then, when it appeals the PTAB decision.[4]

AVX had not established constitutional standing at the PTAB.  On appeal, AVX argued that it suffered the requisite constitutional standing injury because the statutory estoppel provisions of the America Invents Act (AIA), 35 U.S.C. § 315(e), would prevent it from asserting the obviousness challenges it raised or reasonably could have raised if Presidio now or in the future asserted the same patent claims against AVX in federal district litigation.  AVX also argued that it maintained standing as a competitor of Presidio (called “competitor standing”), thereby also establishing constitutional standing injury.

The AIA estoppel provisions state that an IPR petitioner “may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review”[5] and “may not assert either in a civil action . . . or in a proceeding before the [ITC]  . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”[6]  Estoppel attaches at the time of the Final Written Decision.

To that end, AVX argued that, unless it could appeal the PTAB’s Final Written Decision, it would be “forever barred” from challenging Presidio’s upheld patent claims.  In the opinion of the Federal Circuit, though, such estoppel did not create an “injury in fact” in this case because AVX “is not engaged in any activity that would give rise to an infringement suit.”[7]

AVX and Presidio are competitors.  Both parties make and sell electronic components (e.g., capacitors).  Both parties own patents covering capacitors.  Both parties have invested millions of dollars to develop their products.  The parties have been involved in several litigations against each other, two still on-going.  AVX has previously been ordered to pay damages to Presidio and has been enjoined from infringing certain of Presidio’s patents.  Presidio had issued press releases of its winnings against AVX. None of those facts, however, weighed in favor of AVX in establishing injury in fact on appeal.

Having rejected the notion that estoppel itself establishes constitutional standing, the Federal Circuit then posited whether the estoppel effect was still existent.  The Court noted that it:

. . . has not decided whether . . . § 315(e) would have estoppel effect even where the IPR petitioner lacked Article III standing to appeal the Board’s decision to this court.  For this court to so hold, we would have to consider whether that reading of § 315(e) is tied to § 319’s right of appeal for any “party dissatisfied with the final written decision” of the Board [and] whether § 315(e) should be read to incorporate a traditional preclusion principle—that neither claim nor issue preclusion applies when appellate review of the decision with a potentially preclusive effect is unavailable. [citations omitted].  We have not addressed those and other considerations bearing on the proper application of § 315(e).

We decline to do so here.  The parties have not briefed the issues.[8]

The Court specifically suggested though, that if Presidio asserted the upheld claims against AVX in federal district court, AVX could at that time “test whether § 315(e) bars it from raising the obviousness challenges that the Board reviewed and rejected.”[9]

While on the one hand, estoppel arose at the time of the PTAB decision, it is well-accepted that a judgment has no preclusive effect if a party has no right to appeal.  So the question to be decided is whether a judgment (or administrative decision) has preclusive effect if a party has no constitutional standing to appeal, yet has a right to appeal (in this case, statutorily given by § 319).

AVX’s second argument was that competitor standing established the injury required for constitutional standing.  The Federal Circuit again disagreed, saying competitor standing was not present in this case.  Competitor standing exists when a party suffers injury in fact resulting from a government action that alters existing competitive conditions or provides benefits to an existing competitor.  Injury that might be caused by possible future competition or that might result if a party might not be able to be a competitor in the future is speculative and, therefore, insufficient.  The Federal Circuit held that competitor standing gives rise to constitutional standing in cases only where the “disputed action [poses] a nonspeculative threat to a concrete interest of the challenger”[10] – in other words, where the challenger faces an specific, concrete, and present or inevitable economic injury as a result of the government action.

Upholding Presidio’s patent claims merely reaffirmed Presidio’s exclusivity rights, but did not directly injure AVX, especially because AVX was not currently using the claimed features of the upheld claims.[11]

Importantly, not only were AVX and Presidio not current competitors, AVX had not established that it had any plans to develop a capacitor covered by the patent-in-issue.  Lawsuits and allegations between the parties on other patents, claims, and products were of no significance to the Federal Circuit.  Press releases that might lessen a party’s goodwill or reputation in the eyes of its customers were determined not to be a concrete injury in fact.

The Federal Circuit has recognized the distinction between injury to current competition and injury to future competition in other cases.[12]  In JTEKT, for example, the Federal Circuit dismissed JTEKT’s appeal for lack of standing because JTEKT had not established “that [its present] stage of development [of its product] create[d] a concrete and substantial risk of infringement or [would] likely lead to claims of infringement.”[13]  JTEKT petitioned the U.S. Supreme Court, questioning whether a party has standing to appeal a Final Written Decision of the PTAB when Congress statutorily provided the right to appeal and created a estoppel that precludes the party from later asserting certain challenges.  JTEKT claims, and perhaps rightly so, that injury is created to those competitors of patent-holders that want to ascertain a definitive answer to their challenges in order to complete due diligence before completion of product development.  JTEKT claims the Federal Circuit requires absolute injury in fact, when it should require only likely harm, in order to establish standing.

JTEKT stresses that (1) “in enacting §§ 319 and 141, Congress intended for any party dissatisfied with a final decision to be able to appeal,” [14] (2) “in enacting 35 U.S.C §§ 318 and 311, Congress created a new private right, the invasion of which constitutes an injury in fact,”[15] and (3) “in enacting 35 U.S.C § 315, Congress created estoppel, constituting an injury in fact when tied to an un-appealable, incorrect final written decision.”[16]

In contrast, the Solicitor General’s Amicus Curiae Brief in RPX (see footnote 13) disagrees with petitioner RPX (and, by implication, JTEKT and AVX) and his position may carry significant weight.  Requesting that RPX’s writ of certiorari be denied, the Solicitor General (SG) submitted: “

etitioner has not suffered an injury in fact and thus lacks Article III standing” and “[t]he court of appeals’ decision does not warrant this Court’s review.”[17]  The SG made numerous points.  For example, he argued that the continued existence of patent claims causes no harm where the petitioner “claims no commercial or other interest in the subject matter of the [] patent.”  He also focused on a different rationale: “[b]ecause the AIA does not ‘guarantee a particular outcome’ for a person that requests inter partes review, the court of appeals correctly held that petitioner had received ‘all the statute requires,’ insofar as petitioner ‘was permitted to request review and participate once the [US]PTO granted its request’ [and] ‘[t]he USPTO’s statutory obligation to cancel a patent claim thus arises from the Board’s ‘final[] determin[ation]’ that the claim is ‘unpatentable,’ not from the proof offered by the petitioner for inter partes review.”[18]  At the PTAB, the petitioner would have done what it could and suffered no deprivation of its rights.

Noteworthy in the RPX case was that RPX did not contend that it had Article III standing by virtue of Section 319.  However, the SG stated: “The right to initiate the appeal, by contrast, is conferred not on ‘[a]ny party to the inter partes review,’ but on ‘[a] party dissatisfied with the final written decision of the [Board].’”[19]  Dissatisfaction, though, was not the same as disagreement with the decision. [B]ecause any appeal by its nature is premised on disagreement with the decision being appealed, that prerequisite would have no practical effect if every party that disagreed with the Board’s decision could invoke the Federal Circuit’s jurisdiction. To prevent that prerequisite from being superfluous, the term “dissatisfied with” should be construed to mean “aggrieved by” or “injured by.”[20]

So, it may be that the Supreme Court will decide not to hear either the RPX case or the JTEKT case, leaving in place case law stating that estoppel does not create constitutional standing injury in fact.  A determination not to hear the issue also leaves in place the uncertainty of whether a petitioner is estopped from asserting invalidity challenges in a later proceeding.

Until the interaction of estoppel and the appeal of a PTAB Final Written Decision is settled, a petitioner, when filing an IPR Petition, would do well to evidence in its petition non-speculative injury that would be caused by an adverse PTAB Final Written Decision.  Also in the meantime, a party may be able to scour its competitor’s patent portfolio for patents in which it has no direct competitive interest and file IPR challenges against those patents merely to see whether it can invalidate some claims.  If estoppel arises only when a party has constitutional standing to appeal, then a party knowing it would not have constitutional standing clearly would have two chances at invalidating patent claims – first challenging the patent in PTAB AIA proceeding and later again in district court litigation.

As a further comment, the issue of estoppel tied to an un-appealable decision might also arise in the following scenario:  Suppose, prior to the Supreme Court decision in SAS Inst. Inc. v. Lee, 2017 U.S. LEXIS 3236 (U.S. May 22, 2017), a petitioner had filed an IPR petition and the PTAB had granted partial institution and issued a Final Written Decision upholding some claims.  Now suppose, after SAS, the Federal Circuit had remanded the case to the PTAB without vacating the Final Written Decision and the PTAB then denied institution as to all claims and all grounds.  Similar to AVX, the petitioner would be left with a previous Final Written Decision for which estoppel had attached at the time of the decision and for which the petitioner had a right to appeal, but which the Federal Circuit declined to hear on appeal, not on constitutional grounds, but because of the intervening SAS ruling.  This is also an open-ended question.  Will estoppel in that scenario preclude the petitioner from raising its PTAB-raised challenges in a district court case?

We hope to be able to report definitive answers to some of the difficult questions raised by these cases soon.


[1] Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1175 (Fed. Cir. 2017), relying on Raines v. Byrd, 521 U.S. 811, 820 n. 3 (1997).

[2] Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotation marks omitted).

[3] Id. at 560 (citations omitted).

[4] JTEKT Corp. v. GKN Automotive Ltd., 898 F. 3d 1217, 1220 (Fed. Cir. 2018) (writ of cert. filed Dec. 7, 2018) (quoting Phigenix, 845 F.3d at 1171-72).

[5] 35 U.S.C. § 315(e)(1).

[6] 35 U.S.C. § 315(e)(2).

[7] AVX, slip op. at 8, citing Phigenix, 845 F.3d at 1175-76 (quoting Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1262 (Fed. Cir. 2014).

[8] AVX, slip op. at 8-9.

[9] Id. at 9.

[10] AVX, slip op. at 11.

[11] AVX, slip op. at 12.

[12] See, e.g., JTEKT, 898 F.3d at 1221.

[13] Id.  JTEKT’s petition for writ of certiorari to the U.S. Supreme Court was originally distributed for the Conference of February 15, 2019, but, on February 6th, was rescheduled for a yet-to-be-determined date.  JTEKT requested that its case be heard along with RPX Corp. v. ChanBond LLC (Case. No. 17-1686) (writ of cert. filed June 18, 2018).   On May 9, 2019, the Solicitor General of the United States submitted an Amicus Curiae Brief in the RPX case.  RPX, May 9, 2019 Document.  See also Phigenix, 845 F. 3d at 1173-74.

[14] JTEKT Petition, p. 8.

[15] Id. at 12.

[16] Id. at 15.

[17] RPX, SG Amicus Curiae Brief, May 9, 2019 Document, pp. 9, 19.

[18] Id. at 10, 13 (citations omitted).

[19] Id. at 17 (emphasis in original) (citation omitted).

[20] Id. at 17-18.