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IP Alert: Petitioners Without District Court Litigation Lack Standing to Appeal PTAB Decisions Upholding Patentability

April 13, 2018

On April 12, in Luitpold Pharmaceuticals, Inc. v. Pharmacosmos A/S, the Federal Circuit issued a per curiam order holding that an unsuccessful inter partes review (IPR) petitioner lacked Article III standing required to cross-appeal. Although the court designated the order as nonprecedential, the order further clarifies an important issue for IPR petitioners.

Pharmacosmos filed three IPR petitions seeking to invalidate a trio of Luitpold’s patents. Notably, the parties did not identify any district court proceedings relating to the petitions. In the IPR at issue in Pharmacosmos’s cross-appeal, the Patent Trial and Appeal Board (PTAB) reached a final decision holding that 16 claims of Luitpold’s patent were invalid, while upholding two of the patent claims. Luitpold appealed with respect to the invalid claims, and Pharmacosmos cross-appealed with respect to the claims upheld by the PTAB.

Luitpold filed a motion to dismiss Pharmacosmos’s cross-appeal for lack of standing. The Federal Circuit agreed and dismissed Pharmacosmos’s cross-appeal. The order does not discuss the relevant facts, but holds that “Pharmacosmos has not established an injury in fact sufficient to confer Article III standing.” In the IPR pleadings, the parties did not identify any underlying district court litigation. Further, in briefing the issue of standing, Luitpold established that it had not asserted the patent at issue in a licensing demand letter sent to Pharmacosmos.

In a separate decision issued the same day, the Federal Circuit summarily affirmed the PTAB’s decision in both of Pharmacosmos’s IPR proceedings, denying Luitpold’s appeals.

Parties who want to challenge the validity of an issued patent via IPR proceedings will want to consider the effects of the Federal Circuit’s order. Under the America Invents Act, an unsuccessful petitioner generally is estopped from challenging a patent claim once the PTAB has issued a final decision upholding that claim. This case now holds that the petitioner cannot cross-appeal its loss at the PTAB, notwithstanding the resulting estoppel. Had Pharmacosmos established facts in support of its standing—by establishing its right to declaratory judgment—Pharmacosmos likely could have appealed or cross-appealed the PTAB’s adverse ruling on the two upheld claims.

The Federal Circuit’s order places a further limitation on parties who choose to request inter partes review, because petitioners who are not able to establish standing for district court litigation likewise do not have standing to appeal or cross-appeal from the PTAB’s final decision upholding patentability.

For more information on this ruling, please contact Fitch Even partner David A. Gosse, author of this alert.

 

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