CAFC Issues Another Precedential Decision on Standing

May 07, 2020

The Federal Circuit issued a precedential decision addressing standing requirements in Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corp., No. 2018-2273, slip op. (Fed. Cir. April 23, 2020).

Over the past year, the Federal Circuit has tightened the standing requirements for an IPR appeal. An IPR does not require standing because it is an administrative proceeding, but a party seeking to appeal a final IPR decision to the Federal Circuit must show that it has standing to do so. To briefly review, standing exists when an appellant has (1) suffered an injury in fact (2) that is fairly traceable to the appellee’s challenged conduct, and (3) that is likely to be redressed by a favorable judicial decision. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016); Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1171 (Fed. Cir. 2017). The injury in fact must be concrete and particularized, Spokeo, 136 S. Ct. at 1545; Phigenix, 845 F.3d at 1171. However, the Federal Circuit has explained on numerous occasions, that a “specific threat of infringement litigation by the patentee is not required to establish jurisdiction.” See, e.g., ABB Inc. v. Cooper Indus., LLC, 635 F.3d 1345, 1348 (Fed. Cir. 2011). Rather, “the petitioner must generally show a controversy “of sufficient immediacy and reality” to warrant the requested judicial relief.” E.I. du Pont de Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1004 (Fed. Cir. 2018).

Nevertheless, the appellant lacks standing if there are only future plans for a possibly infringing product, and the appellant did not establish that it had concrete plans for future activity that creates a substantial risk of future infringement or would likely cause the patentee to assert a claim of infringement. JTEKT Corp. v. GKN Automotive, Ltd., 898 F.3d 1217, 1220-21 (Fed. Cir. 2018).

The case in Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corp. was an appeal from the Patent Trial and Appeal Board in Nos. IPR2017-00854, IPR2017-01550, IPR2017-01929, and IPR2017-01946. The Patent Owner was Novartis, and the Petitioners included Apotex, Sun, Teva, Actavis, and Argentum. All petitioners other than Argentum settled their respective appeals with Novartis, and only Argentum remained. On August 29, 2018, Novartis filed a motion to dismiss Argentum’s appeal for lack of standing.

Regarding the first requirement of suffering an injury in fact, Argentum argued that it faces a real and imminent threat of litigation as it jointly pursues with its partner KVK-Tech, Inc., a generic version of Novartis’ Gilenya® product for which they are in the process of filing an ANDA, and that Novartis sued multiple other generic companies to protect Gilenya®. Argentum used the Federal Circuit’s decision in Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., 889 F.3d 1274, 1282–83 (Fed. Cir. 2018), finding that an ANDA did not need to have been filed to establish standing, because the patent at issue was an obstacle to the approval of its anticipated ANDA. Argentum also raised that it would lose any opportunity to assert the same invalidity arguments in any future PTO proceedings or litigation involving the same patent, under 35 U.S.C. § 315(e).

However, the Federal Circuit held that Argentum had not provided sufficient evidence of a reasonable and imminent threat of litigation, because unlike in Altaire, it was KVK-Tech, Inc. –not Argentum – that had plans of filing the ANDA (and such ANDA was not yet filed). The court found that any potential litigation was merely conjectural, and Argentum had not provided evidence of any risk of infringing activity of its own, to establish an injury of sufficient immediacy and reality.

This case shows that even if standing may be established by the appellants from a final written decision from PTAB when filing the Notice of Appeal, the Federal Circuit may still dismiss the case for lack of Article III standing if the sole remaining appellant is unable to demonstrate an injury in fact.

Notably, the Federal Circuit reiterated and maintained that the potential of IPR estoppel under 35 U.S.C. § 315(e) is not sufficient to establish standing. AVX Corp. v. Presidio Components, Inc., 923 F.3d 1357, 1362-63 (Fed. Cir. 2019) (citing Phigenix, 845 F.3d at 1175-76). Thus, the Federal Circuit did not clarify the unresolved question on whether IPR estoppel still exists if the petitioner is unable to appeal an adverse decision in the final written decision of an IPR proceeding.