JTEKT v. GKN: Federal Circuit Finds Competitor Lacks Standing To Appeal PTAB's Final Written Decision

Author:Ms Lisa M. Mandrusiak
Profession:Oblon, McClelland, Maier & Neustadt, L.L.P
 
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Background

After determining that its competitor GKN's patent raised a potential risk of infringement for a product under development, JTEKT1 challenged the patentability of claims 1-7 of U.S. Patent No. 8,215,440 via inter partes review (IPR2016-00046). When claims 2 and 3 were confirmed as patentable in the final written decision—and thus the risk of infringement remained—JTEKT appealed, and GKN moved to dismiss the appeal based on lack of standing.

To establish standing, a party must show that they have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct, and (3) that is likely to be redressed by a favorable judicial decision. Phigenix, Inc. v. ImmunoGen, Inc., 845 F.3d 1168, 1171 (Fed. Cir. 2017) (citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)).

In its briefing, JTEKT asserted it had (i) injury based on the potential risk of infringement, (ii) economic injury, and (iii) injury based on the IPR estoppel provisions. But, the panel found that JTEKT failed to establish an actual injury sufficient to confer Article III standing and dismissed the appeal. Specifically, the panel found that because there is no final product, JTEKT cannot definitively say whether it will infringe the '440 patent and that the potential risk of infringement is impossible to quantify at this time. As such, the panel said there is insufficient proof of an injury in fact.

Request for Rehearing

On September 4, 2018 JTEKT filed a combined petition for panel rehearing and rehearing en banc. In JTEKT's petition, it asserts that the panel overlooked and/or misapprehended facts and evidence demonstrating JTEKT's potential risk for infringement and that the panel did not address JTEKT's economic injury at all.

JTEKT also argued that rehearing en banc is necessary because the issue has consequences beyond JTEKT and GKN's dispute. By limiting standing to definitive patent-inflicted injury associated with an infringement suit, the panel's decision risks creating overly-narrow, patent-specific standing jurisprudence that does not consider the broader law necessary to address standing in appeals from all agency actions. And even for patent cases, this unnecessarily narrow view of standing undercuts the effectiveness of the IPR scheme and works to discourage these types of administrative proceedings because petitioners faced with invalid competitor patents during the product design process may have no recourse following an adverse...

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