By Geoff Xiao,* Mike Lavine, and Matt Johnson

The Federal Circuit recently tightened the standing requirements for an IPR appeal in AVX Corp. v. Presidio Components, Inc., No. 18-1106, 2019 WL 2079178 (Fed. Cir. May 13, 2019). AVX previously challenged the validity of Presidio’s ceramic capacitor patent in IPR proceedings before the PTAB. The PTAB reached a split final written decision, holding several claims to be patentable and the rest unpatentable. AVX appealed the decision as to the patentable claims, arguing that it had standing to appeal because the statutory estoppel provision (35 U.S.C. § 315(e)) and the anticompetitive effects of the PTAB’s holding each constitute an “injury in fact.”

Standing Requirements: 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. Standing requires: (1) an injury in fact (i.e., a legally protected interest that is (i) concrete and particularized and (ii) actual or imminent), (2) traceability (i.e., a causal connection between the alleged injury and the conduct complained of), and (3) redressability (i.e., it must be likely, not merely speculative, that the alleged injury will be redressed by a favorable decision). Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Here, the Federal Circuit rejected AVX’s standing arguments because they failed to show an “injury in fact.”

Statutory Estoppel: The Court rejected AVX’s argument that § 315(e) constitutes an “injury in fact” because (1) there was no current possibility of a future patent infringement suit where statutory estoppel could play a role, and (2) § 315(e) would not necessarily have estoppel effect. With respect to holding (2), the Court expressed it has not yet decided (i) whether § 315(e) estoppel would trigger when the IPR petitioner lacks Article III standing to appeal to the Federal Circuit or (ii) whether § 315(e) incorporates the common law, where a “judgement is without preclusive effect against a party which lacks a right to appeal that judgement.” Penda Corp. v. United States, 44 F.3d 967, 973 (Fed. Cir. 1994). In AVX Corp., the Court declined to decide these issues because the parties did not argue or brief them.

Competitor Standing: Under the doctrine of competitor standing, “government actions that alter competitive conditions may give rise to injuries that suffice for standing.” AVX Corp., 2019 WL 2079178, at *10. Still, the alleged competitive effects must be “concrete” and “real”; a showing of possible future competition is insufficient. Id. In AVX Corp., the Court acknowledged that an IPR decision could have a harmful competitive effect, but only if (1) AVX currently used the disputed claims or (2) AVX non-speculatively planned to do so. Ultimately, the Court rejected AVX’s competitor standing argument because AVX satisfied neither of the Court’s two prongs.

Takeaways: AVX Corp. highlights the unsettled issue of whether the estoppel provision of § 315(e) will apply against a party who has no standing to appeal. Until the Courts resolve this issue, PTAB practitioners should avoid relying on § 315(e) to establish standing to appeal an unfavorable PTAB decision. In the meantime, establishing competitor standing by showing non-speculative future use of the challenged patent claim may be a better option for appellants.

*Geoff Xiao is a 2019 summer associate in Jones Day’s San Francisco office

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Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Matt consults on nearly every one of Jones Day's over 290 PTAB cases to date. He currently serves as co-chair of Jones Day's PTAB practice.