IP Law Daily, PATENT NEWS: Supreme Court asked to decide whether competitor standing suffices for appeals of IPR decisions, (Feb 18, 2020)

By Cheryl Beise, J.D.

GE has petitioned the Court to overturn the Federal Circuit’s rule that competitive harm alone does not constitute a concrete and particularized injury sufficient for Article III standing.

General Electric Company (GE) has filed a petition asking the Supreme Court to review a Federal Circuit decision holding that GE lacked standing to appeal a Patent Trial and Appeal Board’s final decision following inter partes review of a competitor’s patent for a gas turbine engine because GE failed to allege a concrete and particularized injury to satisfy Article III standing requirements. According to GE, the Federal Circuit erred by holding that a petitioner who is not already the subject of a patent infringement claim concerning the challenged patent must show that it has "concrete plans for future activity that creates a substantial risk of future infringement." GE is asking the Court to overturn the Federal Circuit’s overly rigid "patent-specific" rule for finding injury in fact. The petition in General Electric Co. v. United Technologies Corp., Dkt. No. 19-1012, was filed on February 12.

United Technologies Corporation (UTC) was the assignee of Patent No. 8,511,605 (the ’605 patent), which related to a gas turbine engine with a gear train driven by a low stage count low pressure turbine. GE petitioned for inter partes review (IPR) of the patent, challenging two claims on grounds of anticipation and five others for obviousness. After UTC disclaimed the first two claims, the Board concluded that the evidence did not show that the remaining claims were unpatentable for obviousness. GE appealed, and UTC moved to dismiss the appeal for lack of standing, arguing that GE had not suffered a sufficient injury in fact from the decision. GE alleged that it had suffered injuries including competitive harm, economic losses, and statutory estoppel under 35 U.S.C. §315(e).

The Federal Circuit held that GE’s alleged competitive injuries were too speculative to confer Article III standing. Although a party need not show Article III standing to file an IPR petition with the Board (since such standing requirements do not apply to administrative agencies), an appeal to a federal court triggers the standing requirement. The Federal Circuit cited its recent decision in AVX Corp. v. Presidio Components, Inc., holding that a government action must change the competitive landscape for "competitor standing" doctrine to apply. In this case, United Technologies had not sued or threatened to sue GE for infringement of the ’605 patent and there was no evidence that GE had suffered or was likely to suffer a concrete and particularized injury. For example, GE did not show that it had lost business due to engines incorporating the patented technology. Although GE argued that it had suffered injury from the increased costs of attempting to develop engines that could implicate the patent claims, it did not provide any accounting for these purportedly increased costs or any evidence that it actually had designed a geared-fan engine. In a concurring opinion, Circuit Judge Todd M. Hughes agreed that the Federal Circuit’s jurisprudence required dismissal of GE’s appeal, but wrote separately to express his belief that the court had developed an "overly rigid and narrow standard" for standing for appeals of IPR proceedings. He argued that the Federal Circuit’s patent-specific approach in AVX Corp. was inconsistent with U.S. Supreme Court precedent, and that GE would have shown standing without the holding of that case.

In its petition, GE argues that the Supreme Court and courts of appeals across the country have long held that government action that subjects parties to competitive harm—such as by increasing the burdens or costs of competition—satisfies Article III’s injury-in-fact requirement. According to GE, the Federal Circuit erred by holding that a petitioner who is not already the subject of a patent infringement claim concerning the challenged patent must show that it has "concrete plans for future activity that creates a substantial risk of future infringement." GE is asking the Court to overturn the Federal Circuit’s "patent-specific rule" for IPR appeals. The Federal Circuit’s misguided rule "effectively requires an IPR petitioner to walk up to the line of admitting to infringement—itself a perilous and competitively injurious undertaking," the petition states.

The question presented by GE’s petition is "Whether competitive harm alone suffices to confer Article III standing to appeal an IPR determination, or whether an appellant must also show concrete plans for future activity that creates a substantial risk of a future patent infringement action."

This case is Dkt. No. 19-1012.

Attorneys: Shay Dvoretzky (Jones Day) and Gregory G. Garre (Latham & Watkins LLP) for General Electric Co.

Companies: General Electric Co.; United Technologies Corp.

News: Patent