Consumer Watchdog Replies to United States Brief on Standing Issue

By Donald Zuhn --

In December, the Federal Circuit invited the United States to address the issue of whether Consumer Watchdog had Article III standing to pursue an appeal of a decision by the Board of Patent Appeals and Interferences affirming the patentability of U.S. Patent No. 7,029,913, which is assigned to the Wisconsin Alumni Research Foundation (WARF).  The appeal arose from an inter partes reexamination of the '913 patent that Consumer Watchdog filed in 2006.  On January 17, the government argued that Consumer Watchdog lacked standing, and therefore, that its appeal should be dismissed (see "United States Argues That Consumer Watchdog Lacks Standing to Appeal Board Decision on WARF Patent").

In a brief filed on January 27, Consumer Watchdog argued that it indeed had standing to pursue the appeal.  Consumer Watchdog opened by contending that:

[N]one of the parties who are merely interested in th[e] patentability [of the '913 patent] has standing to bring this case.  Instead, only one party has standing to appeal the adverse decision of the PTO in inter partes reexamination number 95/000154 pursuant to 35 U.S.C. §§141 and 315(b)(1).  Consumer Watchdog is that party.

Consumer Watchdog acknowledges that "[a]s the Government pointed out repeatedly in its brief, the PTO could have declined CW's request for reexamination altogether, making the two statutes inapplicable to CW" (citations omitted).  However, the brief argues that "[a]fter CW completed that task and participated in the reexamination and Board of Patent Appeals and Interferences appeal for over five years at the PTO, the government's characterization of CW as 'wholly a stranger to the '913 patent' is hardly accurate" (citations omitted).

Consumer Watchdog contends that it has a concrete, differentiated interest in the Board's decision affirming the patentability of the '913 patent.  The brief states that:

The government action that CW seeks to challenge here is not, as the Government insinuates, the patenting of a claimed invention, which applies equally to all people in the United States save the patentee.  Instead, it is the PTO's specific action of, after granting CW's request for reexamination of the '913 patent, issuing a decision with which CW was dissatisfied in the reexamination, an action that applies uniquely to CW.

Reiterating an argument in support of standing from its previous brief, Consumer Watchdog points to "three contexts in which petitioners who had requested and been denied a particular agency action sought and received judicial review, under a statute granting requesters that review, without showing injury independent of the denial."  Those three contexts consisted of requests under FECA and FOA, as well as the inter partes reexamination statutory scheme at issue here.  With respect to the latter, the brief notes that "[t]his Court has heard no less than four cases by third-party requesters who did not show independent injury."  In contrast, the brief points out that "[t]he Government does not reference a single case in which a denied requester who cited a statute granting judicial review to such denied requesters needed to prove injury to show standing."  While the government cited to cases under the APA and EPA, Consumer Watchdog suggests that "[w]hat distinguishes the APA/EPA cases from the FOIA/FECA/inter partes reexam cases is that, in the former cases, the plaintiffs sought review under statutes that didn't designate them as the precise parties to whom review was available," and therefore, contends that "[a]n independent showing of injury was thus necessary for standing."

According to the brief, the government creates an unsupportable loophole by arguing that a finding of no standing for Consumer Watchdog would not prevent the Court from finding standing for other third-party requesters of inter partes reexaminations whose disputes are unripe for declaratory judgment jurisdiction.  In particular, Consumer Watchdog argues that:

[A]n inter partes review decision favorable to patentability would injure a prospective competitor only in exactly the same way that CW is injured here.  The competitor would have spent substantial resources on a proceeding that did not change its inability to practice the claimed invention, and it would be estopped from challenging the validity of the upheld claims in the future.  If the Court does not find standing for CW in this case, it cannot justifiably find standing for other third-party requesters whose cases are unripe for declaratory judgment jurisdiction.

The brief criticizes the government's failure "to address the pragmatic catastrophe of its suggestion," asking whether the Court will need to schedule preliminary standing hearings in all such cases before it can reach the merits.  The brief also asks "[i]f the facts and circumstances change throughout the proceeding, should the Court be forced to continually measure the then-present motivations and intentions of the third party requester, deciding that maybe today the intentions are sufficient for standing, but tomorrow they are not?"

Finally, Consumer Watchdog argues that the government's position would create an asymmetrical scheme in which the third-party requester, but not the patentee, would be denied the right to appeal an adverse decision.  The brief explains that:

A rule that certain third-party requesters, competitors or not, lack the right to appeal a decision that would unquestionably be appealable by the adverse party if reversed is tantamount to saying to prospective third-party requesters, "You may participate, but only until you lose."  According to the government, if a patentee wins at the PTO, the requester may not appeal to the Court, and the matter is over.  If a patentee loses at the PTO, however, then it may indeed appeal to the Court, where if it wins, the challenger would not have the right to seek further review either en banc or from the Supreme Court.

Consumer Watchdog concludes by arguing that "[s]uch an asymmetrical ending to what Congress unambiguously intended to be an inter partes proceeding is unjust and violates principles of fundamental fairness."

In a letter to the Court, WARF's counsel noted that "[b]ecause Appellee Wisconsin Alumni Research Foundation fundamentally agrees with the United States' position as applied to the facts of this case -- specifically, that Consumer Watchdog lacks Article III standing to pursue its appeal in this Court -- Appellee declines the Court's invitation to file a responsive brief."

Comments

[Skeptical]

Is this the same type of 'pragmatic catastrophe' that the animal rights followers suffered in Lujan?

I am not seeing a palpable distinction. The "You may participate, but only until you lose" argument falls flat because the venue in which you are participating is changing, and each venue has well-understood rules, and it is those rules that are being applied. This is just another bite at the apple of Congress made everyone an interested party line of thought - the same line of thought that failed in Lujan.

[Bob]

Excellent post--thank you. I am confused, though, about how CW was able to participate in an inter partes review in the first place if the government now considers it to lack standing. Can inter partes reviews be initiated by anyone regardless of whether they might infringe the patent, or did the PTO make a mistake by allowing CW to initiate one? If CW was properly allowed to initiate the inter partes review, I kind of agree with them that it doesn't really make sense to not allow them to appeal a decision. On the other hand, if CW wins this argument, then inter partes review becomes an end run around standing, doesn't it? Odd as it seems, I think the government has to win here or there will probably be a flood of inter partes reviews by public interest groups that would otherwise not have standing--frankly, a huge mess.

[Skeptical]

Bob,

To alleviate your confusion regarding "I am confused, though, about how CW was able to participate in an inter partes review in the first place if the government now considers it to lack standing." please remember that an adjudication before an Article I court (that is, a court in an executive branch agency setting) has a different set of rules from an adjudication before and Article III court (that is, a court fully in the judicial branch).

What this comes done simply enough is the recognition that two different forums simply have different rules.

[Skeptical]

Bob,

The difference is that different rules apply to Article I and Article III courts.