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The Requirement of Standing in USPTO Oppositions

May 02, 2012

Under the America Invents Act, any person who is not the owner of a patent may seek inter partes review or post-grant review in the USPTO, avoiding the jurisdictional case-or-controversy requirement that has limited district court declaratory judgment actions seeking to invalidate patents.

The post-grant opposition provisions will transform U.S. patent litigation, by providing an expert administrative forum for expeditiously challenging patent validity to parties who would otherwise be barred from district court for lack of standing. The post-grant review statutes contain no requirement that the petitioner have an actual, adverse, commercial interest in the subject matter, or that there be any prospect of eventual patent enforcement.

In contrast, the standing required to maintain a district court declaratory judgment action challenging the validity of a patent has generally barred actions in the absence of a substantial commercial interest in the patented subject matter. The constitutional case or controversy requirement was limited by MedImmune, but a declaratory judgment plaintiff must still show that the dispute is definite and concrete, touching the interests of parties having adverse legal interests, that is real and substantial and admits of specific relief through a decree of conclusive character. The case or controversy requirement raises a substantial barrier to declaratory judgment actions seeking advisory opinions on hypothetical states of fact.

The USPTO considers that there is a “standing” requirement to petition for a post-grant proceeding, but this requirement is far different from “standing” to maintain a district court action challenging a patent. Standing in a USPTO opposition is based on specific statutory time limitations and estoppel provisions that bar a party or its privies from requesting or maintaining a proceeding before the Office after a final decision in another post-grant review or inter partes review.

Proposed Rule § 42.104 requires that a petition for inter-partes review must set forth:

(a) Grounds for standing. The petitioner must certify that the patent for which review is sought is available for inter partes review and that the petitioner is not barred or estopped from requesting an inter partes review of the patent.

A patent is “available for inter partes review” under § 311(c) after the date that is 9 months after the grant of a patent or after termination of post-grant review, unless it is barred by the petitioner’s prior declaratory judgment action under § 315(a)(1) or the patent owner’s infringement action filed more than a year before the petition under § 315(b). These requirements are incorporated in proposed Rules 42.101 and 102(a).

Proposed Rule 42.204(a) similarly requires that a petition for post grant review set forth “grounds for standing.” A patent is “available for post-grant review” up to 9 months after the date of the grant of the patent under § 321(c), unless it is barred by the petitioner’s prior declaratory judgment action under § 325(a)(1), or is a non-broadening reissue patent filed more than 9 months after the grant of the original patent under § 325(f). These requirements are incorporated in proposed Rule 42.201 and 202(a).

With respect to estoppel, a petitioner in a USPTO review of a claim in a patent that results in a final written decision, or the real party in interest or privy of the petitioner, may not request or maintain another inter partes review under § 315(e)(1), or another post-grant review under § 325(e)(1) “on any ground that the petitioner raised or reasonably could have raised” during the first post-grant proceeding to end in a final written decision.

A determination of the scope of estoppel from a first USPTO post-grant proceeding thus depends on the challenged claims subject to a first final Board decision, any ground that the petitioner reasonably could have raised in the first proceeding, the identity of the real party in interest and its privies in the first proceeding, and the identity of the real party in interest in the later proceeding. Proposed Rule 42.8(b)(1) requires that the petitioner identify the real parties in interest in a post-grant proceeding, but not their “privies.”

In many cases, the determination of real parties in interest and their relationship to earlier privies will require detailed factual investigation and legal analysis, particularly if there is a change in the identity of a former real party in interest or privy as the result of corporate reorganization, acquisition or divestiture of patents, or an earlier petition was filed by a consortium or pursuant to a joint defense agreement in the course of litigation in which the issue of estoppel is raised. As the USPTO commentary explains,

in inter partes and post-grant review proceedings before the Office, the petitioner (including any real party-in interest or privy of the petitioner) is estopped from relitigating any ground that was or reasonably could have been raised. … What constitutes a real party-in-interest or privy is a highly fact-dependent question. … While many factors can lead to a determination that a petitioner was a real party-in-interest or privy in a previous proceeding, actual control or the opportunity to control the previous proceeding is an important clue that such a relationship existed. … Factors for determining actual control or the opportunity to control include existence of a controlling interest in the petitioner.

The identification of privies of an earlier real party in interest could be complex, in the absence of a requirement that a petitioner identify both real parties in interest and their privies. Where the issue is disputed, the commentary on the proposed rules indicates that the Board may grant the patent owner “additional” discovery based on sufficient concerns regarding the petitioner’s standing, that may ultimately be resolved by a district court ruling on a motion to dismiss defenses based on statutory estoppel. The scope of a potential estoppel underscores the importance of a thorough investigation before filing a petition, since the mandatory disclosure of real parties in interest must be filed by the petitioner as part of the petition under proposed Rule 42.8(a)(1).

The USPTO’s consideration of “standing” to file a petition for post grant review thus concerns the statutory time limits for filing, and the estoppel bar against relitigating issues that were raised, or could reasonably have been raised by the petitioner in an earlier post-grant proceeding. Neither the proposed rules nor the USPTO commentary indicates that the Office contemplates any other restriction on the ability of any person to petition for inter partes review or post-grant review.

Under the post-grant statutes and the USPTO’s proposed rules, standing to maintain an opposition does not require that a petitioner establish that a patent dispute is definite and concrete, or that touches the interests of parties having specific existing adverse legal interests. This conclusion rests on the fundamental assumption that the courts will not engraft a nonstatutory requirement of adverse potential commercial interest as a requirement for pursuing a post-grant opposition or appeal. As the D.C. Circuit has explained, federal agencies are not Article III courts, and are not bound to follow the law of standing derived from the “case or controversy” requirement. Judicially-devised prudential standing requirements are also inapplicable to an administrative agency acting within the jurisdiction Congress assigned to it, and the post-grant opposition statutes are broadly drafted to permit any person to seek invalidation of a patent in the USPTO.