Sunday, June 8, 2014

CW v WARF decided

On June 4, 2014 the CAFC decided the case of CW v WARF
The Court dismissed the appeal, i.e. threw it out of court for lack of "standing."
The entire opinion is reproduced below.

United States Court of Appeals
for the Federal Circuit
(formerly known as The Foundation for Taxpayer
and Consumer Rights),
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in Reexamination
No. 95/000,154.
Decided: June 4, 2014
SABRINA Y. HASSAN, Public Patent Foundation Benjamin
N. Cardozo School of Law, of New York, New York,
argued for appellant. With her on the Brief was DANIEL
KARA F. STOLL, Finnegan, Henderson, Farabow, Garrett
& Dunner, LLP, of Washington, DC, argued for
appellee. With her on the brief were WILLIAM B. RAICH
MARK R. FREEMAN, Attorney, Appellate Staff, Civil
Division, United States Department of Justice, of Washington,
DC, argued for amicus curiae. With him on the
brief were STUART F. DELERY, Assistant Attorney General
and SCOTT R. MCINTOSH, Attorney. Of counsel on the
brief were NATHAN K. KELLEY, Solicitor, and SCOTT C.
WEIDENFELLER, Senior Counsel for Patent Law and
Litigation, United States Patent and Trademark Office, of
Alexandria, Virginia.
Before PROST,* Chief Judge, RADER,** and HUGHES, Circuit
RADER, Circuit Judge.
Consumer Watchdog appeals from the Patent Trial
and Appeal Board’s decision affirming the patentability of
claims 1–4 of U.S. Patent No. 7,029,913 (’913 patent).
Because Consumer Watchdog has not established an
injury in fact sufficient to confer Article III standing,
however, this court dismisses the appeal.
Consumer Watchdog is a self-described “not-for-profit
public charity dedicated to providing a voice for taxpayers
and consumers in special interest-dominated public
discourse, government and politics.” Appellant’s Br. 1. In
2006, Consumer Watchdog requested inter partes reexamination
of the ’913 patent, which is owned by Appellee
Wisconsin Alumni Research Foundation (WARF). J.A.
106. The ’913 patent is generally directed to human
embryonic stem cell cultures. E.g., ’913 patent abst.
* Sharon Prost assumed the position of Chief Judge
on May 31, 2014.
** Randall R. Rader vacated the position of Chief
Judge on May 30, 2014.
Consumer Watchdog has not alleged any involvement
in research or commercial activities involving human
embryonic stem cells. Nor has it alleged that it is an
actual or prospective competitor of WARF or licensee of
the ’913 patent. Instead, Consumer Watchdog simply
alleges that WARF’s “broad and aggressive assertion of
the ’913 patent has put a severe burden on taxpayerfunded
research in the State of California where [Consumer
Watchdog] is located.” Appellant’s Br. 2. Indeed,
Consumer Watchdog states that it filed the reexamination
request because it was concerned that the ’913 patent
allowed WARF to completely preempt all uses of human
embryonic stem cells, particularly those for scientific and
medical research. Id. Consumer Watchdog was ultimately
unsuccessful in the reexamination, however, and filed
the present appeal.
Federal courts do not have authority to entertain
every dispute. Relevant to this appeal, Article III only
allows the federal courts to adjudicate “Cases” and “Controversies.”
U.S. Const. art. III, § 2, cl. 1. Ostensibly,
these broad terms could cover a wide range of disputes.
Over the years, however, the federal courts have developed
a variety of doctrines to clarify that Article III limits
the federal courts’ jurisdiction to those disputes seeking to
“redress or prevent actual or imminently threatened
injury to persons caused by private or official violation of
law.” Summers v. Earth Island Inst., 555 U.S. 488, 492–
93 (2009). These doctrines—including standing, ripeness,
and mootness—distinguish justiciable disputes from those
that are not. Prasco, LLC v. Medicis Pharm. Corp., 537
F.3d 1329, 1336 (Fed. Cir. 2008). Collectively, these
doctrines represent a fundamental limitation on the
authority of the federal courts. Hollingsworth v. Perry,
133 S. Ct. 2652, 2661 (2013).
The present appeal concerns Article III standing. To
meet the constitutional minimum for standing, the party
seeking to invoke federal jurisdiction must satisfy three
requirements. Lujan v. Defenders of Wildlife, 504 U.S.
555, 560 (1992). First, the party must show that it has
suffered an “injury in fact” that is both concrete and
particularized, and actual or imminent (as opposed to
conjectural or hypothetical). Id. at 560–61. Second, it
must show that the injury is fairly traceable to the challenged
action. Id. at 560. Third, the party must show
that it is likely, rather than merely speculative, that a
favorable judicial decision will redress the injury. Id. at
These constitutional requirements for standing apply
on appeal, just as they do before district courts. Hollingsworth,
133 S. Ct. at 2661. Accordingly, these requirements
apply with equal force to appeals from
administrative agencies, such as the U.S. Patent and
Trademark Office (PTO), to the federal courts. See Sierra
Club v. E.P.A., 292 F.3d 895, 899 (D.C. Cir. 2002). To be
clear, although Article III standing is not necessarily a
requirement to appear before an administrative agency,
once a party seeks review in a federal court, “the constitutional
requirement that it have standing kicks in.” Id.
That said, where Congress has accorded a procedural
right to a litigant, such as the right to appeal an administrative
decision, certain requirements of standing—
namely immediacy and redressability, as well as prudential
aspects that are not part of Article III—may be relaxed.
See Massachusetts v. E.P.A., 549 U.S. 497, 517–18
(2007). However, the “requirement of injury in fact is a
hard floor of Article III jurisdiction that cannot be removed
by statute.” Summers, 555 U.S. at 497. That
injury must be more than a general grievance, Hollingsworth,
133 S. Ct. at 2662, or abstract harm, City of
Los Angeles v. Lyons, 461 U.S. 95, 101 (1983).
Indeed, “a disagreement, however sharp and acrimonious
it may be” will not suffice for the injury in fact
requirement. Hollingsworth, 133 S. Ct. at 2661 (internal
quotations and citation omitted). Rather, the party
invoking federal jurisdiction must have “a personal stake
in the outcome.” Lyons, 461 U.S. at 101. The personal
stake in the outcome—and injury in fact—generally will
be easier to show where the party seeking to invoke the
federal courts’ jurisdiction is the object of the complained
of action (or inaction). Lujan, 504 U.S. at 561. By contrast,
where a party is alleging an injury arising from the
government’s allegedly unlawful action or inaction pertaining
to a third party, injury in fact is much more
difficult to prove. Id. at 561–62.
With these principles in mind, this court turns to
Consumer Watchdog’s appeal. Consumer Watchdog does
not identify any alleged injury aside from the Board
denying Consumer Watchdog the particular outcome it
desired in the reexamination, i.e., canceling the claims of
the ’913 patent. Appellant’s Br. in Response to United
States 3. Consumer Watchdog does not allege that it is
engaged in any activity involving human embryonic stem
cells that could form the basis for an infringement claim.
It does not allege that it intends to engage in such activity.
Nor does it allege that it is an actual or prospective
licensee, or that it has any other connection to the ’913
patent or the claimed subject matter. Instead, Consumer
Watchdog relies on the Board’s denial of Consumer
Watchdog’s requested administrative action—namely, the
Board’s refusal to cancel claims 1–4 of the ’913 patent.
That denial, however, is insufficient to confer standing.
To be sure, “Congress may enact statutes creating
legal rights, the invasion of which creates standing, even
though no injury would exist without the statute.” Linda
R.S. v. Richard D., 410 U.S. 614, 617 n.3 (1973) (citations
omitted). That principle, however, does not simply override
the requirement of injury in fact. Lujan, 504 U.S. at
578. Here, the Board’s disagreement with Consumer
Watchdog did not invade any legal right conferred by the
inter partes reexamination statute. The statute at issue
here allowed any third party to request reexamination,
and, where granted, allowed the third party to participate.
35 U.S.C. §§ 311(a), 314(b)(2) (2006). The statute
did not guarantee a particular outcome favorable to the
requester. See generally 35 U.S.C. §§ 311–318 (2006).
Consequently, the Board’s denial of Consumer Watchdog’s
request did not invade any legal right conferred upon
Consumer Watchdog.
For this reason, Consumer Watchdog’s analogy to the
Freedom of Information Act (FOIA) and Federal Election
Campaign Act (FECA) is unpersuasive. These acts created
substantive legal rights—access to certain government
records—the denial of which inflicts a concrete and particularized
injury in fact. See FEC v. Akins, 524 U.S. 11,
21 (1998). Unlike the plaintiffs in the FOIA and FECA
cases, Consumer Watchdog was not denied anything to
which it was entitled. Consumer Watchdog was permitted
to request reexamination and participate once the
PTO granted its request. This is all the statute requires.
See generally 35 U.S.C. §§ 311–318. Accordingly, unlike
the FOIA and FECA cases, the PTO did not abridge any
of Consumer Watchdog’s rights. See Lujan, 504 U.S. at
562 (“[W]hen the plaintiff is not himself the object of the
government action or inaction he challenges, standing is
not precluded, but it is ordinarily ‘substantially more
difficult’ to establish.”) (quoting Allen v. Wright, 468 U.S.
737, 758 (1984)).
Nor is it enough that the inter partes reexamination
statute allows a third party requester to appeal decisions
favorable to patentability. 35 U.S.C. § 315(b). A statutory
grant of a procedural right, e.g., right to appeal, does
not eliminate the requirements of Article III. See
Lexmark Int’l, Inc. v. Static Control Components, Inc., 134
S. Ct. 1377, 1386 (2014). To be clear, a statutory grant of
a procedural right may relax the requirements of immediacy
and redressability, and eliminate any prudential
limitations, Massachusetts, 549 U.S. at 517–18, which
distinguishes the present inquiry from that governing a
declaratory judgment action. But the statutory grant of a
procedural right does not eliminate the requirement that
Consumer Watchdog have a particularized, concrete stake
in the outcome of the reexamination. Summers, 555 U.S.
at 496 (“[D]eprivation of a procedural right without some
concrete interest that is affected by the deprivation—a
procedural right in vacuo—is insufficient to create Article
III standing.”).
The estoppel provisions contained within the inter
partes reexamination statute likewise do not constitute
an injury in fact for Article III purposes. 35 U.S.C.
§ 317(a), (b). Consumer Watchdog is not engaged in any
activity that would give rise to a possible infringement
suit. Nor does Consumer Watchdog provide any indication
that it would file another request seeking to cancel
claims at the Patent Office. In any event, as Consumer
Watchdog only has a general grievance against the ’913
patent, the “conjectural or hypothetical” nature of any
injury flowing from the estoppel provisions is insufficient
to confer standing upon Consumer Watchdog. DaimlerChrysler
Corp. v. Cuno, 547 U.S. 332, 344 (2006);
Warth v. Seldin, 422 U.S. 490, 509 (1975); see also Sea-
Land Serv., Inc. v. Dep’t of Transp., 137 F.3d 640, 648
(D.C. Cir. 1998); cf. also Ass’n for Molecular Pathology v.
U.S. Patent & Trademark Office, 689 F.3d 1303, 1323
(Fed. Cir. 2012) (holding various plaintiffs lacked standing
in declaratory judgment action because alleged injuries
were too speculative), rev’d on other grounds sub nom.
Ass’n for Molecular Pathology v. Myriad Genetics, Inc.,
133 S. Ct. 2107, 2114 (2013). The court, however, leaves
it to future panels to decide whether, under other circumCONSUMER
stances, the preclusive effect of the estoppel provisions
could constitute an injury in fact.
In sum, aside from its procedural right to appeal,
Consumer Watchdog has only alleged a general grievance
concerning the ’913 patent. It states that it is a nonprofit
consumer rights organization that is concerned about the
potential preemptive reach of the ’913 patent and the
alleged burden it places on taxpayer-funded research in
the State of California. Appellant’s Br. 1–2. While Consumer
Watchdog is sharply opposed to the Board’s decision
and the existence of the ’913 patent, that is not
enough to make this dispute justiciable. Lujan, 504 U.S.
at 577.
Because Consumer Watchdog has not identified a
particularized, concrete interest in the patentability of the
’913 patent, or any injury in fact flowing from the Board’s
decision, it lacks standing to appeal the decision affirming
the patentability of the amended claims. The court has
considered Consumer Watchdog’s remaining arguments to
the contrary, but finds them unpersuasive. Accordingly,
Consumer Watchdog’s appeal is dismissed.

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