Friday, August 03, 2018

JTEKT case: standing requires that a planned product create a substantial risk of infringement

The outcome was "no standing":

GKN Automotive LTD (“GKN”) owns U.S. Patent No.
8,215,440 (“the ’440 patent”). In inter partes review
(“IPR”), the Patent Trial and Appeal Board (“the Board”)
found claims 2 and 3 of the ’440 patent not unpatentable.
JTEKT Corporation (“JTEKT”), the petitioner in the IPR,
appealed. Because JTEKT lacks standing to appeal, we
dismiss the appeal.

The Consumer Watchdog/WARF case is cited:

Under the IPR statute, any person or entity may petition
the Patent Office to institute an IPR proceeding. 35
U.S.C. § 311(a). There is no requirement that the petitioner
have Article III standing, as “[p]arties that initiate
[IPRs] need not have a concrete stake in the outcome;
indeed, they may lack constitutional standing.” Cuozzo
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143–44 (2016).
We have similarly concluded that “Article III standing is
not necessarily a requirement to appear before an administrative
agency.” Consumer Watchdog v. Wis. Alumni
Research Found.,
753 F.3d 1258, 1261 (Fed. Cir. 2014)
(citation omitted). The statute also provides that an
unsuccessful petitioner may appeal an adverse final
written decision. 35 U.S.C. § 141(c) (“A party to an inter
partes review or a post-grant review who is dissatisfied
with the final written decision of the Patent Trial and
Appeal Board . . . may appeal the Board’s decision . . . to
the United States Court of Appeals for the Federal Circuit.”).


Similarly, in Consumer Watchdog, a nonprofit organization
(Consumer Watchdog) petitioned for IPR concerning
a patent for embryonic stem cells, but was
unsuccessful before the Board. Consumer Watchdog, 753
F.3d. at 1260. Consumer Watchdog appealed to this
court. Consumer Watchdog did not “allege[] any involvement
in research or commercial activities involving human
embryonic stem cells. Nor . . . that it [was] an actual
or prospective competitor of [the patent owner] or licensee.”
Id. We held that there was no standing “[b]ecause
Consumer Watchdog [did] not establish[] an injury in
fact.” Id. These cases stressed that the “obligation to
establish an injury in fact” for appellants “remains firm.”
Phigenix, 845 F.3d. at 1172 n.2.

In THIS case:

As the party seeking judicial review, JTEKT has the
burden of establishing that it possesses the requisite
injury. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332,
342 (2006). Thus, in IPR appeals, “an appellant must . . .
supply the requisite proof of an injury in fact when it
seeks review of an agency’s final action in a federal court,”
by creating a necessary record in this court, if the record
before the Board does not establish standing. Phigenix,
845 F.3d at 1171–72. When the record before the Board is
inadequate, the appellants “must supplement the record
to the extent necessary to explain and substantiate its
entitlement to judicial review,” such as by submitting
“affidavits or other evidence to demonstrate its standing.”
Id. at 1173 (citations omitted).

The fact that JTEKT has no product on the market at
the present time does not preclude Article III standing,
either in IPRs or in declaratory judgment actions. See,
e.g., Altaire Pharms., Inc. v. Paragon Bioteck, Inc., 889
F.3d 1274, 1280–83 (Fed. Cir. 2018). Both IPRs and
declaratory judgment actions enable a party to secure a
judicial determination in advance of actual, liabilitycreating
injury. But where the party relies on potential
infringement liability as a basis for injury in fact, but is
not currently engaging in infringing activity, it must
establish that it has concrete plans for future activity that
creates a substantial risk of future infringement or likely
cause the patentee to assert a claim of infringement.
While JTEKT has submitted two declarations in support
of its standing, JTEKT’s problem is that these declarations
do not establish that its planned product would
create a substantial risk of infringing claims 2 or 3 of
GKN’s ’440 patent or likely lead to charges of infringement.
GKN has not alleged infringement, see PPG Indus.,
Inc. v. Valspar Sourcing, Inc., 679 F. App’x 1002, 1004
(Fed. Cir. 2017) (non-precedential), and, while JTEKT
and GKN are competitors generally, JTEKT expressly
conceded that “no product is yet finalized.” J.A. 1642, at ¶
13. JTEKT’s product is in development and “will continue
to evolve.” J.A. 1642, at ¶ 15. The declaration of Mikiharu
Oyabu, JTEKT’s Chief Engineer, admits that
“JTEKT is [still] currently validating its design, including
tuning and conducting customer demonstrations. . . . [t]he
concept will continue to evolve and may change until it is
completely finalized.” J.A. 1642, at ¶¶ 14–15.

The bottom line:

Because JTEKT has failed to establish an actual injury
sufficient to confer Article III standing, we dismiss this


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