No Article III Standing Requirement for Appellees in Appeals From IPR Proceedings

In a precedential decision issued August 7, 2017, Personal Audio, LLC v. Electronic Frontier Foundation, No. 2016-1123 (Fed. Cir. Aug. 7, 2017), the Federal Circuit considered the implications of Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753 F.3d 1258 (Fed. Cir. 2014), on the question of whether a party lacking Article III standing may nonetheless participate in an appeal as an appellee. In Consumer Watchdog, the Federal Circuit held that a PTAB petitioner that does not meet the Article III case-or-controversy requirement does not have standing to appeal from a PTAB decision in an inter partes reexamination (and earlier this year, the holding in Consumer Watchdog was extended to the IPR context in Phigenix, Inc. v. ImmunoGen, Inc., 845 F.3d 1168 (Fed. Cir. 2017)).

In Personal Audio, EFF had filed an IPR petition challenging claims of a patent owned by Personal Audio. The PTAB ultimately found the challenged claims to be unpatentable in its Final Decision, thus ruling in EFF’s favor. After Personal Audio appealed, the Federal Circuit asked the parties to brief the question of whether EFF has standing to participate in the appeal at all. In a decision authored by Judge Newman (and joined by Judges Clevenger and O’Malley), the Federal Circuit held that EFF was allowed to “appear[] in court to defend the PTAB decision in its favor.” Slip op. at 7.

The Federal Circuit explained that the critical question raised in Consumer Watchdog is whether the party invoking judicial review, i.e., the appellant (in this case Personal Audio), has Article III standing. Slip op. at 6-7 (citing ASARCO Inc. v. Kadish, 490 U.S. 605, 618 (1989)). Here, it was “apparent that Personal Audio, on cancellation of its patent claims by the PTAB, [had] experienced an alteration of ‘tangible legal rights . . . that is sufficiently distinct and palpable to confer standing under Article III.’” Slip op. at 7 (quoting Virginia v. Hicks, 539 U.S. 113, 121 (2003)). Thus, the Federal Circuit held, “[w]ith Article III satisfied as to the appellant, EFF is not constitutionally excluded from appearing in court to defend the PTAB decision in its favor.” Slip op. at 7. The Federal Circuit then went on to affirm the PTAB’s holding as to the unpatentability of the claims at issue.

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