Oblon, one of the largest law firms in the United States focused exclusively on intellectual property law, filed a petition for certiorari after the United States Court of Appeals for the Federal Circuit declined its petition for panel rehearing and rehearing en banc on behalf of its client, JTEKT Corporation, an engineering and manufacturing company and affiliate of Toyota. JTEKT found that its competitor GKN’s patent posed serious roadblocks and raised a potential risk of infringement for a product under development, and challenged the patentability of claims 1–7 via inter partes review (IPR2016-00046). When claims 2 and 3 were confirmed as patentable in the final written decision—and thus the risk of infringement remained—JTEKT appealed, and GKN moved to dismiss the appeal based on lack of standing.

“The Court’s decision is a disappointment as the panel clearly overlooked facts and evidence demonstrating JTEKT’s potential risk for infringement and did not address JTEKT’s economic injury at all,” said W. Todd Baker, Chair of Oblon’s Post-Grant Patent Group and lead counsel for JTEKT.  “Although rehearing is rarely granted at the Federal Circuit, we were hopeful that the Court would have recognized the importance of this issue and its implications on other parties in the future. Because of the importance of this issue, JTEKT is proceeding to the Supreme Court.”

“Unfortunately, the panel’s decision risks creating overly narrow, patent-specific laws that do not consider the broader law necessary to address standing in appeals from all agency actions,” said Lisa M. Mandrusiak, Senior Associate with Oblon. “This significantly limited view of standing undercuts the effectiveness of the IPR scheme and works to discourage these types of administrative proceedings because petitioners faced with invalid competitor patents during the product design process may have no recourse available.”

Background: JTEKT Corporation vs. GKN Automotive LTD.

To establish standing, a party must show that they have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct, and (3) that is likely to be redressed by a favorable judicial decision.  Phigenix, Inc. v. ImmunoGen, Inc., 845 F.3d 1168, 1171 (Fed. Cir. 2017) (citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)).  

On Sept. 4, 2018, Oblon filed a combined petition for panel rehearing and rehearing en banc, which was ultimately denied In JTEKT’s petition, it asserted that the panel overlooked and/or misapprehended facts and evidence demonstrating JTEKT’s potential risk for infringement and that the panel did not address JTEKT’s economic injury.  JTEKT requested rehearing en banc to answer two questions:

  1. Whether the estoppel provisions of the IPR statute independently constitute a real and substantial injury sufficient to establish standing between competitors; and
  2. Whether the panel’s decision erroneously limits an injury in fact sufficient to establish standing to definitive patent-inflicted injury when this determination is contrary to both the statutes establishing standing and case law establishing standing based on other types of injury such as economic injury.

Appellant standing from IPR final written decisions is currently a hot-button issue, and several panels appear to have invited the en banc court to weigh in at least on the estoppel issue. JTEKT’s petition for certiorari frames the issue as whether Congress conferred automatic standing to IPR petitioners through the IPR statutory scheme.