Lost at the PTAB, but haven’t been sued for infringement?

You have standing to appeal if you pinky swear you believe you'll be sued

General Electric Company, Appellant v. Raytheon Technologies Corporation, Appellee


December 23, 2020

Case Summary

To have Article III standing to bring a lawsuit or an appeal, a party must have suffered an injury in fact that is: (a) fairly traceable to the conduct of the other party to the litigation; and (b) likely to be redressed by a favorable judicial decision.

The case-or-controversy requirement of Article III does not apply to administrative actions such as IPR proceedings; Congress took advantage of this when it drafted 35 U.S.C. § 311(a), which allows any person, other than the patent owner, to file an IPR petition with the Patent Trial and Appeals Board—regardless of whether the challenger is being (or is likely to be) sued for infringement of the challenged patent.

The IPR statutes grant a right to appeal PTAB decisions to the Federal Circuit; but if a disappointed patent challenger seeks to overturn a Board decision—and the patent owner has not already sued or threatened to sue for infringement—the challenger must meet standing requirements that are more restrictive than those contained in § 311(a). Specifically, the Federal Circuit has held that some requirements of Article III standing may be relaxed in this type of appeal from an administrative decision, but an appellant must still be able to show an injury in fact—such as a likelihood that it will be sued for infringing the challenged patent; otherwise, the appeal must be dismissed.

In this case, General Electric filed an IPR petition challenging the validity of Raytheon’s patent on a geared turbofan jet engine. The PTAB instituted a trial but ultimately ruled against GE. When the company filed an appeal, patent owner Raytheon argued that GE lacked standing because Raytheon never "sued or threatened to sue GE" for infringing the [challenged] patent, and because GE "had never alleged that an engine exists that presents a concrete and substantial risk of infringing the [challenged] patent."

In a 2019 decision involving another IPR trial in which GE challenged a patent and lost (Gen. Elec. Co. v. United Techs. Corp., 928 F.3d 1349 (Fed. Cir. 2019)), the

Federal Circuit dismissed GE’s appeal for lack of standing because the company

relied on potential infringement liability as a basis for injury in fact (that is, it claimed that the patent owner was going to file an infringement suit), but GE: (a) failed to show that it was engaging in infringing activity; and (b) failed to establish that it had concrete plans for future activity that would likely cause the patent owner to assert a claim of infringement.

In other recent cases addressing the issue of a patent challenger’s standing on appeal from a PTAB decision, the Federal Circuit has explained that the appellant does not need to face a specific threat of litigation to establish the required injury in fact; instead, “it is generally sufficient for the appellant to show that it has engaged in, is engaging in, or will likely engage in activity that would give rise to a possible infringement suit.”

In this appeal, the Federal Circuit agreed with GE that it had standing to challenge its loss at the PTAB, because, among other things, it: (a) spent $10-12 million in 2019 developing a geared turbofan architecture and design; and (b) offered this geared turbofan design to Airbus, a manufacturer of commercial jet aircraft. Although GE did not prove that it will definitely select this engine as part of its final bid for Airbus (or for any other bid), previous Federal Circuit decisions have held that "[a]ctivities that 'will likely'—but might not—occur in the future can be sufficient to confer standing . . . ."

Finally, the panel also found GE had established that a sale to Airbus would raise a substantial risk of an infringement suit, placing heavy weight on this sworn statement from GE Aviation's Chief IP Counsel: "GE fully expects that [Raytheon] would accuse this engine of infringing … the [challenged] patent . . . ." In the Federal Circuit’s view, this combination of: (a) significant investment in a geared turbofan design that was offered to a customer; and (b) a reasonable belief that Raytheon would sue GE for patent infringement if it sold engines based on that design, was sufficient to establish that GE had shown an injury in fact, and therefore had standing to appeal its loss at the PTAB.

2021.01 case summary for GE v Raytheon
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