Federal Circuit Finds Standing to Appeal Reexamination Decisions Even Though the Reexamination Requestor Had Not Been Sued For Infringement At the Time the Reexaminations Were Filed and Decided, but Nonetheless Dismissed the Appeal as Moot Due to Patentee’s Covenant Not to Sue

PPG INDUS., INC. v. VALSPAR SOURCING, INC.: Feb. 9, 2017. Before Newman, Chen, and Stoll.

Takeaways:

• A reexamination requestor has standing to appeal the PTAB’s reexamination decisions even though the requestor had not been sued for infringement at the time the reexaminations were initiated and decided, if the reexamination requestor can show that it had a legitimate concern of being sued.

• A patentee’s covenant not to sue a reexamination requestor for infringement of the patent will render moot the requestor’s appeal from the PTAB’s decision in the reexamination of the patent.

• Because the patentee’s covenant not to sue mooted the appeal, the Federal Circuit not only dismissed the appeal but also vacated the underlying PTAB decisions.

Procedural Posture:

Reexamination requestor appealed the final decisions by the PTAB in reexaminations of two patents.  The Federal Circuit dismissed the appeal as moot and vacated the PTAB decisions.

Synopsis:

• Standing: The Federal Circuit held that a reexamination requestor (and alleged infringer) had standing to appeal the PTAB’s final decisions in two reexaminations even though the requestor had not been sued for infringement at the time the reexaminations were initiated and decided. The patentee argued that the reexamination requestor had no standing to appeal because there was no Article III case or controversy.  However, the Federal Circuit found that the reexamination requestor had demonstrated that it possessed more than a “general grievance concerning” the patents because the evidence showed: (i) by the time the reexamination requestor filed its notice of appeal, it had already launched a potentially infringing product; and (ii) the reexamination requestor had received at least one inquiry from a customer suggesting that the patentee intended to sue the reexamination requestor for infringement.  Additionally, the Federal Circuit found that the reexamination requestor’s concern of being sued proved warranted because the patentee subsequently filed an infringement action against it on related patents.  As such, the Federal Circuit found that the reexamination requestor had shown “a particularized, concrete interest in the patentability” of the subject matter and, accordingly, established that it had standing to appeal the PTAB’s decisions.

• Mootness: Despite the fact that the requestor had standing to appeal, the Federal Circuit dismissed the appeal as moot because the patentee’s covenant not to sue absolved the reexamination requestor of any possible infringement of the patents.  However, because the patentee was the prevailing party below and had caused the appeal to become moot by unilaterally granting the covenant, the Federal Circuit also vacated the underlying PTAB decisions.