By Andrew Williams —

Which parties to an IPR proceeding have standing to either appeal or participate in an appeal from an adverse final written decision by the Board?  The Federal Circuit had previously held that a petitioner that did not otherwise have Article III standing could not appeal an adverse decision (Phigenix, Inc. v. Immunogen, Inc.), but that a successful petitioner was "not constitutionally excluded from appearing in court to defend" a decision (Personal Audio, LLC v. Electronic Frontier Foundation).  Today, in Luitpold Pharmaceuticals, Inc. v. Pharmacosmos A/S, the Federal Circuit answered in the negative the question whether a petitioner otherwise without standing could cross-appeal a final written decision in which some of the claims were determined to be patentable.  In a two-page order, the Court stated that "[b]ecause Pharmacosmos has not established an injury fact sufficient to confer Article III standing," it was dismissing the case.  However, because the order is nonprecedential, and more importantly because there was no discussion or analysis as to why Pharmacosmos lacked standing, it is unclear what the broader implications of this case will be.  Nevertheless, by looking at the underlying briefing and oral argument, we might be able to glean some information about the contours of what is required to find petitioner standing for IPR proceedings.

How did we get here?  The language of 35 U.S.C. § 141(c) states that any party "who is dissatisfied with the final written decision" of the Board "may appeal the Board's decision" to the Federal Circuit.  Nevertheless, the Federal Circuit's Consumer Watchdog v. Wisconsin Alumni Research case in the inter partes reexamination context appeared to be the writing on the wall for petitioners desiring to appeal IPR decisions that did not have Article III standing.  Of course, the Federal Circuit made it clear in the Phigenix case that standing is required for a petitioner to appeal an adverse final written decision.  Important in that decision was the fact that the petitioner/appellant was "not engaged in any activity that would give rise to a possible infringement suit."  The Court has also held that as long as the appellant has standing, a petitioner does not require independent standing to participate in the appeal.  In the Personal Audio case, the public interest group Electronic Frontier Foundation ("EFF") had crowd-sourced both the cost of filing an IPR petition against Personal Audio's podcasting patent (made famous (or infamous) by the NPR podcast "Planet Money"), and the technological substance found within the petition.  Other than coordinating the effort, filing, and participating in the IPR proceeding, the EFF had no interest in the case that could be used to establish the Article III case-or-controversy requirement.  Nevertheless, because Personal Audio, "the party invoking judicial review," had "experienced an alteration of 'tangible legal rights,'" sufficient to confer standing, the EFF was not excluded from the appeal.

So why did Pharmacosmos think that it had standing to cross-appeal its adverse decision from the Board?  One attempt to distinguish this case from Phigenix was in noting that the Court already had jurisdiction over Luitpold's appeal of the same patents and that the two claims Pharmacosmos was appealing were related to these other claims by subject matter.  In other words, it was arguing part Personal Audio and part judicial efficiency.  However, Personal Audio was not applicable here because nothing was stopping Pharmacosmos from participating as an appellee.  This issue was its cross appeal.  And Luitpold had identified numerous Federal Circuit cases that stood for the proposition that the standing requirements applied equally to "appeals" and "cross appeals."  As such, even if there would be judicial economy, it would be irrelevant if there did not exist standing in the first place.

In addition, Pharmacosmos attempted to take Phigenix head-on by distinguishing the cases on their facts.  Pharmacosmos argued that the Phigenix company was a discovery-stage biotechnology research company that did not market any products.  Instead, Pharmacosmos itself was a well-established company with a number of marketed products and in direct active market competition with Luitpold.  The patent at issue was U.S. Patent No. 7,754,702, entitled "Methods and Compositions for Administration of Iron," which claims methods of treating diseases, disorders, or conditions "characterized by iron deficiency or dysfunctional iron metabolism resulting in reduced bioavailability of dietary iron . . . ."  The '702 patent is listed in the Orange Book as covering the Luitpold product Injectafer®, along with three additional patents, including the grandchild of the '702 patent, U.S. Patent 8,895,612.  Nevertheless, Pharmacosmos does not yet sell a product in the U.S. that would fall within the scope of those claims.  Even though it is marketing its own iron isomaltoside product in Europe, Monofer®, Pharmacosmos is still conducting clinical trials in the U.S. to obtain FDA approval.  Moreover, Pharmacosmos' relationship with its former development partner, Helsinn Healthcare S.A., ended, and it was still seeking a new commercialization partner for the U.S.

Nevertheless, Luitpold had sent a warning letter to Pharmacosmos regarding its development of Monofer® in the U.S.  This occurred shortly after Pharmacosmos and Helsinn announced their partnership in January 2015.  Within a month, Luitpold sent warning letters claiming infringement, but the letters only mentioned the grandchild '612 patent not the '702 patent.  Luitpold pointed out that the warning letter was irrelevant because it did not mention the '702 patent.  However, Pharmacosmos maintained its relevance because the two patents had allegedly overlapping claims.  And even though there is no opinion or discussion in the order regarding this warning letter, the Federal Circuit apparently agreed with Luitpold that it was not relevant.  For example, during oral argument, counsel for Pharmacosmos noted that it had "a little bit of an additional hurdle to get through to convince the Court that the assertion of other patent rights which had substantially similar claim elements . . . would create a reasonable apprehension on the part of [Party] that it will be sued."  The Court interrupted in the middle of this statement with the snide (but telling) remark:  "Just a little bit."

The other stumbling block that Pharmacosmos could not overcome was the Sandoz v. Amgen case, in which the Court held that a biosimilar maker did not have standing to bring a declaratory judgement action against a BLA holder prior to the filing of an aBLA with the FDA.  Luitpold argued that the Pharmacosmos situation was even worse, because its clinical studies were expected to take several years.  During Oral Argument, the Federal Circuit seemed equally skeptical that this case was any different than Sandoz.  In fact, when pressed, Pharmacosmos' counsel could only point to the warning letter as a distinction between the two cases.  But again, this letter mentioned different patent rights, not those at issue in the present IPR.  The Court is currently considering another case in which a biosimilar manufacturer filed an IPR before submitting its aBLA, so we may see additional analysis of the difference between the IPR setting and the DJ jurisdiction of Sandoz v. Amgen.  However, for the present case, any such distinction was insufficient for the Court to find Article III standing for the Pharmacosmos cross-appeal.

This case, and others like it, will likely be a topic of discussion at the American Conference Institute's 12th Annual Paragraph IV Disputes conference on April 23-24, 2018 in New York, NY.  As a reminder, this author will be in attendance, so if you are attending, please say hello.  Patent Docs readers are entitled to a 10% discount off of registration using discount code P10-999-PTD18, but hurry because space is limited and registration will be closing soon.

Luitpold Pharmaceuticals, Inc. v. Pharmacosmos A/S (Fed. Cir. 2018)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Wallach and Taranto
Per Curiam Order