Federal Circuit Decides IPR Petitioner’s Standing In Two Appeals, With Different Outcomes
On December 1, 2021, the United States Court of Appeals for the Federal Circuit (CAFC) issued two opinions related to the same inter partes review (IPR) petitioner’s standing to appeal two decisions of the Patent Trial and Appeal Board (PTAB). ModernaTx, Inc. v. Arbutus Biopharma Corp, — F.4th — (Fed. Cir. Dec. 1, 2021); ModernaTx, Inc. v. Arbutus Biopharma Corp f/k/a Protiva Biotherapeutics, Inc., — F.4th — (Fed. Cir. Dec. 1, 2021). In the first opinion, the CAFC found that petitioner had established standing by demonstrating a sufficient risk of an infringement suit based on the patent owner’s statements and actions. In the second opinion, the CAFC found that petitioner lacked standing at the time the appeal was filed because petitioner’s evidence of financial burden from the validity of the patent at issue was too speculative.
As background, although there is no standing requirement to request institution of an IPR by the PTAB, an appellant must have standing to seek Federal Circuit review of a PTAB decision in an IPR. To have standing, an appellant must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the appellee, and (3) that is likely to be redressed by a favorable judicial decision. The appellant must have standing at the time it filed its appeal, and at all times throughout the appeal.
In March 2018 and January 2019, ModernaTx, Inc. (Appellant) petitioned for IPR of two patents owned by Arbutus Biopharma Corporation (Appellee)—U.S. Patent No. 8,058,069 (the ’069 Patent) and U.S. Patent No. 9,364,435 (the ’435 Patent)—directed to the use of stable lipid nanoparticles to deliver RNA-based medicines. In September 2019 and July 2020, the PTAB issued final written decisions finding that Appellant had not met its burden to show that the challenged claims of the ’435 and ’069 Patents, respectively, were invalid. Appellant filed its appeal as to the ’435 Patent in November 2019 and filed its appeal as to the ’069 Patent in September 2020. In each appeal, Appellee filed motions to dismiss for lack of standing arguing that Appellant had not demonstrated an injury in fact, and Appellant opposed. The Federal Circuit found that Appellant had established standing to appeal the PTAB’s decision regarding the ’069 Patent, but not the ’435 Patent.
The Federal Circuit found that Appellant had standing to appeal the PTAB’s July 2020 decision regarding the ’069 Patent because Appellant had demonstrated an injury sufficient to confer standing. Specifically, the Federal Circuit found that Appellant had shown that its activities in developing an mRNA-based COVID-19 vaccine gave rise to a possible infringement suit based on (1) Appellee’s public statements regarding the broad coverage of its patent portfolio, (2) Appellee’s consistent position that Appellant requires a license to its patents, and (3) Appellee’s refusal to grant Appellant a covenant-not-to sue.
However, the Federal Circuit found that Appellant did not have standing to appeal the PTAB’s September 2019 decision regarding the ’435 Patent because Appellant had not demonstrated an injury in fact at the time it initiated its appeal in November 2019 or at all times throughout the appeal. In January 2020, in opposition to Appellee’s motion to dismiss, Appellant had argued that its standing was not based on the threat of an impending infringement suit or Appellee’s accusations of infringement, but its financial burden as a sublicensee to practice the methods of the ’435 Patent in its research regarding four viral targets. In March 2021, Appellant submitted supplemental evidence, in which it admitted that it had suspended its sublicensed activities regarding the four viral targets, but that it had potential infringement liability related to its COVID-19 vaccine development activities—based on the same evidence it relied on for standing in its appeal regarding the ’069 Patent. The Federal Circuit dismissed Appellant’s appeal, relying on Apple v. Qualcomm to find that Appellant lacked standing at the outset of its appeal in November 2019 because Appellant failed to show that its licensing fees would change if the ’435 Patent were invalidated. The Federal Circuit also found that, even if Appellant had standing in November 2019 based on its sublicensed activities, it failed to show that it had standing throughout the appeal because Appellant failed show that its COVID-19 development activities had advanced enough to confer standing by the time it suspended its sublicensed activities.