Phigenix, Inc. v. ImmunoGen, Inc.
845 F.3d 1168 (Fed. Cir. Jan. 9, 2017)
Authored by Kelsey Barnes
Statement of Facts: The U.S. Patent and Trademark Office (“USPTO”) assigned Appellee ImmunoGen, Inc. (“ImmunoGen”) U.S. Patent No. 8,337,856 (“the ’856 patent”), which claimed methods of treatment for a variety of cancers. ImmunoGen granted Genentech, Inc. (“Genentech”) an exclusive license to the ‘856 patent, which Genentech used to produce the drug Kadcyla®™ (“Kadcyla”). Appellant Phigenix, Inc. (“Phigenix”) is a for-profit biotechnology, pharmaceutical, and biomedical research company that developed an intellectual property portfolio consisting of various cancer-fighting drugs and treatments. Phigenix’s portfolio included U.S. Patent No. 8,080,534 (“the ’534 patent”). Phigenix alleged that the ’534 patent covered subject matter claimed in the ’856 patent and brought litigation against Genentech in relation to its production of the drug Kadcyla.
Procedural History: Phigenix sought inter partes review of the ’856 patent, alleging that claims 1-8 (“the Asserted Claims”) of the patent were unpatentable as obvious over prior art references. The USPTO Patent Trial and Appeal Board (“PTAB”) found the Asserted Claims nonobvious. Phigenix appealed the PTAB’s final written decision to the Federal Circuit. ImmunoGen filed a motion to dismiss, asserting that Phigenix lacked Article III standing to appeal the PTAB’s Final Written Decision. The Federal Circuit denied the motion and requested that the parties address the standing issue in their briefs.
Question Presented: Under Article III of the Constitution, does Phigenix have standing to appeal the PTAB’s Final Written Decision affirming patentability of the Asserted Claims of the ’856 patent?
Holding: No. Phigenix does not have standing under Article III of the Constitution to appeal the PTAB’s Final Written Decision because Phigenix did not demonstrate injury in fact consistent with the Federal Circuit’s legal requirements to demonstrate standing in an appeal from a final agency action.
Reasoning: In addressing the question presented, the court considered (1) general Article III standing requirements, (2) the legal requirements to demonstrate standing in an appeal from a final agency action, and (3) whether Phigenix met each of these requirements.
The court first recognized its general obligation to ensure that litigants have Article III standing, DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 340 (2006), even when a litigant appeals from a final agency action, Massachusetts v. EPA, 549 U.S. 497, 505-06, 516-26 (2007). The constitutional minimum of standing consists of three elements under Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992): (a) an appellant must have suffered an injury in fact; (b) the injury must be fairly traceable to the challenged conduct of the appellee; and (c) the injury is likely to be redressed by a favorable judicial decision. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). The Appellant’s injury must be “concrete and particularized.” Id. at 1545. A “concrete” injury is one that “actually exist[s],” id. at 1548, or appears “imminent,” Lujan, 504 U.S. at 560. An injury is “particularized” if it affects an appellant “in a personal and individual way.” Spokeo, 136 S. Ct. at 1548. “[A]lthough Article III standing is not necessarily a requirement to appear before an administrative agency,” Consumer Watchdog v. Wisconsin Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014), an appellant must supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court, Massachusetts v. EPA, 549 U.S. 497, 517 (2007).
The court then established the legal standard for demonstrating standing in an appeal from a final agency action – a standard the Federal Circuit had not set in the thirty-five years since the court’s inception. The legal requirements for demonstrating standing in an appeal from a final agency action include: (a) the burden of production; (b) the evidence an appellant must produce to meet that burden; and (c) when an appellant must produce that evidence. See Phigenix v. ImmunoGen, Inc., 845 F.3d 1168, 1172 (Fed. Cir. Jan. 9, 2017). First, an appellant seeking a federal court’s review of a final agency action bears the same burden of production as that of a plaintiff moving for summary judgment in a district court. See Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002). The court joined four other circuits in adopting the D.C. Circuit’s summary judgment burden of production. Second, the appellant must either identify record evidence from the agency proceeding sufficient to support its standing to seek review in federal court or, if there is none because standing was not an issue before the agency, submit additional evidence to the court of appeals. Lastly, because standing involves threshold questions regarding a court’s authority to hear a dispute, Massachusetts, 549 U.S. at 505, the appellant must produce evidence establishing its standing “at the first appropriate” time, “whether in response to a motion to dismiss or in the opening brief.” Phigenix, 845 F.3d at 1173 (citing Sierra Club, 292 F.3d at 900). If there is no record evidence to support the standing at the time of appeal, “the appellant must produce such evidence at the appellate level at the earliest possible opportunity.” Id.
Phigenix failed to meet these requirements in establishing that it had suffered an injury in fact. Phigenix attempted to argue that it had suffered an actual economic injury because the existence of ImmunoGen’s ’856 patent encumbered Phigenix’s licensing efforts. Phigenix did not substantiate this argument with record evidence developed before the PTAB. Phigenix relied upon non-record documents, including declarations used to support Phigenix’s response to ImmunoGen’s motion to dismiss. The court applied Fed. R. Civ. P. 56(c)(4) to conclude that the declarations did not set out facts sufficient to support a concrete economic injury because Phigenix never licensed the ’534 patent to anyone. Thus, the invalidation of the ’856 patent would not increase Phigenix’s licensing revenues. Phigenix also contended that it had suffered an injury in fact because 35 U.S.C. § 141(c) provided a statutory basis for appeal. The Federal Circuit concluded that Phigenix could not base its injury in fact upon a violation of § 141(c) because Phigenix had been permitted to file its appeal, and the exercise of its right to appeal did not necessarily establish that Phigenix possessed Article III standing. Lastly, Phigenix attempted to argue that the estoppel effect of the PTAB’s decision adversely impacted Phigenix’s ability to provide a contractual warranty. However, the court held that an estoppel provision does not constitute an injury in fact when the appellant is not engaged in any activity that would give rise to a possible infringement suit.