In a recent decision, Incyte Corporation v. Sun Pharmaceutical Industries, Inc., the Federal Circuit reaffirmed the stringent standards for establishing Article III standing in appeals from PTAB decisions. The court dismissed Incyte’s appeal from a PTAB post-grant review proceeding, holding that Incyte failed to demonstrate a sufficient injury in fact required for Article III standing.
Background of the Case
Sun Pharmaceutical Industries holds U.S. Patent No. 10,561,659, directed to methods of treating hair-loss disorders, specifically alopecia areata, using precise dosages of deuterated analogs of ruxolitinib. Incyte challenged the validity of Sun’s patent claims via PGR, alleging obviousness. However, the PTAB upheld the claims. Incyte subsequently appealed the PTAB decision.
Article III Standing Requirement
Before reaching the merits of an appeal, the Federal Circuit emphasized that the appellant must establish Article III standing, which includes showing:
- An injury in fact that is concrete and particularized, and actual or imminent.
- A causal connection between the injury and the conduct complained of.
- Likelihood that the injury will be redressed by a favorable decision.
Insufficient Injury in Fact
Incyte asserted two bases for standing:
1. Potential Infringement Liability:
Incyte argued its ongoing development of a topical deuterated ruxolitinib product to treat alopecia areata presented a substantial risk of future infringement liability. However, the Federal Circuit found Incyte’s plans insufficiently concrete to confer standing. The court pointed to Incyte’s minimal initial investment, the uncertain timeline, and multiple significant regulatory and development hurdles remaining, concluding that these factors rendered the potential injury too speculative.
The court specifically distinguished Incyte’s scenario from JTEKT Corp. v. GKN Auto. LTD., where concrete plans and actual steps toward market entry are necessary to substantiate an imminent risk of infringement liability. Merely earmarking funds and expressing intentions did not meet the stringent threshold required.
2. Competitor Standing Doctrine:
Incyte also sought standing under the competitor standing doctrine, arguing Sun’s patent limited Incyte’s competitive opportunities. The Federal Circuit, citing its decision in AVX Corp. v. Presidio Components, emphasized that competitor standing in the patent context requires showing nonspeculative plans to engage in activities covered by the challenged patent claims. Because Incyte failed to demonstrate such concrete and imminent plans, this doctrine did not confer standing.
Key Takeaways
This decision underscores the Federal Circuit’s stringent application of Article III standing requirements in patent appeals. Specifically, it highlights:
- The necessity of demonstrating concrete, nonspeculative plans to engage in potentially infringing activities.
- The limited applicability of competitor standing doctrine absent clear and imminent infringement risks.
Conclusion
The Federal Circuit’s ruling in Incyte Corp. v. Sun Pharmaceutical reiterates the high bar patent challengers must clear to establish standing. Parties contemplating appeals from PTAB proceedings should ensure that they have documented concrete and imminent plans potentially subjecting them to infringement liability before initiating appeals.
By Charles Gideon Korrell