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JTEKT Corp. v. GKN Automotive Ltd.

United States Court of Appeals, Federal Circuit

August 3, 2018

JTEKT CORPORATION, Appellant
v.
GKN AUTOMOTIVE LTD., Appellee

          Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2016-00046.

          Wilbur T. Baker, Oblon, McClelland, Maier & Neu-stadt, LLP, Alexandria, VA, argued for appellant. Also represented by Lisa Mandrusiak, Ryan W. Smith.

          Linda Mettes, Brooks Kushman PC, Southfield, MI, argued for appellee. Also represented by Sangeeta G. Shah, Kristin Lee Murphy.

          Before Prost, Chief Judge, Dyk and O'Malley, Circuit Judges.

          Dyk, Circuit Judge.

         GKN Automotive LTD ("GKN") owns U.S. Patent No. 8, 215, 440 ("the '440 patent"). In inter partes review ("IPR"), the Patent Trial and Appeal Board ("the Board") found claims 2 and 3 of the '440 patent not unpatentable. JTEKT Corporation ("JTEKT"), the petitioner in the IPR, appealed. Because JTEKT lacks standing to appeal, we dismiss the appeal.

         Background

         GKN's '440 patent describes a drivetrain for a four-wheel drive vehicle that is made up of primary and secondary drivetrains. The drivetrain can be switched between two-wheel drive mode and four-wheel drive mode. The claimed drivetrain operates to reduce the number of rotating components when the secondary drivetrain is disconnected.

         JTEKT petitioned for IPR of the patentability of claims 1-7 of the '440 patent in IPR2016-00046. The Board instituted IPR on all challenged claims. After institution, GKN disclaimed claims 1, 4, and 5. Accordingly, the IPR focused on whether JTEKT had shown that claims 2 and 3 would have been obvious over the prior art of Teraoka in view of Watanabe and whether claims 6 and 7 would have been obvious over the prior art of Teraoka in view of Burrows. Claims 2 and 3-the claims currently on appeal-specify that two side-shaft couplings connect the secondary axle rather than one side-shaft coupling. These side-shaft couplings provide both transverse and longitudinal power distribution between the left and right wheels and the front and rear wheels.

         On January 23, 2017, the Board held that claims 6 and 7 would have been obvious over Teraoka in view of Burrows, but that JTEKT did not show that claims 2 and 3 would have been obvious over Teraoka in view of Watanabe. The Board decided that JTEKT had failed to establish that a person of ordinary skill "would have had a reasonable expectation of reducing vehicle weight with the proposed modification," that being the stated motivation to combine. J.A. 0032.

         GKN did not appeal the Board's decision with respect to claims 6 and 7. But JTEKT appealed the Board's decision regarding claims 2 and 3. GKN's motion to dismiss the appeal based on lack of standing was denied by a motions panel of this court, which "deem[ed] it the better course for the parties to address the standing issue in their briefs." Order, No. 17-1828, ECF No. 23. JTEKT asserts that we have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

         Discussion

         Under the IPR statute, any person or entity may petition the Patent Office to institute an IPR proceeding. 35 U.S.C. § 311(a). There is no requirement that the petitioner have Article III standing, as "[p]arties that initiate [IPRs] need not have a concrete stake in the outcome; indeed, they may lack constitutional standing." Cuozzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131, 2143-44 (2016). We have similarly concluded that "Article III standing is not necessarily a requirement to appear before an administrative agency." Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014) (citation omitted). The statute also provides that an unsuccessful petitioner may appeal an adverse final written decision. 35 U.S.C. § 141(c) ("A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board . . . may appeal the Board's decision . . . to the United States Court of Appeals for the Federal Circuit.").

         In a series of decisions, we have held that the statute cannot be read to dispense with the Article III injury-in-fact requirement for appeal to this court. In Phigenix, Inc. v. Immunogen, Inc., we wrote that "[a]n appellant's obligation to establish an injury in fact remains firm even though it need not 'meet all the normal standards for redressability and immediacy' when, as here, a statute provides that appellant with a right to appeal." 845 F.3d 1168, 1172 n.2 (Fed. Cir. 2017) (citations omitted); see also 35 U.S.C. § 141(c). Phigenix lacked standing to appeal an IPR because it did not face an actual injury. Phigenix, 845 F.3d at 1176. Phigenix did not argue that it was at risk of "infringing the [patent at issue], that it is an actual or prospective licensee . . . or that it otherwise plans to take any action that would implicate the patent . . . . Instead, ...


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