If a case is settled can a defendant appeal an inter partes review? FISHER v. RESMED

If a case is settled can a defendant appeal an inter partes review? FISHER v. RESMED

A patent is a set of exclusive rights granted to the inventor of a new invention.  An inventor gains patent protection for their invention in the United States by filing a patent application with the United States Patent and Trademark Office.  A patent examiner is assigned by the United States Patent and Trademark Office to review a patent application and ensure that the application meets all the patent law requirements.  A patent application must meet several requirements for a patent to be granted but the fundamental requirements are that the invention is new, useful and not obvious.  An invention is obvious if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time a patent application is filed describing the invention.

Prior art is anything known to a person skilled in the field of technology to which the patent is related.   If an invention is described in a piece of prior art then the invention is obvious.  Also if multiple pieces of prior art combined describe the features of an invention and a motivation to combine the prior art can be demonstrated, the invention is considered obvious.  If prior art cannot be found which describes all the aspects of an invention, then the invention is not considered obvious and, assuming all the other requirements are met, the patent can be granted.

After a patent is granted, the patent can still be invalidated if evidence the invention was obvious is discovered.  Any member of the public can institute an Inter Partes Review of a patent based on sections 35 U.S.C. § 102 (novelty requirement) and 35 U.S.C. § 103 (nonobviousness requirement).  An Inter Partes Review is a trial proceeding conducted at the Patent Trial and Appeal Board to review the patentability of one or more claims of an issued patent.  The Patent Trial and Appeal Board can accept new prior art from the public and modify or cancel a patent based on that prior art.

If a patent owner does not like a decision from the Patent Trial and Appeal Board, they can appeal the ruling to the Court of Appeals for the Federal Circuit.  Whether the opposing party may appeal a Patent Trial and Appeal Board decision is a more complex question.  Frequently, an Inter Partes Review is initiated by a defendant in a patent infringement case because the Patent Trial and Appeal Board move much faster than a federal court.  The defendant can get the patent invalidated faster and the patent infringement case dismissed.  In that case if the defendant does not like the Patent Trial and Appeal Board’s decision, they can appeal the decision to the Federal Circuit.

A settlement in a court case is more likely than a final verdict.  Parties prefer to settle a case because it gives them more control over the outcome.  The question then becomes, if a defendant in a patent infringement case loses an inter partes review and the case is settled, can a the defendant appeal the decision of the Patent Trial and Appeal Board to the Court of Appeals for the Federal Circuit?

FISHER & PAYKEL HEALTHCARE LIMITED, v. RESMED LIMITED, 2018-2262 (C.A.F.C. 2019) is a case which answers this question.  ResMed owns U.S. Patent 9,027,556 (“’556 patent”), which is directed to masks that can be used for treatment of sleep disordered breathing.  In 2016, ResMed sued Fisher for patent infringement. Fisher petitioned for IPR, and the Patent Trial and Appeal Board determined that Fisher had failed to demonstrate that any claims of the ’556 patent are unpatentable.  Fisher appealed the Board’s decision to the Court of Appeals for the Federal Circuit.  The two parties then settled the patent infringement suit.  ResMed moved for dismissal of Fisher’s appeal of the IPR decision on the grounds that Fisher lacked standing.

The Federal Circuit agreed that Fisher lacked standing and dismissed the appeal.  The Federal Circuit found that Fisher failed to demonstrate there was a “substantial risk of future infringement” or a likelihood that Fisher’s plans would “cause the patentee to assert a claim of infringement.” To have standing to appeal an IPR decision there must be a controversy and because the case had been settled that controversy no longer existed.

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