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`
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`
`
`
`
`IN THE
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`
`
`
`
`
`PERSONAL AUDIO, LLC,
`Appellant,
`
`v.
`
`ELECTRONIC FRONTIER FOUNDATION,
`Appellee.
`
`
`
`
`
`
`
`
`Appeal from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in No. IPR2014-00070.
`
`
`
`
`
`
`BRIEF OF AMICI CURIAE UNIFIED PATENTS INC. AND
`ASKELADDEN L.L.C. IN SUPPORT OF APPELLEE’S RESPONSE
`TO THE COURT’S SUA SPONTE ORDER FOR SUPPLEMENTAL
`BRIEFING REGARDING STANDING
`
`
`
`
`
`Kevin Jakel
`Jonathan Stroud
`UNIFIED PATENTS INC.
`1875 Connecticut Avenue, NW
`Washington, DC 20009
`(650) 999-0455
`
`
`
`
`Brian T. Burgess
`GOODWIN PROCTER LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 346-4000
`
`
`
`August 1, 2016
`
`
`
` James R. Barney
`Philip Andrew Riley
`David K. Mroz
`FINNEGAN, HENDERSON, FARABOW,
` GARRETT & DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 408-4400
`Counsel for Unified Patents Inc.
`
`Kevin J. Culligan
`John P. Hanish
`GOODWIN PROCTER LLP
`The New York Times Building
`620 Eighth Avenue
`New York, New York 10018
`(212) 813-8800
`Counsel for Askeladden L.L.C.
`
`
`USR Exhibit 2010 Page 1
`
`
`
`CERTIFICATE OF INTEREST
`
`Counsel for Amicus Curiae Unified Patents Inc. certifies the following (use
`“None” if applicable; use extra sheets if necessary):
`
`
`1. The full name of every party represented by me is:
`
`Unified Patents Inc.
`
`2. Name of the Real Party in interest (Please only include any real party in
`interest NOT identified in Question 3) represented by me is:
`
`None
`
`
`
`
`
`
`
`3. Parent corporations and any publicly held companies that own 10 % or more
`of the stock of the party represented by me are:
`
`None
`
`4. The names of all law firms and the partners or associates that appeared for
`the party or amicus now represented by me in the trial court or agency or are
`expected to appear in this court (and who have not or will not enter an
`appearance in this case) are:
`
`
`
`
`
`
`FINNEGAN, HENDERSON, FARABOW,
` GARRETT & DUNNER, LLP
`James R. Barney
`Philip Andrew Riley
`David K. Mroz
`901 New York Avenue, NW
`Washington, DC 20001-4413
`
`UNIFIED PATENTS INC.
`Kevin Jakel
`Jonathan Stroud
`1875 Connecticut Avenue, NW
`Washington, DC 20009
`
`
`
`USR Exhibit 2010 Page 2
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`/s/ James R. Barney
`James R. Barney
`Philip Andrew Riley
`David K. Mroz
`FINNEGAN, HENDERSON, FARABOW,
` GARRETT & DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 408-4400
`Counsel for Unified Patents Inc.
`
`
`
`
`August 1, 2016
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`USR Exhibit 2010 Page 3
`
`
`
`CERTIFICATE OF INTEREST
`
`Counsel for Amicus Curiae Askeladden L.L.C. certifies the following (use “None”
`if applicable; use extra sheets if necessary):
`
`
`1. The full name of every party represented by me is:
`
`Askeladden L.L.C.
`
`2. Name of the Real Party in interest (Please only include any real party in
`interest NOT identified in Question 3) represented by me is:
`
`None
`
`
`
`3. Parent corporations and any publicly held companies that own 10 % or more
`of the stock of the party represented by me are:
`
`
`Askeladden L.L.C. is a wholly owned subsidiary of The Clearing
`House Payments Company L.L.C. No corporation or publicly held company
`owns 10 percent or more of The Clearing House Payments Company L.L.C.
`
`
`4. The names of all law firms and the partners or associates that appeared for
`the party or amicus now represented by me in the trial court or agency or are
`expected to appear in this court (and who have not or will not enter an
`appearance in this case) are:
`
`
`
`Date: August 1, 2016
`
`
`
`
`
`GOODWIN PROCTER LLP
`Kevin J. Culligan, John P. Hanish, Brian T. Burgess
`
`
`Respectfully submitted,
`
`
`/s/ Kevin J. Culligan
`GOODWIN PROCTER, LLP
`620 Eighth Avenue
`New York, New York 10018
`(212) 813-8800
`Counsel for Askeladden L.L.C.
`
`
`
`
`
`
`
`
`
`USR Exhibit 2010 Page 4
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`STATEMENT OF INTEREST OF THE AMICI CURIAE ...................................... 1
`
`SUMMARY OF THE ARGUMENT ........................................................................ 2
`
`I.
`
`ARGUMENT ................................................................................................... 3
`
`A.
`
`B.
`
`C.
`
`Consumer Watchdog Is Not Applicable Here ....................................... 3
`
`Congress Has Answered Any Prudential Concerns About
`EFF’s Standing ...................................................................................... 6
`
`Because There Are Fundamental Differences Between
`Patent-Challenging Organizations, a Bright-Line Test for
`Standing Would Be Inappropriate ......................................................... 8
`
`II.
`
`CONCLUSION ................................................................................................ 9
`
`
`
`
`
`
`
`
`
`i
`
`USR Exhibit 2010 Page 5
`
`
`
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Federal Cases
`ASARCO Inc. v. Kadish,
`490 U.S. 605 (1989) .......................................................................................... 4, 5
`
`Baker v. Carr,
`369 U.S. 186 (1962) .............................................................................................. 9
`
`Bond v. Utreras,
`585 F.3d 1061 (7th Cir. 2009) .............................................................................. 6
`
`Camreta v. Greene,
`131 S. Ct. 2020 (2011) .......................................................................................... 5
`
`Clouding Corp. v. Unified Patents, Inc..
`640 F. App'x 997 (Fed. Cir. 2016) ........................................................................ 1
`
`Consumer Watchdog v. Wisconsin Alumni Research Foundation,
`753 F.3d 1258 (Fed. Cir. 2014) ...................................................................passim
`
`Legault v. Zambarano,
`105 F.3d 24 (1st Cir. 1997) ................................................................................... 6
`
`Los Angeles v. Lyons,
`461 U.S. 95 (1983) ................................................................................................ 9
`
`Lujan v. Defenders of Wildlife,
`504 U.S. 555 (1992) .............................................................................................. 3
`
`Railway Labor Executives’ Ass’n v. United States,
`987 F.2d 806 (D.C. Cir. 1993) .............................................................................. 4
`
`Rumsfeld v. Forum for Academic and Institutional Rights, Inc.,
`547 U.S. 47 (2006) ................................................................................................ 4
`
`Summer v. Earth Island Inst.,
`555 U.S. 488 (2009) .............................................................................................. 4
`
`Tileston v. Ullman,
`318 U.S. 44 (1943) ................................................................................................ 5
`
`
`
`ii
`
`USR Exhibit 2010 Page 6
`
`
`
`
`
`United States v. Windsor,
`133 S. Ct. 2675 (2013) .......................................................................................... 5
`Welch v. United States,
`578 U.S. __ (2016) ................................................................................................ 6
`
`Federal Statutes
`
`35 U.S.C. § 311 .......................................................................................................... 2
`
`35 U.S.C. § 311(a) ..................................................................................................... 7
`
`35 U.S.C. § 319 .............................................................................................. 2, 6, 7, 9
`
`America Invents Act .................................................................................................. 7
`
`Constitutional Provisions
`Article III ...........................................................................................................passim
`
`
`
`
`
`
`
`iii
`
`USR Exhibit 2010 Page 7
`
`
`
`
`
`STATEMENT OF INTEREST OF THE AMICI CURIAE1
`Unified Patents Inc. (“Unified”) is a for-profit, member-based organization
`
`whose goal is to reduce the number of non-practicing-entity (“NPE”) assertions in
`
`specific technology areas. In general, Unified monitors NPE activity and other
`
`information in deciding which NPE patents to challenge via inter partes review
`
`(“IPR”). Unified collects annual fees from its members to fund its activities, acting
`
`independently in deciding whether and how to challenge any given NPE patent.
`
`By monitoring NPE activity and strategically challenging poor-quality patents in
`
`key technology areas, Unified provides a valuable service to its members and to
`
`the business community at large.2
`
`Askeladden L.L.C. (“Askeladden”) is an education, information and
`
`advocacy organization dedicated to improving the understanding, use, reliability
`
`and quality of patents pertinent to financial services and related industries.
`
`Askeladden is a wholly owned subsidiary of The Clearing Housing Payments
`
`Company L.L.C., which is the oldest banking association and payments company
`
`in the United States. Askeladden seeks to improve the United States patent system
`
`1 No counsel for a party authored this brief in whole or in part, and no counsel for a
`party made a monetary contribution intended to fund the preparation or submission
`of this brief. No person other than the amici curiae made a monetary contribution
`to the brief’s preparation or submission. Appellee EFF has consented to the filing
`of this amicus brief, but Appellant Personal Audio, LLC has not.
`2 Unified appeared before this Court as appellee in Clouding Corp. v. Unified
`Patents, Inc., 640 F. App'x 997 (Fed. Cir. 2016).
`
`
`
`1
`
`USR Exhibit 2010 Page 8
`
`
`
`
`
`by, among other things, submitting amicus curiae briefs on important issues of
`
`intellectual property law. Askeladden also challenges patents through the IPR
`
`process that it believes are unpatentable and may be used to inhibit innovation in
`
`the financial services industry.
`
`SUMMARY OF THE ARGUMENT
`
`Amici curiae Unified and Askeladden respectfully submit this brief in
`
`support of Electronic Frontier Foundation’s (“EFF’s”) right to participate in this
`
`appeal as an appellee. As EFF explained in its letter brief, Article III’s “case or
`
`controversy” requirement is satisfied here because the party invoking the Court’s
`
`jurisdiction—Personal Audio, LLC—has standing to appeal the adverse decision
`
`of the Patent Trial and Appeal Board (“PTAB”). Whether EFF would have had
`
`standing to appeal if the PTAB had upheld the patent is irrelevant, and this Court’s
`
`decision in Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753
`
`F.3d 1258 (Fed. Cir. 2014), accordingly does not apply. To the extent there are any
`
`“prudential standing” concerns about EFF’s participation as an appellee, such
`
`concerns are fully answered by Congress’s specific decision to provide any
`
`“person” with a right to file an IPR petition and further to guarantee “[a]ny party”
`
`in the IPR “the right to be a party to the appeal.” 35 U.S.C. §§ 311, 319.
`
`
`
`For these reasons, the Court should allow EFF to participate in the appeal.
`
`At a minimum, the Court should not make any broad pronouncements about the
`
`
`
`2
`
`USR Exhibit 2010 Page 9
`
`
`
`
`
`circumstances in which IPR filers may participate in an appeal. Many different
`
`organizations, ranging from professional societies and individuals to standard-
`
`setting organizations and for profit-entities, file IPR petitions for many different
`
`reasons. Any questions about an organization’s ability to participate in an appeal
`
`from an IPR should be resolved case-by-case, rather than through bright-line rules.
`
`I.
`
`ARGUMENT
`A. Consumer Watchdog Is Not Applicable Here
`In Consumer Watchdog, a not-for-profit public charity requested an inter
`
`partes reexamination of a patent related to human embryonic stem cell cultures.
`
`753 F.3d at 1260. After the patent office failed to hold unpatentable the challenged
`
`claims during reexamination, Consumer Watchdog appealed to this Court, seeking
`
`judicial review of the PTAB’s decision to affirm the claims. As the party “seeking
`
`to invoke federal jurisdiction,” Consumer Watchdog was required to establish
`
`Article III standing, including that it had suffered an injury in fact. Id. at 1260-61
`
`(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). Because
`
`Consumer Watchdog did “not allege[] that it is engaged in any activity involving
`
`human embryonic stem cells that could form the basis for an infringement claim,”
`
`
`
`3
`
`USR Exhibit 2010 Page 10
`
`
`
`
`
`this Court held that it had failed to establish an injury in fact. Id. at 1261 (citing
`
`Summer v. Earth Island Inst., 555 U.S. 488, 497 (2009)).3
`
`Here, in contrast, EFF is not “seeking to invoke federal jurisdiction.” Id.,
`
`753 F.3d at 1260. Instead, EFF is the appellee and therefore bears no burden to
`
`establish an injury in fact. See Rumsfeld v. Forum for Academic and Institutional
`
`Rights, Inc., 547 U.S. 47, 52 n.2 (2006) (“[T]he presence of one party with
`
`standing is sufficient to satisfy Article III’s case-or-controversy requirement.”);
`
`Railway Labor Executives’ Ass’n v. United States, 987 F.2d 806, 810 (D.C. Cir.
`
`1993) (“[I]f one party has standing in an action, a court need not reach the issue of
`
`standing of other parties when it makes no difference to the merits of the case.”).
`
`Indeed, it appears undisputed that this appeal involves a justiciable controversy
`
`because the appellant has suffered an injury in fact based on the PTAB’s decision
`
`that its patent claims should be cancelled.
`
`The context here is analogous to the situation in ASARCO Inc. v. Kadish,
`
`490 U.S. 605 (1989), on which EFF correctly relies. There, the Supreme Court
`
`held that even though the plaintiffs-respondents lacked Article III standing (which
`
`
`3 Consumer Watchdog did not raise any potential grounds for Article III standing
`other than “the Board’s denial of [its] requested administrative action—namely,
`the Board’s refusal to cancel [the challenged] claims.” 753 F.3d 1261. Thus, it is
`not clear whether Consumer Watchdog might have been able to establish standing
`based on other grounds, e.g., economic injury or associational standing.
`
`
`
`4
`
`USR Exhibit 2010 Page 11
`
`
`
`
`
`is not required in a state-court action) and thus could not have filed an action in
`
`federal court, the Court had jurisdiction over the appeal because the petitioners
`
`seeking review had suffered “a specific injury stemming from the [adverse] state-
`
`court decree.” Id. at 617. Notably, the Supreme Court did not question the
`
`plaintiffs-respondents’ participation in the appeal; to the contrary, the Court
`
`recognized that “the parties remain adverse” because the plaintiffs-respondents
`
`were defending the state court’s judgment, and that the appeal would resolve a
`
`“genuine case or controversy.” Id. at 619 (citing Tileston v. Ullman, 318 U.S. 44,
`
`46 (1943)). Likewise here, regardless of whether EFF would have standing to
`
`initiate a patent challenge (which is not required in an IPR), this Court has
`
`jurisdiction because Personal Audio has been injured by the PTAB’s order and
`
`there is a genuine controversy over whether that order (which EFF is defending) is
`
`correct.4
`
`
`4 Personal Audio claims that Camreta v. Greene, 131 S. Ct. 2020 (2011),
`establishes that both appellants and appellees must independently establish Article
`III standing, but that is incorrect. Camreta merely states that an opposing party
`must have an “ongoing interest in the dispute,” so that the case features “that
`concrete adverseness which sharpens the presentation of issues.” Id. at 2028
`(citation omitted). This is a description of “prudential standing,” which is separate
`from Article III standing and can be “relaxed” by statute. Consumer Watchdog,
`753 F.3d at 1261; see also United States v. Windsor, 133 S. Ct. 2675, 2685-86
`(2013) (recognizing this requirement’s prudential nature). In any event, adversity is
`present here for the same reason it was present in Kadish, 490 U.S. at 619.
`
`
`
`5
`
`USR Exhibit 2010 Page 12
`
`
`
`
`
`B. Congress Has Answered Any Prudential Concerns About
`EFF’s Standing
`Because the constitutional baseline for Article III jurisdiction is met, the
`
`question whether EFF has “standing” to present opposing arguments on appeal is
`
`largely academic because EFF could still participate in the appeal as an intervenor
`
`or an amicus curiae. See, e.g., Legault v. Zambarano, 105 F.3d 24, 26 (1st Cir.
`
`1997) (dismissing challenge to appellee’s standing as a “meaningless quibble”);
`
`Bond v. Utreras, 585 F.3d 1061, 1070 (7th Cir. 2009) (holding that standing of an
`
`intervenor was irrelevant where the court otherwise had jurisdiction). Certainly
`
`there is no constitutional requirement that an entity or individual have redundant
`
`Article III standing to participate in a proceeding and defend a judgment, as
`
`evidenced by courts’ frequent practice of appointing attorneys as amicus curiae to
`
`defend lower-court judgments. See, e.g., Welch v. United States, 578 U.S. __
`
`(2016) (slip. op. 6).
`
`The question whether EFF should be allowed to participate in this appeal is
`
`thus entirely prudential, and Congress has squarely answered that prudential
`
`question in the relevant statute. See Consumer Watchdog, 753 F.3d at 1261
`
`(recognizing that prudential aspects of standing are “relaxed” where “Congress has
`
`accorded a procedural right to a litigant”). The IPR statute establishes a right of
`
`appeal to this Court and specifically states that “[a]ny party to the inter partes
`
`review shall have the right to be a party to the appeal.” 35 U.S.C. § 319 (emphasis
`
`
`
`6
`
`USR Exhibit 2010 Page 13
`
`
`
`
`
`added). Depriving EFF of the right to participate in the appeal would contradict
`
`Congress’s express judgment, and it could undermine the IPR process more
`
`generally. In adopting the IPR process as part of the America Invents Act,
`
`Congress wanted to encourage prompt administrative challenges to improvidently
`
`granted patents to ensure that weak patents are not used to inhibit innovation and
`
`competition. Congress accomplished this objective by, among other things,
`
`ensuring broad access to the IPR process: any “person” (who is not the patent
`
`holder) may petition to institute an IPR, and that “person” may also be a party to
`
`any appeal. Id. §§ 311(a), 319. If initiating parties were not allowed to defend
`
`favorable PTAB decisions in this Court, it might discourage them from challenging
`
`patents in the first place, contrary to Congress’s clear intent in enacting the statute.
`
`Denying EFF’s statutory right to participate in the appeal would also create
`
`practical problems. As noted, pp. 4-5, supra, there is no question that the Court has
`
`jurisdiction over this appeal; the PTAB held unpatentable several of Personal
`
`Audio’s patent claims and Personal Audio has a right to appeal that adverse order.
`
`Because the Patent Office declined to intervene in this appeal, the Court would
`
`either have to decide the case without adversary briefing or argument—an
`
`unattractive outcome inconsistent with our adversarial system—or appoint an
`
`amicus curiae. Of course, if the Court were to appoint an amicus, the most obvious
`
`candidate would be EFF, given its investment in and familiarity with the case. But
`
`
`
`7
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`USR Exhibit 2010 Page 14
`
`
`
`
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`there is no reason for the Court to introduce this unproductive complexity through
`
`an amicus-appointment process when it can simply follow Congress’s direction.
`
`C. Because There Are Fundamental Differences Between
`Patent-Challenging Organizations, a Bright-Line Test for
`Standing Would Be Inappropriate
`
`If the Court disagrees and concludes that EFF lacks standing to participate as
`
`an appellee in this case, the Court should exercise caution in how it formulates its
`
`holding to avoid unanticipated impacts on other IPR filers who may be dissimilarly
`
`situated. There are many organizations and individuals that may, for myriad
`
`reasons, choose to undertake the painstaking and costly task of instituting an IPR
`
`to challenge the patentability of a U.S. patent despite having no direct exposure to
`
`the patent. These organizations may have vastly different operations, finances,
`
`relationships with industry, motivations, and business models (or lack thereof).
`
`Examples include trade associations, professional societies, standards-setting
`
`bodies, charitable and educational foundations, political organizations, hedge
`
`funds, industrial alliances, and a wide variety of for-profit entities whose business
`
`model includes challenging patents via IPRs. Given this varied landscape and the
`
`still evolving nature of the IPR field, prudence dictates that this Court refrain from
`
`creating any bright-line rules or tests regarding standing that might prove unfair or
`
`unworkable in future cases.
`
`
`
`8
`
`USR Exhibit 2010 Page 15
`
`
`
`
`
`II. CONCLUSION
`The Court should hold that EFF may participate as an appellee because
`
`(1) an Article III case or controversy clearly exists by virtue of the appellant’s
`
`injury in fact; and (2) any “prudential standing” concerns are answered by EFF’s
`
`procedural right under 35 U.S.C. § 319 to be a party to the appeal. EFF clearly has
`
`an interest in this matter, and it is in the best position to provide “that concrete
`
`adverseness which sharpens the presentation of issues.” Los Angeles v. Lyons, 461
`
`U.S. 95, 101 (1983) (citing Baker v. Carr, 369 U.S. 186, 204 (1962)). If the Court
`
`disagrees, Unified and Askeladden respectfully urge the Court to refrain from
`
`establishing any categorical rules limiting participation as a party to an appeal from
`
`an IPR. Any such categorical or bright-line rule could have unforeseen
`
`consequences given the great variety among organizations that challenge patents
`
`through the IPR process. The Court should instead proceed carefully, analyzing
`
`parties case-by-case.
`
`
`
`
`
`
`
`9
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`USR Exhibit 2010 Page 16
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`
`
`
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`August 1, 2016
`
`
`
`
`
`
`
`
`
` Respectfully submitted,
`
`
`/s/ James R. Barney
`James R. Barney
`Philip Andrew Riley
`David K. Mroz
`FINNEGAN, HENDERSON, FARABOW,
` GARRETT & DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 408-4400
`Counsel for Unified Patents Inc.
`
`Kevin Jakel
`Jonathan Stroud
`UNIFIED PATENTS INC.
`1875 Connecticut Avenue, NW
`Washington, DC 20009
`(650) 999-0455
`
`Kevin J. Culligan
`John P. Hanish
`GOODWIN PROCTER LLP
`The New York Times Building
`620 Eighth Avenue
`New York, New York 10018
`(212) 813-8800
`
`Brian T. Burgess
`GOODWIN PROCTER LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 346-4000
`
`Counsel for Askeladden L.L.C.
`
`10
`
`USR Exhibit 2010 Page 17
`
`
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that I served a copy of the foregoing BRIEF OF AMICI
`
`CURIAE UNIFIED PATENTS INC. AND ASKELADDEN L.L.C. IN SUPPORT OF
`
`APPELLEE’S RESPONSE TO THE COURT’S SUA SPONTE ORDER FOR
`
`SUPPLEMENTAL BRIEFING REGARDING STANDING on counsel of record on
`
`August 1, 2016, by Electronic Means (the Court’s CM/ECF).
`
`
`
`
` /s/ James R. Barney
`
` Signature of Counsel
`
` James R. Barney
` Name of Counsel
`
`
`
`
`
`
`Firm:
`
`
`Address:
`City, State and Zip
`Telephone:
`
`Fax #:
`
`
`E-Mail address:
`
`
`
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`901 New York Avenue, N.W.
`Washington, DC 20001-4413
`202-408-4412
`202-408-4400
`james.barney@finnegan.com
`
`
`
`11
`
`USR Exhibit 2010 Page 18
`
`