Stem Cell Case Could Test Groups' Ability to Challenge Patents

, The Litigation Daily

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When Daniel Ravicher stood to argue an appeal last week at the U.S. Court of Appeals for the Federal Circuit, he was cut off almost immediately by Chief Judge Randall Rader.

"Do you have standing to be here?" Rader asked.

"I was afraid you'd ask me that," Ravicher replied.

Thus began a legal debate that could have major repercussions for public interest groups challenging patent reexaminations by the U.S. Patent and Trademark Office. The outcome will likely determine whether third parties such as Ravicher's client, the public interest group Consumer Watchdog, can lodge Federal Circuit appeals when PTO patent reviews don't go their way.

The case dates back to 2006, when two public interest groups, Consumer Watchdog and the Public Patent Foundation, challenged a patent on human embryonic stem cells owned by Wisconsin Alumni Research Foundation (WARF). The watchdog groups failed to convince the PTO to invalidate the patent's claims, which, as Ravicher started telling the court before he was interrupted, "are directed not to methods of isolating embryonic stem cells, not to methods of maintaining them, not for methods of use. Just to in vitro embryonic human stem cells. Stop."

The challenge at the PTO took place before the U.S. Supreme Court issued its June decision in Association for Molecular Pathology v. Myriad Genetics Inc., which held that merely isolating genes that are found in nature does not make them patentable. Ravicher, who represented the plaintiffs in Myriad along with the American Civil Liberties Union, is convinced the WARF patent on stem cells is also invalid. He appealed the PTO's decision to the Federal Circuit, where he faced off against WARF's lawyers at Finnegan, Henderson, Farabow, Garrett & Dunner.

But rather than consider the merits of the appeal during oral arguments on Dec. 2, the three-judge panel—Judges Rader, Sharon Prost and Todd Hughes—grilled Ravicher for more than 30 minutes on whether he had standing in the case. They agreed that third parties are allowed to challenge PTO decisions on patents, but they seemed skeptical of the notion that these third parties can then appeal to the Federal Circuit if they find the PTO's conclusions "unsatisfactory."

"The statutes expressly give us the right to appeal to the Federal Circuit," Ravicher told the Litigation Daily. "The question at issue is whether the courts feel empowered under the constitution to hear the case."

The judges wondered whether dissatisfaction with a PTO decision gives rise to "injury" for purposes of standing to sue. Ravicher, a vocal patent attorney who heads the Public Patent Foundation and dabbles on Wall Street, maintains that it does. "The injury is that the government has not done what we're entitled to have it do," Ravicher said.

The Federal Circuit has heard reexamination appeals in the past. In most of these cases the appellant or appellee is an interested party, so standing isn't an issue. But Ravicher said the Federal Circuit has never before raised the issue of third-party standing.

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