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11 July 2019PatentsRory O'Neill

GE unable to challenge UTC patent: Fed Circuit

The US Court of Appeals for the Federal Circuit has ruled that General Electric (GE) does not have standing to challenge a turbine engine patent owned by United Technologies Corporation (UTC).

In its decision, issued yesterday, July 10, the Federal Circuit upheld UTC’s argument that GE lacked standing under Article III of the US Constitution.

Article III limits judicial power to “controversies” between two parties, which the Supreme Court has interpreted as meaning that a plaintiff must have suffered injury in order to bring legal action.

In a concurring opinion, however, Circuit Judge Todd Hughes argued that Federal Circuit precedent with respect to standing to bring patent invalidation actions was “overly rigid and narrow”.

Hughes said that if he was not bound by the Federal Circuit’s May 2019 decision in AVX Corp v Presidio Components, he would “conclude that GE has established Article III standing to appeal the [PTAB’s] adverse decision”.

According to Hughes, AVX held that parties who are not engaged in activity which infringes a patent, and have no plans to do so, do not have standing as a competitor to challenge the patent.

GE requested an inter partes review of the patent (US number 8,511,605) in 2016, arguing that it should be invalidated on the grounds of obviousness.

When the US Patent Trial and Appeal Board (PTAB) ruled in favour of UTC, GE appealed against the decision to the Federal Circuit.

UTC filed a countermotion in 2017, claiming that GE had failed to demonstrate sufficient injury in order to have standing to challenge the patent.

The patent covers a gas-powered turbine engine design for use in aircraft.

According to GE’s chief IP counsel Alexander Long, who presented evidence in the case, the ‘605 patent blocked GE from submitting designs to clients which “meet customer needs”.

In his evidence, he said that aircraft manufacturer Boeing had requested information from GE and other potential suppliers regarding a geared-fan engine similar to the design claimed in the UTC patent.

GE claimed that being forced to “design around” the ‘605 patent limited their design choices and presented additional research and development costs, constituting injury under Article III.

According to the Federal Circuit, however, GE failed to present evidence that it had “lost business or lost opportunities because it could not deliver a geared-fan engine covered by the upheld claims or any evidence that prospective bids require geared-fan engine designs”.

GE had not specified in its evidence whether it had lost the bid in question, or to what extent the ‘605 patent impacted on its decision to submit an alternative design to Boeing.

In his concurring opinion, Circuit Judge Hughes, while acknowledging that he was bound by precedent, said that the court had developed “an overly rigid and narrow standard for Article III standing”.

Citing Boeing’s request for a geared-fan engine design, Hughes said that “GE cannot design and produce such an engine without risking infringement”.

“UTC’s patent effectively precludes GE from meeting its customer’s design needs without spending additional resources to design around the patent,” he added.

This demonstrated a clear injury which ought to be sufficient to establish standing, Hughes argued, while accepting that this was not possible under the AVX precedent.

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