Rethinking Standing in Intellectual Property Challenges

Abstract

Patents have become a serious business risk. They issue from the Patent and Trademark Office in record-breaking quantity and are aggressively enforced by patent trolls. But many patents are likely to be invalid; and even those which are valid are likely to be narrower than their owners claim. Firms investing in innovation would find it desirable to clear their respective fields of invalid or overbroad patents prior to making their investments, and there is great social value in reducing the number of such patents. But the path to determining the validity or scope of issued patents runs through the courts, and in recent years the Federal Circuit has developed special standing rules for patent challengers that allow access to the courts only when it appears that an infringement suit is temporally or legally proximate. In this Article, I criticize this “proximity” criterion on conceptual, doctrinal, and normative grounds and provide a comprehensive account of standing to challenge the scope and validity of patents. Conceptually, I argue that because patents are a form of regulation, their effects sweep more broadly than the Federal Circuit currently appreciates. When the risk of infringement liability deters business and investment activities, the affected parties can bring a “quiet title” action to obtain certainty about the validity or scope of adverse patents. I then argue as a doctrinal matter that there is no reason to treat patent challenges differently from other cases. Applying traditional principles of constitutional and prudential standing broadens the range of potential plaintiffs. Finally, I justify this result on normative grounds because the Federal Circuit’s restrictive approach creates a misalignment between those who have incentives to challenge patents and those who have access to the courts. Allowing challenges by a broader range of plaintiffs will result in more socially valuable validity litigation.