Federal Circuit Affirms PTO Rulemaking Petition Dismissal on Standing Grounds

The Federal Circuit has upheld the dismissal of US Inventor Inc. and National Small Business United’s challenge to the USPTO’s denial of a rulemaking petition, clarifying the standards for organizational and associational standing in administrative law disputes.

BACKGROUND AND PROCEDURAL HISTORY

The dispute originated when US Inventor Inc. and National Small Business United (collectively appellants) sought judicial review of the US Patent and Trademark Office (PTO)’s denial of a petition for rulemaking. The petition requested amendments to 37 CFR §§ 42.108 and 42.208, aiming to restrict the PTO’s discretion in instituting inter partes review (IPR) or post-grant review (PGR) under the America Invents Act (AIA), specifically when the patent owner objected and met certain criteria including original applicant status, small or micro entity designation, and reduction to practice of challenged claims.

The PTO declined the petition, referencing ongoing related rulemaking efforts and a commitment to “providing clarity as to institution standards.” Appellants then alleged violations of the Administrative Procedure Act (APA) and the AIA, contending the PTO failed to act within a reasonable time (5 USC § 555(b)), did not provide a sufficient statement of denial grounds (5 USC § 555(e)), and neglected statutory notice-and-comment requirements (35 U.S.C. §§ 2(b)(2), 315(d), 316(a)-(b), 325(d), 326(a)). The PTO moved to dismiss for lack of standing, and the district court granted the motion, setting the stage for appellate review.

DISTRICT COURT’S RATIONALE AND FINDINGS

The district court concluded that appellants lacked both organizational and associational standing to sue. The court determined that the theory of injury advanced was “too speculative to describe a concrete injury from [PTO’s] denial of their petition,” hinging on conjecture about future events, specifically actions by independent third parties such as the Patent Trial and Appeal Board (PTAB) and district courts. Furthermore, the court found appellants failed to demonstrate that any member of their organizations would have standing to bring suit, which is essential for associational standing. This finding reflected a strict application of standing doctrine, requiring not only a direct injury but also evidence that members are themselves subject to actual or imminent harm.

FEDERAL CIRCUIT’S DE NOVO REVIEW AND STANDING ANALYSIS

On appeal, the Federal Circuit applied DC Circuit law—as it must in any APA cases involving federal agencies—to review standing de novo. The court reiterated the tripartite requirements for Article III standing: (1) injury in fact; (2) causation; and (3) redressability. It emphasized that an “injury in fact” must be “concrete and particularized” and “actual or imminent,” not “conjectural or hypothetical.” The court found that appellants’ alleged injury—the risk of patent cancellation resulting from IPR or PGR institution—was speculative and contingent upon a complex chain of future actions by third parties, including petition filings, satisfaction of substantive standards, and discretionary board decisions. The Federal Circuit concluded that “one or more of the events in the causal chain of events that must occur to result in injury is highly speculative,” thereby failing the “concrete and particularized” standard required for standing.

COMPARISON TO PRIOR CASE LAW: APPLE INC. V. VIDAL

The court distinguished this case from Apple Inc. v. Vidal, where standing was recognized because Apple was a “repeat player” routinely subject to infringement suits and IPR petitions, with demonstrated past harm. In contrast, the appellants in this matter did not provide evidence that any member faced a “substantial risk” of harm or was comparably situated. The court thereby reinforced the necessity of showing an actual or imminent injury, rather than speculative or generalized grievances, to establish standing in administrative rulemaking challenges.

RIGHT TO PETITION AND ITS LIMITS IN CONFERRING STANDING

The appellants argued that the procedural right to petition for rulemaking itself conferred standing. The Federal Circuit rejected this assertion, clarifying that “the grant of a procedural right alone cannot serve as the basis for Article III standing unless the procedures in question are designed to protect some threatened concrete interest of petitioners’ that is the ultimate basis of his standing.” Thus, while procedural rights exist, they do not obviate the requirement for a substantive, concrete interest at risk. The decision underscores the boundaries of procedural standing in administrative law, limiting its use to situations where a genuine threat to a concrete interest is present.

APPELLANTS’ ADDITIONAL ARGUMENTS AND COURT’S CONCLUSIONS

The court found the remaining arguments by appellants unpersuasive, reiterating that they “lack associational standing.” The judgment of the district court was therefore affirmed, with the Federal Circuit concurring that the causal chain of injury was “highly speculative” and “largely depend[ent] on future actions to be taken by third parties.” This conclusion reflects a stringent application of standing doctrine and signals a clear precedent for future challenges to agency rulemaking denials.

IMPLICATIONS FOR PATENT OWNERS AND SMALL ENTITIES

The Federal Circuit’s decision has immediate and significant implications for patent owners—especially those claiming small entity or micro entity status—who seek to influence PTO rulemaking through petitions. The ruling applies existing DC Circuit precedent that speculative harms related to potential future administrative proceedings are insufficient to establish standing. Organizations representing inventors and small businesses must demonstrate a direct, imminent injury affecting identifiable members to pursue similar administrative challenges. This precedent may limit the ability of advocacy groups to litigate procedural grievances unless concrete interests are at stake.

BROADER IMPACT ON ADMINISTRATIVE LAW AND FUTURE LITIGATION

Beyond patent law, the decision is instructive for administrative law generally. It confirms the judiciary’s rigorous approach to standing in rulemaking disputes, requiring evidence of a direct threat to a concrete interest rather than hypothetical or generalized concerns. Agencies such as the PTO can expect fewer successful challenges to discretionary denials of rulemaking petitions absent demonstration of actual or imminent harm. For future litigants, the ruling highlights the need to carefully document and substantiate injury when asserting standing in administrative and regulatory contexts.

OUTLOOK: PROSPECTS FOR RULEMAKING AND ADVOCACY STRATEGIES

Looking ahead, advocacy organizations may need to pivot their strategies, focusing on direct engagement with PTO comment periods and targeted litigation where concrete member interests are demonstrably at risk. The PTO’s statement that it “supports the goal of providing clarity as to institution standards” and will consider overlapping issues in future rulemaking suggests that policy changes remain possible, but judicial review will be constrained by strict standing requirements. Stakeholders should monitor ongoing regulatory efforts and prepare to meet rigorous evidentiary standards should they seek judicial intervention.

CONCLUSION

The Federal Circuit’s affirmation of the district court’s dismissal for lack of standing in this matter provides a clear, authoritative precedent on the boundaries of organizational and associational standing in administrative rulemaking disputes. The decision reinforces the necessity of demonstrating a concrete, imminent injury and sets a high bar for future challenges to agency action. Patent owners, advocacy groups, and administrative law practitioners should incorporate these lessons into their future strategies, both in regulatory advocacy and litigation.