Petition for Writ of Certiorari — General Electric Company, Petitioner v. Raytheon Technologies Corporation, fka United Technologies Corporation

Supreme Court briefFeb 12, 2020

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No. _______

In the

Supreme Court of the United States

GENERAL ELECTRIC COMPANY,

Petitioner,

UNITED TECHNOLOGIES CORPORATION,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

SHAY DVORETZKY

AMANDA K. RICE

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

GREGORY G. GARRE

Counsel of Record

ROMAN MARTINEZ

TYCE R. WALTERS

LATHAM & WATKINS LLP

555 Eleventh Street, NW

Suite 1000

Washington, DC 20004

(202) 637-2207

gregory.garre@lw.com

Counsel for Petitioner

QUESTION PRESENTED

This Court and courts of appeals across the

country have long held that government action that

subjects parties to competitive harm, such as by

increasing the burdens or costs of competition,

satisfies Article III’s injury-in-fact requirement. In

determining whether a petitioner in an inter partes

review (IPR) proceeding has Article III standing to

appeal a final written decision by the Patent and

Trademark Office (PTO), however, the Federal

Circuit has repeatedly held that such competitive

harm does not constitute an injury-in-fact. Instead,

the court has held that to establish standing, a

petitioner who is not already the subject of a patent

infringement claim concerning the challenged patent

must show that it has “concrete plans for future

activity that creates a substantial risk of future

infringement.” App. 8a (citation omitted). As Judge

Hughes recognized in this case, the Federal Circuit

has thus erected a “patent-specific approach to the

doctrine of competitor standing that is out of step with

Supreme Court precedent.” Id. at 9a (Hughes, J.,

concurring in the judgment).

The question presented is:

Whether competitive harm alone suffices to confer

Article III standing to appeal an IPR determination,

or whether an appellant must also show concrete

plans for future activity that creates a substantial

risk of a future patent infringement action.

RULE 29.6 STATEMENT

Pursuant to Rule 29.6 of the Rule of this Court,

petitioner General Electric Company states that it

has no parent corporation, and no publicly held

company owns 10% or more of its stock.

iii

LIST OF RELATED PROCEEDINGS

Pursuant to Supreme Court Rule 14.1(b)(iii),

petitioner states that there are no proceedings

directly related to this case in this Court.

TABLE OF CONTENTS

Page

QUESTION PRESENTED ......................................... i

RULE 29.6 STATEMENT.......................................... ii

LIST OF RELATED PROCEEDINGS ..................... iii

TABLE OF AUTHORITIES .................................... vii

OPINIONS AND ORDERS BELOW ......................... 1

JURISDICTION ......................................................... 1

CONSTITUTIONAL

AND

STATUTORY

PROVISIONS INVOLVED ................................ 1

INTRODUCTION ...................................................... 1

STATEMENT OF THE CASE ................................... 5

Legal Background ...................................... 5

Factual Background ................................... 7

This Proceeding .......................................... 8

REASONS FOR GRANTING THE WRIT............... 12

II.

The

Federal

Circuit’s

Heightened

Competitor-Standing Rule Conflicts With

Decisions Of Other Circuits ............................. 14

The Federal Circuit’s Heightened

Standing Requirement For IPR

Appeals ..................................................... 14

In Other Circuits, Competitive Harm

Alone Confers Standing ........................... 17

The

Federal

Circuit’s

Heightened

Competitor-Standing Rule Also Conflicts

With Decisions Of This Court .......................... 24

TABLE OF CONTENTS—Continued

Page

The Federal Circuit’s Rule Conflicts

With This Court’s Standing Decisions .... 24

The Federal Circuit Disregarded This

Court’s Admonitions That Patent Law

Is Governed By The Same Basic

Principles As Other Areas Of Civil

Litigation .................................................. 27

The Federal Circuit’s Heightened

Standing Requirement Is Particularly

Inappropriate In The IPR Context .......... 29

III. The Question Presented Is Exceptionally

Important And Warrants Review .................... 32

CONCLUSION ......................................................... 34

APPENDIX

Opinion of the United States Court of Appeals

for the Federal Circuit, General Electric

Co. v. United Technologies Corp., 928 F.3d

1349 (Fed. Cir. 2019) ..........................................1a

Final Written Decision of the United States

Patent and Trademark Office Before the

Patent Trial and Appeal Board, General

Electric Co. v. United Technologies Corp.,

Case IPR2016-00531 (P.T.O. June 26,

2017) ..................................................................19a

TABLE OF CONTENTS—Continued

Page

Order of the United States Court of Appeals for

the Federal Circuit Denying Petition for

Rehearing En Banc, General Electric Co. v.

United Technologies Corp., No. 2017-2497

(Fed. Cir. Oct. 15, 2019) ...................................54a

U.S. Const. art. III, § 2............................................56a

35 U.S.C. § 311 ........................................................57a

35 U.S.C. § 315(e) ....................................................58a

35 U.S.C. § 319 ........................................................59a

Declaration of Alexander E. Long in Support of

General Electric Company’s Opposition to

Appellee’s Motion to Dismiss, General

Electric Co. v. United Technologies Corp.,

No. 2017-2497 (Fed. Cir. Jan. 16, 2018),

ECF No. 36 (without exhibits) .........................60a

Supplemental Declaration of Alexander E.

Long in Support of General Electric

Company’s Standing, General Electric Co.

v. United Technologies Corp., No. 20172497 (Fed. Cir. Nov. 28, 2018) (redacted),

ECF No. 63 (without exhibit) ...........................69a

vii

TABLE OF AUTHORITIES

Page(s)

CASES

ABB Inc. v. Cooper Industries, LLC,

635 F.3d 1345 (Fed. Cir. 2011) ............................29

Abortion Rights Mobilization Inc. v. Baker

(In re United States Catholic

Conference),

885 F.2d 1020 (2d Cir. 1989) ...............................21

Adams v. Watson,

10 F.3d 915 (1st Cir. 1993) ............................17, 21

Altaire Pharmaceuticals, Inc. v. Paragon

Bioteck, Inc.,

889 F.3d 1274 (Fed. Cir.), remand order

modified by stipulation, 738 F. App’x

1017 (Fed. Cir. 2018) ...........................................16

American Institute of Certified Public

Accountants v. IRS,

804 F.3d 1193 (D.C. Cir. 2015) ............................17

Americans for Safe Access v. DEA,

706 F.3d 438 (D.C. Cir.), cert. denied,

571 U.S. 885 (2013) ................................................4

Association of Data Processing Service

Organizations, Inc. v. Camp,

397 U.S. 150 (1970) ..............................................25

AVX Corp. v. Presidio Components, Inc.,

923 F.3d 1357 (Fed. Cir. 2019) .................... passim

viii

TABLE OF AUTHORITIES—Continued

Page(s)

Becker v. FEC,

230 F.3d 381 (1st Cir. 2000), cert.

denied, 532 U.S. 1007 (2001) ...............................23

Canadian Lumber Trade Alliance v. United

States,

517 F.3d 1319 (Fed. Cir. 2008), cert.

denied, 555 U.S. 819 (2008) .................................28

Carpenters Industrial Council v. Zinke,

854 F.3d 1 (D.C. Cir. 2017) ..................................27

Center for Reproductive Law & Policy v.

Bush,

304 F.3d 183 (2d Cir. 2002) ...........................17, 21

Clinton v. City of New York,

524 U.S. 417 (1998) .............................. 2, 13, 24, 25

Consumer Watchdog v. Wisconsin Alumni

Research Foundation,

753 F.3d 1258 (Fed. Cir. 2014), cert.

denied, 574 U.S. 1153 (2015) ...............................23

Cooper v. Texas Alcoholic Beverage

Commission,

820 F.3d 730 (5th Cir.), cert. denied, 137

S. Ct. 494 (2016)...................................................20

Cuozzo Speed Technologies, LLC v. Lee,

136 S. Ct. 2131 (2016)........................................3, 5

Cyzewski v. Jevic Holding Corp.,

137 S. Ct. 973 (2017)......................................13, 27

TABLE OF AUTHORITIES—Continued

Page(s)

DaimlerChrysler Corp. v. Cuno,

547 U.S. 332 (2006) ..............................................32

Danvers Motor Co. v. Ford Motor Co.,

432 F.3d 286 (3d Cir. 2005) .................................13

Deposit Guaranty National Bank v. Roper,

445 U.S. 326 (1980) ..............................................31

E.I. DuPont de Nemours & Co. v. Synvina

C.V.,

904 F.3d 996 (Fed. Cir. 2018) ..............................16

eBay Inc. v. MercExchange, L.L.C.,

547 U.S. 388 (2006) ..........................................2, 28

Ecosystem Investment Partners v. Crosby

Dredging, L.L.C.,

729 F. App’x 287 (5th Cir. 2018) .........................27

Electrical Fittings Corp. v. Thomas & Betts

Co.,

307 U.S. 241 (1939) ..............................................31

Fisher & Paykel Healthcare Ltd. v. ResMed

Ltd.,

789 F. App’x 877 (Fed. Cir. 2019) ........................16

Holmes Group, Inc. v. Vornado Air

Circulation Systems, Inc.,

535 U.S. 826 (2002) ..............................................28

TABLE OF AUTHORITIES—Continued

Page(s)

International Brotherhood of Teamsters v.

DOT,

724 F.3d 206 (D.C. Cir. 2013) ..............................20

Investment Co. Institute v. Camp,

401 U.S. 617 (1971) ..............................................25

JTEKT Corp. v. GKN Automotive Ltd.,

898 F.3d 1217 (Fed. Cir. 2018), cert.

denied, 139 S. Ct. 2713 (2019) .............................15

KSR International Co. v. Teleflex Inc.,

550 U.S. 398 (2007) ................................................9

Lujan v. Defenders of Wildlife,

504 U.S. 555 (1992) ..............................................13

Marshall & Ilsley Corp. v. Heimann,

652 F.2d 685 (7th Cir. 1981), cert.

denied, 455 U.S. 481 (1982) ...........................17, 22

Mata v. Lynch,

135 S. Ct. 2150 (2015)..........................................12

MedImmune, Inc. v. Genentech, Inc.,

549 U.S. 118 (2007) ................................ 2, 4, 28, 29

Mendoza v. Perez,

754 F.3d 1002 (D.C. Cir. 2014) ......................19, 22

Momenta Pharmaceuticals, Inc. v. BristolMyers Squibb Co.,

915 F.3d 764 (Fed. Cir. 2019) ..............................16

TABLE OF AUTHORITIES—Continued

Page(s)

Oil States Energy Services, LLC v. Greene’s

Energy Group, LLC,

138 S. Ct. 1365 (2018)......................................6, 31

Phigenix, Inc. v. Immunogen, Inc.,

845 F.3d 1168 (Fed. Cir. 2017) ............................16

SCA Hygiene Products Aktiebolag v. First

Quality Baby Products, LLC,

137 S. Ct. 954 (2017)........................................1, 28

Shays v. FEC,

414 F.3d 76 (D.C. Cir. 2005) .................... 17, 20, 22

Sherley v. Sebelius,

610 F.3d 69 (D.C. Cir. 2010) ........................ passim

Simmons v. ICC,

900 F.2d 1023 (7th Cir. 1990), cert.

denied, 499 U.S. 919 (1991) .................................20

Spokeo, Inc. v. Robins,

136 S. Ct. 1540 (2016)..........................................30

TrafficSchool.com, Inc. v. Edriver Inc.,

653 F.3d 820 (9th Cir. 2011)..........................17, 22

UPS Worldwide Forwarding, Inc. v. United

States Postal Service,

66 F.3d 621 (3d Cir. 1995), cert. denied,

516 U.S. 1171 (1996) ............................................17

xii

TABLE OF AUTHORITIES—Continued

Page(s)

Vermont Agency of Natural Resources v.

United States ex rel. Stevens,

529 U.S. 765 (2000) ..............................................31

WesternGeco LLC v. ION Geophysical

Corp.,

138 S. Ct. 2129 (2018)..........................................26

CONSTITUTIONAL, STATUTORY AND

REGULATORY PROVISIONS

U.S. Const. art. III, § 2................................................1

28 U.S.C. § 1254(1)......................................................1

35 U.S.C. § 141 ............................................................6

35 U.S.C. § 142 ............................................................6

35 U.S.C. § 143 ............................................................6

35 U.S.C. § 144 ............................................................6

35 U.S.C. § 311(a)..................................................5, 30

35 U.S.C. § 311(b)........................................................5

35 U.S.C. § 314(a)........................................................5

35 U.S.C. § 315(c) ......................................................30

35 U.S.C. § 315(e) ......................................................30

35 U.S.C. § 315(e)(2) ...................................................6

xiii

TABLE OF AUTHORITIES—Continued

Page(s)

35 U.S.C. § 316 ............................................................5

35 U.S.C. § 318(a)........................................................6

35 U.S.C. § 319 .............................................. 3, 6, 9, 30

Pub. L. No. 112-29, 125 Stat. 284 (2011) ...................1

37 C.F.R. § 42.1 et seq. ................................................5

OTHER AUTHORITIES

3 K. Davis & R. Pierce, Administrative Law

Treatise (3d ed. 1994).......................................2, 24

Matthew Dowd & Jonathan Stroud, Will

Fed. Circ. Consider The Competitor

Standing Doctrine?, Law360 (Dec. 18,

2018), https://www.law360.com/articles/

1110478 ..........................................................13, 22

FTC, To Promote Innovation: The Proper

Balance of Competition and Patent Law

and Policy: Executive Summary (2003) ................5

GE Aviation, Aviation History,

https://www.geaviation.com/company/avi

ation-history (last visited Feb. 7, 2020) ................7

Richard Godson, A Practical Treatise on the

Law of Patents for Inventions and of

xiv

TABLE OF AUTHORITIES—Continued

Page(s)

W.M. Hindmarch, A Treatise on the Law

Relative to Patent Privileges for the Sole

Use of Inventions (1847) ......................................31

H.R. Rep. No. 112-98, pt. 1 (2011) ........................5, 33

Patent Quality Improvement: Post-Grant

Opposition: Hearing before the

Subcomm. on Courts, the Internet, and

Intellectual Prop. of the H. Comm. on the

Judiciary, 108th Cong. (2004) .............................32

PETITION FOR A WRIT OF CERTIORARI

Petitioner General Electric Company (GE)

respectfully petitions this Court for a writ of certiorari

to review the judgment of the United States Court of

Appeals for the Federal Circuit in this case.

OPINIONS AND ORDERS BELOW

The Patent Trial and Appeal Board’s Final

Written Decision (App. 19a-53a) is unreported. The

Federal Circuit’s opinion (App. 1a-18a) is reported at

928 F.3d 1349. The Federal Circuit’s order denying

rehearing en banc (App. 54a-55a) is unreported.

JURISDICTION

The Federal Circuit entered its opinion on July 10,

2019. App. 1a. GE timely filed a petition for

rehearing en banc, which the Federal Circuit denied

on October 15, 2019. Id. at 55a. On January 6, 2020,

the Chief Justice extended the time for filing a

petition for a writ of certiorari to and including

February 12, 2020. This Court has jurisdiction under

28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Article III, § 2, of the United States Constitution

as well as pertinent provisions of the Leahy-Smith

America Invents Act, Pub. L. No. 112-29, 125 Stat.

284 (2011), are reprinted at App. 56a-59a.

INTRODUCTION

This Court has repeatedly rejected the Federal

Circuit’s attempts to create patent-specific exceptions

to generally applicable doctrines governing civil

litigation in the federal courts. See, e.g., SCA Hygiene

Prods. Aktiebolag v. First Quality Baby Prods., LLC,

137 S. Ct. 954, 963-64 (2017); MedImmune, Inc. v.

Genentech, Inc., 549 U.S. 118, 132 & n.11 (2007); eBay

Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391-93

(2006). This petition seeks review of another such

rule: a heightened requirement for establishing

Article III standing to appeal final decisions by the

Patent Trial and Appeal Board of the Patent and

Trademark Office (PTO) in inter partes review (IPR)

proceedings challenging the validity of patents.

The Court has long held that government action

that subjects parties to competitive harm satisfies

Article III’s injury-in-fact requirement. See Clinton v.

City of N.Y., 524 U.S. 417, 433 (1998) (citing 3 K.

Davis & R. Pierce, Administrative Law Treatise 13-14

(3d ed. 1994)). Following this Court’s lead, the D.C.

Circuit and other courts of appeals have applied a

common-sense inquiry, grounded in the “basic law of

economics,” to assess whether (and how) a challenged

action impacts competition. Sherley v. Sebelius, 610

F.3d 69, 72 (D.C. Cir. 2010) (citation omitted).

Although “[t]he form of that [competitive] injury may

vary,” these courts have held that actions that

unlawfully benefit a plaintiff’s business rival cause

economic injury that gives rise to standing. Id.

Especially in the D.C. Circuit, competitor standing

has served as a critical springboard for challenging a

broad spectrum of administrative actions.

This case concerns the showing required to

establish standing to appeal a final decision of the

PTO rejecting an IPR challenge under the America

Invents Act (AIA), one of the most important

developments in patent law in the past century. As

this Court has recognized, Congress enacted the

AIA—and its new, IPR procedure—to “protect the

public’s ‘paramount interest in seeing that patent

monopolies . . . are kept within their legitimate

scope.’” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct.

2131, 2144 (2016) (alteration in original) (citation

omitted). To advance that “paramount interest,”

Congress allowed anyone to file an IPR petition and

authorized any “party dissatisfied with [a] final

written decision” of the PTO to appeal the decision to

the Federal Circuit. 35 U.S.C. § 319. The question

here is what a dissatisfied party must show when it

competes in an area impacted by the patent at issue

in the IPR proceeding, but is not yet subject to actual

or threatened patent infringement litigation.

As Judge Hughes observed below, instead of

answering that question by applying the same

competitor-standing doctrine used by this Court and

other circuits, the Federal Circuit has devised a

special, “patent-specific” rule for IPR appeals. App.

9a (Hughes, J., concurring in the judgment). Under

that rule, showing that an IPR petitioner directly

competes with the patent owner and will suffer

economic injury as a result of the PTO’s decision is not

sufficient to establish injury-in-fact; instead, a

petitioner must show concrete current or future plans

to infringe the patent at issue. See id. at 4a-8a; AVX

Corp. v. Presidio Components, Inc., 923 F.3d 1357,

1365 (Fed. Cir. 2019) (a dissatisfied IPR petitioner

must demonstrate “concrete plans for future activity

that creates a substantial risk of future infringement

or [would] likely cause the patentee to assert a claim

of infringement.” (citation omitted)).

This test

effectively requires an IPR petitioner to walk up to

the line of admitting to infringement—itself a

perilous and competitively injurious undertaking.

The Federal Circuit has repeatedly applied this rule

to deny parties like GE appellate review of PTO

decisions by an Article III court.

As Judge Hughes explained, the Federal Circuit’s

“overly rigid and narrow” rule for establishing

standing in this context does not just conflict with this

Court’s competitor-standing decisions; it effectively

resurrects “the ‘reasonable apprehension of imminent

suit’ test . . . which the Supreme Court overruled [in

MedImmune, Inc. v. Genentech, Inc., 549 U.S. at 132

n.11].” App. 13a (concurrence). Moreover, this case

starkly illustrates why the Federal Circuit’s rule is

wrong.

GE directly competes with United

Technologies Corporation (UTC) in a “fiercely

competitive market” over the very subject of the

patent at issue in this case—commercial aircraft

engines. Id. at 16a. The PTO’s decision to uphold the

patent at issue directly benefits UTC, and harms GE,

by limiting GE’s ability to design commercially

competitive engines meeting customers’ needs. In

fact, GE has already expended time and money to

design around the patent. Id. at 17a. In any other

circuit, those facts would present a straightforward

case for competitor standing.

The question whether the Federal Circuit has

properly erected this heightened, patent-specific

standing requirement is extraordinarily important.

The Federal Circuit’s rule frustrates Congress’s

express intent of using IPR challenges to weed out

invalid and overbroad patents. For purposes of

determining standing, it must be assumed that a

petitioner’s claim is meritorious. See Americans for

Safe Access v. DEA, 706 F.3d 438, 443 (D.C. Cir.), cert.

denied, 571 U.S. 885 (2013). Accordingly, the Federal

Circuit’s rule limits Article III oversight of the PTO in

circumstances where Congress thought it necessary—

where the PTO has erroneously upheld an overbroad

patent. If allowed to stand, the Federal Circuit’s rule

would erode the vital role of the judiciary in reviewing

the legality of administrative actions that inflict real,

substantial, and imminent harm on citizens.

The petition should be granted.

STATEMENT OF THE CASE

A. Legal Background

Congress enacted the AIA in 2011, in response to

a “growing sense that questionable patents are too

easily obtained and are too difficult to challenge.”

H.R. Rep. No. 112-98, pt. 1, at 39 (2011). The

government had long recognized that “[p]oor patent

quality and legal standards and procedures that

inadvertently may have anticompetitive effects can

. . . hamper competition that otherwise would

stimulate innovation.” FTC, To Promote Innovation:

The Proper Balance of Competition and Patent Law

and Policy: Executive Summary 5 (2003). Congress

thus created “an adjudicative proceeding,” H.R. Rep.

No. 112-98 at 46-47, the IPR process, to permit third

parties to challenge patent claims for obviousness or

lack of novelty, see 35 U.S.C. § 311(a)-(b).

“[A]ny third party can ask the agency to initiate

inter partes review of a patent claim.” Cuozzo Speed

Techs., 136 S. Ct. at 2137; see 35 U.S.C. § 311(a).

When an IPR petition is filed, the PTO first

determines whether to institute review. 35 U.S.C.

§ 314(a). If review is instituted, the Patent Trial and

Appeal Board (Board) then conducts a trial-like

proceeding to assess the patentability of the claims at

issue. See id. § 316; 37 C.F.R. § 42.1 et seq. At the

end of any IPR instituted by the PTO, the Board must

“issue a final written decision with respect to the

patentability of any patent claim challenged by the

petitioner.” 35 U.S.C. § 318(a). While the IPR process

can result in the elimination of dubious patents, it

also carries with it a significant risk for the petitioner:

once a final written decision is rendered, the AIA

provides that an IPR petitioner “may not assert . . . in

a civil action . . . that the [patent] claim is invalid on

any ground that the petitioner raised or reasonably

could have raised” before the Board. Id. § 315(e)(2).

This Court has recognized that the IPR process

serves a critical role in “protect[ing] ‘the public’s

paramount interest in seeing that patent monopolies

are kept within their legitimate scope.’” Oil States

Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138

S. Ct. 1365, 1374 (2018) (citation omitted). While

IPRs come after a patent is granted, “[p]atent claims

are granted subject to the qualification that the PTO

has ‘the authority to reexamine—and perhaps

cancel—a patent claim’ in an inter partes review.” Id.

(citation omitted). As the government has explained,

“Congress presumably mandated the use of trial-type

procedures in inter partes review because it believed

they would increase the accuracy of the Board’s

decisions” and “prevent ‘administrative abuses.’” Br.

for the Fed. Resp’t 26, Oil States Energy Servs., LLC

v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365 (2018)

(No. 16-712), 2017 WL 4805230 (citations omitted).

Congress also provided a broad right to appellate

review of final IPR decisions. Any “party dissatisfied

with the final written decision of the [Board] . . . may

appeal the decision” to the Federal Circuit, pursuant

to 35 U.S.C. §§ 141-144. 35 U.S.C. § 319.

B. Factual Background

GE built and successfully tested America’s first jet

engine in 1942 under contract with the U.S. Army Air

Corps, and has been a worldwide leader in aviation

technology ever since.

Today, GE (through its

operating division GE Aviation) is a global provider of

aircraft engines and related systems and services. GE

designs, builds, and supplies engines for the majority

of commercial aircraft, including Boeing and Airbus

airplanes, currently in service around the world.1

The commercial aircraft engine market is fiercely

competitive. Three companies dominate the market:

GE; UTC (through its subsidiary Pratt & Whitney);

and Rolls-Royce. App. 61a (¶ 4). GE and UTC

compete directly against one another, and UTC is

GE’s biggest competitor in the relevant market. Id.

Both offer engines customized to work with a

customer’s aircraft. Id. at 61a-63a (¶¶ 5, 8).

Delivering an engine to a customer requires

enormous up-front expenditures and commitments:

the research, design, testing, development, and

certification process for each engine typically takes 810 years and costs hundreds of millions, or even

billions, of dollars. Id. at 62a (¶¶ 6-7). During the

design process, a customer approaches GE (or a

competitor) with design specifications for a next

generation of aircraft. Id. at 61a-63a (¶¶ 5, 8). The

customer “explain[s] to GE [its] needs and

requirements for turbofan engines, to enable GE to

provide competitive offerings that will satisfy [its]

1 See

generally GE Aviation, Aviation

https://www.geaviation.com/company/aviation-history

visited Feb. 7, 2020).

History,

(last

requirements.” Id. at 70a (¶ 3). GE then performs

design work based on those early specifications, in

order to meet a prospective date for entry-into-service

as much as a decade later. Id. at 62a-63a (¶ 8).

Once an engine is selected and certified, an engine

maker can expect to receive orders and requests for

maintenance for many years, justifying the upfront

expenses. Id. at 62a (¶ 7). For example, the GE90

turbofan engine used to power the Boeing 777

airliner, which entered service 25 years ago,

continues to power 777s today. Id. (¶ 6). GE is

actively working with customers today to design

engines that will fly the next generation of aircraft

into the middle of the 21st century if not beyond.

C. This Proceeding

This case arises from UTC’s attempt to gain a

competitive advantage in this market by amassing an

extensive patent portfolio covering aircraft engines.

Over the past decade, UTC has filed thousands of

patent applications on aircraft engines; as is not

uncommon, applications including overbroad claims

have nevertheless been issued by the PTO. App. 63a

(¶ 10). One of these is U.S. Patent No. 8,511,605 (’605

patent), which claims a conventional geared turbofan

engine in which a turbine drives a fan through a

gearbox. Id. at 64a (¶¶ 12-13). In the mid-1970s, GE

itself had designed a geared engine with all or nearly

all of the features described in each challenged claim

of UTC’s patent. Id. at 65a (¶ 14).

In 2016, GE filed an IPR petition seeking review

of the ’605 patent. Id. at 2a. GE argued that claims

1-2 and 7-11 of the ’605 patent were either anticipated

or rendered obvious by prior art—including

references describing GE’s own geared engines built

in the 1970s. Id. at 2a-3a. Among other things, a

1979 NASA publication authored by a GE employee

disclosed every limitation of independent claim 1. Id.

at 64a. After the PTO instituted review, UTC

disclaimed claims 1-2. Id. at 2a. The Board issued a

final written decision rejecting GE’s contention that

claims 7-11 were invalid for obviousness. Id. In doing

so, it focused on whether the prior art was capable of

meeting unclaimed goals, despite this Court’s

admonition in KSR International Co. v. Teleflex Inc.,

550 U.S. 398, 419 (2007), that obviousness must focus

on the claims at issue. Id. at 33a-49a.

GE—a “dissatisfied” party, see 35 U.S.C. § 319—

appealed the PTO’s decision to the Federal Circuit.

App. 2a. UTC moved to dismiss the appeal on the

ground that GE lacked Article III standing. UTC

noted that it had neither sued nor “threatened to sue

GE for infringement of the ’605 patent,” and argued

that, unless “GE has taken [steps] that may infringe,

there is no injury in fact and no standing.” CAFC

UTC Mot. to Dismiss 9, ECF No. 30. UTC dismissed

the notion that competitive harm could establish

standing in the absence of evidence that GE had

infringed, or had concrete plans to infringe, the

patent. Id. at 10-12.

In response, GE submitted two declarations by its

Chief IP Counsel and General Counsel for

Engineering for GE Aviation, explaining the

competitive harm it was currently suffering and

would imminently face. See App. 60a-73a (Long Decl.

& Suppl. Long Decl.).2 GE outlined the highly

GE submitted the first declaration (App. 60a-68a) in

response to UTC’s motion to dismiss, and the second (id. at 69a-

competitive market for turbofan engines and its fierce

competition with UTC.

It explained that the

existence of the ’605 patent “restricts GE’s design

choices” for new engines and “forces GE to expend

additional research and development money on

designs that do not implicate” the patent. Id. at 66a

(¶ 16). As an example, GE explained that, in recent

discussions surrounding an aircraft, Boeing

requested that GE “[r]efine” and “[i]nvestigate” a type

of engine that would potentially implicate the ’605

patent. CAFC Sealed Suppl. Long Decl. ¶ 7 & Ex. I,

ECF No. 64 (alterations in original); see also App. 72a

(Long Suppl. Dec. ¶ 7 (redacted)). In response, GE

expended time and money researching and

attempting to design an engine that would potentially

implicate the ’605 patent as well as engines that

would not. App. 66a (¶ 16); id. at 72a (¶ 7).

Following full briefing and oral argument, the

Federal Circuit issued a precedential opinion

dismissing GE’s appeal for lack of standing. The court

noted that it had “addressed the ‘competitor standing’

doctrine in AVX Corp. v. Presidio Components, Inc.,

923 F.3d 1357 (Fed. Cir. 2019).” App. 6a. In AVX, the

court held that an IPR appellant “lacked Article III

standing because it had ‘no present or nonspeculative

interest in engaging in conduct’” covered by the

challenged patent, even though the appellant actively

competed against the patent owner in the relevant

market. Id. (quoting AVX, 923 F.3d at 1363). The

Federal Circuit below followed AVX and held that it

“[saw] no competitive harm to GE sufficient to

establish standing to appeal.” Id. at 7a. In the court’s

73a) in response to the panel’s request for additional

information. App. 2a-4a.

view, the PTO’s decision rejecting GE’s IPR challenge

to the ’605 patent “did not change the competitive

landscape for commercial airplane engines.” Id.

The Federal Circuit dismissed all the competitive

injuries alleged by GE. As for the “increased research

and development costs” that GE has incurred and is

likely to incur in trying to design around the ’605

patent, the court concluded that GE had failed to

provide an adequate “accounting.” Id. As for the

impact on “future” competition, the court pointed to

the fact that “UTC has not sued or threatened to sue

GE for infringing the ’605 patent.” Id. at 8a. And as

for “estoppel under 35 U.S.C. § 315(e),” the court

opined that, “[w]here, as here, the appellant does not

currently practice the patent claims and the injury is

speculative, we have held that the estoppel provision

does not amount to an injury in fact.” Id.

Judge Hughes concurred only in the judgment. Id.

at 9a. He agreed with the panel that the Federal

Circuit’s “recent precedent compels holding that [GE]

lacks Article III standing here,” but he believed that

the court’s “precedent has developed an overly rigid

and narrow standard for Article III standing in the

context of appeals from inter partes review

proceedings.” Id. He explained that the court’s

“recent decision in [AVX],” which, in his view, was

“incorrectly decided,” “takes a patent-specific

approach to the doctrine of competitor standing that

is out of step with Supreme Court precedent.” Id.

Applying this Court’s precedent, he would have held

that GE has Article III standing.

As Judge Hughes explained, “[t]he risk of a future

infringement suit is not the only way an IPR

petitioner can show injury-in-fact.” Id. at 13a.

Instead, he observed, this Court recognizes that a

much broader range of competitive injuries can

support standing. Id. at 13a-16a. And here, he

reasoned, the “costly competitive burden” imposed by

UTC’s patent, which “effectively precludes GE from

meeting its customer’s design needs without spending

additional resources to design around the patent,”

constitutes a “‘concrete and particularized’ harm to

GE.” Id. at 17a (citation omitted). Judge Hughes

added

that

the

AIA’s

estoppel

provision

“underscore[s] the problems with our increasingly

narrow approach to Article III standing,” id. at 18a,

and has an “especially significant impact where the

parties are direct competitors,” id. at 17a.

The Federal Circuit denied GE’s petition for

rehearing en banc. Id. at 54a-55a.

REASONS FOR GRANTING THE WRIT

The Federal Circuit has adopted a patent-specific

rule for civil litigation that cannot be squared with

this Court’s decisions outside the patent context—this

time, concerning the requirements for establishing

Article III standing in the IPR context. As this Court

has long recognized, the baseline requirements for

demonstrating Article III standing are central to

fulfilling the constitutional role, and duty, of the

federal courts to resolve cases and controversies. See

Mata v. Lynch, 135 S. Ct. 2150, 2156 (2015) (“[W]hen

a federal court has jurisdiction, it also has a ‘virtually

unflagging obligation . . . to exercise’ that authority.”

(alteration in original) (citation omitted)). Those

requirements should not fluctuate based on whether

a dispute involves a patent or something else.

That includes the requirement for establishing an

injury-in-fact—an “invasion of a legally protected

interest which is (a) concrete and particularized, and

(b) actual or imminent, not conjectural or

hypothetical.” Lujan v. Defenders of Wildlife, 504

U.S. 555, 560 (1992) (footnote and quotation marks

omitted). While unquestionably important, “[i]njuryin-fact is not Mount Everest.” Danvers Motor Co. v.

Ford Motor Co., 432 F.3d 286, 294 (3d Cir. 2005)

(Alito, J.). The Court therefore has recognized a broad

range of injuries triggering standing under Article III,

including competitive and related economic harm.

See Clinton v. City of N.Y., 524 U.S. 417, 433 (1998);

Cyzewski v. Jevic Holding Corp., 137 S. Ct. 973, 983

(2017) (“For standing purposes, a loss of even a small

amount of money is ordinarily an ‘injury.’”).3

The Federal Circuit’s “overly rigid” requirement

for establishing Article III standing in the IPR context

is “out of step with Supreme Court precedent.” App.

9a (concurrence). The Federal Circuit’s rule also

conflicts with decisions of other circuits, which hold

that competitive harm itself confers standing, without

requiring additional showings. And the upshot is that

the Federal Circuit has insulated an important

category of agency action from judicial oversight in

Courts sometimes differentiate between “competitive

harm” (e.g., increased competition or lost business opportunities)

and “economic injury” (e.g., the expenditure of additional

resources). But as commentators have observed, “the two are

simply different sides of the same coin because an agency action

that advantages one’s competitor often causes a financial harm

to the party.” Matthew Dowd & Jonathan Stroud, Will Fed. Circ.

Consider The Competitor Standing Doctrine?, Law360 (Dec. 18,

2018), https://www.law360.com/articles/1110478. To the extent

the two concepts can be distinguished, GE has alleged both

competitive and economic injuries (such as the expenditures it

has already made in designing around the patent at issue); both

naturally fall under the rubric of competitor standing. We refer

to the injuries alleged here generally as competitive harm.

direct opposition to the express will of Congress. This

Court’s intervention is needed.

I. The

Federal

Circuit’s

Heightened

Competitor-Standing Rule Conflicts With

Decisions Of Other Circuits

The Federal Circuit’s decision here conflicts with

the decisions of other circuits. Whereas in other

circuits competitive harm itself may establish Article

III standing, in the Federal Circuit an IPR petitioner

must make an additional showing—that it has

“concrete plans for future activity that creates a

substantial risk of future infringement or [would]

likely cause the patentee to assert a claim of

infringement.” AVX Corp. v. Presidio Components,

Inc., 923 F.3d 1357, 1365 (Fed. Cir. 2019) (citation

omitted). That circuit conflict warrants certiorari.

A. The

Federal

Circuit’s

Heightened

Standing Requirement For IPR Appeals

In AVX, the Federal Circuit held that a patent

claim could have “a harmful competitive effect” on an

IPR challenger only if “the challenger was currently

using the claimed features or nonspeculatively

planning to do so in competition.” Id. AVX concerned

a challenge to a patent covering a type of capacitor,

brought by a rival manufacturer. Id. at 1359-60. The

parties to the IPR proceeding were frequently adverse

in patent litigation, and the IPR petitioner had

explained that in the capacitor market, “even the

threat of a permanent injunction [based on patent

infringement] can dissuade customers from choosing

a particular capacitor.” Id. at 1360-61. Already, in

fact, “at least one customer . . . would not buy one of

AVX’s capacitors because of the risk of a future

injunction.” Id. at 1361.

Yet, the Federal Circuit held that the IPR

petitioner lacked standing to appeal the PTO’s final

decision. The Federal Circuit recognized that this

Court, as well as the D.C. Circuit, will find standing

based on competitive harm where government action

“nonspeculatively threaten[s] economic injury to the

challenger by the ordinary operation of economic

forces.” Id. at 1364. But the court reasoned that the

“government action at issue” in an IPR—“the

upholding of specific patent claims”—is “quite

different” than the government action challenged in

the cases in which other circuits have found standing

based on competitive harm. Id. at 1365. The court

believed that, because government action in the IPR

context does not “address prices or introduce new

competitors,” it does not operate by “ordinary

economic forces” to “naturally harm a firm.” Id.

The AVX court recognized one circumstance where

“[a] patent claim could have a harmful competitive

effect on a would-be challenger” conferring standing—

where “the challenger was currently using the

claimed features or nonspeculatively planning to do

so in competition.” Id. But the court explained that

the Federal Circuit has “repeatedly” denied standing

to IPR petitioners seeking to “appeal claim-upholding

Board decisions where those petitioners lacked

‘concrete plans for future activity that creates a

substantial risk of future infringement or [would]

likely cause the patentee to assert a claim of

infringement.’” Id. (emphasis added) (quoting JTEKT

Corp. v. GKN Auto. Ltd., 898 F.3d 1217, 1221 (Fed.

Cir. 2018), cert. denied, 139 S. Ct. 2713 (2019)).4

Thus, under AVX, “even when . . . parties are direct

competitors,” if the IPR “petitioner is not currently

engaged in infringing activity and has no concrete

plans to do so in the imminent future,” it will be held

to lack Article III standing. App. 14a (concurrence).

The Federal Circuit applied the AVX rule in

holding that GE lacked standing to appeal the IPR

decision in this case. Id. at 6a-8a. And it has

continued to apply that rule in subsequent cases. See

Fisher & Paykel Healthcare Ltd. v. ResMed Ltd., 789

F. App’x 877, 878 (Fed. Cir. 2019) (reiterating that a

dissatisfied IPR petitioner must demonstrate plans

that “create a ‘substantial risk of future

infringement,’” and finding that the appellant’s

assertion that it “continues to develop products that

[the patent owner] may at some future date allege

infringe claims of the” challenged patent did not

suffice (citation omitted)).

In addition to JTEKT, the AVX court cited Momenta

Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., 915 F.3d 764,

770 (Fed. Cir. 2019), and Phigenix, Inc. v. Immunogen, Inc., 845

F.3d 1168, 1173-74 (Fed. Cir. 2017), as cases denying standing

where an appellant failed to establish a concrete or substantial

risk of infringement. See AVX, 923 F.3d at 1365-66. Conversely,

the court explained that the Federal Circuit has found standing

based on “the inevitability of an infringement suit.” Id. at 136667 (discussing Altaire Pharmaceuticals, Inc. v. Paragon Bioteck,

Inc., 889 F.3d 1274, 1283 (Fed. Cir.), remand order modified by

stipulation, 738 F. App’x 1017 (Fed. Cir. 2018); E.I. DuPont de

Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1005 (Fed. Cir.

2018)).

B. In Other Circuits, Competitive Harm

Alone Confers Standing

By contrast, numerous other circuits have

recognized that the sort of competitive harm alleged

here confers standing—without requiring any

particular showing as to likelihood of future

litigation. The First, Second, Third, Seventh, Ninth,

and D.C. Circuits all apply simple economic logic to

determine the existence of an injury-in-fact; hold that

government action creating competitive advantages

or burdens in the marketplace is sufficient to support

standing; and recognize that the “form of that

[competitive] injury may vary.” Sherley v. Sebelius,

610 F.3d 69, 72 (D.C. Cir. 2010).5

1. The conflict with the D.C. Circuit is especially

stark. The D.C. Circuit has applied “[b]asic economic

logic” when assessing competitive harm. American

Inst. of Certified Pub. Accountants v. IRS, 804 F.3d

1193, 1198 (D.C. Cir. 2015). Accordingly, the D.C.

Circuit has recognized that “illegal structuring of a

competitive environment” is “sufficient to support

Article III standing.” Shays v. FEC, 414 F.3d 76, 85

(D.C. Cir. 2005). And the court has found standing

“when the Government takes a step that benefits [a]

rival and therefore injures [a competitor]

economically.” Sherley, 610 F.3d at 72.

See also, e.g., TrafficSchool.com, Inc. v. Edriver Inc., 653

F.3d 820, 825-26 (9th Cir. 2011); Adams v. Watson, 10 F.3d 915,

922-23 (1st Cir. 1993); Center for Reproductive Law & Policy v.

Bush, 304 F.3d 183, 197 (2d Cir. 2002); UPS Worldwide

Forwarding, Inc. v. United States Postal Serv., 66 F.3d 621 (3d

Cir. 1995), cert. denied, 516 U.S. 1171 (1996); Marshall & Ilsley

Corp. v. Heimann, 652 F.2d 685, 692-93 (7th Cir. 1981), cert.

denied, 455 U.S. 481 (1982).

Two recent cases, in particular, illustrate the gulf

between the D.C. Circuit’s practical approach to

competitor standing and the Federal Circuit’s rigid,

patent-specific rule. In Sherley, the D.C. Circuit

addressed the standing of doctors challenging

guidelines authorizing increased research grants for

embryonic stem cell research. Id. at 70-71. The

plaintiff doctors performed only adult stem cell

research, and claimed that the new rule would “result

in increased competition for limited federal funding.”

Id. at 71 (citation omitted). The D.C. Circuit found

that the doctors had standing, explaining that,

because “increased competition [by additional grant

applicants] almost surely injures a seller in one form

or another, he need not wait until ‘allegedly illegal

transactions . . . hurt [him] competitively’ before

challenging the regulatory . . . governmental decision

that increases competition.” Id. at 72 (alterations in

original) (citation omitted).

The court also

emphasized that the mere fact that the doctors would

have to “invest more time and resources to craft a

successful grant application” established “an actual,

here-and-now injury.” Id. at 74.

The D.C. Circuit stressed that the “form of th[e]

injury [triggering standing] may vary.” Id. at 72.

“[F]or example,” the court explained, “a seller facing

increased competition may lose sales to rivals, or be

forced to lower its sale price or to expend more

resources to achieve the same sales, all to the

detriment of its bottom line.”

Id.

Moreover,

“[b]ecause increased competition almost surely

injures a seller in one form or another, he need not

wait until ‘allegedly illegal transactions . . . hurt

[him]

competitively’

before

challenging

the

. . . government decision that increases competition.”

Id. (alterations in original) (citation omitted); see id.

at 74 (“Although no one can say exactly how likely the

Doctors are to lose funding to [new grant] projects

. . . , having been put into competition with those

projects, the Doctors face a substantial enough

probability to deem the injury to them imminent.”).

The competitive injury in Sherley is far less

concrete and imminent than the competitive injury

here. Sherley upheld standing based on the logic that

the presence of an unspecified number of additional

grant applicants would have some marginal effect on

doctors’ chances of securing a grant in the future, and

that the doctors would have to spend more time and

money to prepare a successful application. By

contrast, UTC’s patent has limited GE’s ability to

compete in the aircraft engine market by restricting

its ability to design and sell a type of engine. And if

there were any doubt that the competitive threat here

is real, GE—like the plaintiff in Sherley—has already

suffered “an actual, here-and-now injury” in the form

of the “time and resources” it has expended, and will

expend, in designing around the patent in order to

compete for business. Id. at 74.

Mendoza v. Perez is also instructive. There, the

D.C. Circuit explained that, to establish standing, a

plaintiff need only “demonstrate that it is a direct and

current competitor whose bottom line may be

adversely affected by the challenged government

action.” 754 F.3d 1002, 1013 (D.C. Cir. 2014)

(emphasis altered).

The court thus held that

experienced animal herders who had not actually

applied for jobs in that industry had standing to

challenge regulations that gave “herding operations

access to inexpensive foreign labor without protecting

U.S. workers.” Id. at 1007. Again, the competitive

injury here is far more direct and real. As explained,

GE and UTC currently compete in the relevant

market and GE has already expended time and

resources in seeking to design around the challenged

patent in response to customer interest.

The D.C. Circuit is frequently called upon to

evaluate the standing of parties challenging agency

action that unfairly benefits or burdens competitors

or otherwise creates harmful competitive effects. And

it has consistently held that “when regulations

illegally structure a competitive environment—

whether an agency proceeding, a market, or a

reelection race—parties defending concrete interests

. . . in that environment suffer legal harm under

Article III.”

Shays, 414 F.3d at 87; see also

International Bhd. of Teamsters v. DOT, 724 F.3d 206,

211-12 (D.C. Cir. 2013) (Kavanaugh, J.) (explaining

that under “competitor standing doctrine,” it is

understood that “economic actors suffer an injury in

fact when agencies lift regulatory restrictions on their

competitors or otherwise allow increased competition

against them,” because such competitive harm will

ultimately result in lower prices or decreased market

share (quoting Sherley, 610 F.3d at 72)).

2. Other circuits also take a practical, commonsense approach to competitor standing, relying on the

“basic law of economics,” rather than rigid rules like

the Federal Circuit’s “concrete current or future plans

to infringe” test (App. 14a (concurrence)), to

determine whether a competitive harm triggers

standing.

Cooper v. Texas Alcoholic Beverage

Comm’n, 820 F.3d 730, 738 (5th Cir.), cert. denied, 137

S. Ct. 494 (2016); see also Simmons v. ICC, 900 F.2d

1023, 1026 (7th Cir. 1990) (“An allegation of

competitive injury is sufficient to satisfy the first

prong of the standing test.”), cert. denied, 499 U.S. 919

(1991); Adams v. Watson, 10 F.3d 915, 922 (1st Cir.

1993) (explaining that “future injury-in-fact is viewed

as ‘obvious’” when government action removes

competitive burdens on a plaintiff’s rivals, thus

“disadvantag[ing] the plaintiff’s competitive position

in the relevant marketplace”).

For instance, the Second Circuit recognizes

standing where “the government’s allocation of a

particular benefit ‘creates an uneven playing field,’”

so long as a plaintiff shows “‘that he personally

competes in the same arena with the party to whom

the government has bestowed the assertedly illegal

benefit.’” Center for Reproductive Law & Policy v.

Bush, 304 F.3d 183, 197 (2d Cir. 2002) (Sotomayor, J.)

(quoting Abortion Rights Mobilization Inc. v. Baker

(In re United States Catholic Conference), 885 F.2d

1020, 1029 (2d Cir. 1989)). It thus upheld standing

where an advocacy organization challenged

government action that “bestowed a benefit on

plaintiffs’ competitive adversaries.” Id. at 197.

Likewise, the First Circuit has recognized that

“many cases uphold ‘competitor standing’ based on

‘unadorned allegations’ of latent economic injury.”

Adams, 10 F.3d at 921 (citation omitted); id. at 921

n.13 (collecting cases from the D.C., Second, and

Ninth Circuits). Because “basic economic theory . . .

posit[s] elemental laws of cause and effect,” that court

has explained that parties can rely “on such core

economic postulates” to show future economic harm

from current competitive changes. Id. at 923.

Using the same logic, the Seventh Circuit has

found competitor standing where a small bank was

being acquired by a larger one, due to the “change in

the competitive configuration of [a city’s] banking

community.” Marshall & Ilsley Corp v. Heimann.,

652 F.2d 685, 692-93 (7th Cir. 1981), cert. denied, 455

U.S. 481 (1982). And the Ninth Circuit has found

standing where a competitor deceptively implied that

it was a governmental organization in order to garner

additional sales, because “[s]ales gained by one

[competitor] are thus likely to come at the other’s

expense.” TrafficSchool.com, Inc., 653 F.3d at 825-26.

Many of these cases concern situations in which

government action introduced new competitors and

thus increased competition in the relevant market.

But the fact that a patent excludes some competitors

from engaging in certain market activities, as opposed

to increasing competition by adding market

participants, does not justify the Federal Circuit’s

rule. See AVX, 923 F.3d at 1367. To the contrary, the

PTO’s decision to grant, and then to uphold, an

invalid and overbroad patent is functionally

“equivalent to agency action that confers an ‘illegal

benefit’ on one’s competitor.” Matthew Dowd &

Jonathan Stroud, Will Fed. Circ. Consider The

Competitor Standing Doctrine?, Law360 (Dec. 18,

2018), https://www.law360.com/articles/1110478.

As the D.C. Circuit explained in the election

context, it does not matter that “challenged rules

create neither more nor different rival candidates,” so

long as governmental action requires a challenger to

“anticipate and respond to a broader range of

competitive tactics.” Shays, 414 F.3d at 86. The “form

of that [competitive] injury may vary,” Sherley, 610

F.3d at 72, and competitor standing is triggered not

only by “increased competition,” but also by “lost

opportunity,” Mendoza, 754 F.3d at 1010. Thus,

government action that “benefits [a business] rival,”

or forces a firm to “expend more resources” to

compete, inflicts an injury-in-fact triggering standing.

Sherley, 610 F.3d at 72. The decision to uphold an

invalid patent is precisely such an action.6

Finally, in other circuits standing is particularly

obvious where the competitive injury requires a party

to incur immediate costs, as happened here. Thus, for

example, the First Circuit held that a presidential

candidate had standing to challenge regulations

permitting corporate sponsorship of presidential

debates: the “reasonabl[e] claims” that the candidate

was “forced . . . to make significant adjustments to his

campaign strategy and use of funds” to keep pace with

his rivals conferred standing, even where a precise

accounting of that harm was impossible. Becker v.

FEC, 230 F.3d 381, 386 (1st Cir. 2000), cert. denied,

532 U.S. 1007 (2001); see Sherley, 610 F.3d at 74 (fact

that plaintiffs “will have to invest more time and

resources to craft a successful grant application . . is

an actual, here-and-now injury”).

Under that analysis, there is little doubt that GE’s

inability to “meet[] its customer’s design needs

without spending additional resources to design

around the patent” would confer standing. App. 17a.

As explained, GE has already expended some time

and money in attempting to design around the ’605

That does not mean that the mere existence of a patent

is enough to establish standing. IPR challengers seeking to

invalidate a patent covering a market in which they do not

compete would not be able to assert a competitive injury.

Competitive harm would thus not have been implicated in cases

such as Consumer Watchdog v. Wisconsin Alumni Research

Foundation, 753 F.3d 1258 (Fed. Cir. 2014), cert. denied, 574

U.S. 1153 (2015). There, the petitioner argued standing based

only on an alleged statutory injury.

patent and, as that example alone illustrates, it is

likely to do so in the future. Supra at 10.

Certiorari is needed to resolve this conflict.

II. The

Federal

Circuit’s

Heightened

Competitor-Standing Rule Also Conflicts

With Decisions Of This Court

A. The Federal Circuit’s Rule Conflicts With

This Court’s Standing Decisions

Other circuits have not come up with this robust

approach to competitive harm on their own—they

have followed this Court’s lead. In Clinton, for

example, this Court observed that it “routinely

recognizes probable economic injury resulting from

[governmental actions] that alter competitive

conditions as sufficient to satisfy the [Article III

‘injury-in-fact’ requirement].”

524 U.S. at 433

(alterations in original) (quoting 3 K. Davis & R.

Pierce, Administrative Law Treatise 13-14 (3d ed.

1994)).

There, the Court held that farmers’

cooperatives had standing to challenge the

President’s cancellation of a provision entitling

certain facilities to tax benefits when selling to a

cooperative.

The Court explained that the

cooperatives had been deprived of statutory

“bargaining chips” in negotiations, id. at 432, and—

following a leading treatise—recognized that it

“follows logically that any . . . petitioner who is likely

to suffer economic injury as a result of [governmental

action] that changes market conditions satisfies [the

injury-in-fact] part of the standing test,” id. at 433

(last alteration added) (quoting Davis & Pierce 13-14).

That is true, the Court held, regardless of whether the

cooperatives could show that, if the tax benefit had

remained in effect, they would have succeeded in

securing their “end result.” Id. at 433 n.22.

Similarly, in Association of Data Processing

Service Organizations, Inc. v. Camp, the Court held

that plaintiffs had standing to challenge an

administrative decision that increased competition in

plaintiffs’ market by allowing new players to enter,

because such competition “might entail some future

loss of profits.” 397 U.S. 150, 152 (1970) (emphasis

added).

There, data processing businesses had

challenged a decision by the Comptroller of the

Currency allowing national banks to make “data

processing services available to other banks and to

bank customers.” Instead of insisting on proof of an

actual loss in business, the Court relied on basic logic

to conclude that allowing banks to offer this

additional service would impose a competitive burden

on firms that already offered the service. See

Investment Co. Inst. v. Camp, 401 U.S. 617, 620 (1971)

(finding standing based on same competitive injury).

The Federal Circuit’s decision in this case cannot

be squared with the practical approach to competitor

standing consistently followed by this Court. The

PTO’s decision operates to exclude GE from a segment

of the aircraft engine market and forces GE to expend

resources exploring potential alternative offerings to

ensure it can compete on a level playing field. The

fact that the challenged PTO action neither directly

regulates prices nor introduces a new competitor is

entirely irrelevant. See App. 9a (concurrence) (“[A]

Board decision erroneously upholding a competitor’s

patent” is not “meaningfully different from the type of

government actions held to invoke competitor

standing.”). Indeed, a patent is the classic anticompetition instrument, granting the holder a

monopoly for its duration. See WesternGeco LLC v.

ION Geophysical Corp., 138 S. Ct. 2129, 2139-40

(2018) (Gorsuch, J., dissenting). The PTO’s decision

to reject an instituted challenge to the validity of a

patent likewise directly impacts competition.

This case sharply illustrates the flaws in the

Federal Circuit’s “overly rigid and narrow standard”

for establishing competitor standing in the IPR

context. App. 9a (concurrence). GE and UTC “are

direct competitors in the commercial aircraft turbofan

engine market”—indeed, they are two of the three

major players in that market.

Id. at 10a

(concurrence); id. at 61a (¶ 4). The industry operates

on an extremely long lifecycle, in which development

must begin a decade or more before an engine will

enter into service on a commercial airliner. Id. at 62a63a (¶ 8). Accordingly, “in order to maintain its

competitive position in the market,” GE must be able,

in discussions with customers, to “consider engine

designs which . . . may implicate the” challenged

patent. Id. at 72a (¶ 9).

In considering designs, GE must therefore either

risk ultimately infringing UTC’s overbroad patent

years down the road, or expend resources attempting

to design around it. As Judge Hughes recognized, the

patent thus “effectively precludes GE from meeting

its customer’s design needs without spending

additional resources to design around the patent.” Id.

at 17a (concurrence). Both the concreteness and

immediacy of GE’s injury are underscored by the fact

that it has already expended “time and money to

consider engine designs that could potentially

implicate the ’605 patent”—at a customer’s specific

request. Id. at 6a (emphasis omitted); see also id. at

71a-72a (¶¶ 5-7). That expenditure of time and

money itself demonstrates that GE is suffering an

“actual, here-and-now injury” (Sherley, 610 F.3d at

74) that triggers standing under Article III.7

Under the principles established by this Court’s

decisions, the competitive harm faced by GE readily

passes the threshold for an injury-in-fact.

B. The Federal Circuit Disregarded This

Court’s Admonitions That Patent Law Is

Governed By The Same Basic Principles

As Other Areas Of Civil Litigation

The Federal Circuit’s heightened standing rule for

IPR appeals also conflicts with this Court’s repeated

admonishment that the Federal Circuit should not

devise special rules for patent litigation.

Outside the IPR context, even the Federal Circuit

has applied flexible competitor-standing principles

that rely on basic economic logic, rather than impose

In dismissing these expenditures, the Federal Circuit

complained that GE failed to provide an “accounting” for these

costs. App. 7a. But here again, its reasoning conflicts with this

Court’s own precedent. In Cyzewski, this Court admonished that

“a loss of even a small amount of money is ordinarily an ‘injury.’”

137 S. Ct. at 983. GE was not required to go further and itemize

its costs. See also Carpenters Indus. Council v. Zinke, 854 F.3d

1, 5 (D.C. Cir. 2017) (holding that where lumber companies were

likely to face reduced timber supplies, “[e]conomic harm to a

business clearly constitutes an injury-in-fact” and “the amount

is irrelevant,” because “[a] dollar of economic harm is still an

injury-in-fact for standing purposes”); Ecosystem Inv. Partners v.

Crosby Dredging, L.L.C., 729 F. App’x 287, 293 (5th Cir. 2018)

(holding that “delay in recovering [a plaintiff’s] investment and

the lingering uncertainty that it will ever be recouped

constitutes economic harm. Even if this harm is small, ‘[f]or

standing purposes, a loss of even a small amount of money is

ordinarily an “injury”’” (alteration in original) (quoting

Cyzewski, 137 S. Ct. at 983)).

rigid rules about the particular types of harms that

trigger standing.

In Canadian Lumber Trade

Alliance v. United States, for example, the Canadian

Wheat Board challenged the distribution of collected

duties to U.S. wheat producers. 517 F.3d 1319 (Fed.

Cir. 2008), cert. denied, 555 U.S. 819 (2008). The

Federal Circuit held that an injury-in-fact could be

inferred without requiring a further showing that the

distribution would certainly lower prices or reduce

market share, because “it is presumed (i.e., without

affirmative findings of fact) that a boon to some

market participants is a detriment to their

competitors.” Id. at 1334. The Federal Circuit has

thus created a patent-specific rule for constitutional

standing—distinct even from the rule applicable to

non-patent cases within that circuit.

This Court has repeatedly stressed, however, that

“[p]atent law is governed by the same common-law

principles, methods of statutory interpretation, and

procedural rules as other areas of civil litigation.”

SCA Hygiene Prods. Aktiebolag, 137 S. Ct. at 964

(alteration in original); id. at 963-64 (rejecting

Federal Circuit’s patent-specific rule). The Court

therefore has frequently intervened when the Federal

Circuit has erroneously devised patent-specific rules.

See, e.g., id.; MedImmune, Inc. v. Genentech, Inc., 549

U.S. 118, 132 & n.11 (2007); Holmes Grp., Inc. v.

Vornado Air Circulation Sys., Inc., 535 U.S. 826, 82734 (2002); eBay Inc. v. MercExchange, L.L.C., 547 U.S.

388, 391-93 (2006). Here again, the Federal Circuit’s

departure from the baseline rule for civil litigation,

and creation of a patent-specific rule for standing,

warrants this Court’s intervention.

In fact, not only has the Federal Circuit once again

taken a patent-specific approach to generally

applicable doctrine, but it has done so in a way that

this Court has already rejected. In MedImmune, the

Court explained that the Federal Circuit had erred in

creating a patent-specific test for Article III standing

under the Declaratory Judgment Act. 549 U.S. at 132

n.11. Under that erroneous test, a plaintiff could

demonstrate injury-in-fact only by showing a

“reasonable apprehension of suit.”

Id. (citation

omitted); see also ABB Inc. v. Cooper Indus., LLC, 635

F.3d 1345, 1348 (Fed. Cir. 2011) (recognizing that this

Court rejected the requirement of a “reasonable

apprehension of imminent suit”). As Judge Hughes

explained, the Federal Circuit’s rule here “conflate[s]

the injury-in-fact analysis with the ‘reasonable

apprehension of imminent suit’ test for declaratory

judgment jurisdiction.” App. 13a (concurrence).

The Federal Circuit’s roundabout resurrection of

its discredited, “reasonable apprehension of imminent

suit” test as a barrier to standing in the IPR context

underscores the need for this Court’s review.

C. The

Federal

Circuit’s

Heightened

Standing Requirement Is Particularly

Inappropriate In The IPR Context

The Federal Circuit’s imposition of a heightened

standing requirement is especially problematic in the

context of the underlying statutory scheme. The

Federal Circuit’s decision frustrates Congress’s clear

intent to grant broad rights to challenge PTO

decisions and access appellate review; disregards the

additional risk of harm imposed by the AIA’s estoppel

provision; and flies in the face of historical practice.

Congress unambiguously sought to broadly define

the universe of those who could seek IPR and

subsequently challenge the PTO’s final written

decisions before an Article III court. Congress gave

any person the right to invoke the IPR process,

regardless of whether the person had any connection

to the patent at issue. 35 U.S.C. § 311(a); see also id.

§ 315(c). Congress also appreciated that appellate

review of the PTO’s determinations by an Article III

court would be critical to the healthy functioning of

this regime. It thus allowed any “dissatisfied” party

the right to appeal a PTO determination. Id. § 319;

see supra at 5-6. While Congress cannot override

Article III, its clear intent to allow any “dissatisfied”

party to appeal strongly counsels against heightening

the burden for establishing Article III injury-in-fact.

The Federal Circuit’s rule ignores the unique role

of Congress in defining injuries-in-fact. See Spokeo,

Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016) (“the

judgment of Congress play[s] [an] important role[]” in

identifying injuries-in-fact). By allowing any “party

dissatisfied with [a] final written decision” to appeal,

35 U.S.C. § 319, Congress demonstrated an intent to

expand the right to access federal courts as broadly as

the Constitution permits. Imposition of a heightened

standing rule is particularly inappropriate “where

Congress has provided IPR petitioners [this]

procedural right of appeal.” App. 14a (concurrence).

Moreover, the competitive harm faced by GE is

magnified by the AIA’s estoppel provision. 35 U.S.C.

§ 315(e). As Judge Hughes observed, “the effects of

that estoppel have especially significant impact

where the parties are direct competitors.” App. 17a

(concurrence). In a long-lifecycle industry such as the

commercial aircraft engine business, competitors may

be precluded from mounting a challenge to an

overbroad patent many years down the road—thus

making

“potential

infringement

litigation

significantly more impactful on GE’s future design

choices.” Id. at 18a (concurrence). The PTO’s decision

rejecting an IPR challenge therefore grants a

competitor an added advantage (on top of the patent),

which is absent until or unless the PTO rejects an IPR

challenge in a final Board decision. Cf. Deposit Guar.

Nat’l Bank v. Roper, 445 U.S. 326, 334-37 (1980)

(collateral estoppel effect of decision concerning the

validity of a patent in “unspecified future litigation”

may create “personal stake” conferring Article III

standing; discussing Electrical Fittings Corp. v.

Thomas & Betts Co., 307 U.S. 241, 241-43 (1939)).

Historical practice also weighs against ratcheting

up the standing requirement in this context. In fact,

if a patent-specific approach to Article III standing

were ever appropriate, history would favor relaxing

the showing required. Historical tradition, going back

to the English Court of Chancery, permitted parties

to challenge improperly issued patents through a writ

of scire facias even if they suffered no specific, patentrelated injury. See W.M. Hindmarch, A Treatise on

the Law Relative to Patent Privileges for the Sole Use

of Inventions 235 (1847); see also Richard Godson, A

Practical Treatise on the Law of Patents for Inventions

and of Copyright 197 (1832) (“All persons are injured

by the existence of an illegal patent for an invention,

and every one is therefore at liberty to petition . . . to

have it cancelled.”). That tradition bears on the

constitutional standing inquiry and militates in favor

of recognizing standing in this case. See Vermont

Agency of Natural Res. v. United States ex rel. Stevens,

529 U.S. 765, 774 (2000). Moreover, this Court

recently affirmed that the PTO, in issuing a patent,

“take[s] from the public rights of immense value, and

bestow[s] them upon the patentee.” Oil States Energy

Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct.

1365, 1373 (2018) (alterations in original) (citation

omitted). If GE—a direct competitor of UTC in the

relevant market—cannot challenge that taking of a

public right, it is unclear who could do so.

III. The Question Presented Is Exceptionally

Important And Warrants Review

The scope of Article III standing is central to the

role of the Judiciary and, as relevant here, the ability

of citizens to challenge government action. See

DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341-43

(2006).

The injury-in-fact required to establish

competitor standing, in particular, is an issue of

recurring and unquestioned importance.

Judicial recognition of competitive injury plays a

crucial role in ensuring that the federal courts are

available to check government action that unlawfully

impacts competition among market participants. The

D.C. Circuit’s robust competitor-standing rule, for

example, has facilitated judicial review of a broad

array of administrative decisions by parties facing

competitive harm from those decisions. See, e.g.,

Sherley, 610 F.3d at 72-73 (finding standing to

challenge new guidelines on stem cell research

because of impact on competition).

The application of the injury-in-fact requirement

is also unquestionably important in the IPR context

in particular. In enacting the AIA, Congress wished

to subject the PTO’s determinations to greater

oversight by allowing private parties to challenge

overbroad patents. As one Congress member noted,

“patents may discourage competition,” and invalid

patents “severely restrict[]” the “flow of ideas and

capital.” Patent Quality Improvement: Post-Grant

Opposition: Hearing before the Subcomm. on Courts,

the Internet, and Intellectual Prop. of the H. Comm. on

the Judiciary, 108th Cong. 49 (2004) (statement of

Rep. John Conyers, Jr.).

Likewise, Congress

appreciated that “a more efficient and streamlined

patent system” would have pro-competitive effects by

“improv[ing] patent quality and limit[ing] . . .

litigation costs,” H.R. Rep. No. 112-98 at 40.

By insulating PTO decisions upholding patent

claims from judicial review, the Federal Circuit’s

heightened standing rule restricts precisely the

outside scrutiny of the PTO’s patent determinations

that Congress intended to increase. The rule thus

frustrates Congress’s efforts to permit more efficient

challenges to patents that restrict innovation. Worse,

it creates an asymmetry that favors invalid patents.

A patent-holder whose patent is invalidated through

the IPR process will always have standing to seek

judicial review. But an unsuccessful IPR challenger

will lack standing unless he can demonstrate a

concrete plan to infringe. That result places a thumb

on the scale against the exact public interest that the

IPR process was designed to protect.

The stark facts of this case present an excellent

vehicle to review the Federal Circuit’s heightened

standing rule. As Judge Hughes explained, the record

here shows real and imminent competitive harm in a

“fiercely

competitive

market.”

App.

16a

(concurrence). Only by applying the Federal Circuit’s

heightened requirement did the court deny standing.

This case therefore offers the Court an ideal

opportunity to address the question presented.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

SHAY DVORETZKY

AMANDA K. RICE

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

GREGORY G. GARRE

Counsel of Record

ROMAN MARTINEZ

TYCE R. WALTERS

LATHAM & WATKINS LLP

555 Eleventh Street, NW

Suite 1000

Washington, DC 20004

(202) 637-2207

gregory.garre@lw.com

Counsel for Petitioner

February 12, 2020

APPENDIX

TABLE OF CONTENTS

Page

Opinion of the United States Court of Appeals

for the Federal Circuit, General Electric

Co. v. United Technologies Corp., 928 F.3d

1349 (Fed. Cir. 2019) ..........................................1a

Final Written Decision of the United States

Patent and Trademark Office Before the

Patent Trial and Appeal Board, General

Electric Co. v. United Technologies Corp.,

Case IPR2016-00531 (P.T.O. June 26,

2017) ..................................................................19a

Order of the United States Court of Appeals for

the Federal Circuit Denying Petition for

Rehearing En Banc, General Electric Co. v.

United Technologies Corp., No. 2017-2497

(Fed. Cir. Oct. 15, 2019) ...................................54a

U.S. Const. art. III, § 2............................................56a

35 U.S.C. § 311 ........................................................57a

35 U.S.C. § 315(e) ....................................................58a

35 U.S.C. § 319 ........................................................59a

Declaration of Alexander E. Long in Support of

General Electric Company’s Opposition to

Appellee’s Motion to Dismiss, General

Electric Co. v. United Technologies Corp.,

No. 2017-2497 (Fed. Cir. Jan. 16, 2018),

ECF No. 36 (without exhibits) .........................60a

TABLE OF CONTENTS—Continued

Page

Supplemental Declaration of Alexander E.

Long in Support of General Electric

Company’s Standing, General Electric Co.

v. United Technologies Corp., No. 20172497 (Fed. Cir. Nov. 28, 2018) (redacted),

ECF No. 63 (without exhibit) ...........................69a

UNITED STATES COURT OF APPEALS,

FEDERAL CIRCUIT

GENERAL ELECTRIC COMPANY,

Appellant

UNITED TECHNOLOGIES CORPORATION,

Appellee

2017-2497

Decided: July 10, 2019

928 F.3d 1349

OPINION

Before Reyna, Taranto, and Hughes, Circuit

Judges.

Concurring opinion filed by Circuit Judge Hughes.

Reyna, Circuit Judge.

General Electric Company petitioned the United

States Patent Trial and Appeal Board for inter partes

review of U.S. Patent No. 8,511,605.

United

Technologies Corporation is the assignee of the

patent. The Board found the claims not obvious in

view of the prior art. General Electric appeals. For

the reasons discussed below, we hold that General

Electric lacks Article III standing and accordingly, we

dismiss the appeal.

BACKGROUND

Appellee United Technologies Corporation

(“UTC”) is the assignee of U.S. Patent No. 8,511,605

(“the ’605 patent”). The ’605 patent is generally

directed to a gas turbine engine having a gear train

driven by a spool with a low stage count low pressure

turbine. ’605 patent, Abstract. This particular gas

turbine engine is designed for use in airplanes and

has an axially movable variable area fan nozzle.

On January 29, 2016, General Electric Company

(“GE”) filed a petition for inter partes review (“IPR”)

challenging claims 1 and 2 of the ’605 patent on

grounds of anticipation and claims 7–11 of the ’605

patent on grounds of obviousness. After institution,

UTC disclaimed claims 1 and 2, leaving only claims

7–11 at issue. On June 26, 2017, the United States

Patent Trial and Appeal Board (“Board”) issued a

Final Written Decision concluding that the

preponderance of the evidence did not show claims 7–

11 of the ’605 patent to be unpatentable for

obviousness. GE timely appealed to this court.

On December 29, 2017, UTC moved to dismiss

GE’s appeal for lack of standing. UTC asserted that

GE lacked standing because it failed to demonstrate

a sufficient injury in fact. In support, UTC pointed to

this court’s decisions holding that an appellant does

not automatically possess standing to appeal an

adverse Board decision by virtue of serving its

petitions in the challenged IPR. GE submitted a

response on January 16, 2018, including the

Declaration of Alexander E. Long, GE’s Chief IP

Counsel and General Counsel of Engineering for GE

Aviation (“First Long Declaration”).

Mr. Long

explained that the commercial aircraft engine

business operates on a long life-cycle and that

airplane engines are designed to meet certain

specifications for certain aircraft. Because the design

of aircraft engines can take eight years or more, GE

develops new engines based on old designs. Mr. Long

stated that, in the 1970s, GE developed a geared

turbofan engine with a variable area fan nozzle for

NASA. GE asserted that the ’605 patent impedes its

ability to use its 1970s geared-fan engine design as a

basis for developing and marketing future geared

turbofan engine designs with a variable area fan

nozzle, thereby limiting the scope of GE’s engine

designs and its ability to compete in a highly

regulated industry. Mr. Long also declared that

designing around the ’605 patent restricts GE’s

design choices and forced GE to incur additional

research and development expenses.

We denied UTC’s motion without addressing the

merits and ordered UTC to brief the issue in its

responsive appellate brief. The parties subsequently

briefed the standing issue. GE argued that the

injuries it suffered include statutory estoppel,

economic loss, future threat of litigation, and

competitive harm. GE relied on the First Long

Declaration as evidence to show its injuries. UTC

argued that GE suffered no injury in fact because:

(1) UTC has not sued or threatened to sue GE for

infringement of the ’605 patent; (2) GE does not offer

evidence of a concrete and particularized economic

injury because it has not developed an engine that

implicates claims 7–11 of the ’605 patent; and

(3) statutory estoppel and the competitive standing

doctrine do not apply to GE.

We heard oral argument on November 7, 2018.

Much of oral argument focused on whether GE had

constitutional standing to appeal and whether

general statements made in the First Long

Declaration were sufficient to establish standing. We

subsequently ordered GE to supplement the First

Long Declaration and submit any additional

declarations that would provide greater specificity

regarding the asserted injury GE contends provides

sufficient standing to appeal in this matter. We

provided UTC with an opportunity to respond.

Each party filed its supplemental submission. GE

filed an additional declaration from Mr. Long on

November 28, 2018 (“Second Long Declaration”). In

his second declaration, Mr. Long stated that Boeing

requested information from GE and several of its

competitors for engine designs for future Boeing

aircrafts. Mr. Long also noted that Boeing requested

information regarding designs for both geared-fan

engines and direct-drive engines.

In response to Boeing’s request, GE researched a

geared-fan engine design that “would potentially

implicate [UTC’s] 605 Patent.” Second Long Decl. ¶ 5.

GE asserts it “expended time and money researching

and further developing” this technology for the

potential business opportunity with Boeing. Id. ¶ 7.

Ultimately, GE chose not to submit to Boeing a

geared-fan engine design and instead submitted a

design for a direct-drive engine of the type used in

GE’s current engine designs. The record does not

indicate why GE submitted a direct-drive engine

design instead of a geared-fan engine design. Nor

does Mr. Long state whether GE lost this particular

bid.

He contends only that to maintain GE’s

competitive position, it needs to be able to meet

customer needs with a geared-fan engine design that

may implicate the ’605 patent.

DISCUSSION

Not every party to an IPR will have Article III

standing to appeal a final written decision of the

Board. See Phigenix, Inc. v. Immunogen, Inc., 845

F.3d 1168, 1172 (Fed. Cir. 2017) (citing Cuozzo Speed

Techs., LLC v. Lee, ––– U.S. ––––, 136 S. Ct. 2131,

2143–44, 195 L.Ed.2d 423 (2016)). To establish

standing, an appellant must have suffered an injury

in fact that has a nexus to the challenged conduct and

that can be ameliorated by the court. Id. at 1171

(citing Spokeo, Inc. v. Robins, ––– U.S. ––––, 136 S.

Ct. 1540, 1545, 194 L.Ed.2d 635 (2016)). The injury

in fact must be “concrete and particularized,” not

merely “conjectural or hypothetical.” JTEKT Corp. v.

GKN Auto. Ltd., 898 F.3d 1217, 1220 (Fed. Cir. 2018)

(emphasis omitted) (first quoting Spokeo, 136 S. Ct. at

1545, and then quoting Lujan v. Defs. of Wildlife, 504

U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351

(1992)).

GE has the burden of showing that it suffered an

injury in fact sufficient to confer Article III standing

to appeal. See DaimlerChrysler Corp. v. Cuno, 547

U.S. 332, 342, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006).

It is undisputed that GE did not establish before the

Board that it had standing to appeal the Board’s Final

Written Decision. See JTEKT, 898 F.3d at 1220.

Therefore, GE must create a record in this court with

the “requisite proof of an injury in fact” sufficient to

show that it has standing to appeal. Id. (quoting

Phigenix, 845 F.3d at 1171–72). As a result, GE has

submitted two declarations from Mr. Long and has

proffered three theories of harm to support standing:

(1) competitive harm; (2) economic losses; and

(3) estoppel under 35 U.S.C. § 315(e). For the reasons

stated below, we reject GE’s arguments.

GE’s purported competitive injuries are too

speculative to support constitutional standing. See

Phigenix, 845 F.3d at 1171 (stating that the injury

must be real or imminent). Mr. Long’s declarations

are the only evidence of standing before the court, and

neither shows a concrete and imminent injury to GE

related to the ’605 patent. Mr. Long does not assert

that GE lost bids to customers because it could offer

only a direct-drive engine design. Nor does Mr. Long

attest that GE submitted a direct-drive engine design

to Boeing because of the ’605 patent. Mr. Long

contends only that GE expended some unspecified

amount of time and money to consider engine designs

that could potentially implicate the ’605 patent.

Boeing may have asked for information regarding a

possible geared-fan engine design, but there is no

evidence that Boeing demanded or required an engine

covered by claims 7–11 of the ’605 patent, and there

is no indication that GE lost the Boeing bid. The

evidence shows that GE submitted to Boeing a directdrive engine design, but there is no indication as to

why it opted not to submit a geared-fan engine design.

There is also no evidence that GE lost business or lost

opportunities because it could not deliver a gearedfan engine covered by the upheld claims or any

evidence that prospective bids require geared-fan

engine designs. GE asserts only speculative harm

untethered to the ’605 patent. Without a real,

particularized injury, GE lacks standing to appeal the

IPR decision.

We recently addressed the “competitor standing”

doctrine in AVX Corp. v. Presidio Components, Inc.,

923 F.3d 1357 (Fed. Cir. 2019). There, we concluded

that the appellant lacked Article III standing because

it had “no present or nonspeculative interest in

engaging in conduct even arguably covered by the

patent claims at issue.” Id. at 1363. We explained

that competitor standing has been found when

government action alters competitive conditions. Id.

at 1364 (citing Clinton v. City of New York, 524 U.S.

417, 433, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998)). In

those circumstances, the government “provides

benefits to an existing competitor or expands the

number of entrants in the petitioner’s market, not an

agency action that is, at most, the first step in the

direction of future competition.” Id. at 1364 (quoting

New World Radio, Inc. v. FCC, 294 F.3d 164, 172

(D.C. Cir. 2002)).

For the competitor standing doctrine to apply, the

government action must change the competitive

landscape by, for example, creating new benefits to

competitors. Put another way, the government action

must alter the status quo of the field of competition.

Here, the Board’s upholding of claims 7–11 of the ’605

patent did not change the competitive landscape for

commercial airplane engines.

See id. (“The

government action is the upholding of specific patent

claims, which do not address prices or introduce new

competitors, but rather give exclusivity rights over

precisely defined product features.”). Therefore, we

see no competitive harm to GE sufficient to establish

standing to appeal.

We similarly reject GE’s economic losses

argument. GE contends that it has been injured by

increased research and development costs sustained

by attempts to design engines that could implicate the

’605 patent and engines that do not implicate the ’605

patent. Yet, GE provides no further details. It fails

to provide an accounting for the additional research

and development costs expended to design around the

’605 patent. It provides no evidence that GE actually

designed a geared-fan engine or that these research

and development costs are tied to a demand by Boeing

for a geared-fan engine. The only evidence that GE

actually designed a geared-fan engine is the engine

that it designed in the 1970s. Any economic loss

deriving from the 1970s engine is not an imminent

injury. See Lujan, 504 U.S. at 560, 112 S.Ct. 2130

(stating that injury in fact must be actual or

imminent). Aside from a broad claim of research and

development expenditures, GE has provided no

evidence that these expenses were caused by the ’605

patent. See id. (requiring “a causal connection

between the injury and the conduct complained of”).

Therefore, GE’s broad claim of economic loss is

insufficient to confer standing.

There is also no evidence that GE is in the process

of designing an engine covered by claims 7–11 of the

’605 patent. Nor has GE demonstrated that it has

definite plans to use the claimed features of the ’605

patent in the airplane engine market. See JTEKT,

898 F.3d at 1221 (holding appellant lacked standing

because it had not established that it had “concrete

plans for future activity that creates a substantial

risk of future infringement”). UTC has not sued or

threatened to sue GE for infringing the ’605 patent.

Appellee Br. 36.

Therefore, GE’s future harm

argument fails.

GE also contends that estoppel under 35 U.S.C.

§ 315(e) creates injury in fact for standing purposes.

We have previously rejected the estoppel argument as

a basis for Article III standing. Where, as here, the

appellant does not currently practice the patent

claims and the injury is speculative, we have held that

the estoppel provision does not amount to an injury in

fact. See, e.g., AVX Corp., 923 F.3d at 1362–63;

Phigenix, 845 F.3d at 1175–76; Consumer Watchdog

v. Wis. Alumni Research Found., 753 F.3d 1258, 1262

(Fed. Cir. 2014). We see no need to reach a different

conclusion on this record.

CONCLUSION

We have considered GE’s remaining arguments

and find them unpersuasive. We hold that GE lacks

Article III standing to appeal the Board’s Final

Written Decision and therefore dismiss the appeal.

DISMISSED

COSTS

No costs.

Hughes, Circuit Judge, concurring.

Because our recent precedent compels holding

that General Electric Company lacks Article III

standing here, I concur in the judgment. I write

separately because I believe that precedent has

developed an overly rigid and narrow standard for

Article III standing in the context of appeals from

inter partes review proceedings.

Our recent decision in AVX Corp. v. Presidio

Components, Inc., 923 F.3d 1357 (Fed. Cir. 2019),

which I believe was incorrectly decided, takes a

patent-specific approach to the doctrine of competitor

standing that is out of step with Supreme Court

precedent. The Court has repeatedly held that

government actions altering the competitive

landscape of a market cause competitors probable

economic injury sufficient for Article III standing.

And I do not believe that a Board decision erroneously

upholding a competitor’s patent in an IPR is

meaningfully different from the type of government

actions held to invoke competitor standing in those

cases. Thus, absent our holding in AVX Corp., I would

conclude that GE possesses Article III standing in

this appeal.

10a

The parties here are direct competitors in the

commercial aircraft turbofan engine market. GE,

both itself and through joint ventures, “designs, tests,

certifies, manufactures, and supplies aircraft

engines” for major airplane manufacturers, or

“airframers,” such as Boeing and Airbus. Decl. of

Alexander E. Long 2 ¶ 3, ECF No. 36. During the

design process, “airframers explain to GE their needs

and requirements for turbofan engines, to enable GE

to provide competitive offerings that will satisfy the

airframers’ requirements.” Suppl. Decl. of Alexander

E. Long 2 ¶ 3, ECF No. 64.

Due to the safety and regulatory requirements of

the turbofan engine market, “designing, developing,

testing, and certifying a new aircraft engine can take

eight to ten years or longer.” Long Decl. 3 ¶ 6. And

“[t]here is enormous up-front investment required.”

Long Decl. 4 ¶ 7. Accordingly, “new aircraft engine

design work necessarily begins years before there is

any commercial sale or offer for sale of the final

engine.” Long Decl. 4 ¶ 8.

According to GE, competition in the aircraft

engine market is fierce, and the market is dominated

by three major players: GE, Universal Technologies

Corporation, and Rolls-Royce. GE petitioned for IPR

of a patent owned by UTC. That patent is directed to

a turbofan engine design – the very type of technology

over which GE and UTC fiercely compete. The Board

decided that GE failed to show that the challenged

claims were unpatentable, and GE appealed that

decision to this Court.

UTC filed a motion to dismiss the appeal, arguing

that GE lacks Article III standing because GE does

11a

not produce or plan to produce an engine that would

infringe its patent. Relying on precedent of both this

Court and the Supreme Court, GE argued that the

Board’s decision to uphold UT’s patent caused GE a

concrete competitive injury sufficient to satisfy

Article III standing.

The sole issue with respect to standing in this case

is whether GE has shown that it has suffered an

injury-in-fact. An injury-in-fact requires a party to

establish “an invasion of a legally protected interest

which is (a) concrete and particularized, and (b)

actual or imminent, not conjectural or hypothetical.”

Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S.Ct.

2130, 119 L.Ed.2d 351 (1992) (internal quotation

marks and citations omitted). This requirement

“ensure[s] that the plaintiffs have a stake in the fight

and will therefore diligently prosecute the case . . .

while, at the same time, ensuring that the claim is not

abstract or conjectural so that resolution by the

judiciary is both manageable and proper.” Canadian

Lumber Trade All. v. United States, 517 F.3d 1319,

1333 (Fed. Cir. 2008) (internal quotation marks

omitted); see also Massachusetts v. E.P.A., 549 U.S.

497, 517, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) (“At

bottom, ‘the gist of the question of standing’ is

whether petitioners have ‘such a personal stake in the

outcome of the controversy as to assure that concrete

adverseness which sharpens the presentation of

issues upon which the court so largely depends for

illumination.’ ” (quoting Baker v. Carr, 369 U.S. 186,

204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962))). But

“[i]njury-in-fact is not Mount Everest.” Canadian

Lumber, 517 F.3d at 1333 (quoting Danvers Motor Co.

12a

v. Ford Motor Co., 432 F.3d 286, 294 (3d Cir. 2005));

accord Bowman v. Wilson, 672 F.2d 1145, 1151 (3d

Cir. 1982) (“The contours of the injury-in-fact

requirement, while not precisely defined, are very

generous.”).

Many of our recent cases dealing with injury-infact in IPR appeals have focused on the

appellant/petitioner’s likelihood of facing a future

infringement suit. See JTEKT Corp. v. GKN Auto.

LTD., 898 F.3d 1217, 1220 (Fed. Cir. 2018) (noting

that “typically in order to demonstrate the requisite

injury in an IPR appeal, the appellant/petitioner must

show that it is engaged or will likely engage ‘in an[ ]

activity that would give rise to a possible

infringement suit,’ . . . or has contractual rights that

are affected by a determination of patent validity”

(quoting Consumer Watchdog v. Wis. Alumni

Research Found., 753 F.3d 1258, 1262 (Fed. Cir.

2014))); see also Momenta Pharm., Inc. v. BristolMyers Squibb Co., 915 F.3d 764, 769–70 (Fed. Cir.

2019) (holding that an IPR petitioner lacked standing

because it had abandoned its plans for developing a

potentially infringing product, so it no longer faced a

potential infringement suit); E.I. Dupont de Nemours

& Co. v. Synvina C.V., 904 F.3d 996, 1004 (Fed. Cir.

2018) (holding that an IPR petitioner had suffered an

injury in fact because it “currently operates a plant

capable of infringing” the challenged patent);

Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168,

1173–74 (Fed. Cir. 2017) (noting that appellant “does

not contend that it faces risk of infringing the

[challenged] patent, that it is an actual or prospective

licensee of the patent, or that it otherwise plans to

take any action that would implicate the patent”);

Consumer Watchdog, 753 F.3d at 1262 (noting that

13a

the appellant/petitioner “is not engaged in any

activity that would give rise to a possible

infringement suit”). But these cases do not suggest

that the only means for an IPR petitioner to establish

injury-in-fact is to show a reasonable likelihood of an

imminent infringement suit. Such a reading would

conflate the injury-in-fact analysis with the

“reasonable apprehension of imminent suit” test for

declaratory judgment jurisdiction, which the

Supreme Court overruled. See MedImmune, Inc. v.

Genentech, Inc., 549 U.S. 118, 132 n. 11, 127 S.Ct. 764,

166 L.Ed.2d 604 (2007) (noting that the “reasonable

apprehension of suit” test conflicts with Supreme

Court precedent); see also ABB Inc. v. Cooper Indus.,

LLC, 635 F.3d 1345, 1348 (Fed. Cir. 2011)

(recognizing

that

MedImmune

rejected

the

requirement of a “reasonable apprehension of

imminent suit” to establish declaratory judgment

jurisdiction).

The risk of a future infringement suit is not the

only way an IPR petitioner can show injury-in-fact.

“The [Supreme Court] routinely recognizes probable

economic injury resulting from [government actions]

that alter competitive conditions as sufficient to

satisfy the [Article III injury-in-fact requirement].” 3

K. Davis & R. Pierce, Administrative Law Treatise

13–14 (3d ed. 1994); see also Clinton v. City of New

York, 524 U.S. 417, 433, 118 S.Ct. 2091, 141 L.Ed.2d

393 (1998) (citing David & Pierce, supra, at 13–14).

This Court’s recent decision in AVX Corp. addressed

the competitor standing doctrine in IPR appeals. We

held that a patent could cause an IPR petitioner

competitive harm if the petitioner “was currently

using the claimed features [of the challenged patent]

or nonspeculatively planning to do so in competition.”

14a

AVX Corp., 923 F.3d at 1365. But if the petitioner is

not currently engaged in infringing activity and has

no concrete plans to do so in the imminent future, we

held that the Board’s decision to uphold a challenged

patent does not invoke the competitor standing

doctrine. Id.

Thus, even when the parties are direct

competitors, our cases require an unsuccessful IPR

appellant/petitioner to show concrete current or

future plans to infringe the challenged patent. I do

not believe that Article III requires such a showing,

particularly where Congress has provided IPR

petitioners a procedural right of appeal. See 35 U.S.C.

§ 141; see also Consumer Watchdog, 753 F.3d at 1261

(recognizing that “where Congress has accorded a

procedural right to a litigant, such as the right to

appeal

administrative

decision,

certain

requirements of standing—namely immediacy and

redressability, as well as prudential aspects that are

not part of Article III—may be relaxed”).

AVX Corp. found that the “government action at

issue [in IPR] is quite different” from the government

action in other cases applying competitor standing.

AVX Corp., 923 F.3d at 1365. According to AVX Corp.,

the “feature-specific exclusivity right [of a patent]

does not, by the operation of ordinary economic forces,

naturally harm a firm just because it is a competitor

in the same market as the beneficiary of the

government action (the patentee).” Id. This analysis

sets patents apart from other applications of

competitor standing on the basis that a patent’s

exclusivity right is different than other interests. The

Supreme Court, however, has made clear that

“[p]atent law is governed by the same common-law

principles, methods of statutory interpretation, and

15a

procedural rules as other areas of civil litigation.”

SCA Hygiene Prods. Aktiebolag v. First Quality Baby

Prods., LLC, ––– U.S. ––––, 137 S. Ct. 954, 964, 197

L.Ed.2d 292 (2017) (internal quotation marks

omitted).

Our patent-specific treatment of competitor

standing is out of step with its application in other

areas. The Supreme Court has repeatedly found

standing where government action subjects the

plaintiff to increased competition because of the

probable economic injury that accompanies it. See

Clinton, 524 U.S. at 433, 118 S.Ct. 2091; Ass’n of Data

Processing Serv. Orgs., Inc., 397 U.S. 150, 152, 90

S.Ct. 827, 25 L.Ed.2d 184 (1970); Inv. Co. Inst. v.

Camp, 401 U.S. 617, 620, 91 S.Ct. 1091, 28 L.Ed.2d

367 (1971); accord Canadian Lumber, 517 F.3d at

1334; La. Energy & Power Auth. v. FERC, 141 F.3d

364, 367 (D.C. Cir. 1998). In Data Processing, for

example, the petitioners – organizations who sold

data processing services to businesses – challenged a

ruling by the Comptroller of Currency that allowed

national banks to provide data processing services to

other banks and bank customers. 397 U.S. at 151, 90

S.Ct. 827.

The Supreme Court held that the

Comptroller’s ruling caused petitioners an injury-infact because the resulting increase in competition

would likely cause petitioners future economic harm.

Id. at 152, 90 S.Ct. 827. Similarly, in Clinton the

Supreme Court held that a farmers’ cooperative

suffered a concrete injury when the president

cancelled a tax benefit enacted to facilitate the

purchase of processing plants by such cooperatives.

524 U.S. at 432, 118 S.Ct. 2091. The Court found that

“[b]y depriving [the cooperative] of their statutory

bargaining chip, the cancellation inflicted a sufficient

16a

likelihood of economic injury to establish standing

under our precedents.” Id.

In both Data Processing and Clinton, the

government action subjected the challenger to

increased competition. The exclusionary right of a

patent, however, allows the patent owner to exclude

others from competing in its market. But like an

action that increases competition, government action

that excludes an appellant from effectively competing

in a market, such as erroneously upholding its

competitor’s patent, provides a benefit to the

competitor and causes competitive harm to the

appellant that presumptively leads to economic

injury. See Canadian Lumber, 517 F.3d at 1332

(noting that competitor standing “relies on economic

logic to conclude that a plaintiff will likely suffer an

injury-in-fact when the government acts in a way that

increases competition or aids the plaintiff’s

competitors” (emphasis added)). Thus, I do not believe

there is any sound basis for AVX Corp.’s patentspecific treatment of the competitor standing

doctrine.

The facts of this case further demonstrate why

AVX Corp.’s patent-specific approach is incorrect. GE

and UTC are direct competitors in a fiercely

competitive market that requires significant up-front

investment years before any profits can be realized.

During the engine design process, “airframers explain

to GE their needs and requirements for turbofan

engines, to enable GE to provide competitive offerings

that will satisfy the airframers’ requirements.” Long

Suppl. Decl. at 2 ¶ 3. According to GE, one such airframer specifically requested that GE research an

engine design that would implicate UTC’s patent.

But at least until that patent expires, GE cannot

17a

design and produce such an engine without risking

infringement.

Thus, UTC’s patent effectively

precludes GE from meeting its customer’s design

needs without spending additional resources to

design around the patent.1 I fail to see how this costly

competitive burden does not constitute a “concrete

and particularized” harm to GE. See Lujan, 504 U.S.

at 560, 112 S.Ct. 2130. And GE certainly has a

“personal stake in the outcome of th[is] controversy,”

which concerns the validity of a patent owned by its

direct competitor covering technology over which the

parties compete. E.P.A., 549 U.S. at 517, 127 S.Ct.

1438 (internal quotation marks omitted)

Finally, as the majority correctly notes, we have

repeatedly held that the estoppel provisions of 35

U.S.C. § 315(e), standing alone, do not create an

injury. Maj. Op. 1354–55. But the effects of that

estoppel have especially significant impact where the

parties are direct competitors.

Unlike the

appellant/petitioners in Consumer Watchdog or

Phigenix, who did not manufacture or sell products in

the market involving the patented technology, see

Consumer Watchdog, 753 F.3d at 1260; Phigenix, 845

F.3d at 1171, GE is one of three major actors in the

turbofan engine market. Although we have not

In Biotechnology Industry Organization v. District of

Columbia, we found that “[w]hether the Act is enforced or not,”

pharmaceutical manufacturers challenging a statute that

penalized selling prescription drugs at “excessive price[s]” could

demonstrate injury-in-fact due to the “actual administrative

costs” they would necessarily incur in complying with the

statute. 496 F.3d 1362, 1370–71 (Fed. Cir. 2007). Those “actual

administrative costs” are analogous to the increased research

and design costs that GE has allegedly suffered due to UTC’s

patent.

18a

decided whether § 315(e) would estop an IPR

petitioner who lacked standing to appeal an

unfavorable Board decision, see AVX Corp., 923 F.3d

at 1363, until we do, UTC’s patent is an even greater

competitive deterrent for GE. GE faces uncertainty

as to whether it is estopped from raising an invalidity

defense on any ground “that [it] raised or reasonably

could have raised during” its IPR. See § 315(e)(2).

This uncertainty makes facing potential infringement

litigation significantly more impactful on GE’s future

design choices. Thus, while I agree that 35 U.S.C.

§ 315(e) estoppel alone does not create an injury-infact, its potential effects in this case underscore the

problems with our increasingly narrow approach to

Article III standing.

Absent AVX Corp., which I believe was incorrectly

decided, I would conclude that GE has established

Article III standing to appeal the Board’s adverse

decision. Because I am bound by that precedent,

however, I respectfully concur only in the judgment.

19a

Trials@uspto.gov

571-272-7822

Paper 42

Entered: June 26, 2017

UNITED STATES PATENT AND TRADEMARK

OFFICE

BEFORE THE PATENT TRIAL

AND APPEAL BOARD

GENERAL ELECTRIC COMPANY,

Petitioner,

UNITED TECHNOLOGIES CORPORATION,

Patent Owner.

Case IPR2016-00531

Patent 8,511,605 B2

Before HYUN J. JUNG, SCOTT A. DANIELS and

GEORGE R. HOSKINS, Administrative Patent

Judges.

DANIELS, Administrative Patent Judge.

FINAL WRITTEN DECISION

35 U.S.C. § 318(a) and 37 C.F.R. § 42.73

DANIELS, Administrative Patent Judge.

I. INTRODUCTION

A. Background

General Electric Company (“Petitioner” or “GE”)

filed a Petition requesting inter partes review of

claims 1, 2, and 7–11 of U.S. Patent No. 8,511,605 B2

(Ex. 1001, “the ’605 patent”). Paper 1 (“Pet.”). GE’s

20a

Petition is supported by declarations from Dr. Reza

Abhari (Ex. 1003, “Abhari Declaration,” and Ex. 1036,

“Abhari Reply Declaration”).

Pet. 4.

United

Technologies Corp. (“Patent Owner” or “UTC”) filed a

Preliminary Response. Paper 6 (“Prelim. Resp.”). On

June 30, 2016, the Board instituted a trial,

determining that GE had shown a reasonable

likelihood of prevailing on at least one of the

challenged claims of the ’605 patent. Paper 7 (“Inst.

Dec.”) 2.

After institution of trial, UTC filed a Patent

Owner Response, along with declarations by Dr. Jack

Mattingly (Ex. 2009, “Mattingly Declaration”) and

Mr. Paul Duesler (Ex. 2022, “Duesler Declaration”).

Paper 15 (“PO Resp.”). GE entered subsequently a

Reply (Paper 24, “Pet. Reply”).

In a motion

authorized by the Board, UTC also moves to strike

certain portions of the Abhari Reply Declaration and

GE’s Reply. Paper 30. GE provided a rebuttal to

UTC’s motion. Paper 34.

Notably, UTC disclaimed claims 1 and 2 of the ’605

patent leaving only claims 7–11 at issue in this

proceeding. PO Resp. 5.1

A hearing for IPR2016-00531 was held on May 4,

2017. The transcript of the hearing has been entered

into the record. Paper 41 (“Tr.”).

We have jurisdiction under 35 U.S.C. § 6(c). This

final written decision is issued pursuant to 35 U.S.C.

§ 318(a).

1 UTC filed a Disclaimer under 37 C.F.R. 1.321 of claims

1–6 and 12–14 in the ’605 patent with the USPTO on October 14,

2016. For completeness of the record, we enter the Disclaimer

as Exhibit 3001.

21a

GE has not shown by a preponderance of the

evidence that claims 7–11 of the ’605 patent are

unpatentable, and UTC’s motion to strike is denied.

B. Additional Proceedings

In addition to this petition, GE has filed a petition

challenging the patentability of claims 1–6 and 12–16

of the ’605 patent. See IPR2016–00533. GE indicates

that they are unaware of any litigation involving the

’605 patent. Pet. 1; see also Paper 5, 2 (Patent Owner

indicating the same).

C. The ’605 Patent

The ’605 patent issued August 20, 2013 from an

application filed May 31, 2012, and claims priority as

a continuation-in-part from application No.

12/131,876, filed June 2, 2008, now U.S. Pat. No.

8,128,021. Ex. 1001, cover page. The ’605 patent is

titled “Gas Turbine Engine With Low Stage Count

Low Pressure Turbine.” Id. at 1:1–2. Figure 1A,

reproduced below, illustrates the invention:

Figure 1A depicts a partial fragmentary schematic

view of gas turbofan engine 10 suspended from engine

pylon 12. Id. at 3:32–34. Turbofan 10 includes fan

section 20 within fan nacelle F and a core engine

22a

within core nacelle C. Id. at 3:36–39, Fig. 1A. In

operation, airflow enters fan nacelle F, which at least

partially surrounds core nacelle C. Id. at 3:66–67.

The fan passes air both into the core engine (core air

flow) and around the core engine (bypass air flow). Id.

The bypass air flow provides a certain amount of the

engine thrust as does the core engine, and the low

pressure turbine in the core drives the fan. See id. at

4:2–12, 4:42–43.

In one described embodiment relevant to the

remaining ground in this proceeding, a Variable Area

Fan Nozzle, (“VAFN”), varies the fan nozzle exit area

in order to adjust the pressure ratio of the fan bypass

airflow.

Id. at 4:31–34.

We note the VAFN

mechanism is not, apparently, depicted in any of the

figures in the ’605 patent. See Ex. 1001, Figs. 1–5,

and see Tr. 5:2. According to the ’605 patent, the

VAFN’s ability to selectively adjust the pressure ratio

of the bypass air flow, “allows the engine to change to

a more favorable fan operating line at low power,

avoiding the instability region, and still provide the

relatively smaller nozzle area necessary to obtain a

high-efficiency fan operating line at cruise.” Id. at

4:37–41.

D. Illustrative Claims

The remaining challenged claims are claims 7–11.

Claims 1 and 7 illustrate the claimed subject matter

and are reproduced below:

1. A gas turbine engine comprising:

a gear train defined along an engine centerline axis;

a spool along said engine centerline axis which

drives said gear train, said spool includes a low

stage count low pressure turbine

a fan rotatable at a fan speed about the centerline

23a

axis and driven by the low pressure turbine

through the gear train, wherein the fan speed is

less than a speed of the low pressure turbine;

a core surrounded by a core nacelle defined about

the engine centerline axis;

a fan nacelle mounted at least partially around said

core nacelle to define a fan bypass airflow path

for a fan bypass airflow, wherein a bypass ratio

defined by the fan bypass passage airflow

divided by airflow through the core is greater

than about ten (10).

7. The engine as recited in claim 1, further

comprising:

a fan variable area nozzle axially movable relative

said fan nacelle to vary a fan nozzle exit area and

adjust the fan pressure ratio of the fan bypass

airflow during engine operation.

Ex. 1001, 7:43–8:7, 8:19–23 (emphasis added).

Claims 8–11 depend directly or indirectly from claim

E. The Alleged Ground of Unpatentability

GE contends that the challenged claims are

unpatentable on the following specific ground.2

References

Basis

Claims Challenged

Willis3 and

Duesler4

§ 103

7–11

GE supports its challenge with the Abhari Declarations

(Exs. 1003, 1036). See infra.

William S. Willis, Quiet Clean Short-Haul Experimental

Engine (QCSEE) Final Report (Aug. 1979) (Ex. 1011).

US 5,778,659 (July 14, 1998) (Ex. 1006 or Duesler ’659).

24a

II. CLAIM CONSTRUCTION

UTC asserts no construction for any claim terms.

See PO Resp. Although GE proposed constructions for

a number of claim terms in its Petition (Pet. 12–22),

neither party disputes our initial determination that

no claim term requires construction. See Inst. Dec. 5,

and see Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc.,

200 F.3d 795, 803 (Fed. Cir. 1999) (only those terms

which are in controversy need to be construed, and

only to the extent necessary to resolve the

controversy).

III. ANALYSIS

A. Claims 7–11 — Alleged

Willis and Duesler

obviousness

over

GE asserts that claims 7–11 would have been

obvious over Willis and Duesler. Pet. 31–43. A patent

is invalid for obviousness:

if the differences between the subject matter

sought to be patented and the prior art are

such that the subject matter as a whole would

have been obvious at the time the invention

was made to a person having ordinary skill in

the art to which said subject matter pertains.

35 U.S.C. § 103. Obviousness is a question of law

based on underlying factual findings: (1) the scope

and content of the prior art; (2) the differences

between the claims and the prior art; (3) the level of

ordinary skill in the art; and (4) objective indicia of

nonobviousness. See Graham v. John Deere Co. of

Kansas City, 383 U.S. 1, 17–18 (1966). We must

consider all four Graham factors prior to reaching a

conclusion regarding obviousness. See Eurand, Inc.

v. Mylan Pharms., Inc. (In re Cyclobenzaprine

25a

Hydrochloride Extended-Release Capsule Patent

Litig.), 676 F.3d 1063, 1076–77 (Fed. Cir. 2012). As

the party challenging the patentability of the claims

at issue, GE bears the burden of proving obviousness

by a preponderance of the evidence. See 35 U.S.C.

§ 316(e).

B. Scope and Content of the Prior Art

1. Willis

Willis,

titled

“Quiet

Clean

Short-Haul

Experimental Engine,” describes “the design,

fabrication, and testing of turbofan propulsion

systems for two short-haul transport aircraft and

delivery of these systems to NASA for further

testing.” Ex. 1011, 019. The developed engines use

low-pressure ratio fans at lower fan tip speeds, and

also include “[a] variable-area fan-exhaust nozzle [ ]

necessary to keep the fan pressure ratio from

dropping too low at cruise.” Id. at 026. Figure 8

depicts the Under-the-Wing (UTW) version of Willis’

turbofan engine, Figure 8 is reproduced below:

26a

As depicted in Figure 8 the UTW engine comprises

a fan with variable pitch composite blades, a twostage power turbine driving a star-type, epicyclic

main reduction gear, which in turn drives the fan,

and, a variable area fan nozzle. Id. at 032–033. Willis

depicts a radially hinged flap acting as a VAFN,

labeled “Variable Area Composite Fan Nozzle,” in

Figure 8, above. Willis explains that in Figure 8 “[t]he

fan nozzle is shown in the cruise position. It opens

part way for takeoff and approach and further for

reverse, where it functions as an inlet.” Id. at 032.

2. Duesler ’659

Duesler ’659 describes a variable area fan exhaust

nozzle for an aircraft gas turbine engine. Ex. 1006,

1:12–20. An annotated version of Figure 2 depicts the

downstream portion of outer nacelle 20 with

translating sleeve 38, which we highlight in yellow,

Figure 2 annotated is reproduced below:

27a

Figure 2, as annotated above, depicts downstream

portion 24 of outer nacelle 20 including fixed

geometry fan exhaust nozzle translating sleeve 38

disposed in a stowed position. Id. at 4:22–26, 49–51.

The sleeve is translatable between the stowed

position and a deployed position, illustrated below, in

Figure 3. Id. at 4:52–55.

Figure 3 depicts fan exhaust nozzle translating

sleeve 38, highlighted in yellow, disposed in a

28a

deployed position. Id. As shown by comparing

reference numbers 30 and 30′ in Figure 3, aftward

movement of the sleeve causes an increase in the

throat area while forward movement causes a

decrease in the throat area. Id. at 4:58–61. This

movement between the stowed and deployed positions

is the exclusive means for varying the throat area and

the quantity of forward thrust from gases discharged

from the duct. Id. at 4:55–58.

C. Differences

Between

the

Prior

Art

and the Claimed Invention

Claim 1

Claim 7 depends directly from claim 1, and by its

dependency, includes all the limitations of claim 1.

See Ex. 1001, 7:43–8:7, 8:19–23. GE argues that

Willis anticipates and discloses each limitation in

claim 1. Pet. 24–31. UTC has now disclaimed claim

1. PO Resp. 5. We were persuaded in our Decision to

Institute that GE “demonstrated a reasonable

likelihood of prevailing at trial on its challenge of

claims 1 and 2 as anticipated by Willis.” Inst. Dec. 7.

UTC presents no arguments in its Response

contradicting GE’s assertions of anticipation or

refuting the Board’s anticipation analysis in our

Decision to Institute with respect to claim 1.

We adopt GE’s contentions as our findings with

regard to anticipation of the challenged independent

claim 1 because, upon review of the full record in this

proceeding, the cited portions of Willis reasonably

support GE’s assertions that the elements of claim 1

are known and explicitly shown by Willis. See Pet.

24–31 (citing Exs. 1003 ¶ 64–72; 1011, .024, .026,

.032, .034, .088, .092, .135).

29a

Claim 7

To meet the “fan variable area nozzle axially

moveable” limitation recited in claim 7, GE relies on

Duesler’s translating sleeve 38 in combination with

Willis. Pet. 31–37. GE contends that “Duesler

discloses a variable area fan nozzle that varies the

nozzle exit area with an axially movable sleeve.” Pet.

32–33 (citing Ex. 1006, 2:48–58; Ex. 1003 at ¶ 75). GE

asserts that a person of ordinary skill in the art would

have known about different structures for varying the

fan nozzle exit area and that “a variable area fan

nozzle could include a plurality of flaps actuated in

the radial direction, or a sleeve that is actuated in the

axial direction.” Id. at 33 (emphasis added) (citing Ex.

1006, Ex. 1008).

Relying on its declarant, Dr. Abhari, a Professor of

Aerothermodynamics and the Director of the

Laboratory for Energy Conversion in Zurich,

Switzerland, GE argues that substituting translating

sleeve 38 of Duesler, for the flaps in Willis is just a

design choice, and, “simply the application of a known

structure to achieve a predictable result (adjusting

the nozzle exit area).” Id. at 33 (citing Ex. 1003 ¶ 77).

Dr. Abhari opines that one of ordinary skill in the art

understands that the hinging flap structure in Willis

is interchangeable with sleeve 38 from Duesler to

serve the same purpose, i.e. varying the fan nozzle

exit area. Ex. 1003 ¶ 77 (“The radially moveable flaps

and axially moveable sleeve are both known

structures used for the same purpose—varying the

fan nozzle exit area.”). Dr. Abhari states for example

that hinged flaps “can be advantageous for military

applications (e.g., fighter jets) that require optimal

performance and maneuverability.” Id. ¶ 78 (citing

Ex. 1014, .100–.101). On the other hand, by using a

30a

translating sleeve “airflow leakage is minimized

because the nozzle is comprised of only a few

components and therefore has a relatively continuous

inner surface.” Id. (citing Ex. 1006, 3:21–25). Size,

weight, and cost are other factors noted by Dr. Abhari

for choosing one structure over the other. Id.

UTC disagrees with Dr. Abhari’s assertion that

substituting Duesler’s translating sleeve 38 for

Willis’s radially moveable flaps is simply a matter of

“design choice.” PO Resp. 28. UTC points out that

the primary objective of the Willis engine was

specifically to have a high reverse-thrust for very

short runways. See id. at 29 (“creating an engine

capable of effective reverse thrust and very low noise

was Willis’s intended purpose and principle of

operation”).

UTC argues that the “proposed

substitution would change the principles under which

the Willis engine was designed to operate and render

the engine unsuitable for its intended purpose.” Id.

at 30 (citing Plas-Pak Indus., Inc. v. Sulzer Mixpac

AG, 600 F. App’x 755, 758 (Fed. Cir. 2015)).

Specifically, UTC argues that “Duesler’s

translating-sleeve nozzle can only serve effectively as

an exhaust and not an inlet, so it could never meet the

reverse-thrust requirements that are central to

Willis’s mission.” Id. at 2–3. In support of this

position UTC provides testimony from Dr. Jack D.

Mattingly, Professor Emeritus of Mechanical

Engineering at Seattle University College of Science

and Engineering. Ex. 2009 ¶ 3. Also, UTC presents

testimony from Paul W. Duesler, the first named

inventor of the Duesler ’659 patent. See Ex. 2022; see

also Ex. 1006, “Cover Page.” Based on Dr. Mattingly’s

testimony, UTC alleges that one of ordinary skill in

the art would not combine Duesler with Willis

31a

because Duesler “would render Willis’s engine

inoperable for its intended purpose.” PO Resp. 29.

Specifically, UTC contends that using Duesler’s

sleeve

would

make

Willis’s

reverse-thrust

“performance worse” and the engine “too loud” for

Willis’s stated noise design requirements. Id. at 35–

36.

We agree with GE that Duesler’s translating

sleeve 38, and the pivoting flaps used in the Willis

engine, accomplish at least one common task, that

is—varying the fan outlet area. Compare Ex. 1006,

2:66–3:1 with Ex. 1011, .032 (Willis’s “[fan nozzle]

opens part way for takeoff and approach and further

for reverse, where it functions as an inlet.”). Both Dr.

Abhari and Dr. Mattingly provide testimony

supporting the determination that Duesler and Willis

both disclose a variable area fan nozzle (VAFN).

Compare Ex. 1003 ¶¶ 75–77 with Ex. 2009 ¶¶ 51, 65.

The question addressed below is whether one of

ordinary skill in the art would have, as a matter of

design choice and given that both structures vary the

fan outlet (exhaust) area of a turbofan engine,

substituted Duesler’s axially translating sleeve nozzle

configuration for the radially hinged VAFN structure

in Willis?

D. The Level of Ordinary Skill in the Art

GE’s declarant, Dr. Abhari, testifies that a person

of ordinary skill in the art “would include someone

who has a M.S. degree in in Mechanical Engineering

or Aerospace Engineering as well as at least 3–5 years

of experience in the field of gas turbine engine design

and analysis.” Ex. 1003 ¶ 4. Disagreeing with Dr.

Abhari’s opinion as to the years of experience one of

32a

ordinary skill would have in this field, Dr. Mattingly

states that:

a person of ordinary skill in this art would have

. . . at least ten years of work experience or

equivalent study in the design of gas turbine

engines for aircraft. Persons of ordinary skill

in the art typically have worked as component

designers, gained familiarity with engine

components, and then been promoted to

system-level design responsibilities.

Ex. 2009 ¶ 40.

The difference in opinion between declarants fails

mainly to settle on a time frame, i.e. years of

experience, in aircraft gas turbine engine design, that

a person of ordinary skill in the art would generally

have. These positions, however, are not as far afield

as they might seem. We recognize from Dr. Abhari’s

and Dr. Mattingly’s testimony that gas turbine

aircraft engines and their operating conditions are

functionally and structurally complex. See Ex. 1003

¶¶ 21, 53, 55, 60; Ex. 2009 ¶ 38. From the testimony

of both declarants we understand that a person of

skill in the art of aircraft turbine design is not a newly

minted mechanical or aeronautical engineer fresh

from undergraduate, or even graduate studies,

without a number of years of work experience in the

field of aircraft engine design. See Ex. 1003 ¶ 4, and

see Ex. 2009 ¶ 40. Our review of the prior art in

conjunction with the declarants’ testimony informs us

of the complexity of the structural and functional

aspects of aircraft engine design and indicates that

the level of ordinary skill in the art of aircraft

turbofan engine design is fairly high, requiring

significant time working in the field. We reconcile the

33a

declarants’ inconsistent statements as to years of

work experience by determining that a person of

ordinary skill in the art of gas turbine engines for

aircraft would have a professional background that

includes at least an M.S. degree in mechanical or

aeronautical engineering and, along with whatever

additional engineering background knowledge and

skill set they possess, at least 5–10 years of work and

study experience in design and analysis of aircraft gas

turbine engines. We point out that regardless of the

difference in years of experience asserted by the

declarants, our ultimate findings and conclusions

would be the same under either definition.

E. Secondary

Considerations

Non–

Obviousness

Evidence of secondary considerations of nonobviousness, when present, must always be

considered en route to a determination of

obviousness. See Cyclobenzaprine, 676 F.3d at 1075–

76. However, the absence of secondary considerations

is a neutral factor. See Custom Acc., Inc., v. Jeffrey–

Allan Indus., Inc., 807 F.2d 955, 960 (Fed. Cir. 1986).

Neither party introduced evidence on secondary

considerations of nonobviousness. Consequently, we

will focus our attention on the first three Graham

factors.

F. Whether the Prior Art Could Have Been

Combined and/or Substituted to Achieve the

Claimed Invention

The Supreme Court instructs us to take an

expansive and flexible approach in determining

whether a patented invention was obvious at the time

it was made. See KSR Int’l Co. v. Teleflex Inc., 550

U.S. 398, 415 (2007). Where “a patent claims a

34a

structure already known in the prior art that is

altered by the mere substitution of one element for

another known in the field, the combination must do

more than yield predictable results.” Id. at 416. It is

well settled, however, that prior art combinations

cannot change the “basic principles under which the

[prior art] was designed to operate.” In re Ratti, 270

F.2d 810, 813 (1959). Also, a combination that

renders prior art “‘inoperable for its intended

purpose,’ may fail to support a conclusion of

obviousness.” Plas-Pak Indus., Inc. v. Sulzer Mixpac

AG, 600 F. App’x 755, 757–58 (Fed. Cir. 2015) (citing

In re Gordon, 733 F.2d 900, 902 (Fed. Cir. 1984)).

UTC argues that the proposed combination

changes the principle of operation of Willis’s engine,

and would make Willis’s engine inoperable for its

intended purpose by having decreased reverse-thrust

capability that could not stop an aircraft on a short

runway, and that it would also make the engine

noisier. PO Resp. 30. Alleging that the Willis engine

would, thus, become unsuitable for its intended

purpose of powering “a fleet of new aircraft that would

operate from smaller airports close to city centers,”

(Ex. 1011, .024) UTC asserts that a person of ordinary

skill in the art of gas turbine aircraft engine design

would not simply substitute Duesler’s translating

sleeve for Willis’s pivoting flap design. Id.

The stated objective of the Willis engine

development program was “to develop the technology

needed to meet the stringent noise, exhaust

emissions, performance, weight, and transient thrustresponse requirements of future short-haul aircraft”

so aircraft could land in smaller airports closer to

population centers. Ex. 1011, .019, .024. These

objectives were based on

35a

major problems facing the air transport

industry in the early 1970’s [including] noise

and airport congestion. Noise had forced the

closing of certain runways, the imposition of

curfews at some airports, and the use of

special flight restrictions . . . . The congestion

problem was manifested by traffic and

parking problems, baggage-handling delays,

and (especially in bad weather) long delays in

departures and arrivals due to congested air

space.

Id. at .024. To develop a feasible engine for “shorthaul” aircraft that could land on a very short runway

in smaller airports, Willis discloses an engine having

a variable pitch fan, that is—a fan that is arranged in

a pitch angle producing forward thrust, and then

moved, i.e. closed, to a pitch angle producing reversethrust through the engine. See id. at .043 (“During

closure, the normal forward flow drops smoothly to

zero, then reverse flow is gradually established.”). To

adequately stop an aircraft, Willis required a

combination airflow and pressure ratio across the fan

to meet the reverse-thrust objective of 35% of the

forward-thrust. Id. at .049.

Additionally, as depicted in Willis’s Figure 3

another goal was to keep the noise level below a

certain level because smaller airports accommodating

such short-haul aircraft were closer to busier

population centers. Id. at .024–.025.

Willis Figure 3 is reproduced below:

36a

Figure 3 from Willis illustrates graphically fan

pressure ratio as a function of noise level, and a

desired total system noise goal. Id. at .025.

Based on these goals, the structural and functional

design requirements for Willis’s short-haul engine are

quite specific as shown listed, below, in Willis’s Table

III.

Ex. 1011, .034.

37a

A cross-section of Willis’s Under-the-wing (“UTW”)

engine as designed based on the stated objectives and

requirements is shown, below, in Figure 8 reproduced

from Willis.

Ex. 1011, .033. Willis discloses in Figure 8 an inlet as

depicted and labeled on the left side of the figure, and

a nozzle defined between the pivoting flaps and the

core on the right side of the figure. In the forwardthrust state, the airflow through the fan enters the

inlet and emanates from the nozzle. Id. at .032. In

the reverse-thrust state, the airflow is reversed to

help brake the aircraft upon landing, with the air

entering the engine through the nozzle and exiting

from the engine inlet. Id. Willis’s nozzle flaps pivot

about a connection between the base of the flap and

the outer nacelle to vary the fan nozzle area. Id. at

.134, Fig. 74. Figure 8 illustrates the flaps in a cruise

position, and in the image of Figure 74 the flaps are

shown, open, in a reverse-thrust position. Id. at .032–

033, .128, .134. Figure 74 is reproduced below:

38a

In the reverse-thrust position shown in Figure 74

Willis’s flaps are open, showing how the nozzle

structure now acts as an inlet when the variable pitch

fan blades are altered to produce a reverse airflow

through the engine and hence, reverse-thrust. Ex.

1011, 32, 34–35, 134; Ex. 2009 ¶ 60.

UTC’s declarant, Dr. Mattingly, testifies that

pivoting flaps “have the ability to open wider than the

fan nacelle itself, enabling Willis to draw in the

necessary airflow to produce sufficient reverse

thrust.” Ex. 2009 ¶ 60. Dr. Mattingly explains that

the flap structure is important “because most of the

airflow does not enter the nozzle in a straight or linear

direction, but rather it approaches at a steep angle.”

Id. ¶ 61. Dr. Mattingly provides an annotated Figure

from his own textbook, illustrating this steep angle,

defined by air having a Mach number close to 0. Id.

Dr. Mattingly explains that based on such airflow and

flap structure “a person of ordinary skill in the art

would recognize that the thrust reverser of Willis’s

39a

UTW engine is an effective design for generating the

large amount of reverse thrust (e.g., 35% of max

forward thrust) needed to stop quickly on a short-haul

runway (2000 feet).” Id. ¶ 62. Dr. Mattingly explains

further that Duesler’s translating sleeve nozzle does

not function as an inlet and “the engine would not be

able to draw air in over the sharp, axial-direction

trailing edge 32 of the sleeve 38.” Id. ¶ 72.

Hypothesizing that Duesler’s sleeve could act as

an inlet, Dr. Mattingly offers a summary of inlet area

geometry and air flow comparison calculations

between Willis’s and Duesler’s nozzles, asserting that

Duesler’s nozzle has a 28–37% higher inlet drag, i.e.

loss of reverse-thrust, compared to Willis’s nozzle. Id.

¶¶ 90–94. Based on his calculations of reverse-thrust

loss in Duesler, Dr. Mattingly states

A person of ordinary skill in the art would view

this as especially critical to Willis’s short-haul

goal for an “effective thrust reverser (GE–

1011.026) that could produce up to 35% of its

forward thrust in reverse (GE–1011.301) and . . .

would not view the Willis-Duesler combination

as an effective thrust reverser.

Id. ¶ 95.

Dr. Mattingly testifies further that Duesler’s

translating sleeve would exceed the noise

requirements for Willis’s engine of “100 dB at a 500foot sideline for maximum reverse thrust” Id. ¶ 95

(citing Ex. 1011, 19). Dr. Mattingly states that

[a] person of ordinary skill in the art would

recognize that attempting to draw in a large

amount of air over Duesler’s sharp, trailing edge

32 at maximum [reverse] thrust on the UTW

engine would generate noise well above Willis’s

40a

intensity limit.

This would have been

unacceptable in the congested areas where

Willis’s short-haul airports are located.

Id. ¶ 96.

In response, GE points out that its obviousness

analysis rests simply on the substitution of Duesler’s

translating sleeve for Willis’s flaps.5 See Pet. Reply 4.

GE relies mainly on the testimony of Dr. Abhari that

both types of variable area nozzles were known in the

art at the time of filing of the ’605 patent. Pet. 33

(citing Exs. 1006, 1008); Pet. Reply 6 (citing Ex. 1003

¶ 77; Ex. 2019, 112 at 399:7–14, 128 at 415:5–17). GE

points out that Dr. Mattingly was unable to rebut Dr.

Abhari’s testimony that axially moveable variable

area fan nozzles were known in the art. Pet. Reply 7–

GE argues also that Dr. Abhari provided sufficient

evidence of motivation to combine, i.e. a reason to

substitute an axially moveable sleeve for the hinged

flaps in Willis because with a translating sleeve

“airflow leakage is minimized because the nozzle is

comprised of only a few components and therefore has

a relatively continuous inner surface.” Pet. Reply 9

(citing Ex. 1003 ¶ 78). GE contends further that the

“intended purpose” proposed by UTC for Willis’s

engine is too narrow because “[r]everse thrust mode

GE takes issue with UTC’s analysis of the combination

of Duesler’s thrust reversing mechanism in addition to the

translating sleeve. Pet. 4–5; see also PO Resp. 22–25. GE

asserts Duesler’s thrust reversing mechanism and blocking

doors is not part of the combination of references asserted by GE.

Pet. Reply 4–5. Our analysis in this Final Written Decision rests

only on the asserted substitution of Duesler’s translating sleeve

38 for Willis’s hinged flaps.

41a

accounts for several seconds of engine operation,

while the engine also must take-off, climb, cruise, and

descend.” Id. at 13. GE argues also that Dr.

Mattingly’s conclusion that Duesler would be louder

than Willis’s engine is unsubstantiated by sufficient

facts or data and that we should give this testimony

no weight. Id. at 13–14 (citing 37 C.F.R. § 42.65).

It is GE’s ultimate burden of persuasion to show

by a preponderance of the evidence that a person of

ordinary skill in the art would have been motivated to

use an axially translating sleeve in place of Willis’s

radially hinged flaps. See Dynamic Drinkware, LLC

v. National Graphics, Inc., 800 F.3d 1375, 1378 (Fed.

Cir. 2015) (“In an inter partes review, the burden of

persuasion is on the petitioner to prove

‘unpatentability by a preponderance of the evidence,’

35 U.S.C. § 316(e), and that burden never shifts to the

patentee[.]”). On the other hand, the burden of

production, i.e. the burden of going forward with

evidence, shifts between parties. Id. at 1379.

As noted above, our review of the asserted

references, along with the testimony of both Dr.

Mattingly and Dr. Abhari, supports the conclusion

that Duesler and Willis disclose different structures

that perform the function of varying the fan nozzle

exhaust area, and thus, are both understood by those

of ordinary skill in the art as variable area fan

nozzles. See Ex. 1006, 4:52–58 and see Ex. 1011, .032.

Thus, GE’s argument that Dr. Mattingly could not

“rebut” Dr. Abhari’s testimony that such structures

were known in the art is of no consequence. Dr.

Mattingly, in fact, appears to agree, although he is

somewhat reticent to discuss specifics of Duesler’s

nozzle, and the fact that both Willis and Duesler

disclose VAFN’s that vary the nozzle exhaust area.

42a

See Ex. 1033, 90:9–12 (“When I compared the radial

variable nozzle of Willis to the axial variable fan

nozzle of Duesler, it’s my opinion that the Duesler

nozzle is heavier.”).

Dr. Abhari asserts in his declaration that

substituting the axial translating sleeve 38 from

Duesler into Willis’s engine “is simply the application

of a known structure (an axially movable fan nozzle)

to achieve a desired and predictable result (changing

the nozzle exit area).” Ex. 1003 ¶ 77. Dr. Abhari

explained that the choice of whether to use an axial

sleeve or a radially hinged flap as a nozzle can depend

on certain “factors.” Id. ¶ 78. For example, Dr.

Abhari described that where “thrust vectoring” is

desired in military aircraft for maneuverability, a

radially hinged flap nozzle is preferable. Id. If control

of airflow leakage from the nozzle is desired to be

minimized for better propulsive efficiency, then a

sliding sleeve design is preferable as it “has a

relatively continuous inner surface.” Id. (citing Ex.

1006, 3:21–25). Dr. Abhari also noted that “size,

weight and cost” can affect the design choice between

variable area nozzle structures. Id.

GE contends that Dr. Abhari’s testimony supplies

adequate reasons and motivation to substitute

Duesler’s sleeve into Willis’s engine particularly

where he alleges that by using a translating sleeve

design “airflow leakage is minimized . . . which

Duesler describes as beneficial to engine

performance.” Pet. Reply 9 (citing Ex. 1006, 1:53–55).

The problem, however, is that Dr. Abhari’s asserted

“factors” do not substantively explain why or how

Duesler’s translating sleeve would affect the stated

purposes and explicit design parameters of Willis,

which are aimed at “develop[ing] the technology

43a

needed to meet the stringent noise, exhaust

emissions, performance, weight, and transient thrustresponse requirements of future short-haul aircraft,”

as discussed above in our factual findings. We are not

apprised by GE or Dr. Abhari of any aspect of Willis

that relates specifically to “military aircraft

maneuverability.”

Our review reveals Willis’s

express objective is developing a turbofan engine

intended for “short-haul-transport aircraft” for very

short take-off and landing, which requires “a reversepitch fan that can provide reverse thrust without

heavy, variable-geometry, nacelle components.” Ex.

1011, .024, .026. As shown in annotated Table 1,

reproduced below, Willis explicitly sets forth program

goals and parameters needed to be met by the engine

design “to meet the stringent noise, exhaust

emissions, performance, weight, and transient thrustresponse requirements of future short-haul aircraft.”

Id. at .019.

44a

Exemplary goals for Willis’s engine are shown

highlighted in yellow in Table 1, above, including

maximum desired noise at max reverse thrust of 100

PNdB, max reverse thrust of 35% of forward thrust,

and thrust transient characteristics from aircraft

landing approach to max reverse of 1.5 seconds.

Willis is replete with structural design

characteristics based on the noted goals, such as

turbofan variable pitch blades to ensure quick thrust

transient from approach to max reverse for braking,

with all the engine structural design focused on

ensuring that aircraft are capable of take-off and

landing on very short runways and meeting specific

noise parameters. See id. at .026; see also id. at .032

(“[r]ecognizing the critical nature of the blade pitchcontrol system, many concepts were studied, and two

variable-pitch systems were built and tested”). Dr.

Abhari’s general reference to certain “factors” for

choosing between different variable nozzle structures

fails to address in a meaningful manner any of the

express requirements, goals and characteristics

discussed in Willis. For example, in order to land on

a short runway, the Willis engine must be capable of

generating a max reverse thrust of 35% of forward

thrust. Id. at .019, Table 1. Nowhere does Dr. Abhari

provide any estimate, or provide a technical

explanation or analysis that sufficiently explains how

Willis’s engine, equipped with Duesler’s axially

translating nozzle, could be understood by one of

ordinary skill in the art to accommodate such a

reverse thrust parameter.

We do not discount entirely Dr. Abhari’s

testimony, because we find it persuasive as to the

general desirability of using variable area fan nozzles

to improve fan stability and engine efficiency at

45a

cruise. See Ex. 1003 ¶ 75. Based on a review of the

prior art and both parties’ declarant testimony, we

find that a person of ordinary skill in the art of gas

turbofan aircraft engines would have recognized “that

there are a variety of variable area fan nozzle

structural configurations possible for effectuating a

change in the nozzle exit area.” Id. ¶ 77, Ex. 1006; Ex.

1008. But, the Willis engine is directed expressly to

“short-haul” capabilities including take-offs and

landings on very short runways, not to engine

efficiency at cruise. See Ex. 1011, .024. To be clear,

Dr. Abhari’s testimony does not go far enough in

explaining persuasively why a person of ordinary skill

in the art would have substituted Duesler’s nozzle

into Willis’s engine given the express purposes of

Willis.

Dr. Abhari testifies that gas turbofan engines are

complicated systems that depend on “thousands,

often tens of thousands of parts.” Ex. 2018, 79:1–2.

Dr. Abhari testifies further that aircraft engine

design required a “holistic” approach to understand

how the engine would perform in all situations and

operating conditions including emergency conditions:

Q. I think you mentioned before that the systems,

the holistic systems approach is critical, correct?

Absolutely. You wouldn’t function without it.

Q. And you would have to look at that in order to

have a reasonable expectation of success, correct?

MR FERGUSON: Objection. Outside the scope of

the declaration.

A. Again this is not within the patent, but holistic

design and aircraft engine, the safety of an aircraft

engine number one, necessitates understanding

46a

how the engine works, not only during one

operating condition but during all operating

conditions, including emergency conditions that we

have to anticipate. So the engine does not have just

one point that you can take every design point, you

have to look at it in a holistic approach of how it

would work on a wing, start up, go up to take off,

climb, cruise, descend, land turn it off. It has to

work as a whole system.

Id. at 82:14–83:10. Dr. Abhari also testifies that the

engine development process, including verification

and certification, can take years:

Q. And without all this verification testing that

you mention; the components, the engine, bird

damage, fan blade off, icing, the testing on the wing,

you don’t have a reasonable expectation of getting

verification by the regulators, correct?

A. Well, the three major engine manufacturers;

Pratt, GE and Rolls Royce have sufficient

management to manage the risk that often you

don’t go all the way down to the final certifications

without a significant chance of success. This is why

prior to going into certification, which would take

many years, three, four, five years, you spend as

many as a decade de-risking components, systems

and sub systems before you take the management

risk of actually going to the most expensive part of

the engine development cycle, which is the

certification requirements.

Id. at 74:18–75:10. This testimony is at odds with

GE’s general contention that choosing an axially

movable fan nozzle as in Duesler instead of a radially

movable nozzle is a simple matter of substitution.

Pet. 33–34, Pet. Reply 5–6. In fact Dr. Abhari’s

47a

testimony is more consistent with similar testimony

from Dr. Mattingly, who states that:

[a] person of ordinary skill in the art would

recognize that the components of gas turbofan

engines are complex and interrelated, and

that modifying one component may have

undesirable impacts on the fluid dynamics

and mechanics of other engine components,

systems, or the engine as a whole. The ’605

patent, for example, discloses a system of

components, not just an individual engine

component. The disclosed system includes a

gas turbine engine comprising a fan, a gear,

compressors, a combustor, turbines, a core

nozzle, a variable area fan nozzle, and the

core and fan nacelles. In my opinion, a person

of ordinary skill in the art would also

recognize the potential challenges in adapting

components from one gas turbofan engine to

another.

Ex. 2009 ¶ 38.

We are not persuaded, given the apparent

necessity for years of testing, regulatory oversight,

and necessity to evaluate the overall system and

individual components based on stringent structural

and functional requirements of an aircraft turbofan

engine, that one of ordinary skill in the art would

have been motivated to exchange Willis’s hinged flap

variable area nozzle for an axially translating sleeve

such as Duesler simply because it might be “beneficial

to engine performance.” Pet. Reply 9 (citing Ex. 1006,

1:53–55).

Apart from the alleged potential to

overcome “airflow leakage” and “maneuverability”

which are not mentioned as any of the express

48a

parameters, goals or system requirements in Willis,

neither GE nor Dr. Abhari explain sufficiently how an

axially translating sleeve would accommodate the

very specific requirements and goals mandated for

Willis’s engine such as those shown above in Table 1.

We are persuaded based on our review of Willis

and the record of this proceeding that Willis’s variable

pitch fan and pivoting flap variable area nozzle are

together implemented in turbofan aircraft engine in a

manner which provides for solving the unique

problems of short-haul aircraft systems as described

in Willis.

Based on our understanding of the

principles of operation of Willis’s engine including the

necessity for substantial increased reverse-thrust and

reduced noise, we find that Duesler’s translating

sleeve would alter fundamentally the design of

Willis’s engine for short-haul aircraft.

Under our rules, expert testimony that does not

disclose the underlying facts or data on which an

opinion is based is entitled to little or no weight. See

37 C.F.R. § 42.65(a); Office Patent Trial Practice

Guide, 77 Fed. Reg. at 48,763; Rohm & Haas Co. v.

Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997)

(nothing in the Federal Rules of Evidence or Federal

Circuit jurisprudence requires the fact finder to credit

unsupported assertions of an expert witness). We are

not inclined to credit such unsubstantiated testimony.

In an obviousness analysis, a reason must be given

as to why a person of ordinary skill would have been

motivated to modify a reference to achieve the

patented invention. See Innogenetics, N.V. v. Abbott

Labs., 512 F.3d 1363, 1374 (Fed. Cir. 2008).

Furthermore, an obviousness determination requires

not only a reason to modify a prior art reference, but

also that a skilled artisan in doing so would have

49a

perceived a reasonable expectation of success in

making the invention. See Medichem, S.A., v. Rolabo,

S.L., 437 F.3d 1157, 1165 (Fed. Cir. 2006). Although

GE contends that Dr. Abhari provided sufficient

reason to combine, we disagree. See Pet. Reply 8–9.

On the record before us, we are not persuaded that

GE or Dr. Abhari have presented sufficient evidence

that one of ordinary skill in the art of aircraft engine

design would simply swap Willis’s pivoting flap

variable area nozzle for Duesler’s translating sleeve

and that Willis’s engine would continue as a

technically feasible solution to the specific and

express “short-haul” aircraft concept that Willis’s

engine was designed to accomplish.

G. Ultimate Conclusion of Obviousness as to

claims 7–11

After considering all of the underlying factual

considerations,

the

ultimate

conclusion

obviousness is a question of law. See Pfizer, Inc. v.

Apotex, Inc., 480 F.3d 1348, 1359 (Fed. Cir. 2007).

“[T]he great challenge of the obviousness judgment is

proceeding without any hint of hindsight.” Star

Scientific, Inc., v. R.J. Reynolds Tobacco Co., 655 F.3d

1364, 1375 (Fed. Cir. 2011). After considering GE’s

obviousness presentation under the Graham factors

and GE’s lack of evidence on how or why a person of

ordinary skill in the art would have modified Willis’s

engine to achieve the patented invention, we conclude

that GE has failed to establish by a preponderance of

the evidence that claim 7 is obvious.

In view of our determination that GE has failed to

establish that dependent claim 7, as it also

incorporates independent claim 1, would have been

obvious, it necessarily follows that GE has failed to

50a

establish that dependent claims 8–11 which depend

from claim 7 are unpatentable as obvious. See In re

Fritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992)

(dependent claims are nonobvious if the independent

claims from which they depend are nonobvious).

H. Patent Owner’s Motion to Strike

In an Order entered February 10, 2017, we

authorized UTC to file a paper in the form of a list

providing the location and a concise description of any

portion of GE’s Reply and Dr. Abhari’s supplemental

declaration that UTC wished to draw to the Board’s

attention. See Paper 27. In its Motion to Strike

(Paper 30), UTC noted pages 15–22 in GE’s Reply

Brief, and ¶¶ 6–8 of Dr. Abhari’s supplemental

declaration. Paper 30. We address each of these

issues below.

GE’s Reply Brief at the noted pages contends that

the combination of Willis and Duesler would produce

an effective amount of reverse thrust and that the

effects of flow separation are overstated by UTC’s

declarants, Dr. Mattingly and Paul Duesler. Pet.

Reply 15. GE also relies on a patent (Exhibit 1031),

to Rolls Royce, U.S. Patent No. 3,820,719 (“the ’719

patent”) alleging that the ’719 patent discloses an

axially translating variable area nozzle that

promoted reduced flow separation. Id. at 19–20.

The arguments in GE’s Reply with respect to the

issue of flow separation are not persuasive because

they do not provide substantive evidence relating to

flow separation or reverse thrust analysis in Duesler’s

translating sleeve, assuming it were to act as an inlet

for reverse-thrust (as opposed to an outlet). Id. at 15.

GE contends mainly that the Willis engine also has

“flow separation.” Id. at 16–17.

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We note initially that we did not rely on Mr.

Duesler’s testimony in our Decision. See id. at 17–18.

Dr. Mattingly, however, explained in reasonable

technical detail, why Willis’s flaps, as compared to

Duesler’s sleeve, permit higher airflow in reverse

thrust at a Mach number closer to 0, apparently

despite some flow separation in a reverse thrust

mode. See Ex. 2009 ¶¶ 59–61 (“In reverse thrust

mode, the air entering Willis’s UTW engine would

follow the wide streamline corresponding to nearly

M0 = 0, annotated above. Willis’s flaps open widely in

reverse thrust mode to accommodate this

streamline.”). GE’s position that there is also flow

separation occurring in Willis does not persuasively

contradict Dr. Mattingly’s testimony.

GE raises substantively Rolls Royce’s ’719 patent

(Ex. 1031), for the first time in its Reply Brief in

support of its position that axially movable nozzles

were known to be used with a variable pitch fan

engine and “the Rolls Royce 719 Patent would have

provided a person of ordinary skill in the art with

reasonable design modifications for combining Willis

and Duesler.” Pet. Reply 19. GE contends that its

assertion of the ’719 patent, apparently as evidence of

what was known in the art, is in response to UTC’s

arguments in its Patent Owner’s Response that the

combination of Willis and Duesler would decrease the

effective reverse thrust and make the engine louder.

See id., and see Paper 34, 7 (citing PO Resp. 29, 32–

35). During the oral hearing, the parties cited various

case law and Board decisions alleged to support their

positions on this issue. See Tr. 27–29, 4–35.

We do not need to decide if GE’s evidence and

arguments are contrary to 35 U.S.C. § 312(a). Even

52a

if these contentions are not new argument and

evidence, they are not persuasive. The disclosure in

the ’719 patent relating to the axially moving nozzle

forming an opening 76 defining an “additional intake

area” may facilitate additional attached air flow into

the engine during reverse-thrust, but it fails to

adequately explain how this would achieve the

express goals of 35% reverse-thrust and noise

abatement in the range of 100 PNdB expressed in the

Willis short-haul engine design. See Ex. 1031, 3:59–

4:9. GE fails to point to any persuasive evidence in

the ’719 patent, or elsewhere, that explains how, even

assuming the specific structure of the ’719 patent

axially moving nozzle somehow provided a known

design modification, the axially moving sleeve would

meet the fundamental goals of reverse-thrust and

noise abatement of the Willis short-haul engine

design.

Dr. Abhari’s reply declaration similarly does not

provide any persuasive evidence as he echoes GE’s

argument, above, stating that flow separation “is a

common design concern for turbofan engine inlets.”

Ex. 1036 ¶ 6. Dr. Abhari reiterates also GE’s

argument that the ’719 patent combines an axially

moveable nozzle and a variable pitch fan to “produce

an effective amount of reverse thrust.” Id. ¶ 8.

Although we understand from the evidence before us

that an axially moveable nozzle and a variable pitch

fan may have produced a potentially workable engine,

the term “effective amount” is entirely undefined and

falls short of a reasonable explanation or analysis as

to how one of ordinary skill in the art would been

motivated, or led, towards combining an axial

translating nozzle with Willis’s variable pitch fan in

53a

order to meet the reverse-thrust requirements for the

Willis short-haul engine design.

We are not persuaded that GE’s Reply or Dr.

Abhari’s supplemental declaration provide any

additional argument or evidence that one of ordinary

skill in the art would have combined Willis and

Duesler to meet the claimed invention. Therefore, we

need not determine whether or not GE’s raising such

additional arguments contain new argument or new

evidence such as precluded under 35 U.S.C. § 312(a).

Accordingly, we DENY UTC’s Motion to Strike.

IV. ORDER

For the reasons given, it is ORDERED that

Claims 7–11 of U.S. Patent No. 8,511,605 B2 have

not been shown to be unpatentable as obvious over

Willis and Duesler, and

Patent Owner’s motion (Paper 30) is denied.

This is a final decision. Parties to the proceeding

seeking judicial review of the decision must comply

with the notice and service requirements of 37 C.F.R.

§ 90.2.

54a

NOTE: This order is nonprecedential

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

GENERAL ELECTRIC COMPANY,

Appellant

UNITED TECHNOLOGIES CORPORATION,

Appellee

2017-2497

Appeal from the United States Patent and

Trademark Office, Patent Trial and Appeal Board in

No. IPR2016-00531.

ON PETITION FOR REHEARING EN BANC

Before PROST, Chief Judge, NEWMAN, LOURIE,

MOORE, O’MALLEY, REYNA, WALLACH, TARANTO,

CHEN, and HUGHES, Circuit Judges*.

PER CURIAM.

ORDER

Appellant General Electric Company filed a

petition for rehearing en banc. A response to the

petition was invited by the court and filed by Appellee

United Technologies Corporation. The petition was

first referred as a petition for rehearing to the panel

that heard the appeal, and thereafter the petition for

Circuit Judges Dyk and Stoll did not participate.

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rehearing en banc was referred to the circuit judges

who are in regular active service.

Upon consideration thereof,

IT IS ORDERED THAT:

The petition for panel rehearing is denied.

The petition for rehearing en banc is denied.

The mandate of the court will issue on October 22,

2019.

October 15, 2019

Date

FOR THE COURT

/s/ Peter R. Marksteiner

Peter R. Marksteiner

Clerk of Court

56a

UNITED STATES CONSTITUTION

ARTICLE III, SECTION 2

The judicial Power shall extend to all Cases, in

Law and Equity, arising under this Constitution, the

Laws of the United States, and Treaties made, or

which shall be made, under their Authority;—to all

Cases affecting Ambassadors, other public Ministers

and Consuls;—to all Cases of admiralty and maritime

Jurisdiction;—to Controversies to which the United

States shall be a Party;—to Controversies between

two or more States;— between a State and Citizens of

another State,—between Citizens of different

States,—between Citizens of the same State claiming

Lands under Grants of different States, and between

a State, or the Citizens thereof, and foreign States,

Citizens or Subjects.

In all Cases affecting Ambassadors, other public

Ministers and Consuls, and those in which a State

shall be Party, the supreme Court shall have original

Jurisdiction. In all the other Cases before mentioned,

the supreme Court shall have appellate Jurisdiction,

both as to Law and Fact, with such Exceptions, and

under such Regulations as the Congress shall make.

The Trial of all Crimes, except in Cases of

Impeachment, shall be by Jury; and such Trial shall

be held in the State where the said Crimes shall have

been committed; but when not committed within any

State, the Trial shall be at such Place or Places as the

Congress may by Law have directed.

57a

35 U.S.C. § 311

§ 311. Inter partes review

(a) IN GENERAL.—Subject to the provisions of this

chapter, a person who is not the owner of a patent

may file with the Office a petition to institute an inter

partes review of the patent. The Director shall

establish, by regulation, fees to be paid by the person

requesting the review, in such amounts as the

Director determines to be reasonable, considering the

aggregate costs of the review.

(b) SCOPE.—A petitioner in an inter partes review

may request to cancel as unpatentable 1 or more

claims of a patent only on a ground that could be

raised under section 102 or 103 and only on the basis

of prior art consisting of patents or printed

publications.

review shall be filed after the later of either—

(1) the date that is 9 months after the grant of

a patent; or

(2) if a post-grant review is instituted under

chapter 32, the date of the termination of such

post-grant review.

58a

35 U.S.C. § 315

§ 315. Relation to other proceedings or actions

***

(e) ESTOPPEL.—

(1) PROCEEDINGS BEFORE THE OFFICE.—The

petitioner in an inter partes review of a claim in a

patent under this chapter that results in a final

written decision under section 318(a), or the real

party in interest or privy of the petitioner, may not

request or maintain a proceeding before the Office

with respect to that claim on any ground that the

petitioner raised or reasonably could have raised

during that inter partes review.

(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.—

The petitioner in an inter partes review of a claim

in a patent under this chapter that results in a

final written decision under section 318(a), or the

real party in interest or privy of the petitioner,

may not assert either in a civil action arising in

whole or in part under section 1338 of title 28 or in

a proceeding before the International Trade

Commission under section 337 of the Tariff Act of

1930 that the claim is invalid on any ground that

the petitioner raised or reasonably could have

raised during that inter partes review.

59a

35 U.S.C. § 319

§ 319. Appeal

A party dissatisfied with the final written decision

of the Patent Trial and Appeal Board under section

318(a) may appeal the decision pursuant to sections

141 through 144. Any party to the inter partes review

shall have the right to be a party to the appeal.

60a

Appeal No. 2017-2497

__________________

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

__________________

General Electric Company,

Appellant

United Technologies Corporation,

Appellee.

__________________

DECLARATION OF ALEXANDER E. LONG IN

SUPPORT OF GENERAL ELECTRIC

COMPANY’S OPPOSITION TO APPELLEE’S

MOTION TO DISMISS

I, Alexander E. Long, pursuant to 28 U.S.C.

§ 1746, make the following declaration based on my

own personal knowledge or belief following a

reasonable investigation:

1. I am the Chief IP Counsel and General

Counsel – Engineering for GE Aviation. GE Aviation

is a business unit of General Electric Company, the

appellant in the present appeal.

2. GE Aviation (hereinafter “GE”) designs,

develops, manufactures, tests, certifies, and supplies

turbofan engines for both military applications and

the worldwide commercial aviation market. In the

commercial space, GE supplies engines to fly on

airframes produced by major aircraft providers such

as Boeing and Airbus (which in industry parlance are

known as “airframers”). As one example, GE’s GE90,

which entered service in 1995, is a family of high-

61a

bypass turbofan aircraft engines built for the Boeing

777 airliner.

3. GE supplies aircraft engines itself and

through its joint ventures. For example, GE has a

long-standing partnership with Safran Aircraft

Engines (previously Snecma), a French aerospace

engine

manufacturer

headquartered

Courcouronnes, France. The GE-Safran joint venture

is known as CFM International. CFM also designs,

tests, certifies, manufactures, and supplies aircraft

engines, including the CFM56 and LEAP aircraft

engines used on airplanes supplied by Boeing, Airbus,

and others.

4. There are three principal original equipment

manufacturers of aircraft engines for the worldwide

commercial aviation market. They are: (1) GE; (2)

Pratt & Whitney Corporation (a business unit of

appellee United Technologies Corporation (“UTC”)),

based in East Hartford, Connecticut; and (3) RollsRoyce, headquartered in London, England. GE is

UTC’s biggest competitor in the aircraft engine

industry. The competition in the aircraft engine

market is fierce, for the reasons I explain below.

5. The commercial aircraft engine business

operates in a long life-cycle and highly regulated

market.

Aircraft engines must be specifically

designed and certified for specific aircraft. For

example,

through

its

joint

venture

CFM

International, GE supplies the LEAP-1A turbofan

engine specifically for the Airbus A320 aircraft, which

recently entered service in the so-called “narrowbody” market (single-aisle aircraft, capacity of

approximately 140-220 passengers, and a range of

approximately 2,500-3,500 nautical miles).

62a

6. Turbofan engines and their corresponding

aircraft must be certified as airworthy by regulatory

authorities such as the Federal Aviation

Administration (FAA) or the European Aviation

Safety Agency (EASA). The process of designing,

developing, testing, and certifying a new aircraft

engine can take eight to ten years or longer.

Accordingly, once a new engine has been certified

with a specific aircraft and goes into service, that

engine will typically continue to fly on that aircraft for

its full lifespan, subject to normal maintenance,

repair and overhaul (MRO) services. In other words,

once an engine goes on an aircraft, it will not come off

until the airplane is ready to be retired, which can

take 25-30 years or mo

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