CAFC Rejects Inventors Groups’ Bid to Clarify Patent-Cover Language Post-eBay

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday issued a precedential decision denying a number of inventors’ associations standing to sue the U.S. Patent and Trademark Office (USPTO) for failing to amend alleged inaccurate language on the cover of issued U.S patents. District Judge Rachel Kovner of the U.S. District Court for the Eastern District of New York, sitting by designation, authored the precedential opinion of the court.

US Inventor, the Inventor’s Association of South Central Kansas, the Inventors Network of Minnesota, the San Diego Inventors Forum, Inc., MercExchange LLC and Paul Morinville sued the USPTO and its Director, John Squires, claiming that the language on the cover of U.S. patents guaranteeing patent owners the right to exclude is misleading due to the Supreme Court’s decision in eBay v. MercExchange. The eBay decision made it more difficult to obtain injunctions; previously, permanent injunctions would issue automatically upon a finding of infringement, but now courts must first engage in a four-factor test to determine whether an injunction is appropriate. “In appellants’ view, this test ‘has eliminated the patent owner’s ‘right to exclude,’… which is ‘no longer a guarantee or an absolute right of the patent owner,’” wrote the CAFC.

The inventors’ lawsuit sought declaratory and injunctive relief under the Administrative Procedure Act (APA) and asked the CAFC “to compel the PTO to engage in notice-and-comment rulemaking to change the cover language and to enjoin the PTO from ‘making representations of an unequivocal right to exclude on the cover of a granted patent.’”

The U.S. District Court for the Eastern District of Virginia dismissed the complaint for lack of standing and denied a motion for leave to amend.

On appeal, the inventors’ groups argued they established standing under both organizational and associational standing theories, but the CAFC said “neither works.”

With respect to the organizational standing theory, the CAFC said the inventor groups’ argument that they had been forced to spend time and money educating inventors about the limits imposed by eBay, thus diverting resources from their usual activities, did not suffice to establish standing. Instead, the opinion concluded, this amounted to the kind of self-imposed expenditure the Supreme Court rejected in its 2024 decision, FDA v. Alliance for Hippocratic Medicine. An organization cannot “spend its way into standing,” the Federal Circuit explained, merely by devoting resources to opposing, explaining, or mitigating a government policy it dislikes. Otherwise, almost any advocacy organization could create standing by spending a small amount of money responding to a challenged policy.

The organizations also did not establish organizational standing under the precedent in Havens Realty Corp. v. Coleman. In that case, racial steering practices directly interfered with a housing organization’s core counseling and referral services. Here, by contrast, the inventor groups themselves were not misled by the patent covers; instead, they argued their injury arose because they chose to educate unidentified inventors who might misunderstand the language, said the CAFC.

Ultimately, “appellants have not alleged the type of direct interference with core business activities that the Supreme Court found critical to Havens, but rather the diversion of resources that the Court deemed inadequate in Alliance,” wrote the appellate court.

To demonstrate it satisfied the “associational standing” theory, US Inventor submitted declarations from three of its members—Schumann Rafizadeh, Venkat Konda, and Paul Hayes—who said they had previously misunderstood the right represented on their patents. But each inventor also acknowledged that they had since learned that, after eBay, injunctive relief was not guaranteed. “Now that each of these members knows about the eBay decision, there is not ‘a sufficient likelihood that he will again be wronged’ by the cover page language ‘in a similar way,’” wrote the CAFC.

The Inventor’s Association of South Central Kansas and the Inventors Network of Minnesota had not alleged associational standing in the complaint or identified members facing imminent injury, and, although they sought an opportunity to amend, the Federal Circuit agreed with the district court that amendment would be futile because the organizations had not identified any additional facts capable of curing that defect. The district court’s judgment was therefore affirmed in full.