Authored by: Jeremy J. Gustrowsky
Every U.S. patent issued by the Patent and Trademark Office (PTO) bears cover language stating that the patent grants the owner “the right to exclude others from making, using, offering for sale, or selling the invention” in the United States. That phrasing tracks 35 U.S.C. § 154(a)(1) directly. A coalition of inventor-advocacy groups sued the PTO, arguing that this language is misleading in light of the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, L.L.C., which replaced the near-automatic grant of permanent injunctions to prevailing patent owners with the traditional four-factor equitable test. The Federal Circuit affirmed dismissal of the case, holding that the plaintiffs lacked standing.
The plaintiffs (US Inventor, Inventor’s Association of South Central Kansas, and Inventors Network of Minnesota) sought declaratory and injunctive relief under the Administrative Procedure Act. They asked the district court to compel the PTO to engage in notice-and-comment rulemaking to revise the cover page language and to bar the PTO from continuing to represent an “unequivocal right to exclude” on issued patents. The district court dismissed for lack of standing and denied leave to amend.
On organizational standing, the Federal Circuit relied heavily on the Supreme Court’s recent decision in FDA v. Alliance for Hippocratic Medicine. The plaintiffs alleged that the challenged cover language forced them to divert resources to educate their members and develop guidance materials. That, the court explained, is exactly the “diversion of resources” theory that Alliance rejected. An organization cannot “spend its way into standing” by choosing to expend money opposing a government action it disfavors. The Fourth Circuit’s decision in Lane v. Holder reached the same conclusion years earlier.
The court distinguished the Supreme Court’s older Havens Realty decision, which the plaintiffs leaned on. Havens involved a housing counseling organization whose core services were directly disrupted by a landlord’s false statements about apartment availability. Here, by contrast, the plaintiff organizations acknowledged they already know about eBay, so they themselves are not misled by the cover language. Any injury is indirect, running through unidentified inventors whom the organizations then choose to counsel. That falls outside Havens and squarely within the diversion-of-resources theory Alliance foreclosed.
The associational standing theory fared no better. Only US Inventor actually pleaded associational standing, supported by declarations from three inventor-members. Each declarant admitted, however, that he had “now learned” that the right to exclude is not guaranteed after eBay. Because those members are now aware of the actual state of the law, there is no realistic likelihood they will be misled again by the cover language in the future. Past injury alone cannot support forward-looking injunctive or declaratory relief. The other two organizations never pleaded associational standing or attached member declarations at all.
Finally, the court agreed that amendment would be futile. The proposed amendment simply extended the same associational theory to the other two groups, which suffered from the same defect: no plausible allegation of an imminent future injury to any member. The judgment of dismissal was affirmed.
The takeaway for patent owners and advocacy groups is a practical one. Even if there is a genuine argument that the statutory “right to exclude” no longer matches post-eBay reality, challenging the PTO’s cover-page language through litigation faces a steep Article III hurdle. Diversion-of-resources allegations will not suffice, and members who already understand the eBay framework cannot show they will be misled going forward. A rulemaking petition, rather than a lawsuit, may be the more viable avenue for those who want the PTO to update its language.