The panel that ended the first day of the program was moderated by Don Dunner of Finnegan, Henderson, who is the unofficial “Dean of Federal Circuit Advocates.” I had the pleasure of interviewing Dunner nearly a year ago and always enjoy listening to his thoughts and soaking in his wisdom. To his left was Chief Judge Randall Rader of the United States Court of Appeals for the Federal Circuit, and to Rader’s left was Seth Waxman former Solicitor General of the United States and now of Wilmer Hale. To Dunner’s right was Judge William Young of the United States Federal District Court for the District of Massachusetts, and to Young’s right was John Whealan, currently of George Washington Law School and former USPTO Solicitor.
The discussion was lively, perhaps even explosive. You could nearly see sparks fly when Chief Judge Rader continued to pepper Waxman with question after question about his opinion on the propriety of parties lobbying the White House in order to obtain a favorable amici brief from the Department of Justice. Rader zeroed in on the slippery slope and obviously is not pleased with the mixing of law and politics, saying: “this is a cause for concern… Politics and law have a divide.”
It is indeed troubling that the White House under both President Bush and President Obama have allowed lobbying by parties who seek a favorable DOJ amici brief. Interpretations of the law shouldn’t be for sale, or appear to be for sale to the largest donors. But now I am getting ahead of myself, and while one of the highlights of the discussion was certainly Rader’s obvious disdain for the politicizing of patent disputes by lobbyists at the White House, the entirety of the presentation was extraordinary. Judges Rader and Young took turns jabbing at the Supreme Court, but Young also took the opportunity to throw a jab or two at the Federal Circuit. To do justice to the presentation allow me to start from the beginning.
Dunner was introduced as the Dean of Federal Circuit practitioners, having argued more cases at the Federal Circuit than any other person. To this Dunner quipped, “and the other part of that is that I have lost more cases at the Federal Circuit than any other person.” Dunner is, of course, too humble. There is a reason he is so sought after when a party must take an appeal to the Federal Circuit and prevail – he is very, very good.
During his introduction, Randall Rader, who is the Chief Judge of the United States Court of Appeal, interrupted Dunner. Typically introductions are pro-forma, but when the Chief wants to talk everyone sits back and listens. The person introduced immediately before Rader was Waxman, the former Solicitor General and now defender of the patent system as lead counsel for i4i at the United States Supreme Court. Rader said: “I think Seth really won that case… you really did a great job for the patent system.” Waxman quipped that it was the first time he had ever received such a compliment during the introduction of someone else, to laughter by the audience. Nevertheless, it is hard to imagine a patent system where patents are not presumed valid and require clear and convincing evidence to invalidate. Why would one go through the exercise of trying to obtain a patent if it could so easily be thrown out? The behind the scenes scuttlebutt was that the Supreme Court could have easily ruled for Microsoft, thereby significantly damaging the value of all patents. The job Waxman did should not be under-estimated. Microsoft easily out spent i4i lobbying everyone in Washington, DC, that would listen, including those at the White House.
After the introductions were concluded it did not take Chief Judge Rader long to lay into the Supreme Court, doing so without hardly (if ever) mentioning the Court by name; although everyone in the room knew what he was referring to. Rader expressed his frustration with the fact that there are no bright line rules, which make it impossible for counsel to advice clients, such as a CEO who need to make a decision tomorrow. Rader, acting as if he were the lawyer giving the advice, said: “I can get you an answer in about 5 years,” referring to the lengthy process of litigating and obtaining an answer to a fresh legal question. Rader, switching to CEO role, said: “well, I have to make a decision tomorrow.” Rader explained that this is the world he lives in, the obvious implication being that the Supreme Court does not live in or understand the real world as it pertains to the business of innovation and the monetization of intellectual property.
After Rader concluded Waxman echoed this frustration by pointing out the undeniable truth. No bright line rules without any meaningful guidance is great for litigators because it means everything has to be litigated to get to a decision. Cynical, but true. Uncertainty always helps lawyers who have to participate in lengthy, and therefore expensive, proceedings to get answers based on unique factual circumstances.
The panel moderator, Dunner, then turned to Judge Young, who was a real treat to listen to because his frustration was palpable, echoing what so many patent attorneys and litigators feel but dare not say. Directing his comments in a jovial way to Chief Judge Rader, Young said: “I don’t mind bright line rules – give it to me! Having bright line rules isn’t the problem, it is finding out what they are.” Young went on to discuss specifics, explaining that he didn’t have too many issues with Markman, rather Festo is his frustration. “Calling them matter of law doesn’t make it matter of law. I have to figure it out with witnesses,” Young said emphatically. “I will do whatever they say, but calling it a matter of law doesn’t make it matter of law.”
Young’s reference was to the unfortunate practice of several of the Judges on the Federal Circuit to in a rather arbitrary and capricious way label nearly everything as a question of law. They do this, of course, because they want to review the matter de novo without any deference given to the District Court. But a fact is a fact and something that requires witnesses can’t be a pure question of law, it has to at least be a mixed question of fact and law.
Judge Rader seemed not to take any offense to Young’s remarks; they were said honestly with a funny delivery. Of course, Judge Rader himself has written particularly scathing dissents at times when his colleagues on the Court play fast and loose with what is a matter of law and what is a question of fact.
As frustrations were being laid on the table and discussed in an intellectual and rational way, it did not take long for the discussion to turn to eBay v. MercExchange, a case argued (and lost) by Waxman. Waxman lamented: “To my dying day I will think the Court did the country a severe disservice.” To which Chief Judge Rader chimed in: “You are right.” Dunner, who argued the injunction issue in eBay at the Federal Circuit said: “the feeling was that the Federal Circuit was, in a knee jerk way, inclined to issue an injunction.” That was the perception, although the Supreme Court didn’t understand the issue. The Federal Circuit never rubber stamped injunctions, but if a valid claim has been infringed and litigated shouldn’t the overwhelming number of cases result in an injunction, which is just the District Court retaining jurisdiction and saying don’t do this any more or you have to answer to me? How is that substantively different than the right to exclude already embodied in a patent?
Waxman went on to explain: “The parties were so flummoxed that we settled.” It seems no one really knew what to make of the decision. If only that were still true. Perhaps the parties were “flummoxed” because no one could believe the decision meant what it said. The Supreme Court unilaterally, acting as a super legislative body, created a class of patents that are now subject to compulsory licensing. With a patent grant comes the right to exclude, unless you prevail in litigation against an infringer, at which point you may not be entitled to an injunction against future infringement. “Property by definition is the right to exclude, but we are not going to exclude,” Rader said.
As discussion turned to the language authorizing a District Court to issue an injunction Rader, on a role, again took the opportunity to point out that the Supreme Court not only didn’t get what they were doing in eBay but didn’t know enough to ask the right questions. “It says [‘may’] because the public interest may require the protection of health and safety and tolerate trespass… if the Supreme Court had addressed that issue… I might have understood.” No one being safe from Rader’s open, honest and very legitimate criticisms, Rader laid into academics saying: “this isn’t addressed in any law review articles either. Where are all these brilliant academics that really know what the law ought to be.”
In my opinion eBay will likely go down in history as the most bone-headed patent decision ever by the Supreme Court, and that is saying something! This is a Court that at one point incredulously lamented that the only practical use for a particular innovation would be in a computer. Wow! And Congress still lets them hear patent cases? Yikes!
So what does Chief Judge Rader think about the Supreme Court and why they seem to typically create mischief in the patent world? “The Supreme Court is the most majestic court in the world, but their sandbox is the Constitution,” Rader said. Rader explained further that the Supreme Court’s job is “done against the backdrop of terms like ‘reasonable search,’ so they perceive the judicial job as one of balancing. So they don’t see why we give bright line rules.” Rader then picked up on his earlier example of the CEO who needs certainty to make a business appropriate decision, saying that the patent world is a commercial environment where bright line rule serves the area of law best.
I thoroughly enjoyed the program and all the substantive discussions. It is always great to meet new people and see old friends. If you missed the 6th Annual Patent Law Institute in New York City you still have an opportunity to get in the program in one of two ways. First, the West Coast version of the program will take place in San Francisco, California, March 19-20, 2012. If you can’t make it to San Francisco, the on-demand version of the program delivered over the PLI website with full CLE credits will be available for viewing in the coming weeks.