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Chief Judge Rader on the Supreme Court and Judge Posner


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: March 17, 2013 @ 12:07 pm

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Chief Judge Randall Rader of the Federal Circuit, Feb. 27, 2013.

Several weeks ago I attended the annual meeting of the Association of University Technology Managers (AUTM). I spoke at the event on the Bayh-Dole panel, explaining how Universities and the start-ups that they form can better get their positive innovation stories to the media. See Getting Your Invention Story to Journalists Who Care and Time to Take a Stand. I also attended the fireside chat between Chief Judge Rader and AUTM President Sean Flanigan. See Chief Judge Rader Speaks Out About Patent Litigation Abuse.

The fireside chat between Rader and Flanigan lasted nearly 60 minutes, and the Chief took questions from the audience. I found this entire presentation terribly interesting, but there were several things in particular that I have wanted to get to publishing, which did not neatly fit into the first article about patent litigation abuse. Namely, the Chief discussed the Supreme Court’s aversion to bright line rules and why they are really quite important in the commercial law context. He also discussed what the Federal Circuit has done to bring more certainty to damages, and he provided a razor sharp criticism of Judge Posner of the United States Court of Appeals for the Seventh Circuit.

First, when discussing the Supreme Court’s aversion to bright line rules and the need to be able to provide certain advice in a commercial law context Chief Judge Rader explained:

Let me talk about kind of a underlining clash of cultures, which is disrupting the patent field. The Supreme Court comes from a different culture than my legal culture. They handle these majestic cases involving individual vs. collectives rights, liberty vs. order, public vs. private, and they balances these grand principles wonderfully. They are creditably talented and bright people who have a real grasp of that vast responsibility given to them by our Constitution. But that’s not my legal culture.

I come from the commercial law area where to tell the CEO that “well I’m going to have to balance several factors and ask three courts over a period three years whether or not you can have this product enter the market” is simply an inadequate response. In the commercial area we have to have a predictable, yes or I will use the B word — a Bright line rule. Now, that’s lead to kind of this culture clash where the Supreme Court says there needs to be more balancing and flexibility. The formalism of the Federal Circuit is uncomfortable to [the Supreme Court]. But that’s a function of our legal culture. I think perhaps the answer is the Federal Circuit needs to gain a little bit more flexibility from its experience with the Supreme Court, but I hope the Supreme Court also recognizes that the Federal Circuit is reaching its decisions for well considered reasons.

Several minutes later a question was asked about damages and Judge Posner specifically by Ashley Stevens, a past AUTM President. In his rambling decision in Apple v. Motorola, Posner suggested that there were situations where patent owners would not be allowed to seek damages in federal courts. For example, if the damage doesn’t pass a certain threshold Posner believes there is no subject matter jurisdiction for federal courts. How someone could hold a position of authority in the judiciary and also hold that clearly erroneous view is curious. More curious to me is that he actually wrote it down for all to see. Patents are in the Constitution and federal courts clearly have subject matter jurisdiction over such litigation. But what would Chief Judge Rader say? He did not disappoint.

Rader stated:

When [Judge Posner] says he his not sure if Patent Cases should be in the federal courts, frankly the patent cases are the one thing that is guaranteed by the Constitution to be in the federal court. It’s the rest of it that he has to justify.

Rader would then move on to take on the issue of damages, explaining what the Federal Circuit has done recently on the issue:

But damages is what you’re really putting your finger on and the Federal Circuit is has made a real effort to bring more discipline the evaluation process let me give myself a little test here to see if I can state in three sentences what we have done. Sentence number one would be — we require particularized economic evidence including downward sloping demand curves. Second that economic evidence should be limited to the scope of the claimed invention, which really means the scope of the contribution of the invention to the field of art. Third no rules of thumb. Those are probably the three biggest thing we said on damages.

Toward the end of the presentation Chief Judge Rader discussed the categories of invention that are statutorily defined as patent eligible subject matter by 35 U.S.C. 101. He explained:

The Statute is interesting. The United States Patent Statute says whoever invented a machine, process, composition of matter or an article of manufacture or improvement thereof is entitled to a patent. No Exclusions, no exceptions… I always ask my students is there anybody who can think of anything that doesn’t fit within those four statutory categories. I always get one kid in the back and he’ll hold his hand up and give me some answer and my response is always very clear. I say: “Congratulations you’re the only person in this room smart enough to be on the Supreme Court.”

As you can imagine this elicited great laughter in the audience. While those within the industry who have spent a great deal of time considering patent eligibility are hard pressed to come up with any invention that doesn’t fit within the statutory definition of eligible categories, the Supreme Court always seems to find that whatever invention they are looking at doesn’t seem to fit.

And with this article I will conclude my coverage of the AUTM 2013 annual meeting. Until next year… see you in San Francisco.

Chief Judge Randall Rader of the Federal Circuit (left) and AUTM President Sean Flanigan (right).

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Posted in: AUTM, Federal Circuit, Gene Quinn, IP News, IPWatchdog.com Articles, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

14 comments
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  1. Of course Judge Rader was very respectful when he spoke of the Supreme Court, but he made a very sharp criticism nevertheless. In effect, the Supreme Court, for example in KSR, puts the patent world in a world of hurt. Examiners are citing to principles like “obvious to try” in situations that are way out of that rule’s boundary. But my comment is really on another point. That is, while the Supreme Court makes a mess of any reliable understanding, they are mostly interpreting statute. And, the Congress could fix it. Of course they rarely do, and doubtless my point is really just a comment out of frustration because the Congress is as likely to make it worse than better.

  2. Rader is exactly right on the need for bright line rules. In the hypothetical he gives about the CEO, the CEO just wants to know what is OK and what is not OK. Even if he is told not to do what he would prefer to do, he would rather have that than some wishy-washy “well, it depends” which the absence of bright line rules makes necessary.

    Notice the recent press reports about how business executives were not investing as we approached the fiscal cliff because they did not know what the rules would be. That is an example of governmental ambiguity fouling the private sector — just like what Scotus has done to patents.

  3. AC,

    Absolutely, spot on about why SCOTUS so-called “balanced approach” creates chaos. And Rader is the first Chief Judge since Markey willing to challenge Our Judicial Mount Olympus as to who should be the prime arbiter of patent law jurisprudence (SCOTUS needs to take the “hint” that was made by Congress when it created the Federal Circuit in 1982 as to who was to be the prime arbiter of that particular jurisprudence).

  4. I remember when the Fed. Cir. started, they would go beyond the actual case and give good help on common issues. But that is lost on the current Fed. Cir. In a recent opinion, in response to an issue raised about whether filing on the last day, like is a continuation or divisional co-pending if filed on the Tuesday on which the parent issues. They said-“we’ll take that up another day”. That is really scary because if there isn’t a clear answer on that point, we lawyers are all in trouble. Certainly the PTO thinks as we all do, that co-pendency attaches on the day the parent issues. So it isnt just SCOTUS.

  5. Of course, since this is Gene Quinn’s blog, and Gene Quinn is a patent lawyer who loves patent lawyers, who thinks that the highest and best thing to do is for companies to give all their money to patent lawyers, he wants to create as much work for patent lawyers as possible…. so he plays dumb about this too. The bright-line rule is really quite simple. NO patents on mental activities, NO patents on software, NO patents on math, NO patents on nature, NO patents on things you didn’t actually build.

  6. Nathanael-

    You have a right to your opinion that software should not be patented. Software is, of course, patentable in the U.S. and increasingly so around the globe.

    You have a right to your opinion that an actual reduction to practice should be required. The truth is that there is no requirement that inventions be built, but rather that they be explained so that they can be built.

    You do not have a right to misrepresent, at least not here on IPWatchdog.com.

    As you know, what you say is completely false. I have never said or suggested that it is best for companies “to give all their money to patent lawyers.” This type of comment that places words in the mouth of another are not tolerated. This does nothing to forward a debate based on facts. Please take your commentary elsewhere.

    -Gene

  7. Another point I should have mentioned yesterday: The Fed. Circ. was established to consolidate appeals from all over the country because letting them go to the individual circuits was causing too much unpredictability. Fed.Cir. took that to heart and made it a mission to reduce unpredictability. Scotus’s mission, on the other hand seems to be to restore unpredictability, Congressional desire to reduct unpredictability notwithstanding.

  8. Thank you AC.
    Mr. Quinn,
    Do you have any knowledge of special treatment for NIH grant applications under AIA?
    Also, back on the subject, I remember back in 1966 when I was a patent attorney trainee at a chemical company in Cambridge, they spoke of the “new patent law”; that was the 1952 law. Similarly we have a long way to go before we get any useful interpretations of AIA.
    One issue of many that puzzle me is how the inventors’ own publication (during the grace period) will be treated. For example, suppose the published description doesn’t exactly match the claim, maybe different wording, or maybe an additional or an omitted claim element. How about if the publication says “the bar x moves to the right and the wheel Y rotates” and the claims says “the bar x moves so as to cause the wheel Y to rotate”. And a dependant claim says “the bar x can move in any direction”. Is the publication citable against the claims or not. If so, under both 102 and 103?
    The issue is postured because the drafter of the article is trying to do a well edited presentation to her professional colleagues, such a technical journal, typically using an example. The patent attorney has a very different goal, as we know, in drafting claims

  9. <>

    The above statement is not completely true when it comes to biological material, where a deposit may be necessary to satisfy 35 U.S.C. 112.

    Also, as I have discussed with two of my brothers, one a patent attorney and one an electrical engineer and an inventor, I think that the USPTO could have done itself and the public acceptance of software patents a big favor by adding rules, similar to the type of rules for biological material sequence listings and deposits, for software patents. I understand that there are often many ways to accomplish a partical software method and that a particular software method could be accomplished using a variety different programming languages.

    Nevertheless, I think it would have been (and woulld still be) a good idea, for the USPTO and Examiners to require inventors of many software-implemented methods to provide code or other proof, such as a demonstration video, for at least one embodiment of their claimed method to ensure that the disclosure in their application fulfills the written description and enablement requirements of 35 U.S.C. 112.

  10. Mark,

    I think you touch upon a key (and not small) difference (the many ways item).

    Where do you stop?

    In other words, why stop at software? Why not extend the logic to require a working model of every application?

    In essence, you have eviscerated the constructive reduction to practice rule – and have done so on a misunderstood premise: the reason for biological deposits was because words alone were deemed not enough. Such is simply not the case with “software” inventions. By inappropriately extending the exceptions, the “logic” swallows the rule completely.

    Thanks, but I would pass.

  11. <>

    Because software has unique problems with respect to enablement and written description. If I provide drawings of a mechanical device and a description of how the device operates, a person of ordinary skill in the art will usually be able to reproduce the device and confirms it works without additional outside information. The case is similar with an electrical schematic for an electrical invention or a description of the steps I would perform in a chemical invention. But in many cases, I’m not sure that many of the written descriptions, diagrams and flow charts that are in software patents would allow a programmer to readily reproduce to the invention claimed in the claims of these software patents.

    Software inventions are different from most inventions in that the degree of creativity that is involved in coming up with the idea can be miniscule relative to the creativity required to actually reduce the idea to practice (in a working program).

  12. Left out of my previous comment between the

    <>

  13. Left out of my previous comments between the

    “In other words, why stop at software?”

  14. But in many cases, I’m not sure that many of the written descriptions, diagrams and flow charts that are in software patents would allow a programmer to readily reproduce to the invention claimed in the claims of these software patents

    You are buying into the mass hysteria hype.

    The existing rules are plenty good enough. There is NOTHING SPECIAL (like bio) that prevents the written word from sufficing.

    Sorry, but your extension of exception is not logical.