Posts Tagged: "Justice Neil Gorsuch"

Last week, Chief Judge Stark issued a ruling from the District Court in Delaware that applies WesternGeco broadly to increase patent damages from foreign sales resulting from direct infringement.  Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., Civil Action No. 04-1371-LPS (Slip Op., October 4, 2018).  This might occur where a patented product is made in the U.S., but sold abroad, or where the distribution channel for an infringing article includes warehousing in the U.S.  The Judge ruled that WesternGeco overruled the prior law limiting these damages to U.S. sales—now, foreign sales are subject to the full panoply of U.S. patent damages any time there is infringement in the U.S.  The Judge also certified this decision for interlocutory appeal, paving the way for the Federal Circuit to consider this development sooner rather than later.

As was the case with Justice Neil Gorsuch, Kavanaugh has a history of being skeptical toward the growth of the Administrative State, which means the growth of agency power is not something he has shown a predisposition to being in favor of in his decisions. Given the outsized importance of the Patent Trial and Appeal Board (PTAB) within the patent industry, and the fact that the Supreme Court has already twice mentioned “shenanigans” in PTAB procedures, another conservative Justice inclined to be skeptical about the growth of administrative power may ultimately set the stage for review of some of the more egregious PTAB violations of the Administrative Procedures Act, such as but not limited to a severe and substantial lack of judicial independence among the Administrative Patent Judges that make up the PTAB (i.e., the Office admittedly engaging in panel stacking to guarantee favored outcomes in inter partes challenges, the fact that dissents are not allowed unless approved by supervisors, and supervisors deliberating with subordinates on cases they were not assigned to handle).

In WesternGeco LLC v. ION Geophysical Corp., the U.S. Supreme Court held that patent owners may recover lost foreign profits under §271(f)(2) when the infringing party exports parts from the United States for assembly in foreign countries, so long as the relevant infringing conduct occurred in the United States.

Oil States v Greene’s Energy, 584 U.S. ___ (2018), just decided that patents are a public right, a franchise right, akin to a right to erect a toll bridge, and not personal property (slip op. at 9).  What was unfortunately never addressed in Oil States, and which the court specifically left the door open for, was that patents rights are still property rights for the purpose of Due Process–the inference being that IPRs may fail under the Due Process or Takings Clause.  Indeed the court seemed to lament that Oil States did not challenge the retroactive application of IPRs and their constitutional sufficiency on a broader basis.