A Patent Conversation with Steve Kunin: De Novo Review and Bright Line Rules

Steve Kunin

Steve Kunin has been in private practice at Oblon, Spivak for over a decade. Today he is on the firm’s Management Committee, serving as General Counsel, and he also co-chairs the firm’s Post-Grant Patent Proceedings practice group. Prior to entering private practice Kunin worked at the United States Patent and Trademark Office, rising to the level of Deputy Commissioner for Patents in charge of Patent Examination Policy. As a result of this experience at the USPTO, Kunin is a sought after expert who has testified as an expert witness by report, deposition or at trial on patent examination policy, practice and procedure in more than 80 cases.

I have known Kunin for years. We occasionally get together and swap e-mails. During one of our latest meetings I suggested that our conversation would make excellent reading. He agreed to once again go on the record for a wide ranging discussion of patents.

My interview with Kunin occurred on Wednesday, February 26, 2014, at his office in Alexandria, Virginia. We discussed everything from the Federal Circuit’s recent decision in Ballast Lighting, the CAFC’s continued love affair with de novo review, the Supreme Court refusing to allow bright line rules, patent office administrative trials, the role of a patent procedure expert in patent litigation and more.

Without further ado, what follows is part 1 of my interview with Steve Kunin.

[Varsity-2]

QUINN: Thanks for taking the time to chat with me today.  I really appreciate it.

KUNIN:  Thanks, Gene.  I appreciate you taking the opportunity for us to talk today.

QUINN: There is a lot I hope we can cover, so let’s just jump right in. Recently we are hearing many people claiming that the Federal Circuit has in at least some ways outlived its usefulness, which I think is a terrible thing to say, but I understand why it’s being said particularly in light of a five to five decision on software in CLS Bank.  What does all this mean?  Where does it go?  Where is the predictability?

KUNIN: Well, I think that in the litigations that I’m involved in, and I think it’s true of almost any patent office practice expert’s involvement is that the cases in many instances are so fact driven, i.e., they’re so case-by-case that to a large degree on some of these critical issues it is hard to predict the outcome in a jury trial.  That’s true particularly with respect to issues of invalidity as well as infringement.  This in part is caused by the conundrum with respect to correctness of the claim construction order which is reviewable de novo by the Federal Circuit.  This affects predictability because  if on review there were reversible errors made in terms of how the claims were construed it can affect the outcome of the case.

QUINN: As happens much of the time any more.  Particularly with so many questions being de novo review and the Federal Circuit just once again saying that this is de novo, a question of law and claim construction.  And-

KUNIN: Was that surprising to you that the Federal Circuit retained its power over claim construction review?

QUINN: Yes, in a way it is. I think it is if you go back to Markman the intellectual rationale for having this be a question of law is that at the end of the day it needs to be certain.  Different juries can have different thought processes and if this really is a property right you have to be able to describe the metes and bounds of the property and have it be the same this time as it will be the next time.  Now, if that’s true then that rationale to have it as a question of law doesn’t seem to be any longer applicable based on the practice that’s going on at the Federal Circuit because in many regards claim constructions are different depending upon the way the case moves up the procedural chain.  In the same case the claims can be valid in a district court proceeding and then invalid in a PTAB proceeding based upon sometimes the same prior art, but applying different claim construction and burden of proof standards.  So calling claim construction a question of law that required de novo review ignores to some extent the underlying reality that the ultimate determination is based on a great many number of facts and appellate courts just don’t have the infrastructure to make those factual determinations, to weigh the evidence, who to believe and who not believe. I would rather acknowledge the truth that claim construction is a mixed question.  We take these facts that have been cited all the way up and based on those facts did they get the right conclusions?  That should be the way it is if you ask me.

KUNIN: Well, one of the provocative things with respect to the reason why the Ballast Lighting case even was considered for en banc review was that the predicate to the claim construction had to do with whether section 112(f) central claiming was invoked.  Whether in fact there were means or step plus function limitations that required resort to the specification and the prior art to determine corresponding structure and their equivalents.  So you end up in sort of the 2-step process determining whether section 112(f) is invoked or not, ( a question of law), then determining what were the corresponding structures and equivalents to determine what the means in the claim limitations covered ( a question of fact )?

QUINN:  Yes.

KUNIN: So answering both questions results in a mixed question of law and fact.

QUINN: I would say yes.  I would say that the first question should be whether section 112(f) is invoked is a question of law. If the claims use certain magic words presumptively you’re intending to invoke section 112(f) and you’re trying to determine whether or not this statute applies to this situation, and I think that’s a question of law.  But I would agree with you that then the next question’s got to be a question of fact.  Once we know section 112(f) applies what does the claim limitation mean?  What does it cover?

KUNIN: Well, because section 112(f) is central claiming statute.  Where non-section 112(f) limitation are treated as peripheral claiming.  So central claiming, in my opinion, is all about fact finding.

QUINN: Right.  Right.

KUNIN: But if you notice the actual decision doesn’t spend a whole lot of time with respect to drilling down to that level of sophistication.  The decision is more pragmatic than philosophical.

QUINN: I agree and I would say that the older I get the more that that bothers me.  It bothered me a lot when I was in law school.  And you know you have this joke and your law professor will tell you well we have to have eight cases on this one question because the Supreme Court’s going to at every chance they can dodge answering the question so they can’t dodge it any more, you know?  And that’s portrayed as great judicial restraint and blah-blah-blah.  And it seems a little, that’s kind of silly.  You know, everybody knows we need an answer to this question why don’t we just answer that question?  And then you go through your career and you get it to a certain extent at least.  And then we get to the point like right now when I see what goes on at the Federal Circuit with the real difficult questions and at the Supreme Court. Now I’m more of a senior position and you’re trying to consult with business people and give them answers and guidance that then they have to rely on in their daily life and now I totally buy into what Chief Judge Rader says which is bright line rules, we need them because at the end of the day it is in our line of business now once you get a certain level and number of years in you’re not pushing paper, you’re not just doing administrative stuff, you’re giving advice and that’s why people are paying you.  And how can you advise them if the courts won’t answer the pressing questions of the day?  I mean we have Alice v. CLS Bank because they pulled short in Bilski.  You know?

KUNIN: In my opinion, the Supreme Court in Bilski basically took the easy way out by deciding that the claimed invention in Bilski wholly preempted an abstract idea and stating that they were leaving development of more refined contours for determining subject matter eligibility for software implemented inventions to the Federal Circuit.

QUINN: And don’t they always do that?

KUNIN: Again if you synopsize Bilski vs. Kappos the claimed invention is nothing more than the manipulation of abstract ideas so therefore it’s excluded subject matter.  And number two, SCOTUS is going to leave the contours of subject matter eligibility to the Federal Circuit to develop in future case law.

QUINN: Right.  And I just love it when they say that.

KUNIN: Well, if you see what the PTO has done with this conundrum.  When I was there as deputy commissioner I fostered the practice of creating examination guidelines that were published in the Federal Register for public comment.  We had examination guidelines for subject matter eligibility, utility, written description, section 112(f) and non-obviousness.  Special training materials for enablement in the field of biotechnology were created and made available to the public.  We issued guidelines after guidelines for examiners and the public at large.  Why?  We tried to provide a uniform way for examiners to apply a methodology to try to reach consistent results in a more predictable way.  That is why you see in a lot of the examination guidelines they have flow diagrams.

[Varsity-1]

QUINN: I think that that makes all the sense in the world because then also those guidelines are not just given to the examiners, any of those guidelines are also given to the public.  And not that the general John Q. Public’s going to read them, but patent attorneys, we’re going to read them.  And if we know what you’ve told the examiners – don’t do this but do this – then we can give you the thing that is going to get our clients in and out the door the quickest.  Because as it turns out clients like patents, they like getting rights.  They don’t like long waits.  They don’t like getting jerked around.

What bothers me so much about the software stuff is there’s any number of ways I can claim it, but I don’t see any justification in the statute that say you can’t claim it at all, period.  Software is patentable.  It’s all over the statute.  So just tell me which one of these claim methodologies you want and we’ll give it to you.  And that’s the problem right now in the software world, we know that the statute says at least some software is patent eligible, but we don’t know what claiming techniques the Courts want to see.  So it raises the cost. All the applications you file you claim it as a system, you can claim it as computer medium, you claim it in means plus function, and you claim it as a method because who knows which one of these are going to survive the day.

KUNIN: It’s a pyramid where at the base of the pyramid is the patent and trademark office that has to make tens of if not hundreds of thousands of patentability decisions every year.   On a higher level of the pyramid the district courts and then Federal Circuit handle many fewer cases.

QUINN: Right.

KUNIN: When you get up to the Supreme Court, how many patent cases do they handle a year?  It’s on one hand each year typically, right?

QUINN: Right, right.  Even this active court it’s going to be less than ten.  And that’s a huge number for the Supreme Court.  It’s usually one or two or three.

KUNIN: Yes.  But I think we’re in a situation right now where the Golden Age of the supremacy of the Federal Circuit as the final arbiter of the development of the patent law is gone– meaning the Supreme Court would refrain from meddling.—

QUINN: Oh, don’t say that.

KUNIN: — Remember though an Act of Congress in 1982 the Federal Circuit was established as the single reviewing court for district court patent appeals to provide uniformity and consistency in the development of the patent laws.  And for a couple of decades it was pretty much left unsupervised by the Supreme Court to let the patent law develop more consistency.  But now if you look back from 2014 you see that there’s been a sea change in how the Supreme Court has exercised its supervisory role.  This may be in part due to the intra-court disagreements in the Federal Circuit decision-making  inviting the Supreme Court to take a case.  We see that systematically there seems to be a desire of the Supreme Court to get the Federal Circuit, in the area of patent law, to apply general law principles.  No special rules for patent cases need exist for legal aspects that are not unique to the patent statutes.

QUINN: Right.  Never mind the fact that the grant of a patent is by its own definition an exclusive right.

KUNIN: That’s true.  But there are many aspects of patent litigation such as an award of attorneys’ fees to the prevailing party or awards of injunctions that are not unique to patent litigation.

QUINN: I wouldn’t mind if we get to be like every other area of law, great.  But why not pick an area that’s really close – say real property law?  Because if we were applying the laws of trespass, you know the principles embodied in the area of trespass on property, that would be fine with me. But with patents we aren’t applying the basic law of property. Title in patents never seems to quiet any more, ever.

KUNIN: Sure.  It is especially difficult to quiet title now when we have the IPR, CBM and PGR administrative trials at the PTO for challenging issued patents.

QUINN: Well, right.  And I know your firm is one of the two firms in town that have really cornered the market because so to speak on those administrative trials.  And for the life of me I can’t understand why if you wanted to challenge a patent, why would you not go and file an inter parties review?

KUNIN: Your instincts are correct.  The statistics show that roughly 70% of patents in litigation are accompanied by a concurrent inter parties review or CBM proceeding.

QUINN: Yes, but why is it only 70%?

KUNIN: Some of these litigations have gone on for so long that inter parties review wasn’t even available because one year had already elapsed before you could file a petition.

QUINN: Right, that’s true.  I get that.  But I know that they’re getting a lot of IPRs.

KUNIN: Right.  Over 1000 have been filed since September 12, 2012.

QUINN: And I think that they’re even getting more than they thought they were going to get, which is really the only area of the AIA where they’re getting more than they predicted, because for example with third party submissions are getting almost none.

KUNIN: That’s true.  But why would you want to spend the money to file a third party submission to make somebody else’s patent stronger?

QUINN: Right.

KUNIN: I mean there’s a lot of good reasons why not to spend time and money on somebody else’s unexamined published patent application, which may result in them getting actually what they really want at the end of the day, that is a higher quality patent.

QUINN: Right.

KUNIN: This could still be a problem for you if it is a blocking patent to your own technology.  On another note the PTAB is actually letting some claims through in IPR proceedings.

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