“Judge Moore will make an outstanding Chief Judge for the Federal Circuit… I’m hopeful that under her leadership she will be able to get the court to work toward consensus, first and foremost with respect to patent eligibility, but also with respect to obviousness and secondary considerations.” – Gene Quinn
On April 21, the U.S. Court of Appeals for the Federal Circuit announced that Judge Kimberly Moore would take over the duties of Chief Judge when current Chief Judge Sharon Prost’s term ends later this month. The following is a retrospective of several of Judge Moore’s important opinions during her time on the Federal Circuit, followed by insider responses to the Federal Circuit’s announcement.
Athena Diagnostics En Banc Denial: Mayo Did Not Convert Medical Diagnostics into Natural Laws
On July 3, 2019, the Federal Circuit issued an incredibly fractured decision denying en banc review in Athena Diagnostics v. Mayo Collaborative Laboratories. A previous panel decision at the Federal Circuit had held that Athena’s method for diagnosing the neuromuscular disorder myasthenia gravis (MG), which was capable of diagnosing MG in 20% of MG patients who would go undiagnosed using conventional diagnostics, was unpatentable subject matter under Section 101 pursuant to Supreme Court precedent in Mayo v. Prometheus Labs. The denial of en banc review of the earlier panel decision resulted in eight opinions. Judge Moore penned one of four dissents in the en banc denial and, at 23 pages in length, the longest opinion in the entire en banc denial.
“None of my colleagues defend the conclusion that claims to diagnostic kits and diagnostic techniques, like those at issue, should be ineligible,” Judge Moore wrote. “The only difference among us is whether the Supreme Court’s Mayo decision requires this outcome.” She argued that the Federal Circuit had turned Mayo into a rule that medical diagnostics are per se ineligible under Section 101, but that the Supreme Court consistently cautions the CAFC against the rigid application of rules extending from Supreme Court precedent.
In discussing why diagnostics deserve patent incentives, Judge Moore noted that while diagnostics guide 66% of medical decisions, they only account for 2.5% of all healthcare costs. Diagnostics tests are expensive to develop, requiring investments of up to $100 million and about 10 years of development, though relatively cheap to reproduce. “Without the possibility of patent protection to recoup the high costs of research and development associated with diagnostic techniques and kits, the impact can only be that there will be fewer advances in diagnostic medicine,” Judge Moore wrote.
Unless one opposes the notion of patent protection entirely, it cannot be reasonably disputed that claims to diagnostic kits and techniques, like pharmaceuticals, which require enormous initial investments in terms of both time and money, are the reason we suffer the promise of a monopoly… The math is simple, you need not be an economist to get it: Without patent protection to recoup the enormous R&D cost, investment in diagnostic medicine will decline. To put it simply, this is bad. It is bad for the health of the American people and the health of the American economy. And it is avoidable depending on our interpretation of the Supreme Court’s holding in Mayo.
In applying Mayo to the claims at issue in Athena Diagnostics, Judge Moore noted that the claims in Mayo met their demise because of their breadth and generality. Meanwhile, Athena Diagnostics’ claims differed significantly because of the inventors’ discovery of a new antibody for diagnosing MG, creating new methods for identifying those antibodies that never existed before in science, and then claiming concrete steps for the application of that new diagnostic method. Judge Moore’s dissent ended with dire words for the many amici filing briefs in the case asking the Federal Circuit for clarity on Section 101:
No need to waste resources with additional en banc requests. Your only hope lies with the Supreme Court or Congress. I hope that they recognize the importance of these technologies, the benefits to society, and the market incentives for American business. And, oh yes, that the statute clearly permits the eligibility of such inventions and that no judicially-created exception should have such a vast embrace. It is neither a good idea, nor warranted by the statute.
Despite calls to the Supreme Court for clarity in Section 101 jurisprudence in the Athena Diagnostics en banc denial from across the Federal Circuit bench, the Supreme Court declined to take up the case on appeal last January.
American Axle: Judge Moore Decides Not to Eat the Majority’s “Validity Goulash”
On October 3, 2019, the Federal Circuit issued a precedential panel decision in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC in which the panel majority invalidated patent claims covering a method for manufacturing propeller shafts for vehicle driveline systems. Judge Moore penned an excoriating dissent of the majority’s decision reflecting many of the concerns that have been raised by the Federal Circuit’s dramatic expansion of the Alice/Mayo framework to declare that tangible inventions can be invalid under Section 101 as directed to a law of nature.
“The majority opinion parrots the Alice/Mayo two-part test,” Judge Moore wrote, “but reduces it to a single inquiry: If the claims are directed to a law of nature (even if the court cannot articulate the precise law of nature) then the claims are ineligible and all evidence of non-conventionality will be disregarded or just plain ignored.” Moore wrote that she was “troubled” with the majority’s treatment of the second step of Alice/Mayo as it addressed issues with the patent’s enablement that were more appropriately dealt with under Section 112, which Neapco didn’t raise during the case. “We cannot convert [Section] 101 into a panacea for every concern we have over an invention’s patentability, especially where the patent statute expressly addresses the other conditions of patentability and where the defendant has not challenged them.”
Although the majority pointed to the application of Hooke’s law for damping vibrations from the driveline to the propshaft, Judge Moore took issue with the fact that the majority’s invalidity analysis was based on the premise that the patent claims were directed to nothing more than Hooke’s law, but that “other laws of nature may be relevant.” As Judge Moore noted, “Section 101 is monstrous enough, it cannot be that now you need not even identify the precise natural law which the claims are purportedly directed to.”
Among other aspects of the majority’s decision, Judge Moore took the panel majority to task for completely disregarding arguments American Axle made regarding its inventive concept in the use of liners during the propshaft manufacturing process, a claim Neapco never disputed, and for ultimately concluding that American Axle’s tests to develop its innovative cardboard liner use itself proved that such liners were known in the prior art. Ultimately, however, Judge Moore’s greatest concern was with how the majority used Section 101 to address issues it was obviously having with the patent’s validity under Section 112. “The majority’s validity goulash is troubling and inconsistent with the patent statute and precedent,” Judge Moore wrote. “The majority worries about result-oriented claiming; I am worried about result-oriented judicial action.”
A petition for writ of certiorari has been filed by American Axle and on Monday, May 3, the Supreme Court invited the Acting Solicitor General to file a brief in this case regarding the views of the U.S. government.
Arthrex v. Smith & Nephew: Fixing the Appointments Clause Problem With PTAB APJs
On October 31, 2019, the Federal Circuit issued a panel opinion in Arthrex v. Smith & Nephew which held that the appointment of administrative patent judges (APJs) at the Patent Trial and Appeal Board (PTAB) was unconstitutional under the Appointments Clause. Judge Moore’s opinion involved important analysis of administrative law that has created major reverberations in patent practice at the PTAB.
Although Arthrex had not raised its Appointments Clause challenge during PTAB proceedings, Judge Moore found that the issue raised by Arthrex had sufficient importance to merit use of Federal Circuit discretion to review. Judge Moore’s analysis relied on criteria from Edmond v. United States on delineating inferior officers, who do not need to be confirmed by the Senate, from principal officers, who do need such confirmation. In assessing these criteria, Judge Moore found insufficient agency review of APJ decisions and a lack of at-will removal for APJs as sufficient to classify APJs as principal officers, despite administrative supervision within the USPTO weighing in favor of classification as inferior officers. To convert APJs from principal to inferior officers, curing the Appointments Clause issue, the Federal Circuit severed for-cause removal provisions serving as tenure protection for APJs.
Arthrex v. Smith & Nephew continued on to the Supreme Court, which held oral arguments in the case this March.
Apple v. Samsung En Banc: Giving Secondary Considerations Their Appropriate Due
On October 7, 2016, the Federal Circuit sitting en banc issued a decision in Apple v. Samsung in which the majority opinion penned by Judge Moore overturned an earlier panel decision that had invalidated Apple patent claims covering technologies to prevent unintentional gesture unlocking of devices and provide autocorrect recommendations to device users. In restoring the jury’s verdict of non-obviousness, Judge Moore paid great attention to the importance of secondary considerations, a part of the legal analysis on obviousness that often gets short shrift by judges even at the Federal Circuit.
“A determination of whether a patent claim is invalid as obvious under [Section] 103 requires consideration of all four Graham factors, and it is error to reach a conclusion of obviousness until all those factors are considered,” Judge Moore wrote. Although conflicting expert testimony on obviousness was presented by both Apple and Samsung, Judge Moore noted that the question for review was whether the jury’s verdict and not Samsung’s arguments on appeal were supported by substantial evidence. In assessing objective indicia of non-obviousness, Judge Moore concluded that Samsung’s own internal documents entered into the record demonstrated substantial evidence industry praise of the “slide to unlock” feature, Samsung’s actual copying, commercial success with a nexus to the “slide to unlock” feature and long-felt need as demonstrated by Samsung’s rejection of alternative unlock features.
Samsung would appeal this decision, although its petition for writ of certiorari was denied in November 2017. Despite Judge Moore’s stirring defense of secondary considerations of non-obviousness in this case, many Federal Circuit panels have treated that Graham factor as a rebuttal factor that must outweigh the first three Graham factors to merit consideration. In her dissent in ZUP v. Nash Manufacturing (2018), Judge Pauline Newman cited to Apple v. Samsung to correct what she felt was the majority’s improper obviousness analysis, noting that “[t]he fourth Graham factor is of particular analytic value in guarding against judicial hindsight. The majority’s decision is a textbook example of hindsight, where the inventor’s teaching is used as a template to render the invention obvious.”
In re Tam: Judge Moore Calls to Overturn In re McGinley Before SCOTUS Strikes Down Disparagement Bar
On December 22, 2015, the Federal Circuit sitting en banc issued a decision in In re Tam, a case involving a challenge to the Lanham Act’s Section 2(a) bar against registering disparaging trademarks. The majority’s opinion, penned by Judge Moore, held that the Section 2(a) bar was unconstitutional under the First Amendment and expressly overruled Federal Circuit precedent from In re McGinley which had foreclosed Tam’s First Amendment challenge to the Trademark Trial and Appeal Board’s (TTAB) affirmance of a trademark examiner’s denial to an application for “THE SLANTS” for the Asian-American rock band to which Tam belonged.
The en banc decision in In re Tam represented an important victory on determining how Federal Circuit case law on the Lanham Act should be analyzed for Judge Moore. After having written the original panel decision affirming the TTAB’s rejection, Judge Moore then added an additional opinion on her own views that In re McGinley should be overturned. “More than thirty years have passed since McGinley, and in that time both the McGinley decision and our reliance on it have been widely criticized,” Judge Moore wrote. She added that shifts in First Amendment “unconstitutional conditions” doctrine had evolved significantly since McGinley was decided in 1981, and the change from taxpayer funding to application fee funding for the USPTO in 1991, both supported reassessments of the standard for assessing the constitutionality of the Section 2(a) disparagement bar. The Supreme Court would go on to affirm the Federal Circuit’s unconstitutionality ruling.
Industry Reaction to Judge Moore’s Promotion
Gene Quinn, President and CEO, IPWatchdog
“Judge Moore will make an outstanding Chief Judge for the Federal Circuit. She is extremely well versed in patent law and well understands the deep and desperate issues facing the court. I’m hopeful that under her leadership she will be able to get the court to work toward consensus, first and foremost with respect to patent eligibility, but also with respect to obviousness and secondary considerations in particular, where her decisions have all been particularly insightful and on point.”
Brian O’Shaughnessy, Partner & Chair, IP Transactions and Licensing Group, Dinsmore & Shohl
“The establishment of the U.S. Court of Appeals for the Federal Circuit was a stroke of genius. It came at a time that the U.S. was lagging in innovation and hence economic vitality, and particularly in manufacturing. A number of countries, notably Japan, were surging economically, strengthening their IP laws to encourage innovation, much of which derived of American invention. It may be that the past does not repeat itself, but it echoes. The echoes of the 1970s are reverberating. Countries once thought of as third tier IP jurisdictions have revamped their patent laws, and are attracting investment, invention, and ingenuity to their shores. Meanwhile, the state of U.S. IP law is increasingly muddled. The U.S. must rededicate itself to the objective that gave rise to the Federal Circuit – a body of patent law that is consistent, predictable, and reliable, and which will fuel economic growth. Judge Kimberly Moore has consistently spoken to those ideals and has demonstrated throughout her jurisprudence a clear-eyed dedication to a pragmatic application of our laws consistent with the Constitutional mandate to promote the progress of the useful arts. It is clear that Judge Moore will stand among the most notable of the Federal Circuit’s chief judges, and we look forward to seeing her imprint on the court.”
Jonathan Stroud, Chief IP Counsel, Unified Patents
“I go back to Chief Judge Moore’s concurrence in Myriad, which I thought was one of the better written opinions from the Federal Circuit in that case. Her clear intellect and ability were on display and she proposed the most workable solution in that case. It was unfortunate that the Supreme Court did not countenance it or take it into account on appeal. A Chief Judge who is capable of that level of thought, consideration and compromise bodes very well for the Federal Circuit. I think that either sometimes the job changes you or sometimes you change the job, and it will be very interesting to see if Judge Moore can broker more compromise and peace similar to what she did very well in Myriad, or if some of the apparent divisions on policy at the court are exacerbated, but I think the former and not the latter will be the case. I believe that Judge Moore will do an amazing job bringing the court together at a time when there are certain issues that are set to continue to divide the court if left unchecked.”