Posts in Federal Circuit

Today, the full Senate Judiciary Committee held a hearing to question two key IP nominees: Judge Leonard Stark of the of the United States District Court for the District of Delaware, who was nominated to replace Judge Kathleen O’Malley on the U.S. Court of Appeals for the Federal Circuit (CAFC); and Katherine Vidal, the nominee for Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO). IPWatchdog has previously reported on the qualifications of both candidates and what their appointments might mean for IP law and practice going forward. While neither nominee made any particularly earth shattering statements, as is often the case in such hearings, Senator Thom Tillis (R-NC), a vocal IP advocate, said he was heartened by Vidal’s acknowledgement that it has become “very difficult to understand the contours of [patent eligibility] law.” Vidal also stated that the current USPTO guidelines on eligibility, which were revised by former USPTO Director Andrei Iancu to provide more clarity, are consistent with the law right now.

The U.S. Court of Appeals for the Federal Circuit (CAFC) earlier today affirmed a district court ruling that Biogen International’s patent for a method of treating multiple sclerosis (MS) was invalid for lack of written description. Judge O’Malley dissented, arguing that the district court clearly erred in its finding that Biogen was judicially estopped from drawing a distinction between clinical and therapeutic effect, and that the entire analysis “might well change” if the case was remanded “for reconsideration of the record with the understanding that the patent is not about clinical efficacy” but therapeutic effect.

Much deserved criticism has been leveled at the U.S. patent system in the last decade or so, from all sides. No one branch of the system seems to much appreciate what the other branches are doing. The Supreme Court and Federal Circuit are issuing decisions that seem innocuous at first, but then inevitably snowball into wrecking balls. Regulatory policies, guidelines and statutory prescriptions that are well intended when the ink dries turn lethal to patents—witness the creation of the Patent Trial and Appeal Board (PTAB). But, despite this situation, in the late summer/early fall of this year, in a brief burst of face-to-face patent events, I began to re-appreciate the value of the system and what it means to the country and our collective future.

As stated in Part One of this series, the Fifth Amendment of the U.S. Constitution guarantees, inter alia, that no person shall be deprived of property (including intellectual property), without due process of law. However, the Supreme Court has never held that a single appellate court must comply with Fifth Amendment due process of law. The closest the Supreme Court ever came to such a radical idea as requiring any appellate court in the nation to comply with due process of law was at a time when “Three’s Company” and “The Muppet Show” dominated the 7PM-9PM Nielsen’s ratings. See Singleton v. Wulff, 428 U.S. 106 (1976) (warning the Eighth Circuit that “injustice was more likely to be caused than avoided by deciding the issue without petitioner’s having had an opportunity to be heard,” but not actually requiring the Eighth Circuit to comply with Fifth Amendment due process). In contrast, the Supreme Court has held that even a man classified as an “enemy combatant” by the U.S. government is entitled to at least some measure of due process. See Hamdi v. Rumsfeld, 542 U.S. 507 (2004).

District court patent filings this week remained slightly elevated, at 78, with a fair number of Rothschild, Raymond Anthony Joao, and Jeffrey Gross entities filings complaints; but oddly—after their explosion of new litigations the past two weeks—there was not a single IP Edge case to speak of. The Patent Trial and Appeal Board (PTAB), for its part, was up slightly too, with 37 new petitions (one post grant review and 36 inter partes reviews). Speaking of Jeffrey Gross, though it consists of two patents issued in 2013, the Jeffrey Gross-run Auth Token LLC appears to have waited until the sunset of covered business method (CBM) petitions to turn around and slap virtually all of the nation’s banks, credit card companies, and some financiers with a lawsuit over two pretty identical point-of-sale authentication patents. The cases now include Mastercard, Visa, M&T Bank, PNC Bank, Regions Bank, TD Bank, Trust Financial, and US Bancorp (US Bank), among the 32 defendants thus far.  But the real action was between the Federal Circuit and Judge Albright, as the words and rulings of each become increasingly confrontational toward the other.

“Fair Use” is a flexible defense to claims of copyright infringement. It is a doctrine that evolves as technology and the way in which people use copyrighted works advance. As an exception to the general law prohibiting copying others’ works, it permits copying for a limited and “transformative” purpose, such as commentary, criticism, teaching, news reporting, scholarship, or research. Naturally, the way courts analyze the “fair use” defense must adapt as technology advances and the way in which creative content is developed evolves. Earlier this year, for example, the U.S. Supreme Court ruled on a landmark fair use case involving the “copying” of an Application Programming Interface (API).

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Monday continued its trend of granting mandamus directing Judge Alan Albright of the U.S. District Court for the Western District of Texas to transfer a case to the Northern District of California. In the latest order, Google LLC petitioned the CAFC to direct Albright to transfer the case after he denied it based on the expected time to trial “despite the court itself finding that the transferee venue was otherwise more convenient,” wrote the CAFC, adding that this was a clear abuse of discretion.

On November 12, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed the decision of the U.S. District Court for the Northern District of California that compelled arbitration and dismissed Rohm Semiconductor USA’s declaratory judgment action without prejudice, holding that an arbitrator must determine arbitrability. In 2007, Rohm Japan and MaxPower Semiconductor entered into a technology licensing agreement (TLA). According to the TLA, Rohm Japan and its subsidiaries were permitted to use certain power-related technologies of MaxPower developed under a Development and Stock Purchase Agreement in exchange for royalties paid to MaxPower. In 2011, the TLA was amended to include an agreement to arbitrate “any dispute, controversy, or claims arising out of or in relation to this Agreement or at law, or the breach, termination, or validity thereof.” Further, the amendments provide that arbitration must be conducted “in accordance with the provisions of the California Code of Civil Procedure (CCCP).”

B.E. Technology, a company owned by Martin David Hoyle, developer of internet advertising technology who has been embroiled in litigation with big tech companies like Facebook, Twitter and Google for close to a decade now, today filed a petition for writ of mandamus with the U.S. Court of Appeals for the Federal Circuit (CAFC). The petition asks the court to intervene to “prevent an unconstitutional deprivation of B.E.’s property rights in the onslaught of IPR proceedings that have been brought to challenge the validity of its most critical patents.” B.E. specifically asks the CAFC to direct the Patent Trial and Appeal Board  (PTAB) to vacate its decisions to grant institution in four separate inter partes review (IPR) proceedings: Twitter, Inc. and Google LLC v. B.E. Technology, L.L.C., Nos. IPR2021-00482, IPR2021-00483, IPR2021-00484, and IPR2021-00485. The question presented is: “Whether a writ of mandamus should issue to prevent an unconstitutional deprivation of the Petitioner patent owner’s property rights without due process of law?”

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday, November 12, vacated and remanded a decision of the Trademark Trial and Appeal Board (TTAB) that had found Galperti S.r.l (Galperti-Italy) had not committed fraud on the U.S. Patent and Trademark Office (USPTO) in asserting that it had substantially exclusive use of the mark GALPERTI in the five years preceding its registration. The appeal to the CAFC stems from Galperti, Inc.’s (Galperti-USA’s) petition for cancellation based on its own prior use of the same mark, in which the TTAB found that Galperti-USA had demonstrated only insignificant use of the mark and therefore had not proven fraud or falsity on the part of Galperti-Italy. The CAFC cited two legal errors in the TTAB’s analysis that warranted vacatur and remand.

The U.S. Court of Appeals for the Federal Circuit (CAFC) today dismissed Apple, Inc.’s appeal of four decisions of the Patent Trial and Appeal Board (PTAB) in favor of Qualcomm. The CAFC found that an April 2021 CAFC decision (Apple I) on related PTAB rulings, in which the court found Apple lacked Article III standing, controlled. The opinion for the court was authored by Judge Prost. Judge Pauline Newman dissented. In part, the court in Apple I held that a global settlement between Apple and Qualcomm on the terms of a license agreement meant that “the validity of any single patent would have no effect on Apple’s ongoing payment obligations,” and that Apple had therefore failed to establish standing under the reasoning of MedImmune, Inc. v. Genentech, as it asserted. The court in Apple I explained: “Ultimately, Apple’s assertions amount to little more than an expression of its displeasure with a license provision into which it voluntarily entered. Such allegations do not establish Article III standing.”

On November 5, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision in Celgene Corp. v. Mylan Pharmaceuticals Inc. affirming a ruling of the District of Delaware, which dismissed a Hatch-Waxman lawsuit against related Mylan entities for either improper venue or failure to state a claim upon which relief could be granted. In issuing the decision, the Federal Circuit found that Mylan’s submission of a notice letter to Celgene regarding Mylan’s paragraph IV certification to the U.S. Food and Drug Administration (FDA) stating that Mylan’s generic version of the multiple myeloma treatment Pomalyst would not infringe Celgene’s patents was not itself an act of infringement for purposes of the patent venue statute.

The Dunning-Kruger effect is often defined as a type of cognitive bias whereby people are prone to vastly misjudge their competence. For example, smart and capable people tend to evaluate their skills and competence downward. That is, they tend to not just understand, but deeply internalize the idea that there’s a lot in life that they don’t understand. Circa 500BC, Confucius coined this wisdom stating, “Real knowledge is to know the extent of one’s ignorance.” Then there’s the flip side, where low ability and/or low knowledge people overestimate their own capabilities while simultaneously being unable to recognize their own incompetence. One-hundred and thirty years (give or take) before David Dunning and Justin Kruger conducted their studies on the issue, Charles Darwin described this effect, stating, “ignorance more frequently begets confidence than does knowledge.”

On November 4, the U.S. Court of Appeals for the Federal Circuit (CAFC) reversed a decision by the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) that University of Strathclyde’s patent claims for a method for photoinactivating antibiotic-resistant bacteria without using a photosensitizing agent were unpatentable. The PTAB held claims one, two, three, and four of U.S. Patent No. 9,839,706 (‘706 patent) were obvious based on the prior art. The court held the PTAB’s findings were not based on substantial evidence.

Is patent litigation out of control? Has patent litigation ever been out of control? The answers to these questions largely depend upon your point of view, and as with most complex topics, the truth is nuanced. What is not nuanced are the numbers reported in the annual reports from the  Administrative Office of the United States Courts, which shows that the number of patent cases that reach trial are extremely few. In fact, the number of cases that make it to the final pre-trial conference represents a small subset of the number of cases that are filed. I initially started this research in 1997, while working on my Master’s thesis, which dealt with patent litigation and the use of alternative dispute resolution. The real growth in patent litigation over the last 40 years has taken place before trial. Between 1980 and 2020, the number of patent cases reaching trial ranged between a low of 63 (in the COVID-19 affect FY 2020) but was otherwise at a low o 64 (in FY 2019) and a high of 164 (in FY 2016). All are a remarkably low number of cases that proceed to trial given the number of patent lawsuits commenced.