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Posts Tagged: "Rule 36 judgment"

Consumer 2.0 v. Tenant: CAFC Skirts Another 101 Analysis with Rule 36

Last week, the U.S. Court of Appeals for the Federal Circuit issued a Rule 36 judgment in a patent eligibility case, Consumer 2.0, Inc. v. Tenant Turner, Inc., No. 19-1846 (Fed. Cir. 2020). The ruling affirmed the findings of the U.S. District Court for the Eastern District of Virginia that the claims of a a patent for a “method employing a combination of hardware and software for secure, automated entry of real property” were invalid for being directed to an abstract idea and, thus, were ineligible for patent protection under 35 U.S.C. § 101. The patented method essentially allows a user to enter a “durational” – rather than static – code on a lockbox in order to view a rental property without a realtor being present.

No End in Sight for Rule 36 Racket at Federal Circuit

According to Federal Circuit Rules, a Rule 36 judgment can be entered without an opinion when it is determined by the panel that one of five conditions exist relating to the underlying decision being sufficient or exhibiting no error of law. In such cases, because a written opinion would not have precedential value, a judgment of affirmance without opinion is allowed.

The Federal Circuit use of Rule 36 has been well documented and extremely problematic. As of January 28, the Federal Circuit has issued 44 decisions in 2019. Of those 44 decisions, 24 have been Rule 36 judgments, which are simply one-word judgments that substantively say: “Affirmed.” Twenty of the decisions have been non-precedential decisions. So far in 2019, only 13 decisions of the Federal Circuit have been designated precedential. To do the math, this means 42.1% of the Court’s decisions have been Rule 36 judgments. More generally, combining Rule 36 and non-precedential opinions together, we see that 77.2% of the Court’s decisions are non-precedential, and only 22.8% are precedential.

Alleged Due Process, APA Violations by PTAB Rule 36ed by Federal Circuit

Federal Circuit issued a Rule 36 summary judgment in Chart Trading Development, LLC v. Interactive Brokers LLC, affirming the invalidation of patent claims owned by Chart Trading in covered business method (CBM) proceedings instituted at the Patent Trial and Appeal Board (PTAB). In issuing the summary affirmance of the PTAB, the Federal Circuit panel of Circuit Judges Pauline Newman, S. Jay Plager and Kimberly Moore declined the opportunity to comment on Chart Trading’s arguments on the PTAB’s alleged due process violations by changing the construction of a key term in its final written decision… If the government can award a franchise and that franchise can be taken away in a manner that violates the APA, what is the point in seeking the government franchise in the first place? If the Court charged with making sure the agency that strips government franchises is following the rules is going to decide cases of such importance with only one word — Affirmed — one has to question whether a government franchise is at all a worthwhile pursuit.

Federal Circuit Issues Another Rule 36 Patent Eligibility Loss to a Patent Owner

This particular Rule 36 patent eligibility loss for the patent owner came in Digital Media Technologies, Inc. v. Netflix, Inc., et al., affirmed the district court’s finding that patent claims asserted by Digital Media against Netflix, Amazon and Hulu were invalid under 35 U.S.C. § 101 because they were directed to an abstract idea… Using Rule 36 in an area of the law as unstable, chaotic and unpredictable as patent eligibility is irresponsible. Whether the decision would be the same or not, the parties and the public have a right to have the Federal Circuit make sense ‘this § 101 conundrum.’

Can the Federal Circuit use Rule 36 Affirmances in PTAB Appeals?

Inventor advocacy group US Inventor recently filed an amicus brief with the U.S. Supreme Court asking the nation’s highest court to grant a petition for writ of certiorari in Capella Photonics v. Cisco Systems. This case, if taken up on appeal, will require the Supreme Court to answer whether the Court of Appeals for the Federal Circuit operates in violation of 35 U.S.C. § 144, the statute governing how the Federal Circuit must respond to appeals of decisions from the U.S. Patent and Trademark Office. In other words, can the Federal Circuit use Rule 36 to issue an affirmance without opinion of decisions appealed from the Patent Trial and Appeal Board (PTAB).

Capella Photonics Challenges Federal Circuit Practice of Judgments Without Opinions

Capella Photonics, Inc. has filed a petition for certiorari arguing that the Federal Circuit’s practice of issuing judgments without opinion pursuant to Federal Circuit Rule 36 in appeals from the Patent Trial and Appeal Board violates 35 U.S.C. § 144, which provides that the Federal Circuit “shall issue . . . its mandate and opinion” to the PTO in such appeals. 

Supreme Court Petition Challenges PTAB’s Constitutionality Under the Takings Clause

Advanced Audio’s petition for writ of certiorari notes, all five patents were filed with the U.S. Patent and Trademark Office prior to the enactment of the America Invents Act (AIA), which established the PTAB. Prior to Congressional passage of the AIA, Advanced Audioe didn’t need much litigation of its patent rights to license its patents and achieve most of its revenue. After the AIA passed, Advanced Audio began having to again file suits against those who were practicing its patented technology without a license. The patents invalidated by the PTAB were asserted by Advanced Audio in cases against Amazon, HTC and Pantech Wireless all filed in the Northern District of Illinois. Those cases are stayed in district court pending the resolution of this case, which has created significant costs through attorney fees and significant loss of royalty revenue.

Petition for En Banc Review Asks Federal Circuit for Clarity on Single Reference Obviousness

The focus of the appeal is the need for clarity with respect to hopelessly irreconcilable caselaw on the issue of single reference obviousness… Decisions from the Federal Circuit have created an irreconcilable split within the Federal Circuit itself regarding the proper approach to obviousness determinations, American Vehicular Sciences argues. Indeed, many commentators (ourselves included) have noticed that now more than ever on a variety of issues the outcome of a decision at the Federal Circuit is completely dependent on the panel assigned to the case. While that has been a criticism of the Federal Circuit for some time, it increasingly seems outcomes are arbitrary, capricious and wholly unpredictable— at least until you know who the judges are who will decide the case.

Is the Federal Circuit using Rule 36 to avoid difficult subject matter?

Obviously, Judges cannot be experts on all things, but this apparent lack of understanding of something so fundamental to the case was a bit alarming for the patent owner. Surely, Judge Reyna would clear up his understanding of the difference between a web page and a web server after oral argument and realize that the arguments being made by the defendant were unnecessarily confusing, but also contradicted arguments previously made. Unfortunately, we will never know whether Judge Reyna continues to believe that a web page and a web server are the same thing, or whether the other Judges on the panel were equally confused, because the Federal Circuit issued a Rule 36 affirmance of the trial court’s decision

Did Federal Circuit Fail to Understand the Technology? We Will Never Know Thanks to Rule 36!

But did Judge Reyna really fail to understand the importance that a web page and the page server are not the same thing as the Federal Circuit adjourned to deliberate? Did he and the other judges on the panel continue to have this important, yet fundamental misconception during deliberations? Did the reality that a web page and a page server are not the same thing become appreciated and understood by the Federal Circuit panel, or did this fundamental misconception perpetuate itself up to and through the decision making process? Did counsel for IBM managed to mislead the panel? Did the panel even realize that IBM had made the exact opposite argument about WebSphere technology at the district court? The sad, and rather inexplicable reality is it is impossible to know whether the Federal Circuit was mislead, simply didn’t understand the technology, or was even hoodwinked.

Federal Circuit Issues Rule 36 Affirmance of PTAB After Acknowledging Lack of Technical Knowledge in Oral Arguments

On March 13th, the Court of Appeals for the Federal Circuit issued a decision in Cascades Projection v. Epson America, which upheld a ruling by the Patent Trial and Appeal Board (PTAB) to invalidate the asserted claims in a patent covering a system of projecting images using a liquid crystal display (LCD). During oral arguments, one judge of the Federal Circuit opined that it may not have enough testimony in order to decide the case correctly. To save themselves any discussion, the Federal Circuit panel of Circuit Judges Jimmie Reyna, Evan Wallach and Todd Hughes issued a Rule 36 affirmance of the PTAB’s decision, upholding the PTAB without discussing any reason as to why.

USPTO admits to stacking PTAB panels to achieve desired outcomes

The USPTO admits that the Director does not have statutory authority to adjudicate an issue after a panel has been chosen, but argues that the Director can assert administrative authority to intentionally select Judges that will rule diametrically opposite to those Judges originally assigned to the case, thereby stacking any panel the Director chooses to achieve the result the Director wants in any case… This admission by the USPTO is both stunning and scandalous for at least two reasons. First, the Administrative Procedure Act, which applies to the PTAB, demands decisional independence, which obviously is not happening when the Director of the USPTO can stack a panel to achieve a particular desired outcome.

Rule 36, Collateral Estoppel and Unequal Treatment at the Federal Circuit

IntegraSpec was denied the opportunity to make its case here because of collateral estoppel based on the reasoning that they already had a full and fair opportunity to litigate the dispute. What exactly does “full and fair” mean? Figuring out what the means in the context of Rule 36 disposals is complicated. We do know, however, what “full and fair” cannot mean. The term “full and fair” cannot mean “equal.” While the Federal Circuit continues to want to say that cases decided using the Rule 36 summary mechanism are “no less carefully decided,” the fact is that litigants in Rule 36 cases receive less consideration by the Court; this truth is factually indisputable. It takes a certain amount of time to decide the answers to the questions presented, but it also takes a certain amount of time to explain those answers in a written decision. To think the act of writing the decision is purely ministerial and makes no difference strikes me as pure nonsense.

Federal Circuit says Rule 36 Judgments can have Preclusive Effect

A Federal Circuit Rule 36 judgment can be a valid and final judgment for purposes of preclusive effects. Additionally, district court findings affirmed by a Rule 36 judgment can have preclusive effect as long as each is “necessary” to the final appellate judgment. The Federal Circuit did not address the Circuit split regarding the preclusive effect of independent, alternative holdings.

The Federal Circuit should never use Rule 36 if a patent claim is invalidated

What happens if a patent owner who suffered that Rule 36 summary loss to Google at the Federal Circuit were to decide to sue another party – perhaps Apple – on the same claims that were invalidated in the above mentioned hypothetical Google proceeding? No doubt Apple’s attorneys would be rightfully indignant, and if the proceeding were in federal district court you could guarantee there would be sanctions, likely against both the patent owner and the attorneys representing the patent owner. Why? Because those claims have been lost (i.e., invalidated) in a prior proceeding, and it does not matter that Apple was not privy to that prior proceeding. The underlying property right has been lost, and whether the Federal Circuit wants to admit it or not that is binding precedent.