All posts by Jason Rantanen

About Jason Rantanen

Jason is a Law Professor at the University of Iowa College of Law.

Willfulness: Federal Circuit Denies En Banc Review in Halo v. Pulse

By Jason Rantanen

Halo Electronics, Inc. v. Pulse Electronics, Inc. (Fed. Cir. 2015) (denial of rehearing en banc) Halo Order

The Federal Circuit denied Halo’s petition for rehearing en banc today over the dissent of Judges O’Malley and Hughes.  (For background, Dennis and I previously wrote about the opinion and the petition for rehearing).  The concurrence and dissent focused solely on the issue of willfulness, which Halo had framed as:

Willfulness: Whether an infringer who subjectively knew pre-suit that it was infringing a valid patent (after being given notice of the patent, and failing to design around, seek a license, or stop infringing) can use an unsuccessful defense developed post-suit as a per se bar to liability for pre-suit willful infringement, despite the flexible text of 35 U.S.C. § 284.

This is not the right case: Concurring in the denial of the rehearing en banc, Judge Taranto, joined by Judge Reyna, wrote separately to explain that the denial was appropriate because “Halo raises only one question about the enhanced-damages provision of the Patent Act, 35 U.S.C. § 274, and I do not think that further review of that question is warranted.”  Concurrence at 4.  In the concurrence’s view, “[t]he only enhancement-related question that Halo presents for en banc review is whether the objective reasonableness of Pulse’s invalidity position must be judged only on the basis of Pulse’s beliefs before the infringement took place.” Id. at 5.  In Judge Taranto’s view, “Halo has not demonstrated the general importance of that question or that the panel’s assessment of objective reasonableness is inconsistent with any applicable precedents or produces confusion calling for en banc review.”  Id.  Nor is the requirement of objective recklessness affected by Octane Fitness.

Nevertheless, the concurrence observed, there are many aspects of the court’s § 284 jurisprudence that could bear revisiting en banc, including “whether willfulness should remain a necessary condition for enhancement under § 284’s “may” language,”” the proper standards for finding willfulness,” “who makes which decisions and what standards of proof and review should govern those decisions,” whether “a judge or jury decide willfulness, in full or in part,” whether “willfulness (or, rather, its factual predicates) have to be proved by clear and convincing evidence,” and “what standards govern appellate review”?  In Judge Taranto’s words, “Whether such questions warrant en banc review will have to be determined in other cases.”  Id. at 1.

The Willfulness Jurisprudence Should be Reevaluated: Judge O’Malley, joined by Judge Hughes, disagreed for the same reasons provided in her dissent to the original opinion (discussed here).  The court’s “jurisprudence governing the award of enhanced damages under § 284 has closely mirrored our jurisprudence governing the award of attorneys’ fees under § 285.” Dissent at 2. But “[w]e now know that the artificial and awkward construct we had established for § 285 claims is not appropriate. We should assess whether the same is true with respect to the structure we continue to employ under § 284.”  Id. at 4.  Both the court’s framework for assessing willfulness and the framework for attorneys’ fees were predicted on its interpretation of Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993).  But in Octane Fitness, the Supreme Court held that the Federal Circuit had misunderstood PRE for its attorneys’ fees inquiry.  Consequently “[w]e should now assess whether a flexible test similar to what we have been told to apply in the § 285 context is also appropriate for an award of enhanced damages.”  Id. at 5.

Beyond the effect of Octane Fitness, Judge O’Malley identifies additional issues with the current willfulness framework: its requirement of clear and convincing evidence, the court’s imposition of de novo review, which was rejected for fee awards by the Court in Highmark, and who should be making the decision to enhance damages: the judge or the jury?

The Unsettled Standard of Review: Shortly after releasing its denial of rehearing en banc in Halo, the court issued a revised opinion in Stryker v. Zimmer, in which it added a new footnote:

6   This court has not yet addressed whether Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), or Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1746 (2014), altered the standard of review under which this court analyzes the objective prong of willfulness. However, as the district court failed to undertake any objective assessment of Zimmer’s specific defenses, the district court erred under any standard of review and thus this court need not now address what standard of review is proper regarding the objective prong of willfulness.

Combined with the additional language in Stryker v. Zimmer, the court may be gearing up to take on a compromise issue in willfulness: namely, whether a modified standard of review is appropriate.  That said, it is entirely possible that the Supreme Court will take on the bigger question that Judge O’Malley raises in dissent.  Halo remains an appeal to watch.

Guest Post: The Layered Patent System

Guest post by Michael Risch, Professor of Law, Villanova University School of Law.  Professor Risch also recently joined the Written Description blog as a regular author.  The full article, forthcoming in the Iowa Law Review, is available here.

This follows my last guest post about my article A Generation of Patent Litigation and is the third in my Patent Troll Myths series of studies of the ten most litigious NPEs from 2000-2010. To recap, I gathered data on 1313 randomly selected patent cases distributed over a 25 year period in roughly the same proportion as the 917 cases filed by the most litigious NPEs over the same time period. The number of cases grew substantially starting in 2004. This led to 792 nonNPE patents versus 352 NPE patents, which indicates that the NPEs asserted the more patents per case. This article expands on the last one by looking at the technology categories for each patent as well as the initial source of the patent that wound up in litigation.

The results of my analysis confirmed much of what we already knew, but the data allowed me to demonstrate it. In short, patent litigation is a complex system made up of at least three layers: inventors and their assignees, patent plaintiffs, and technology. There are surely more layers, like defendants and licensees, but these three layers have some of the most relevance to patent quality. The problem is that most of our discourse examines one—or maybe a second—layer at a time, but rarely all three. Thus, we have NPEs versus producers, software versus pharma, individuals versus corporations. We rarely have data that includes all three of these layers in one place. When they are included, they are usually considered control variables rather than additional explanatory measures.

This study seeks the interconnection between the layers. I’ll give a few examples in this post, but there is a lot more detail in the paper.

Consider, for example, initial assignees. Both the random plaintiffs and the most litigious NPEs obtained a majority of their patents from product companies. And a substantial percentage of those companies were public for both groups (though about twice as many for the random plaintiffs). But not all product companies are created equal. Among the random companies, the initial assignees were bigger, better funded by venture and stock market investors, had more employees, and earned greater sales.

What does this mean? Any quality differences we might see between the NPEs and random plaintiffs might relate to the size and types of companies obtaining those patents. It also means that the technologies we see the NPEs enforcing might be the types of technologies that require less investment.

In fact, we do see different types of technologies. The following table shows the top five patent classes for each group with a comparison to the percentage held by the other group. The differences are stark. The paper shows the top 13 categories, and shows that 66% of the NPE patents are in the top 13 classes, while only 30% of the random group’s patents are in the top 13 classes.

Top NonNPE Classes Top NPE Classes
Class   NonNPE NPE Class   NonNPE NPE
514 Drug 4.17% 0.28% 379 Telephonic Comm. 2.40% 17.05%
362 Illumination 4.17% 0.28% 360 Mag. Info. Storage 0.00% 8.24%
348 Television 3.66% 6.53% 705 Fin. Bus. Meth. 1.01% 6.82%
424 Drug 3.54% 0.00% 348 Television 3.66% 6.53%
349 Liquid Crystal 2.53% 0.00% 709 Data Process. Trans. 1.89% 4.55%


When we break down by technology and by plaintiff type (two different layers), we see differences that weren’t apparent before. The graphs below show two categories, e-commerce, which has higher invalidation rates, and electric circuits, which has lower.


In electronic commerce, the nonNPE group saw no challenges – at all. Among the litigious NPEs, however, nearly half of the patents were challenged. When there was a decision on the merits, patents were completely invalidated about half as often as they were held valid. But much of the time, challenges were denied or pending at dismissal.

For electric circuits, however, patents were challenged at about the same rate. But this time it was the nonNPE group that was more likely to reach a decision on the merits – with validation more than twice as much as invalidation when there was a decision on the merits, but also a decision on the merits almost three-fourths of the time. Among the litigious NPE group, however, all of the challenges were denied or pending at settlement, and none went through to final judgment.

These are just two technology categories. The paper compares several others, including optics, chemistry, and medical instruments. It also considers results for different types of software (and for non-software).

As a final test, I ran a series of regressions to test the likelihood that a patent would be adjudicated to have any invalid claim. The full model is presented in the paper, but a few of findings stood out.

First, patents coming from failed startups had the highest correlation with invalidity, regardless of who enforced the patent.

Second, patents left unassigned at issuance were more likely to be invalidated whether asserted by either group (though individual obtained patents fared better when asserted by the random plaintiffs). However, the same was not true of patents assigned to inventor-owned companies. The data does not allow a causal inference, but there appears to be something about inventors starting their own companies that improves validity outcomes later.

Third, once source of the patent and type of plaintiff is controlled for, invalidity differences appear for only some types of technology. This is consistent with the graph I show above, but more rigorous. Thus, for example, cryptography patents are invalidated about one-third as often when we consider the source of the patent and type of plaintiff as compared to just looking at the average cryptography patent without patentee/plaintiff type. On the other hand, optics patents are invalidated at about the same rate, whether or not we consider the source or plaintiff type.

Fourth, these findings continue for software. Though software patents are, on average, invalidated more often than other patents (a finding consistent with other studies), when the type of patentee and plaintiff is considered, whether the patent covers software is no longer statistically significant.

This last point is ultimately the point of the article. When we consider all of the layers of the system rather than just the averages on any one layer, the picture gets far more complex. My data can’t answer every question, of course. After all, I only studied the most litigious NPEs. But even this sample shows the complexity. There’s much more I could write, but I’m out of space. The full article is here if you are interested in reading more.

Patent Litigation Data – March 2015

By Jason Rantanen

One of the main pieces of empirical data being drawn upon by folks arguing for and against various patent law reform proposals is the rate of new patent lawsuit filings.  As the intellectual property scholars’ letter to Congress recently observed, while there were fewer patent lawsuits filed last year than in 2013, that year was itself a record-setting year for patent lawsuit filings.  Professor Matthew Sag’s new study, IP Litigation in the United States District Courts: 1994 to 2014, illustrates the point of rising patent litigation dramatically: in the sixteen years from 1994 until 2010, the annual number of patent lawsuit filings doubled; it doubled again in the three years from 2010 to 2013.

While Professor Sag’s study provides a comprehensive empirical look at intellectual property litigation rates across all areas, over at Lex Machina legal data scientist Brian Howard has dug deeply into the patent lawsuit filing rate numbers to examine whether the America Invents Act led to a reduction in patent lawsuit filings once the anti-joinder provision of the AIA is accounted for.  Even when  controlling for the disaggregation of multi-defendant suits, he finds a rise in patent lawsuit filings during the two years after the enactment of the AIA.  While the more recent period has seen filings turn downward, his findings about the short term effects of the AIA are surprising and worth thinking about further.

Finally, as I’ve noted in the past, I find it useful to think not just about new patent lawsuit filings, which can provide a barometer of future patent litigation activity, but also about currently pending patent litigation and lawsuit termination rates.  In my view, these provide a better (although still imperfect) gauge of what kind of patent activity courts are presently seeing.  Figures 1 and 2 below are updated versions of the pending patent lawsuit data that I’ve previously written about.

Figure 1

Figure 1

Figure 2

Figure 2

The bottom line for this data is that while pending patent litigation remains below the all-time highs of the late 2013’s and early 2014, this activity has plateaued over the last few months and even rose slightly in February.  Digging a bit under the hood of the data, this rise appears due an increase in filings over that month as opposed to a drop in terminations, with February 2015 seeing about 500 new patent cases filed—a rise of 69 over January despite the shortness of the month.  Given the close attention that is paid to patent lawsuit filing rates, I suspect that this is a point that will be jumped on by many.  The below graph shows the number of patent actions filed, using LexMachina data, on a monthly basis from August 2014 – February 2015.

Figure 3

Figure 3

Guest Counterpoint by Prof. Sichelman: The Innovation Act’s Fee-Shifting is Biased against Patent Holders and Will Likely Increase PAE Activity

Ted Sichelman is a Professor of Law and Director of the Technology Entrepreneurship and Intellectual Proerty Clinic and Center for Intellectual Property Law & Markets at the University of San Diego School of Law. 

Representative Bob Goodlatte’s bill, HR 9 (the “Innovation Act”), has been receiving much attention in the press and on the Hill. The Innovation Act is largely identical to the one (HR 3309) that passed the full House in late 2013, so of all the pending patent reform bills, it is likely to receive the most play in Congress this term.

The Innovation Act includes what seems to be a neutral fee-shifting provision. Specifically, it would require a court to “award, to a prevailing party, reasonable fees and other expenses … unless the court finds that the position and conduct of the nonprevailing party or parties were reasonably justified in law and fact or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust.”

Unfortunately, many commentators have focused the issue of whether this provision creates a presumption in favor of fee-shifting without carefully considering the many affiliated provisions in the bill. These additional provisions are particularly important because—contrary to the language quoted above—they significantly skew the effects of fee-shifting against patent holders. Given this lopsided effect, the fee-shifting provisions would probably increase patent assertion entity (PAE) activity. As I explain further below, this is because the provisions would most likely substantially reduce PAEs’ costs of acquiring patents.

A close reading of these additional fee-shifting provisions makes their skewed nature readily apparent. Take, for instance, the provision for “interested” third-party liability. It essentially makes those with a “direct financial interest in the patent . . . damages [award] or . . . licensing revenue” liable in the event a losing patent holder cannot pay a fee award (subject to certain exclusions). By its terms, the third-party liability provision only benefits “a prevailing party defending against an allegation of infringement of a patent claim” (emphasis added). So while third-party liability is quite expansive for those affiliated with losing patent holders, it is nonexistent for those affiliated with losing accused infringers.

Beyond discriminating against patent holders, the third-party liability provision further discriminates against non-practicing patent holders. Third-parties may only be joined in the event that the “prevailing party shows that the nonprevailing party has no substantial interest in the subject matter at issue other than asserting such patent claim in litigation.” This limitation would clearly capture non-practicing entities (NPEs), at least those who do not perform any R&D—although whether and when R&D is sufficient to meet the “substantial interest” threshold is undefined in the statute and thus unclear. If fee-shifting is truly designed to reduce low-quality suits, there is little basis to limit third-party liability only to NPEs. Anyone who has litigated knows that practicing entities, like NPEs, bring both strong and weak suits. There is a substantial economic interest in preventing frivolous suits regardless of the plaintiff’s business model.

Another example of the skewed nature of HR 9 is that settlement counts as a win for the accused infringer when the patentee “unilaterally extends to [the accused infringer] a covenant not to sue for infringement,” unless the patentee could have voluntarily dismissed the action without a court order. My understanding from experienced litigators is that these unilateral covenants tend to occur when the patent holder simply runs out of money and cannot continue to litigate. In this case, courts will often force the patent holder to provide a covenant not to sue in exchange for allowing it to drop the action. Presumably a patent holder providing such a covenant would sometimes not be able pay a fee award, which—if the patent holder is non-practicing—would allow the court to impose judgment on qualifying “interested” third-parties. On the other hand, if an accused infringer goes bankrupt, leading to a default judgment, the patent holder cannot join interested third-parties of the accused infringer when attorneys’ fees are owed.

The upshot of these provisions is to massively skew fee-shifting against the interests of patent holders, leading to an asymmetric risk that would very likely cause risk-averse inventors and assignees to avoid directly enforcing their patents, sometimes even strong ones. This is especially so because patent litigation is highly uncertain and costly, and the relevant test in the provision is the fairly open-ended “reasonably justified in law and fact” standard. Indeed, “reasonable fees and other expenses” in patent cases can be quite high—in large cases, well over $5 million—which would generally be a huge sticker shock to small companies and individual inventors with limited resources. Even a small percentage chance of a paying these fees could deter risk-averse inventors and assignees. In my personal experience running and dealing with many startups and individual inventors, they often are very risk averse when it simply comes to paying their own litigation expenses, much less the opposing party’s fees.

Oddly, the asymmetric nature of the Innovation Act’s fee-shifting provision may have the very opposite effect of what it purports to achieve by reducing so-called “patent troll” suits. As others have argued, the reason is straightforward: PAEs can more easily absorb the risk of bringing suit in the face of potential fee-shifting than startups and individuals. As I already pointed out, startups, individual inventors, and small companies are generally highly risk-averse patent holders. They would therefore fear liability being imposed on them for the direct enforcement of their patents (or if they simply retained an “interest” in a patent that was enforced by a third-party). As such, they would be more likely to sell their patents outright to PAEs instead of retaining a percentage in the litigation (as is standard today).

In fact, PAEs and their funders have already become savvy in this regard and often use single-purpose litigation entities with passive equity investors who cannot “influence, direct, or control” the litigation, removing these investors from liability under the Innovation Act. This approach makes the risk that the plaintiff would not be able to pay fee awards even more acute, leaving the original inventors on the hook if they retain a percentage stake of the proceeds (or probably even an equity stake in the single-purpose entity, because arguably the inventors can “influence” the litigation via their direct involvement). Indeed, even large companies and universities that monetize their patents via PAEs may decide to sell their patents outright to these PAEs, rather than retain a percentage stake, because of the unnecessary risk of placing their assets on the line. (Although the Innovation Act contains an escape valve whereby third parties can renounce all interest in the patents and avoid liability, it must be done very soon after a complaint is filed, which makes it of little use in a typical PAE deal.)

This shift from percentage deals to outright purchases would likely substantially drive down PAE patent acquisition costs. Because independent inventors and startups are risk averse—and some larger companies and universities likely are as well—these entities would expand the number of patents available for direct purchase by PAEs. This would likely push costs low enough that PAEs could afford to acquire much larger pools of patents, thereby increasing PAE assertions and reducing funds remitted back to original inventors and assignees.

Conversely, even though the Innovation Act is highly biased in favor of accused infringers, a risk-neutral PAE or large practicing patentee may be able to extract greater settlements from risk-averse accused infringers, such as startups and small companies, by credibly threatening to take a strong case to trial. This is contrary to the poorly reasoned analysis by organizations such as the Electronic Frontier Foundation, which wrongly assumes that PAEs are “patent trolls” that file “weak” suits and also seemingly forgets small companies are regularly sued by larger competitors. Thus, the Innovation Act’s fee-shifting provisions could very well hurt small companies and startups that are defendants accused of infringement.

In sum, the gains from the Innovation Act’s fee-shifting provision, may simply go to large, risk-neutral companies, regardless of whether they are the Intellectual Ventures or Ciscos of the world, just as scholarly analysis has shown how fee-shifting operates in other areas of the law. Perhaps that is why it is not a coincidence that the Intellectual Property Owners Association , which is dominated by large companies, does not oppose it, while the National Venture Capital Association effectively does oppose it. Like the America Invents Act, the Innovation Act’s fee-shifting provisions would probably shift today’s innovation footprint away from the radical and disruptive (associated more with startups and individuals) towards the incremental (associated more with large, established companies).

There is no solid evidence that the potential benefits of the Innovation Act’s biased fee-shifting provision would outweigh its likely substantial costs. These costs could be so large that that even if we include the touted benefits from all of the other provisions in the Innovation Act, some of which could prove useful, I doubt the Act is worth it. In the very least, we should not impose radical and potentially very costly changes in the patent system without very good evidence. As such, anyone who cares about innovation as a whole should oppose the Innovation Act as it stands.

Fenner v. Cellco: Judge Newman Speaks on Claim Construction

By Jason Rantanen

Fenner Investments, Ltd. v. Cellco Partnership (Fed. Cir. 2015) Download Fenner v Cellco
Panel: Newman (author), Schall, Hughes

In Fenner v. Cellco Partnership, Judge Newman adds another voice to the chorus of Federal Circuit judges reading Teva v. Sandoz as having little effect on the court’s routine review of district court claim constructions.  Here, the panel affirms the district court’s construction of the term “personal identification number” under what appears to be a de novo standard of review   Frustratingly, the opinion never states which standard of review it is applying either generally or to any given issue, but I read all of the issues it addresses as either consisting of intrinsic evidence or going to the “ultimate question” of claim construction.

Judge Newman’s Articulation of the Post-Teva standard of review.  The appellate analysis begins with the established reading of Teva as reinforcing a largely de novo standard of review for claim construction:

 We review de novo the ultimate question of the proper construction of patent claims and the evidence intrinsic to the patent. Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015); id. (“[W]hen the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo.”). The district court’s determination of subsidiary facts based on extrinsic evidence is reviewed for clear error. Id. at 835, 841.

After noting that the appellant’s argument rested on a plain meaning versus the specification & prosecution history tension, the opinion summarizes the claim construction process:

The terms used in patent claims are not construed in the abstract, but in the context in which the term was presented and used by the patentee, as it would have been understood by a person of ordinary skill in the field of the invention on reading the patent documents. See Biogen Idec, Inc. v. GlaxoSmithKline LLC, 713 F.3d 1090, 1095 (Fed. Cir. 2013) (“[A] term’s ordinary meaning must be considered in the context of all the intrinsic evidence, including the claims, specification, and prosecution history.”). Thus, a claim receives the meaning it would have to persons in the field of the invention, when read and understood in light of the entire specification and prosecution history. Phillips v. AWH Corp., 415 F.3d 1303, 1312– 1317 (Fed. Cir. 2005) (en banc). Any explanation, elaboration, or qualification presented by the inventor during patent examination is relevant, for the role of claim construction is to “capture the scope of the actual invention” that is disclosed, described, and patented. Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d 1296, 1305 (Fed. Cir. 2011).

In this articulation of the process, both the specification and the prosecution history play an important role.  But Judge Newman does not stop with this summary; she digs into the meaning of claim construction itself:

Words are symbols, linguistic embodiments of information sought to be communicated, and, as such, can be imperfect at representing their subject. The Supreme Court recently observed this challenge to patent claim interpretation, stating in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2128-29 (2014), that “the definiteness requirement must take into account the inherent limitations of language,” and that clarity is required although “recognizing that absolute precision is unattainable.” When the disputed words describe technology, the terse usage of patent claims often requires “construction” in order to define and establish the legal right. Judicial “construction” of patent claims aims to state the boundaries of the patented subject matter, not to change that which was invented.

Beginning with the written description issue, the opinion concludes that the district court used that portion of the patent properly:

The foundation of judicial claim construction is the “written description” in the specification. The patent statute requires that the claims “particularly point[] out
and distinctly claim[] the subject matter” that the applicant regards as the invention. 35 U.S.C. §112(b). The district court appropriately consulted the description in the ’706 specification “for the purpose of better understanding the meaning of the claim.” White v. Dunbar, 119 U.S. 47, 51 (1886).

The prosecution history further bolstered the district court’s construction even though the examiner did not appear to have relied upon the relevant statements by the applicant in granting the patent:

Fenner argues that these purportedly limiting statements he made during prosecution do not limit the claims, arguing that the statements and the limitations discussed were not the basis for grant of the patent. However, the interested public has the right to rely on the inventor’s statements made during prosecution, without attempting to decipher whether the examiner relied on them, or how much weight they were given. See Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1350 (Fed. Cir. 2004) (“[A] patentee’s statements during prosecution, whether relied on by the examiner or not, are relevant to claim interpretation.”); Laitram Corp. v. Morehouse Indus., Inc., 143 F.3d 1456, 1462 (Fed. Cir. 1998) (“The fact that an examiner placed no reliance on an applicant’s statement distinguishing prior art does not mean that the statement is inconsequential for purposes of claim construction.”)

The court also rejected the appellant’s arguments based on interoperability (concluding that the district court’s construction did not render the claim inoperable) and claim differentiation:

Although claim differentiation is a useful analytic tool, it cannot enlarge the meaning of a claim beyond that which is supported by the patent documents, or relieve any claim of limitations imposed by the prosecution history. See, e.g., Retractable Techs., 653 F.3d at 1305 (“[A]ny presumption created by the doctrine of claim differentiation ‘will be overcome by a contrary construction dictated by the written description or prosecution history.’” (quoting Seachange Int’l, Inc. v. C-COR, Inc.,413 F.3d 1361, 1369 (Fed. Cir. 2005))); Toro Co. v. White Consol. Indus., Inc., 199 F.3d 1295, 1302 (Fed. Cir. 1999) (“[T]he doctrine of claim differentiation does not serve to broaden claims beyond their meaning in light of the specification, and does not override clear statements of scope in the specification and the prosecution history.” (citation omitted)).




Guest Post by Dr. Gaudry and Prof. Tu – Our Call to the PTO: Release SAWS Data

Guest Post by Dr. Kate Gaudry and Prof. Shine Tu.  Professor Tu is an Associate Professor of Law at the West Virginia College of Law.  Dr. Gaudry is a patent attorney with Kilpatrick Townsend.

The Sensitive Application Warning System, or SAWS, program is a secretive program operated by the U.S. Patent and Trademark Office that flags certain patent applications for a heightened level of scrutiny. In October 2014, the PTO responded to one of our requests for information about SAWS. This post discusses the data the PTO provided, highlights areas where it is incomplete, and explains our concerns about the information the PTO declined to provide.

The SAWS program operates like this: If an examiner determines that a criterion applied to an application being examined, he/she is to propose that the application be characterized as a SAWS applications. When an application is entered into the SAWS program, multiple other people (seemingly up to eight or more people) must review and approve examiner-proposed notices of allowances. This enhanced-scrutiny review can negatively impact the applicant. For example, it would likely result in a reduced probability that an application would be allowed, an increased number of office actions issued and an increased pendency. Further, it would appear to prevent the applicant from being able to talk to (via an interview) or even identify the decision-makers controlling an application’s fate. Despite these potential consequences, applicants are not informed when an application is entered into the SAWS program, and the PTO refused to respond to multiple of our requests to identify SAWS application numbers. The PTO instead has insisted that SAWS has a minimal impact on prosecution. (See This conclusion would be surprising given the structure of the program, and is contradicted by our preliminary data.

Sixty pages of memos indicated that there were approximately 100 SAWS-eligibility criteria. Some criteria seem reasonable: for example, “applications claiming inventions which would endanger individuals, the environment, the security of our nation, or public safety.” However, some criteria seem extremely broad, vague and/or frivolous, such as applications “dealing with inventions, which, if issued, would potentially generate unwanted media coverage;” “disclosing seemingly frivolous or silly subject matter;” “with claims of pioneering scope;” “claiming the prevention or curing of diseases which were previously considered impossible to prevent or cure, such as … Alzheimer’s disease, … [or] HIV infection;” and “[directed to] smartphones and other convergence-intensive devices.”) (A full summary of the released SAWS information and criteria can be found here: Given the breadth and vagueness of these categories, we are concerned that the SAWS program seems to be designed to allow the PTO to arbitrarily heighten the criteria of patentability for certain applications.

The PTO recently granted one or our requests to identify high-level statistics pertaining to the program. An initial report of some of these statistics can be found here []. In sum, the PTO provided data regarding the total number of applications that were flagged for SAWS evaluation in fiscal years 2006, 2008, and 2010 having each of three statuses: patented, pending or abandoned. Additionally, the PTO provided information segmenting these applications based on technology center assignment and prosecution statistics for individual application sets (each set corresponding to a SAWS designation, filing year and current status).

In short, very few applications are evaluated under the SAWS program (approximately 1 in 2500). However, for those that are – contrary to the PTO’s contentions – the PTO’s own data shows that the SAWS program has a sizable impact on prosecution, both in increasing prosecution duration and reduction in allowance rates.

SAWS Impact

Reduced Allowance Rate

One impact is that SAWS applications appear to be less likely to issue as patents and more likely to be pending for extended durations. We had requested data identifying the status for published, utility SAWS applications filed in fiscal year 2006 and for published, utility applications filed in the same time period. As reported in the January 2015 Law360 article [], far fewer SAWS applications had issued as compared to the greater application set (see Table 1), and many more were pending.

SAWS1FIG. 1 below breaks this result down by technology center. (“BM” is representative of the business-method art units in technology center 3600, which includes art units 3621-29, 3681-89 and 3691-96.) As shown, SAWS applications are generally substantially less likely than other applications to have issued as patents (FIG. 1A) and are substantially more likely to be pending (FIG. 1B).

Figure 1

Figure 1

It is impossible for us to evaluate the appropriateness of SAWS applications being less likely to be patented 9 years after filing than other applications because the PTO has not released the application numbers. Potentially, these SAWS applications include “silly” applications (however that is defined), or potentially these SAWS applications include a novel drug that will cure Alzheimer’s disease. But without the application numbers, we can only hypothesize about the contents of the SAWS-tracked applications.

Extended Prosecution of Patents

What we can, at least quantitatively, evaluate are those applications that the PTO eventually determined were worthy of a patent. As initially reported in the above-referenced Law360 article, the prosecutions of these patent-worthy applications were dramatically affected. In particular, it took substantially longer to receive notices of allowances. FIG. 2 is a new graph showing the time from application filing to patent issuance for SAWS patents and other patents filed in fiscal year 2006, separated by technology center.


Figure 2

Thus, years (on average, three years) are added to a patent’s pendency, and this delay will likely be even more substantial as the pending SAWS applications reach final disposition. Technology Center 1600 is one center where this delay is quite apparent. Given that Technology Center 1600 examines patent applications relating to (amongst other subjects) drug compounds and that SAWS applications are more common in Technology Center 1600 than many other technology centers, the delay may be of great societal concern, as it may affect investments devoted to the innovations and thus the accessibility of new treatments. Further, the number of SAWS applications in Technology Center 1600 has approximately doubled between filing year 2006 and 2010.

The prosecution delay could be, due to additional office actions issued against SAWS applications. For applications filed in fiscal year 2006 that have issued as patents, the average number of office actions issued per patent was 4.3 for SAWS patents and 2.3 for the corps-wide patent set. Another one of our upcoming articles on IPWatchDog shows the discrepancy in office-action counts and RCE filings for individual technology centers. This increase in office-action issuances and RCE filings likely requires applicants to invest substantially more money in procurement of a patent. (In our Law360 article [], we estimate the additional costs to be roughly $7000.)

Concerns and Oddities Surrounding SAWS

The PTO is Not Recognizing the Impact of SAWS

This data seems to suggest that the enhanced scrutiny of SAWS is not innocuous. Nonetheless, the PTO seems to be in denial of the data that the agency itself provided. As reported by Corporate Counsel [link to:] a PTO spokesperson said, in response to this data that “any time added to the prosecution of the patent is usually minimal.” Given that the average added delay is three years, this assessment seems to be inaccurate.

The PTO is Hiding its SAWS Classifications

The PTO has been repeatedly asked, by us and by others, to indicate whether particular applications are being evaluated under SAWS and/or to identify all SAWS applications. The PTO repeatedly refuses to do so. The agency asserts that the information is privileged as part of an agency’s deliberative process. Dennis Crouch has previously explained why he believes that this privilege assertion is misplaced. [Link to] Even if the privilege was proper (which the authors concur is not for multiple reasons), such privilege in this instance could be waived by the PTO. For the sake of transparency and to allow applicants to stay informed as to the true status of their applications, the PTO should choose to release such information. Such disclosure would also allow applicants to be able to identify who the true decision-makers are in relation to SAWS matters, rather than undergoing frustration with seeming inconsistencies between conversations (at which allowable subject matter is identified) with an examiner and official papers issued by the office (nonetheless rejecting an application).

SAWS Violates Proper Rulemaking

If we assume the SAWS program is a procedural, and not a substantive, rule, the PTO could have authority to promulgate such a rule. (The PTO does not have authority to make substantive rules.) However, procedural rules must be appropriately enacted. The PTO frequently complies with informal notice-and-comment rulemaking procedures (e.g., as opposed to formal rulemaking procedures). However, with regard to SAWS, neither notice nor comment opportunity were provided.

Up until December 2014 (shortly after our first Law360 publication conveying to the public the SAWS information we received), the PTO seemed to have no mention of SAWS on their website or in the MPEP. Even the new PTO website acknowledging the program [] does not include any information about how the program actually works. Rather, it merely speaks to the program’s purpose and downplays effects on applications’ examinations.

SAWS Violates Due Process

Possible property rights seem to be affected by SAWS. Applicants subjected to SAWS appear to be less likely to be patented, and patent issuance is delayed. This delay in issuance may preclude an applicant from protecting an invention during a critical time (e.g., critical in view of a competitive landscape, litigation, or investment opportunity). Despite these consequences, the PTO does not abide by fair procedures in relation to the program.

There is no clear criteria indicating what types of applications will be subjected to SAWS. Rather, the very broad, extensive SAWS-eligibility list could seemingly qualify many more applications to be reviewed under SAWS than the reported 0.04%.

Further, there is no disclosure as to how the program actually operates and which applications are affected. This precludes applicants from challenging or even understanding SAWS designations and immunizes the PTO from improper selection processes.

Our Call to the PTO: Be Transparent about SAWS

The PTO claims that SAWS is a mere quality-control effort, that SAWS applications undergo the same examination review as other applications, and that the SAWS process minimally affects processing delays. Nonetheless, to outsiders, this program is suspicious for at least the following reasons:

  • One of the top SAWS-eligibility criteria relates to reducing PTO embarrassment.
  • While the PTO has repeatedly asserted that SAWS does not affect examination delays, we have shown that contention to be wrong.
  • The SAWS-eligibility list could seemingly qualify most patent applications for SAWS, while only 0.04% are entered into the program. Thus, the actual SAWS-selection criteria is unknown to the public (and creates bias opportunity).
  • SAWS violates the PTO’s rulemaking authority.
  • SAWS violates due process.
  • The PTO has refused to identify which applications are in SAWS, such that it appears as though they are attempting to make the program immune from challenge or embarrassment.

If this program is a fair program, we call for the PTO to release the SAWS application numbers and, going forward, to inform applicants when their applications have been selected for SAWS review. We are not alone in this call, as attorneys from a variety of firms [] stand with us in asking why the PTO has kept this program a secret for decades and why the agency is reluctant to be transparent about its prior and current SAWS reviews.



In re Papst Licensing: Federal Circuit Speaks on Claim Construction

By Jason Rantanen

In re Papst Licensing Digital Camera Patent Litigation (Fed. Cir. 2015) (Download In re Papst)
Panel: Taranto (author), Schall, Chen

In its first precedential opinion addressing claim construction after Teva v. Sandoz, a panel of Judges Taranto, Schall and Chen take the approach that it is business at usual for the court—at least, as long as only intrinsic evidence is involved.

The most significant aspect of this opinion is the relationship between this appeal and Teva.  Here, the district court heard from the parties’ experts on the technical background, but “declined to admit expert testimony or to rely on an expert declaration from Papst, stating that ‘the intrinsic evidence—the claims, the specification, and the prosecution history—provide the full record necessary for claims construction.”  Slip Op. at 7.  Given this posture, the Federal Circuit comfortably applied a de novo standard of review.  From the opinion:

We review the grant of summary judgment of noninfringement de novo, applying the same standard used by the district court. See Bender v. Dudas, 490 F.3d 1361, 1366 (Fed. Cir. 2007). The infringement inquiry, which asks if an accused device contains every claim limitation or its equivalent, Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997), depends on the proper construction of the claims. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc). In this case, we review the district court’s claim constructions de novo, because intrinsic evidence fully determines the proper constructions. See Teva Pharm. U.S.A. Inc. v. Sandoz, Inc., 135 S. Ct. 831, 840–42 (2015). As we have noted, the district court relied only on the intrinsic record, not on any testimony about skilled artisans’ understandings of claim terms in the relevant field, and neither party challenges that approach.

Slip Op. at 8.  Operating within this framework, the court drew upon its “familiar approach to claim construction”:

“We generally give words of a claim their ordinary meaning in the context of the claim and the whole patent document; the specification particularly, but also the prosecution history, informs the determination of claim meaning in context, including by resolving ambiguities; and even if the meaning is plain on the face of the claim language, the patentee can, by acting with sufficient clarity, disclaim such a plain meaning or prescribe a special definition.”…We apply, in particular, the principle that “[t]he construction that stays true to the claim language and most naturally aligns with the patent’s description of the invention will be, in the end, the correct construction.”

Slip Op. at 9-10 (internal citations omitted).  Using that approach, the Federal Circuit reversed all of the district court’s claim constructions at issue.

While this appeal appears to involve Teva‘s paradigmatic scenario in which de novo review is appropriate, future appeals are less likely to offer such a relatively simple posture.   Rather, the expectation is that district judges will seek to insulate themselves from review by relying upon evidence that the Supreme Court said is due deferential review.  This increasing reliance on extrinsic evidence by district courts will result in appeals that intertwine the intrinsic with the extrinic.  That said, the above sections of the opinion suggest to me that the court is probably going to focus its review on the intrinsic evidence first and, if that is clear, will decide the appeal on that ground alone.

There’s another layer of complexity going on here that relates to the starting meaning* of words.  In Teva, the Court observed that:

Construction of written instruments often presents a “question solely of law,” at least when the words in those instruments are “used in their ordinary meaning.”…But sometimes, say when a written instrument uses “technical words or phrases not commonly understood,” id., at 292, those words may give rise to a factual dispute. If so, extrinsic evidence may help to “establish a usage of trade or locality.” []. And in that circumstance, the “determination of the matter of fact” will “preced[e]” the “function of construction.”…This factual determination, like all other factual determinations, must be reviewed for clear error.

Teva v. Sandoz at 5-6 (internal citations omitted).  A tension that emerges from this passage is the tension between “ordinary meaning” and “technical words or phrases not commonly understood.”  The latter, the Court’s opinion states, may be due deference; but when “ordinary meaning” is involved, it is a “question solely of law.”

Here, the claim construction did require some discussion of the ordinary meaning of words.  At issue was the meaning of the claim term “virtual files,” which the district court construed as meaning “files that appear to be but are not physically stored; rather, they are constructed or derived from existing data when their contents are requested by an application program so that they appear to exist as files from the point of view of the host device.”  Slip Op. at 21.  This construction, in the district court’s eyes, limited “the “virtual files” of the “virtual file system” to files “not physically stored on the interface device,” whose content is data “originating from the data transmit/receive device.”  Id.

In reversing the district court’s construction, the Federal Circuit began with its —not the district court’s—ordinary meaning.   “‘Virtual’ conveys some kind of as if action, one thing emulating another; the term was prominently used that way in the computer field at the time of the inventions here.  See CardSoft v. Verifone, Inc., 769 F.3d 1114, 1117–18 (Fed. Cir. 2014) (discussing Java Virtual Machine in patent dating to 1998).”  Slip Op. at 22.  With this meaning as the starting point, the CAFC concluded that the patent identifies this emulation as not turning “on whether data in a ‘virtual file’ is physically located in the interface device or a data device when the host seeks it.”  Id.

The district court, however, relied on a different source for its starting meaning:

The 1993 New IEEE Dictionary defined the term similarly to the construction proposed by the Camera Manufacturers. In the context of a “virtual record,” “virtual” was defined as: “a record that appears to be but is not physically stored; rather, it is constructed or derived from existing data when its contents are requested by an application program….The Court adopts the definition from the New IEEE Dictionary as the most clear and pertinent….”

In re Papst Licensing GmbH & Co. KG Litig., 670 F. Supp. 2d 16, 60 (D.D.C. 2009).  It’s unclear why the Federal Circuit didn’t address the district judge’s choice of starting meaning, substituting its own with no explanation of why.  It’s also not clear to me that the different starting point really matters for the ultimate issue of whether the claim term excludes files stored on the interface device.  But this kind of dispute, where a district judge relied on an extrinsic source for its starting point when construing a claim term, seems to be one that parties will try to make hay with in future appeals on claim construction.

*I’m using “starting meaning” to refer to the meaning that the party construing the claim term begins with; it may or may not be the “ordinary meaning.”  For some words, that may be our individual “mental lexicons,” as Kristen Osenga has described ; for other words, those meanings may come about when we look up the word in a dictionary.  For court opinions on claim constructions, the court will sometimes, but not always, state what it’s using as the starting meaning for a term.  Here, the Federal Circuit started with its meaning from the cited case, while the district court began from the point of the IEEE dictionary and the OED.

Opportunity for Latino Law Students Interested in Intellectual Property

By Jason Rantanen

The Hispanic National Bar Association and Microsoft are once again sponsoring their week-long HNBA/Microsoft Intellectual Property Law Institute (IPLI).  One of my students participated in the 2013 IPLI and raved about it for months afterwards.

From the IPLI website:

The “HNBA/Microsoft IP Law Institute” will provide opportunities for Latino students interested in intellectual property law, including patents, copyrights, trade secrets and trademarks. This summer, up to twenty-five Latino law students from law schools across the country will be chosen to participate in an IP immersion program in Washington, DC with all necessary expenses covered. Candidates will be selected in a highly competitive process, and the selected students will be provided substantive instruction, the opportunity to observe first-hand U.S. IP institutions at work, and the chance to meet leading members of the IP legal community who will serve as mentors and potentially provide pathways for future job opportunities.

For more details, check out the website:

Dr. Sheppard Selected as Director of USPTO’s Detroit Office

By Jason Rantanen

Congratulations to my colleague at the University of Nebraska College of Law, Dr. A. Christal Sheppard, who I understand has been selected as the first Director of the PTO’s Detroit satellite office.  From her biography at the College of Law:

Dr. Sheppard began her career as a scientist earning a M.S. and Ph.D. in Cellular and Molecular Biology from the University of Michigan.  After receiving a J.D. from Cornell University Law School and interning with Judge Rader at the Court of Appeals for the Federal Circuit and the Executive Office of the President’s Office of Science and Technology Policy, she was a practicing attorney at the law firm of Foley & Lardner earning extensive experience in patent prosecution, client patent counseling and ligation. She then served in the Office of the General Counsel of the United States International Trade Commission working on Section 337 matters, arguing before the United States Court of Appeals for the Federal Circuit. In 2005, Dr. Sheppard also completed Harvard University’s John F. Kennedy School of Government’s Executive Education for Senior Managers in Government program.

Her successful career in intellectual property law and policy included her tenure as Chief Counsel on Patents and Trademarks for the United States House of Representatives Committee on the Judiciary where she was integral in many endeavors including the Leahy-Smith America Invents Act, the most comprehensive change to this nation’s intellectual property laws in over 60 years.


Teva v. Sandoz: Deferential Review on Factual Issues; de novo review of final question of construction

By Jason Rantanen

Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. (2015) Download Opinion
Breyer (author), joined by Roberts, Scalia, Kennedy, Ginsburg, Sotomayor, and Kagan; Thomas (dissenting) joined by Alito.

One (or both) of us will certainly write more on this very important opinion.  The Court holds that subsidiary factual issues are reviewed for clear error while legal determinations continue to be reviewed de novo.  From the Court’s syllabus:

Held: When reviewing a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim, the Federal Circuit must apply a “clear error,” not a de novo, standard of review.  Pp. 4–16.


(c) This leaves the question of how the clear error standard should be applied when reviewing subsidiary factfinding in patent claim construction. When the district court reviews only evidence intrinsic to the patent, the judge’s determination is solely a determination of law, and the court of appeals will review that construction de novo. However, where the district court needs to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time peri­od, and where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings about the extrinsic evidence.  The district judge, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them.  The ulti­mate construction of the claim is a legal conclusion that the appellate court can review de novo. But to overturn the judge’s resolution of an underlying factual dispute, the appellate court must find that the judge, in respect to those factual findings, has made a clear error. Pp. 11–14.

(d) Here, for example, the District Court made a factual finding, crediting Teva’s expert’s account, and thereby rejecting Sandoz’s ex­pert’s contrary explanation, about how a skilled artisan would under­stand the way in which a curve created from chromatogram data re­flects molecular weights.  Based on that factual finding, the District Court reached the legal conclusion that figure 1 did not undermine Teva’s argument that molecular weight referred to the first method of calculating molecular weight. When the Federal Circuit reviewed the District Court’s decision, it did not accept Teva’s expert’s explanation, and it failed to accept that explanation without finding that the Dis­trict Court’s contrary determination was “clearly erroneous.”  The Federal Circuit erred in failing to review this factual finding only for clear error.  Teva asserts that there are two additional instances in which the Federal Circuit rejected the District Court’s factual find­ings without concluding that they were clearly erroneous; those mat­ters are left for the Federal Circuit to consider on remand.  Pp. 14– 16.

The Court provides a few examples of how this new standard is to be applied:

In some cases, however, the district court will need to look beyond the patent’s intrinsic evidence and to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the rele­vant art during the relevant time period.  See, e.g., Seymour v. Osborne, 11 Wall. 516, 546 (1871) (a patent may be “so interspersed with technical terms and terms of art that the testimony of scientific witnesses is indispensable to a correct understanding of its meaning”).  In cases where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings about that ex­trinsic evidence. These are the “evidentiary underpin­nings” of claim construction that we discussed in Mark-man, and this subsidiary factfinding must be reviewed for clear error on appeal.

For example, if a district court resolves a dispute be­tween experts and makes a factual finding that, in gen­eral, a certain term of art had a particular meaning to a person of ordinary skill in the art at the time of the inven­tion, the district court must then conduct a legal analysis: whether a skilled artisan would ascribe that same mean­ing to that term in the context of the specific patent claim under review. That is because “[e]xperts may be examined to explain terms of art, and the state of the art, at any given time,” but they cannot be used to prove “the proper or legal construction of any instrument of writing.” Winans v. New York & Erie R. Co., 21 How. 88, 100–101 (1859); see also Markman, supra, at 388 (“‘Where tech­nical terms are used, or where the qualities of substances . . . or any similar data necessary to the comprehension of the language of the patent are unknown to the judge, the testimony of witnesses may be received upon these sub­jects, and any other means of information be employed. But in the actual interpretation of the patent the court proceeds upon its own responsibility, as an arbiter of the law, giving to the patent its true and final character and force’” (quoting 2 W. Robinson, Law of Patents §732, pp. 482–483 (1890); emphasis in original)).

Accordingly, the question we have answered here con­cerns review of the district court’s resolution of a subsidi­ary factual dispute that helps that court determine the proper interpretation of the written patent claim. The district judge, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them. This ultimate interpretation is a legal con­clusion. The appellate court can still review the district court’s ultimate construction of the claim de novo. But, to overturn the judge’s resolution of an underlying factual dispute, the Court of Appeals must find that the judge, in respect to those factual findings, has made a clear error. Fed. Rule Civ. Proc. 52(a)(6).

The full discussion of the Teva example makes a similar point, finding that the Federal Circuit erred because it should have determined whether the district court’s acceptance of Teva’s expert’s explanation of figure 1 in the patent was “clearly erroneous.”



Upcoming Conferences and Workshops

By Jason Rantanen
Three upcoming conferences that may be of interest to readers:
This Friday and Saturday, January 16 and 17, the University of San Diego School of Law’s Center for Intellectual Property Law & Markets is holding its 5th Annual Patent Law Conference.  This year’s topic is “Patent Invalidity after the America Invents Act.”  Speakers include Judges Bencivengo, Bartick & Chen.  I attended last year as part of PatCon and thought it was a great event.  More details here:
Hal Wegner’s 3rd Annual Naples Patent Law Experts Conference will be held February 9 and 10.   This beachfront Conference in Naples, Florida, will involve  an interactive discussion by more than thirty faculty members.  Topics to be covered include recent and pending Supreme Court patent law decisions, potential legislative activity, issues of international law, and more. Further information from the sponsoring organization, the University of Akron, is available here:
On March 5-6, Don Chisum and Janice Mueller will conduct a two-day patent roundtable seminar.  The program is limited to a total of ten participants to maximize opportunities for interactive discussion and debate.  All sessions are led by treatise authors and educators Don Chisum and Janice Mueller. Coverage focuses on recent significant patent decisions of the Federal Circuit and U.S. Supreme Court. Topics currently planned for discussion include:
  • The Supreme Court’s Alice Corp. decision on patent-eligible subject matter and subsequent Federal Circuit decisions applying Alice
  • The Supreme Court’s grant of certiorari in Commil USA concerning the intent requirement for inducing infringement;
  • The Supreme Court’s grant of certiorari in Kimble v. Marvel concerning the propriety of post-patent expiration royalties;
  • The Supreme Court’s pending decision in Teva v. Sandoz on review of patent claim construction;
  • The Federal Circuit’s grant of en banc review in SCA Hygiene to determine whether the Supreme Court’s Petrella decision changed the law of laches as a defense to patent infringement;
  • Patent Practice Gone Wrong: Lessons from Patent Malpractice, Exceptional Case and Rule 11 Sanctions, and Inequitable Conduct Cases;
  • Patent Claim Construction and Definiteness in the Wake of Nautilus (and Anticipating Teva); and
  • Inter Partes Review: Two-Year Snapshot and Lessons from Case Studies.
No advance preparation is expected or required. The Supreme Court of Ohio Commission on Continuing Legal Education has approved the seminar for 12.0 hours of CLE instruction. For additional details on the venue, topics, and registration form, see or e-mail


Bard v. W.L. Gore: Revisiting Willful Infringement (Again)

By Jason Rantanen

Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc. (Fed. Cir. 2015) 14-1114.Opinion.1-7-2015.1
Panel: Prost (author), Hughes (concurring), Newman (dissenting)

Professor Tom Cotter has an excellent write-up of this opinion over on his blog, Comparative Patent Remedies.   The main issue involves willful infringement: applying the de novo standard of review to the objective prong of the willfulness inquiry, as per Seagate and the earlier Bard decision, the majority affirmed the district court’s conclusion that Bard willfully infringed because its noninfringement defense is not “susceptible to a reasonable conclusion of no infringement. ” Judge Hughes wrote separately to reiterate his “belief that the full court should review our willfulness jurisprudence in light of the Supreme Court’s recent decisions” in Highmark  and Octane Fitness.  Judge Newman dissented; in her view, the majority failed to apply the de novo standard of review required by Seagate; applying that standard, the district court erred.   Judge Newman also questioned the imposition of double damages.

Judge Hughes’ concurrence, like Judge O’Malley’s concurrence in Halo v. Pulse last fall, suggests that the Federal Circuit remains divided on the appropriate legal standard for willful infringement post-Highmark and Octane Fitness.  Panels remain bound by the de novo standard set out in Seagate, but Judges Hughes and O’Malley strongly believe that the court should reconsider that precedent.  It may be only a matter of time before the Federal Circuit either addresses this divide en banc or the Supreme Court grants cert.  It’s also possible that the Court will provide some guidance on the issue in Commil v. Cisco; we’ll know later this year.


Promega v. Life Tech, pt. 2: Inducing Oneself

By Jason Rantanen

Promega Corp. v. Life Tech. Corp. (Fed. Cir. 2014) Download Promega v. Life Tech
Panel: Prost (dissenting-in-part), Mayer, Chen (author)

Before the holidays, I wrote about the enablement issue in this case.  Today I’ll talk about the inducement issue, which involves two significant—and probably erroneous—doctrinal developments.  I say “probably erroneous” because in my view at least one, if not both, would likely be reversed by the Supreme Court were it to grant cert.

The short version is that the majority held that in 35 U.S.C. § 271(f)(1), “induce” means “specific intent to cause” and “a substantial portion of the components” includes “a single important or essential component.”  The consequence of the former is that one can induce oneself; the consequence of the latter is that merely supplying a single “main” or “major” component of the claimed invention is sufficient for purposes to 271(f)(1).  Judge Prost dissented as to “induce” and would not have reached the “substantial portion” issue.

The patent claim: The asserted claim, claim 42 of patent No. RE 37,984, is directed to “[a] kit for analyzing polymorphism in at least one locus in a DNA sample.”  The claim limitations involve vessels containing a variety of materials: a mixture of primers, a “polymerizing enzyme suitable for performing a primer-directed polymerase chain reaction,” adenosine, guanine, cytosine and thymidine, a buffer solution, and template DNA.

LifeTech’s activities: LifeTech manufactured Taq polymerase in the United States and shipped it to its facility in the U.K. where it was combined with foreign-manufactured components to produce kits containing all the claimed elements.  While some of the kits were sold in the United States, the main issue on appeal involved kits that never entered the United States.  Taq is indisputably “a polymerizing enzyme suitable for performing a primer-directed polymerase chain reaction.”

Procedural History: At trial, the jury was instructed to consider liability for all “United States sales,” which included “all kits made, used, offered for sale, sold within the United States or imported in the United States as well as kits made outside the United States where a substantial portion of the components are supplied from the United States.” Id. at 11 (emphasis added).  LifeTech preserved its challenge to the italicized language.  The jury returned a verdict finding that “all of LifeTech’s worldwide sales were attributable to infringing acts in the United States.”  Id.  The district court subsequently granted JMOL in LifeTech’s favor.

On appeal, Promega challenged the court’s grant of JMOL as to both sales infringing under 271(a) and under 271(f)(1).  The Federal Circuit focused primarily on the 271(f)(1) issue. 35 U.S.C. § 271(f)(1) states:

Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

(emphasis added).  LifeTech raised two legal grounds for affirming the district court’s grant of JMOL.  First, it argued that 271(f)(1) requires inducement of another; one cannot induce oneself.  Thus, it could not be liable under 271(f)(1) for exporting the Taq polymerase to itself to combine with the other components.  Second, it argued that 271(f)(1) requires that a “substantial portion” of the components be exported; “one” component is not a “substantial portion” of the components.

For 271(f)(1), one can induce oneself: The majority first rejected LifeTech’s argument that 271(f)(1) should be interpreted as requiring another person to be induced.  Rather, it means “merely the specific intent to cause the combination of the components of a patented invention outside the United States.”  Slip Op. at 23.  In reaching this conclusion, it first looked to the dictionary definition of “induce,” observing that it means “to bring about, to cause.”  Id.  From this, it concluded that “[t]he object of the transitive verb ‘induce’ can either be a person or a thing, such as an activity or result.”  Id.  Here, it is the activity that is being “induce[d]”: “The statute is written such that an activity—”the combination”—is the object of “induce,” not a person.”  Id.  Thus, no third party is necessary.  Furthermore, “[h]ad Congress wanted to limit “induce” to actions contemplated by two separate parties, it could easily have done so by assigning liability only where one party actively induced another “to combine the [p]atented components.”  Id.  To bolster its conclusion, the majority drew upon its reading of the legislative history and what it divined as Congress’s intent in passing the statute.  The result is to effectively turn the word “induce” into word “cause.”

The majority’s pseudo-textualist analysis: I’m thoroughly unconvinced by the majority’s analysis.  Setting aside the majority’s reading of the legislative history, which Judge Prost criticizes in her dissent, its textual analysis is deeply flawed.  Proper textualism involves the consideration of the ordinary meaning of words, evaluated in context, and an application of the canons of statutory construction.  But just as in patent law, “ordinary meaning” doesn’t just mean “ordinary meaning.”  Rather, terms with a legal meaning (such as “person”) are given their ordinary legal meaning.   The problem with the majority’s analysis begins with its reliance on a general-purpose dictionary for a term that has a well-established legal meaning and goes downhill from there.

While “induce” might mean “to bring about, to cause” in the general-usage context, in the legal context—and particularly the patent law context—its meaning invariably involves a relationship between two separate persons.  I am not aware of any instances (but would be interested to learn of them) where courts have interpreted “induce”  as encompassing one’s own performance of the proscribed acts.  This is especially true with respect to 271(b), where both the Federal Circuit and the Supreme Court have written extensively about the requirements for the relationship to rise to the level of inducement.  One would not “induce” infringement of a patent by using a machine to carry out a claimed process; one would be liable for direct infringement.  To treat the word as if it were necessary to start from first principles, looking it up in a general purpose dictionary, is to ignore all of this well-established legal meaning.

As part of my background reading for this post, I took a look at Bryan Garner’s Black’s Law Dictionary.  Here’s his entry for “inducement” (there is no separate entry for “induce”), defining it as “The act or process of enticing or persuading another person to take a certain course of action”:

Garner 1999 InducementCongress did not have the benefit of Professor Garner’s text in 1984, when it passed 274(f); this definition comes from the 1999 version of Black’s.*  But my sense is that Garner’s definition is a lot closer to the legal meaning of “actively inducement” than “”  Slip Op. at 23.  And to the extent it is descriptive of the legal meaning, it unquestionably supports the interpretation as involving another person.

Edit to add a legal citation: “It is, however, well established that “[w]here Congress uses terms that have accumulated settled meaning under… the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.”  CCNV v. Reid, 490 U.S. 730 (1989) (quoting NLRB v. Amax Coal Co., 453 U.S. 322, 329 (1981)).

“Congress knows how to say…”: In addition to its dictionary definition, the majority also observed that Congress could easily have included the word “another” in the statute.  The main problem with this interpretative principle is that it only applies when it’s clear that Congress actually does know how to say something.  Typically, the principle is invoked in the context of a parallel statute in which Congress actually said it.  See, e.g., Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct. 2111, 2118 (2014) (“As this provision illustrates, when Congress wishes to impose liability for inducing activity that does not itself constitute direct infringement, it knows precisely how to do so.”) (emphasis added).  Here, however, there is no such contrasting statute that contains that “something;” worse, the closest parallel—Section 271(b)—does not contain the word “another.”  Rather, it says simply “Whoever actively induces infringement of a patent shall be liable as an infringer.”

Edit to add a citation: “Ordinarily, ‘Congress’ silence is just that—silence.”  CCNV v. Reid (quoting Alaska Airlines, Inc. v. Brock, 480 U.C. 678, 686 (1987)).

Judge Prost’s Dissent: Judge Prost’s dissent identifies another problem with the majority’s interpretation: that interpretation is foreclosed by precedent.  “[W]e have never before held—in the context of either § 271(f) or § 271(b)—that a party can induce itself to infringe.  And for good reason: this conclusion runs counter to unambiguous Supreme Court precedent.”  Dissent at 2.

Twice the Supreme Court has held that inducement liability requires a third party. In interpreting the phrase “induces infringement” in § 271(b), the Supreme Court wrote that it requires “that the inducer lead another” or “persuade another.” Global-Tech Appliances, Inc. v. SEB SA, 131 S. Ct. 2060, 2065 (2011) (emphases added). Additionally, in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., a case in the analogous copyright context, the Supreme Court stated that inducement is defined as “entic[ing] or persuad[ing] another” to infringe. 545 U.S. 913, 935 (2005) (emphasis added). The majority cannot point to a single case—from the Supreme Court or otherwise—that supports its contrary interpretation of inducement.

Id. at 2-3.

Judge Prost might go too far in arguing that the majority’s interpretation is foreclosed by precedent (As the majority points out, none of these cases directly confronted the question of whether one can “induce” oneself), but her underlying point is sound: these cases demonstrated that the meaning of “induce” is already well-established as requiring another person.

Multinational companies must be careful: As long as the accused party meets the “supplies…a substantial portion of the components” requirement, it will be liable for its own foreign combination of those elements.**   This has particular importance for multinational companies that engage in distributed manufacturing.  As a policy matter, the court’s decision pushes those companies towards one of two alternatives: purchasing their components from another (possibly US) supplier or simply making the components abroad.  Perhaps the lack of liability in this situation was an oversight in the statute, a statutory loophole.  But if so, the appropriate response would be—as was the case following Deepsouth—legislative action.  (I’m not convinced that it’s necessarily a loophole, but need to think further on that point.)

Every “essential” component is a “substantial portion of the components.”  The majority also interpreted the requirement that “all or a substantial portion of the components of a patented invention” be supplied, concluding that “substantial portion of the components” includes “a single important or essential component.”  Slip Op. at 27.  Here, that component was the Taq polymerase, a widely-used enzyme for polymerase chain reaction.  The court concluded that supplying Taq was enough based on the following evidence: “Without Taq polymerase, the genetic testing kit recited in the Tautz patent would be inoperable because no PCR could occur.  LifeTech’s own witness admitted that the Taq polymerase is one of the “main” and “major components of the accused kits.”  Id. at 32.  As the Taq example demonstrates, under the court’s interpretation any component of a patented invention is an essential component.  If one removes Taq, the kit won’t work; if one removes the primers, the kit won’t work; if one removes the nucelotide bases, the kit won’t work.  This has the potential to greatly expand liability under 271(f)(1).

Rendering 271(f)(2) superfluous: In my view, the majority’s textual analysis of  “substantial portion” suffers from similar flaws as its analysis of “induce.”   The deepest, however, is that by reading “substantial portion” as it does, the majority renders 271(f)(2) superfluous.  That section states:

(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

Under the majority’s interpretation of “substantial portion,” 271(f)(1) reads:

“Whoever without authority supplies or causes to be supplied in or from the United States an important or essential component of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.”

The only differences between the two are that (f)(2) is limited to components that are “especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use;” a knowledge of infringement requirement in (f)(2); and the “intending that such component will be combined” language of (f)(2) versus the “in such manner as to actively induce the combination” language of (f)(1).  The first two differences make (f)(2)’s scope narrower than that of (f)(1), and the third does not constitute a meaningful difference under the majority’s interpretation of “actively induces.”***  The result is that, under the majority’s interpretation, I can’t envision any conduct that would fall within (f)(2) that would not also fall within (f)(1).

*The older definition of “induce” from Black’s doesn’t provide much interpretative help in my view.  See Black’s Law Dictionary, Fourth Edition (West 1951) (defining “induce” as “to bring on or about, to affect, cause, to influence to an act or course of conduct, lead by persuasion or reasoning, incite by motives, prevail on”) (this definition was carried forward through at least the 1990 version). Part of my ambivalence is that without looking at the source of the definition, it’s not clear that another party isn’t required.  And once you look at the source of the definition, it’s apparent that the case wasn’t talking about the legal meaning of “induce” but it’s general purpose meaning.  See State v. Stratford, 55 Idaho 65 (Idaho 1934).

**Nor does the argument that the majority’s interpretation still imposes an “intent” requirement change the analysis.  The majority concludes that “actively induce the combination” means “merely the specific intent to cause the combination of the components of a patented invention outside the United States.”  Slip Op. at 23.  This is nothing more than a volitional conduct requirement: a person that combines the elements will necessarily have the “specific intent to cause the combination” except in very rare, very unusual circumstances.  And the jury instruction discussed above did not mention any requirement of intent.

***If “actively induce” were interpreted as requiring the participation of a third party, then there might be a difference between the two in that a reasonable reading of 271(f)(2) is that it covers one’s own combination of the components.

Side note: This appeal is one of the two that were at the heart of In re Reines; Ed Reines represents LifeTech.  In the other appeal, the district court’s judgment in favor of Promega was summarily affirmed in March.

Comments are welcome.  My comment moderation policy is in effect. 

The Federal Circuit and Judicial Transparency

By Jason Rantanen

Last week, in writing about the Federal Circuit’s grant of en banc review in SCA Hygiene Products v. First Quality Baby Products, I observed that the order was not yet available on the court’s website.  Upon checking again this morning, I noted that it continues to be unavailable.

As a general matter, I tend to favor the existence of the Federal Circuit and believe that the judges who sit on that court are largely just folks who are trying to do the best they can in deciding very challenging cases.  I don’t always agree with the judges’ reasoning, but I appreciate the difficulty of what they are called upon to do (as well as how much easier it is to criticize an analysis than it is to assemble an analysis).

Where I tend to be most disappointed is with those aspects of the court that do not operate at this high level; or even at a “pretty good” level.  In particular, I am routinely unimpressed with the lack of public transparency when it comes to information about the court’s decisions.  One example is the court’s statistics page, which contains data that can be difficult to interpret because no methodology is provided.  Worse, the variety of statistics that the court has publicly released has shrunk over the years.  The court used to provide data on the dispositions of patent infringement cases, for example; that data is no longer provided by the court.

Much greater than problems with the court’s statistical data, however, is the lack of transparency in connection with the court’s decisions themselves.  This is not to say that there is no information: the court deserves credit for deciding, several years ago, to post its opinions on the Federal Circuit webpage.   These opinions are published at throughout the day.  Since around the middle of 2007, the material released at this location has included summary affirmances under Rule 36, and for the past few years “selected” orders have been published there as well.

Unfortunately, no criteria for which orders are “selected” for publication on the website are provided, and extremely significant and important orders are sometimes not released there.  For example, even though the Federal Circuit’s announcements page contains an announcement about the grant of en banc review in SCA Hygiene and an invitation for amicus participation, the order itself (which contains the questions presented) is not available on the court’s website.  Instead, users are directed to download the order from PACER, a registration-required, fee-based system that is routinely criticized on access to justice grounds.  Surely, such an important order would be easily available to the interested public.  It is not.

In addition, as Hal Wegner recently pointed out in his email newsletter, the court’s public revelation of its decisions via PACER creates a second, possibly more significant, issue: those folks who do have PACER access will know about the court’s decisions before those who merely follow its public website.  This is because the decisions can appear on PACER up to two hours before they appear on the Federal Circuit’s website.  The result is that those who follow that particular docket on PACER will gain first knowledge about the outcome of the case, something that may have significant financial implications.

There are some actions that followers of the Federal Circuit can take if they want to stay on the cutting edge of the court’s dispositions.  First, the court has an RSS feed through which it announces releases of opinions on PACER.  You can subscribe to the RSS feed here: (thanks to Hal Wegner for the tip!).  I’m told, but haven’t yet confirmed, that this feed updates at the same time that an opinion is released on PACER.  Second, if you have access to a document monitoring service, such as BNA, you can set it to alert you when individual dockets are updated.  Again, I haven’t yet confirmed how “real time” the alert is.  Both approaches have drawbacks, but they do provide partial solutions.

But the bigger problem remains: the challenge of gaining access to all of the court’s theoretically “public” decisions.  PACER is not like, say, the USPTO‘s trademark search system, which a model of transparency and ease of use.  Instead, it is the electronic equivalent of the warehouse at the end of Indiana Jones and the Raiders of the Lost Ark, with the addition of a fee to open each box.  And the court’s recent elimination of the “daily disposition sheet” has only made it more difficult to even know what’s kept in that warehouse.

With all the technological and political issues surrounding PACER, figuring out how to open up all the court’s judicial decisions to greater public access is, perhaps, not an easy problem to solve.  But given the court’s ability to address complex issues of fact and law in its decisions, it’s rather disappointing that it hasn’t applied that same ability to releasing those decisions in a more transparent way.

One possible start might be to ensure that court opinions and orders are released simultaneously on the court’s website and PACER.  Another would be to post all the court’s orders on the website, not just those that are “selected.”  And a third would be to create an electronic, publicly-available historic set of all the court’s decisions, not just the incomplete set that is currently provided.  All three would  would go a substantial way to ensuring greater judicial transparency and to avoid any more embarrassing lapses like the SCA Hygiene snafu.

By the way – if you are looking for that particular order, you can download it here: SCA Hygiene en banc order

My moderation policy is in effect for comments on this post.  Off-topic, excessive and abusive comments will be removed.

Edit to add a reference to the elimination of the daily disposition sheet after the comment from Pilgrim.  Some additional minor edits for clarification.

Patent Cases Pending as of January 1, 2015

By Jason Rantanen

In November, I wrote about a decline in patent suits pending in district court.  Using Lex Machina, I recently put together an updated set of data that includes patent cases pending as of December 1 and January 1.  The figure below shows a continued drop in cases through November, followed by no real change in December.   The lack of movement for December is the result of a modest increase in new case filings and a substantial drop in terminations relative to the previous month.  (Keep in mind that the underlying data is highly dynamic: in December, for example, there were about 380 new case filings and about 400 terminations of existing cases.)

Pending Patent Cases 1-1-2015

Some folks have asked about the effect of co-pending PTO proceedings.  Lex Machina doesn’t presently offer a way to easily determine whether a proceeding is stayed pending an administrative proceeding at the PTO, so I can’t directly count these stays in the graph.  But my intuition is that they aren’t going to make an enormous difference.  Love & Ambwani report that between September 2012 and September 2014, courts granted litigation stays in 140 suits where there was a co-pending instituted inter partes review.  For comparison, the drop in pending I just don’t see these stays making a significant impact on the above graph regardless of whether they are counted as open cases or terminated cases.

Thanks to my research assistant, Alex Lodge, for collecting the data for the above chart. 

Comment policy: At the suggestion of a few folks, I will try an active moderation policy on this post.  Posts containing name calling, character attacks, or an unnecessarily aggressive tone will be deleted, as will excessive commenting.

Guest Post by Prof. Chiang: A Response to Hrdy and Picozzi

Professor Tun-Jen Chiang is an Associate Professor of Law at the George Mason University School of Law.  Below, he responds to Camilla Hrdy and Ben Picozzi’s commentary on The Interpretation-Construction Distinction in Patent Law.  As with the previous two posts in this series, the real name policy applies to comments on this post. 

Thanks to Jason and Dennis for inviting me to post, and to Jason for the extremely flattering introduction. I should make clear at the outset that I am only speaking for myself, not my coauthor, on this blog, though of course the article represents our joint views.

A brief recap for those who have not read (or only skimmed) the article. The article’s primary claim is conceptual. The claim is that in making decisions pursuant to text, courts necessarily engage in a two-step process: (1) they read the text and try to discern its linguistic meaning, i.e. the meaning of the language, qua language, to members of the intended audience, and (2) they determine the legal effect of the text by rendering a decision. We call the former “interpretation” and the latter “construction.” The key point is that linguistic meaning and legal effect are not always the same, and therefore uncertainty over the legal scope of patent claims does not necessarily arise because of linguistic ambiguity.

A couple of clarifications at the outset. The first is that our definition of “construction” is simply giving text a legal effect—it does not care whether that legal effect is consistent with statute, precedent, and text or not. Camilla’s articulation (where judges “‘construe’ the claims according to their normative beliefs about what the claims’ legal effect should be”) potentially gives the impression that we define construction as only when judges act as super-regulators who engage in free-floating first-order policy analysis. This is not correct. Even the most restrained judge who makes decisions strictly in accordance with statute, precedent, and/or claim text engages in construction, because his decisions necessarily give the claim text a legal effect.

Second, our claim is conceptual, not normative. Our claim is not that interpretation is good or that construction is bad; our claim is that both are intrinsic to the activity of claim analysis, so there is really no “good” or “bad” about the matter. And because our claim is conceptual, our doctrinal prescriptions are very limited. We do not opine, for example, whether courts should give more or less weight to dictionaries, or specifications, or anything else.

The sum is that we are not trying to push a textualist or plain meaning agenda, and we are not trying to suggest that judges who engage in construction are judicial activists who ought to be impeached. Our goal is to simply provide more clarity in analysis and a better diagnosis for what ails patent claims. Specifically, we argue that the uncertainty in patent claims is not caused by linguistic ambiguity, but by methodological disagreement among judges about whether to construe claims according to the patentee’s actual inventive contribution, or instead according to the linguistic meaning of claim text written by the patentee (which is likely to be broader than the real invention).

It is at this point that Hrdy and Picozzi’s response comes in. Hrdy and Picozzi agree with us that methodological disagreement, rather than linguistic ambiguity, underlies disagreements over claim construction. But, they argue, the root source of methodological disagreement in patent law is more narrow than in other areas of law. That is, according to Hrdy and Picozzi, in areas such as constitutional law, “judges are relatively free to interpret and construct the text based on their prior beliefs about which policy outcomes or which form of interpretive methodology (e.g., textualism or anti-textualism) is superior.” But in patent law, they argue, judges are constrained by the Patent Act, and so disagreements over claim construction do not stem from free-floating beliefs about desirable policy outcomes, but instead are tethered to more mundane and legalistic disagreements about the proper statutory construction of the disclosure requirements of 35 U.S.C. § 112. In particular, they argue that “judges’ approaches to claim construction closely followed—and were likely influenced by—their constructions of section 112(a)’s written description requirement and section 112(b)’s definiteness requirement.”

It might perhaps surprise Hrdy and Picozzi to discover that I agree that judges’ approaches to claim construction largely parallel, and are likely influenced by, their positions on § 112. Yet I do not think this defeats my argument. As an initial matter, I would note that, even if Hrdy and Picozzi are correct that disagreements over claim construction stem from narrow legalistic disagreements about the proper understanding of § 112, that would not contradict the core claims of the article—the basic point that disputes about claim analysis are mostly disputes about legal methodology rather than linguistic meaning would still stand. In that sense Hrdy and Picozzi’s argument is less a refutation and more in the nature of a follow-on contribution. But I also think there is a deeper disagreement: Implicit in Hrdy and Picozzi’s con-law-is-different argument seems to be the contention that disagreements about § 112 are not based on beliefs about desirable policy but instead are narrow, mundane, and legalistic debates unencumbered by ideological priors. I think this contention is flawed and that their evidence is more consistent with an alternative hypothesis, namely that judges show a consistent pattern across several doctrinally-distinct issues—claim construction, § 112(a), § 112(b)—because they are influenced by their underlying beliefs about desirable policy (specifically, beliefs about desirable patent scope) in all of them. Judges who favor broad patents tend to construe claims broadly and read § 112 narrowly; judges who favor narrow patents tend to do the opposite. Rather than proving that patent law is not like con law, I submit that the Hrdy and Picozzi’s evidence tends to show that it is.


Federal Circuit to Review Defense of Laches in Patent Law

By Jason Rantanen

This morning, the Federal Circuit issued an Order granting en banc review in SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC.  (Dennis’s  commentary on SCA here: The central issue involves the impact of the Supreme Court’s decision earlier this year in Petrella v. Metro-Goldwyn-Mayer (holding that laches does not apply to copyright infringement occurring within the window provided by the statute of limitations) on patent law.

The issues presented:

(a) In light of the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014) (and considering any relevant differences between copyright and patent law), should this court’s en banc decision in A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992), be overruled so that the defense of laches is not applicable to bar a claim for damages based on patent infringement occurring within the six-year damages limitations period established by 35 U.S.C. § 286?

(b) In light of the fact that there is no statute of limitations for claims of patent infringement and in view of Supreme Court precedent, should the defense of laches be available under some circumstances to bar an entire infringement suit for either damages or injunctive relief? See, e.g., Lane & Bodley Co. v. Locke, 150 U.S. 193 (1893).

The order is not yet available on the Federal Circuit’s website, but can be read here: Download SCA en banc order. Thanks to Hal Wegner for bringing it to my attention.

Guest Post by Camilla Hrdy on The Interpretation-Construction Distinction in Patent Law

Camilla Hrdy is the Center for Technology, Innovation & Competition Fellow at the University of Pennsylvania Law School and a Visiting Fellow at the Yale Law School Information Society Project.  Below, she comments on The Interpretation-Construction Distinction in Patent Law by Professors Chiang and Solum. The “real name” rule applies to comments on this post.

Uncertainty and unpredictability in claim construction outcomes is one of the most important problems in patent litigation today. But patent law isn’t the only context in which judges struggle to determine the meaning of legal texts. In a recent article in the Yale Law Journal, The Interpretation-Construction Distinction in Patent Law, T.J. Chiang and Lawrence Solum argue that construing a patent is no different from any other form of legal analysis performed by judges, whether in constitutional law, statutory law, or contract law. As in these contexts, judges proceed in two distinct stages when determining the legal meaning of a patent’s claims. First, they “interpret” the claims’ linguistic meaning. Second, they “construe” the claims according to their normative beliefs about what the claims’ legal effect should be. According to Chiang and Solum, uncertainty in claim construction outcomes is caused mainly by judges’ disagreements in the “construction” phase, not the “interpretation” phase. In other words, judges disagree over policy, not language.

In a response in the Yale Law Journal Forum, Ben Picozzi and I argue that the “interpretation-construction distinction” does not fully capture how judges construe patent claims because it does not take into account the difference between the statutory context in which claim construction occurs and the constitutional context in which the interpretation-construction distinction evolved. In constitutional analysis, judges are relatively free to interpret and construct the text based on their prior beliefs about which policy outcomes or which form of interpretive methodology (e.g., textualism or anti-textualism) is superior. In contrast, when judges construe the terms of a patent, they must do so in light of the requirements of the Patent Act – in particular, 35 U.S.C. § 112. Section 112 imposes several requirements for minimum disclosure and definiteness. If a patent does not meet these requirements, judges are obligated to find it invalid under one of several doctrines.

We agree with Chiang and Solum, as well as other commentators such as Thomas Krause and Heather Auyang, that significant policy disagreements underlie judges’ divergent views on the legal meaning of patent claims, and that one of the major debates is whether claims should be interpreted broadly, according to how a patentee wrote them, or narrowly, according to what the judge finds to be the “real invention.” But in our view, these debates are based on judges’ disagreements over the precise levels of disclosure and definiteness that section 112 requires. Simply put, what Chiang and Solum call “claim construction” versus “claim interpretation” is actually statutory construction. In our response, we analyze the major claim construction cases that Chiang and Solum use as examples of their theory and show that in each of these examples, the judges’ disagreement over the meaning of the claims at issue was motivated by their disagreement over the meaning of the statute. Specifically, judges’ approaches to claim construction closely followed—and were likely influenced by—their constructions of section 112(a)’s written description requirement and section 112(b)’s definiteness requirement.

Our disagreement with Chiang and Solum is not just theoretical. It is highly relevant for the Supreme Court’s upcoming decision in Teva v. Sandoz, where the Court will decide what standard the Federal Circuit must apply in reviewing district courts’ claim construction decisions. Is claim construction a purely legal question that must be reviewed de novo? Or should at least some aspects of claim construction be reviewed under the more deferential “clear error” standard ordinarily applied to district courts’ factual findings? Most commentators—and the Solicitor General—argue that many issues that arise in claim construction, such as expert testimony on the level of ordinary skill in the art, are factual issues that should be reviewed deferentially. Chiang and Solum disagree, arguing that claim construction should be treated as a question of law and reviewed without deference. The reason they give for their somewhat unusual stance is their view that many important disputes over claim meaning involve construction, not interpretation of claims. If district courts were free to engage in construction without significant oversight from courts of appeal, this would increase, not reduce, uncertainty in outcomes, with “hundreds of district court judges across the nation each following their own individually preferred methodologies in the individual cases that come before them.”

We agree with Chiang and Solum’s conclusion that some purely legal questions underlie judicial disagreements over the meaning of patent claims and that many of these questions are in need of appellate review. But this is because they are questions of statutory construction. Judges disagree over issues like the contours of section 112’s disclosure and claim definiteness requirements, and consequently disagree over the proper construction of claims.

On this view, granting deference to district courts with respect to questions that do not involve statutory construction would not necessarily increase uncertainty and disuniformity in claim construction outcomes. Moreover, even if the Federal Circuit must review many facets of district courts’ claim construction decisions under the more deferential clear error standard, the Federal Circuit could still do much to increase certainty by resolving a number of outstanding statutory debates. For instance, does section 112(a), which the Federal Circuit has held contains a separate written description requirement, also require claims to be construed according to what the inventor “actually invented,” as Judge Lourie and other members of the court have suggested in several claim construction decisions? Does section 112(b), as construed by the Supreme Court in Nautilus v. Biosig, require courts to review more expert evidence in order to determine whether a patent’s claims would inform those skilled in the art “with reasonable certainty” about the scope of the invention?

If the Federal Circuit or the Supreme Court cannot resolve such issues, then Congress should amend the statute to provide greater clarity. This is how patent law has historically progressed and, we believe, is how lawmaking should work within a well-functioning statutory framework. Chiang and Solum’s analysis is a good start, but it doesn’t take this framework into account. Doing so would lead to conclusions that are less pessimistic and more complete.

Comments on the “Real Name” Experiment

By Jason Rantanen

I’ve created this post so that folks can comment on the “real names only” rule that I’m applying in the Interpretation-Construction Distinction threads.  I’ll continue to delete posts under pseudonyms in that thread.

As a point of clarification: Your “real name” is the name that you would use when filling out documents that include the language “under penalty of perjury.”

And a second clarification: I’m only applying this rule to this series of posts.  It is *not* a general policy change.


The Interpretation-Construction Distinction in Patent Law

By Jason Rantanen

Last week, I wrote about my view that patent rights are malleable; that is, their scope and strength can be altered by the parties who interact with them after their issuance.  Malleability is different from ideas that patent rights are simply uncertain; that the scope and strength of patents that revolve around chance or indeterminacy, as it involves changes to the patent right rather than resolution of an unknown variable.

In connection with that work, I’ve recently had several valuable exchanges with Professor Tun-Jen Chiang, whose ability to articulate theoretical concepts in patent law is possibly without equal.  This is not to say that I agree with Chiang’s perspectives; I frequently do not.  But his work bears strong traces of both Richard Epstein and Timothy Dyk in the rigor of its analysis and lucidity of its explanations.

One of Professor Chiang’s most recent works, The Interpretation-Construction Distinction in Patent Law, 123 Yale L. J. 530 (2013), co-authored with Professor Lawrence Solum, takes head-on the issue of indeterminacy in claim scope.  Chiang and Solum argue that this indeterminacy is not so much due to linguistic ambiguity as it is to “a conflict about the underlying goal of claim construction: is it to give effect to the linguistic meaning of text, or is it to tailor patent scope to the real invention?”  Id. at 536.  This conflict, they argue, involves two fundamentally different goals, and determining claim meaning is an incoherent inquiry when judges move between them.  The result is indeterminacy not due to linguistic ambiguity but due to an inability to resolve whether to apply linguistic analysis in the first place.

I’ve provided the abstract below; the full article is here:

The ambiguity of claim language is generally considered to be the most important problem in patent law today. Linguistic ambiguity is believed to cause tremendous uncertainty about patent rights. Scholars and judges have accordingly devoted enormous attention to developing better linguistic tools to help courts understand patent claims.

In this Article, we explain why this diagnosis is fundamentally wrong. Claims are not often ambiguous, and linguistic ambiguity is not a major cause of the uncertainty in patent law today. We shall explain what really causes the uncertainty in patent rights, how the erroneous diagnosis of linguistic ambiguity has led the literature off track, and what will get us back on track to solving the uncertainty problem.

Tomorrow, Camilla Hrdy will guest-blog about her response to The Interpretation-Construction Distinction in Patent Law.  For this series of posts, we’ll be doing something a bit different for comments.  Only comments with the author’s real name will be permitted; all others will be removed.