Microsoft v. DataTern: Judge Rader’s Dissent Withdrawn

Last month I wrote about Microsoft Corporation v. DataTern, Inc., in which the Federal Circuit addressed the issue of subject matter jurisdiction over a declaratory judgment action brought by manufacturers where the patent holder had filed infringement suits only against the manufacturers’ customers, and had not directly threatened the manufacturers themselves.  (I.e.: the reverse of a typical contributory infringement or inducement claim).

In that opinion, the Federal Circuit affirmed the district judge’s ruling that there was jurisdiction in three out of four scenarios on the basis that these sets of facts raised the issue of inducement of infringement and contributory infringement by Microsoft and SAP.  However, the majority (Judges Moore and Prost) reversed as to the fourth scenario, in which DataTern’s infringement charts referenced only third-party documentation for key claim limitations.   Judge Rader dissented as to this final category, expressing concern that the majority’s holding provides “a roadmap to allow DataTern and its successors to keep Microsoft on the sidelines while running up wins against customers, who are often smaller and less-equipped to defend themselves.”

Yesterday, the Federal Circuit vacated the original opinion in Microsoft v. DataTern and issued a new opinion that contains only the majority’s opinion.  Judge Rader is now recused.  The order vacating the original opinion is here: Microsoft Order and the new opinion is here: New Opinion.  A comparison of the two opinions reveals that there are no other substantive differences.  No reason for the recusal is given, and neither party appears to have requested that Judge Rader be recused.  While recusals are not unheard of, this one is unusual because it occurred after the opinion issued and involved the vacation of a dissent.

One issue that this raises is whether there is a violation of Federal Circuit Rule 47.2, which states that “(a) Panels. Cases and controversies will be heard and determined by a panel consisting of an odd number of at least three judges, two of whom may be senior judges of the court.”  Prof. Tim Holbrook thinks not, pointing to Fed. Cir. Rule 47.11, which contemplates recusals after argument:

A quorum is a simple majority of a panel of the court or of the court en banc. In determining whether a quorum exists for en banc purposes, more than half of all circuit judges in regular active service, including recused or disqualified judges, must be eligible to participate in the en banc process. If a judge of a panel that has heard oral argument or taken under sub-mission any appeal, petition, or motion is unable to continue with consideration of the matter because of death, illness, resignation, incapacity, or recusal, the remaining judges will determine the matter if they are in agreement and no remaining judge requests the designation of another judge.

Note: Thanks to Dennis and Tim for contributions to this post.

13 thoughts on “Microsoft v. DataTern: Judge Rader’s Dissent Withdrawn

  1. Has anyone noticed that the Fed. Cir. website lists the chair position as vacant now? Seems odd…

    1. Veritas,

      Is this FUD? I see no such indications of what you intimate at the Court of Appeals Federal Circuit website.

      1. Learn to use the internet. Go to the cafc website. Use the “the court” drop down. Click on “Advisory Council”. Read. Note: chair is indicated as vacan instead of Ed R.

        1. The Advisory Council is related to a separate issue.

          Using the internet should not be so limited as to not using your head.

          Or have you forgotten the role that that advisory council has in several rules package promulgations and the rescinding of those rules packages?

          Or are you also unaware that your choice of this thread carries an implication of Chief Judge Rader (while the council members are not of the CAFC judges)? Veritas is an odd pseduonym for your choice of name to bring this information forward as you have done.

          Just curious though, now that you have indulged yourself with intimations of court intrigue, how do you feel about the 500+ day absence of someone in Kappos’ old position? What do you make of the lack of a properly vetted leader of the patent office and the shadow running of that office? Or does your interest not run in that more glaring vacancy?

  2. It happened again?
    link to law.com
    Supposedly Rader decided to endorse Reines in a way that the court must view as inappropriate. Reines has been showing potential clients an email from Rader.

    1. Reines has been showing potential clients an email from Rader.

      Weird. What’s in the email?

      By the way, that law.com site blows and this is exactly the reason why. They might actually generate some traffic if they didn’t block their news behind a wall.

      Here’s a better one: link to therecorder.com

      Federal Circuit Chief Judge Randall Rader has recused himself from a high-profile case for the second time this week.

      The chief judge on Wednesday pulled out of a dispute between medical device companies over artificial heart valves. His recusal led to the withdrawal and reissuance of an April 21 stay order that Medtronic has described as being a life-and-death matter for some heart patients….

      Both cases were litigated by Weil, Gotshal & Manges and Silicon Valley partner Edward Reines, though it’s not clear that has anything to do with Rader’s recusals. Neither Rader, who became eligible for federal pension benefits two weeks ago, nor Reines responded to inquiries about the recusals….

      Patent attorneys contacted Wednesday were at a loss for why Rader recused himself from the two cases. Rader is known to be friendly with Reines….

  3. Weirdness of all kinds seems to follow this Datatern company around. Golly, I wonder why?

    Remember this?

    link to thepriorart.typepad.com

    Spangenberg says Foley should not be dragging him or his company into a billing dispute that doesn’t involve him. In an early October e-mail to Foley & Lardner, he said that if the firm didn’t drop him from the suit by October 12, “IPNav will be required to recount numerous instances—all supported by references—of Foley’s culture of bad conduct, poor judgment, and nonchalance regarding professionalism, which contradict Foley’s vastly overrated claims of superiority and excellent client service.”

    When Foley didn’t drop the complaint, Spangenberg acted on his threat by filing counterclaims against the firm in which he and his lawyers say Foley is unfairly interfering with his consulting business.

    The best part of that article is the classic quote from Spangenberg, in which he refers to himself in the third person:

    “How much money DataTern owes Foley — that’s not my fight. Erich Spangenberg gets into lots and lots of scrapes, this is not one of them.” And, he says, DataTern was better off once it hired him: “Love me, hate me, I understand IP, and I know how to monetize it.”

    LOL! And we’re all sooper dooper “jealous”.

  4. Did someone post a comment here regarding the case law relied on in for that dissent? Or am I thinking of some other recent case?

    In any event, I thought the majority had it right in their denying MS the right to join in for that particular dispute.

    Keep those customer lawsuits coming, folks! Just turn on the spigot and hose those lazy, thieving table-making and database-creating infringers down. It’d be a shame not to join this party while its swinging because, who knows? It probably won’t last forever.

    1. MM,

      Ned shared a couple of thoughts about it in a reply on the Akamai article. Let’s see if I can figure how to post the link . . .

      Patently O

      As an aside: you’re taking a big chance with using irony on this blog. Any rational reader would recognize your writing as irony. Then there’s anonther kind of reader . . . well . . . we’ll see.

      1. Thanks, Dobu. That’s not the case/comment I’m having difficulty finding. Maybe it wasn’t even a dissent being referred to? Basically it was a comment to the effect that the facts in the case being cited were opposite what the jurist seemed to be assuming. The commenter may have mentioned that he/she had been involved in the case being cited somehow ….?

        Regardless, it’s unfortunate that no reasons were provided for the post-opinion recusal.

    2. MM, one might consider that a customer is strictly liable, the contributory infringer not.

      For this reason, one must sue the direct infringer to gain full damages.

      This is an “odd” but predictable result of trying to coddle big business infringers. If anything, we should restore the law that all infringement is strict liability and let damages be apportioned according to fault.

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