All posts by Jason Rantanen

About Jason Rantanen

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

Order on “In re unsealing of court records” rescinded

By Jason Rantanen

Last week the Federal Circuit issued an order relating to the unsealing of materials filed in cases docketed ten or more years ago. Misc. Docket 22-160: Is your (old) appeal on this list?

Today the court issued a new order rescinding that order as “impracticable.”

Upon further consideration of the court’s August 17, 2022 Order, the court finds it impracticable at this time to continue to proceed with the proposed unsealing of previously-identified cases. Specifically, the court finds that there will be insufficient time and considerable, unanticipated administrative difficulty to both the court and to counsel in providing an opportunity for counsel and parties in the previously-identified cases to permit a physical review of the identified cases by the National Archives and Records Administration’s December 31, 2022 deadline for the court to complete the accessioning of its remaining pa-per case records.

Instead, the court will accession the cases to the National Archives and Records Administration for permanent retention under seal.  Read the new order here: https://cafc.uscourts.gov/wp-content/uploads/22-160.pdf (Archive copy: 22-160)

Misc. Docket 22-160: Is your (old) appeal on this list?

By Jason Rantanen

While this might not be the most newsworthy federal document archives story this week, it’s something that patent practitioners and others who practice before the Federal Circuit might want to take note of.  Today the Federal Circuit issued an order in Miscellaenous Docket 2022-160, “In re: Unsealing of Court Case Records.” The order reads:

The court is in the process of accessioning its remaining paper case records to the National Archives and Records Administration for permanent retention. These records predate the court’s transition to its electronic case management filing system in 2012 and once transferred to the National Archives will remain in only paper format and will not be made available online. Pursuant to Federal Circuit Rule 25.1(a)(1), “[a]fter five years following the end of all proceedings in this court, the court may direct the parties to show cause why confidential filings (except those protected by statute) should not be unsealed and made available to the public.” Through the review of these records, the court has identified several cases containing confidential filings that remain under seal more than five years following the end of all proceedings.

The order goes on to direct parties to the identified cases to this order to show cause within 60 days as to why confidential material in those cases should not be unsealed, along with instructions for what to do. The order is followed by 60 pages of case docket numbers and names. Almost all of them arise from the district courts, but there are a few from other origins. You can access it here: https://cafc.uscourts.gov/wp-content/uploads/22-160.pdf (archived version: 22-160).

For context, in 2012 the Federal Circuit switched from an older version of the court electronic records system to a newer version. As a result, appeals filed prior to the transition without subsequent case activity are only in the older system. (Appeals filed before the transition but with activity after the transition show up in both systems.) Many of the older materials are only available in paper form, and if you’ve ever tried to get them you know that it is very expensive and difficult.

I was curious about what portion of appeals this order applied to, so I plugged the docket numbers from the order into the Federal Circuit Dataset Project to get a sense of what portion of cases this applied to. (The list of docket numbers from the order is linked here: https://doi.org/10.7910/DVN/FRHXWT). In total, there are 1,151 appeal  numbers listed in the order (plus 3 duplicates). Of these, 1,122 matched an appeal docketed in 2000 or later that’s available in PACER; 16 don’t match a record that shows up in PACER (likely because the entire docket is confidential) and 13 involve appeals filed before 2000. The latest appeal was docketed in 2012, and most of the appeals listed were docketed between 2003 and 2010. Out of the 12,225 appeals docketed between 2000 and 2011, 977 show up on this list (about 8%).

However, most of the appeal dockets on the court’s list are appeals from the district courts, and those are only a portion of the court’s cases. Because these are records from the older generation of PACER, we don’t have as much information about them as for later appeals. (See this forthcoming article for details: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4162979.)  However, when I combined the list in the court’s order with our document dataset, which goes back to late 2004, and limited it to opinions and Rule 36 summary affirmances issued between 2005 and 2012, it turned out that about 25% of appeal dockets arising from the district courts that resulted in an opinion or Rule 36 in those years were listed on the court’s order (517/1,459), with about the same percentage for appeals arising from the ITC (79 out of 305). This isn’t exclusive; there are some numbers on the list that didn’t result in an opinion or order. But there’s a good chance that if you had an appeal in a patent infringement case that resulted in an opinion or Rule 36 affirmance between 2000 and 2011, it’s on the court’s list.

Bottom line: this is a lot of appeal dockets, both just in raw numbers and as a fraction of appeals in patent infringement cases and from the CIT.  The appeals were filed over a decade ago, and likely haven’t had any actions since 2012, but it may be worth a ctrl-F on the order to see whether your clients are impacted.

One thing that I do hope is that the court doesn’t de-accession the existing PACER docket search for pre-2012 cases. It provides only limited data and access to documents, but it’s the only publicly accessible directory or index for that information. As far as I know (and I’d love to be wrong!), there’s no existing paper analog.

Who appeals (and wins) patent cases?

By Jason Rantanen

There are lots of studies of Federal Circuit decisions, but very few involve the link between all cases filed at the district court cases and appeals. This prompted the question for me: who actually files appeals in patent infringement cases and how representative are they of the underlying civil actions filed in the courts? It turns out that the answer is “mostly patent asserters” and that they aren’t necessarily representative of case filings.

One of my research team’s ongoing projects is the Federal Circuit Dataset Project, which involves collecting all of the opinions & orders that the Federal Circuit makes available on its website, coding information about them, and then putting it all together into a publicly-accessible database that anyone can use to answer their own questions about the Federal Circuit.  There’s a user-friendly portal to the decisions dataset at empirical.law.uiowa.edu, and the full dataset is available at https://dataverse.harvard.edu/dataverse/CAFC_Dataset_Project.

This year, our major project involved linking up the CAFC dataset with datasets of patent infringement cases filed in the district courts. A draft of the first paper to spin out of this project is now up on SSRN at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4162979. (There is an option to download without logging in, but sometimes you have to hunt for it on the page.)  Thanks to the Houston Law Center’s Institute for Intellectual Property and Information Law for inviting me to present it at their national conference in June. Some takeaways:

  • For patent infringement cases filed between 2011 and 2016, about 6% have at least one appeal, although this rate has been declining from 7.8% of cases filed in 2011 to 4.4% of cases filed in 2016.
  • The average time from case filing to first appeal is 27 months, although there is substantial variation (SD of 18 months with rightward skew).
  • Appeals are overwhelmingly filed by patent asserters: 82% of first appeals in the set were filed by patent asserters compared to 18% by accused infringers.

For this particular project, we linked the Federal Circuit dataset to the Stanford NPE Litigation Database, which contains coding on patent asserter types. (Details about the Stanford dataset are available in Miller et al., Who’s Suing Us? Decoding Patent Plaintiffs since 2000 with the Stanford NPE Litigation Dataset, 21 Stan. Tech. L. Rev. 235 (2018)). Using this data, we found some differences between the frequencies of case filings and appeals.  Figure 2 from the paper shows the most frequent cases by Stanford litigation dataset category. Category 1 are companies that acquired patents but do not themselves make any products or provide any services.

Table of case filer frequency

Figure 2 from Who Appeals Patent Cases

Figure 2 shows that while companies that acquired patents (Stanford litigation dataset category 1) filed 37% of patent infringement actions from 2011-2016, only 25% of appeals from cases filed between 2011 and 2016 arose from those cases. On the other hand, while product companies accounted for only slightly more patent infringement lawsuits (just over 40%), appeals in cases filed by product companies constituted 54% of all appeals filed. In other words, cases brought by product companies are appealed at a higher rater than cases brought by companies that acquired patents. This is consistent with prior findings that cases brought by PAEs settle at a higher rate than cases brought by product companies. Not only that, but we also found a difference in who is bringing the appeal in these cases: in cases brought by a PAE, the patent asserter was the primary appellant about 90% of the time, whereas in cases brought by product companies the patent asserter was the primary appellant only about 70% of the time.

What about who wins these cases?  That’s a bit more complex, and depends on how you define “win.” We define a “win” as obtaining an affirmance if a party is the appellee and an affirmance-in-part, reversal or vacate if a party is the appellant.  Using this definition, we found that overall, patent asserters usually lose on appeal, with product companies being much more successful than PAEs. However, this is heavily affected by the fact that both patent asserters generally and PAEs specifically are in the shoes of the appellant most of the time, and more often than not, the Federal Circuit affirms the district court.

The paper itself goes into more detail, including information about affirmance rates by appellant type, other categories, and the kinds of forms that these decisions take.  You can read it here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4162979.

Disclosure: I am receiving an honorarium from the University of Houston Law Center Institute for Intellectual Property & Information Law upon publication of this paper in the Houston Law Review.

Guest Post by Prof. Contreras: Continental’s Antitrust Suit Against Avanci is Dismissed, but with Fewer Consequences for FRAND

Guest Post by Professor Jorge L. Contreras

On June 22, 2022, the Fifth Circuit reissued its opinion in Continental v. Avanci, replacing an earlier opinion that it issued on February 28.  While the reissued opinion continues to uphold the district court’s dismissal of the suit, it also eliminates the entirety of the Circuit’s earlier dicta concerning the nature of FRAND commitments and Article III standing, dicta that was heavily criticized by amici curiae.

Background

The standardization of wireless telecommunications protocols is largely conducted under the auspices of the European Telecommunications Standards Institute (ETSI) and organizational partners such as the US-based Telecommunications Industry Association (TIA) and Alliance for Telecommunications Industry Solutions (ATIS). Parties that participate in these standards development organizations (SDOs) generally agree to license patents that are essential to the implementation of those standards (standards-essential patents or SEPs) to manufacturers of standardized products on terms that are fair, reasonable and nondiscriminatory (FRAND).

Avanci is a collective licensing platform (similar to a patent pool) that was formed in 2016 to license wireless SEPs to manufacturers in vertical markets including the automotive industry. As of this writing, Avanci’s website indicates that it has licensed SEPs to 37 automotive brands including BMW, Volkswagen, Mercedes, Ford and GM, and that its licenses cover SEPs held by nearly fifty different firms including Nokia, Qualcomm, Ericsson and InterDigital.  Avanci’s licensing rate for automotive 4G SEPs is $15 per vehicle.  Though Avanci itself is not a member of the relevant SDOs, most of the SEP holders participating in Avanci are members, thereby requiring that Avanci abide by their FRAND licensing requirements.

The Litigation

Continental AG is a German supplier of automotive electrical and navigation systems to automotive manufacturers.  In 2019, Continental’s U.S. subsidiary filed suit against Avanci, Nokia, Sharp and several other SEP holders, alleging, among other things, that Avanci breached its FRAND commitment by refusing to offer Continental and other automotive component suppliers a license to SEPs covering the 2G, 3G and 4G standards.  Specifically, Continental alleged that because Avanci’s $15 per-vehicle licensing fee would be exorbitant (i.e., in excess of FRAND) if applied to the $75 telematics control unit (TCU) sold by Continental, Avanci refused to license SEPs to component suppliers like Continental, and instead offered licenses only to automobile manufacturers.  Then, because $15 is negligible in comparison to the overall cost of an automobile, automobile manufacturers would likely pay the charge, but later seek indemnification from Continental for those supra-FRAND costs.  Continental thus argued that it was damaged by Avanci’s refusal to license it directly at a FRAND rate.

Continental’s complaint alleged that this refusal constituted, among other things, a breach of the nondiscrimination element of the SEP holders’ FRAND obligations, a group boycott in violation of Section 1 of the Sherman Act, and an abuse of the standardization system constituting monopolization in violation of Section 2 of the Sherman Act.

Dismissal at the District Court (485 F. Supp. 3d 712 (N.D. Tex. 2020))

Chief Judge Lynn in the Northern District of Texas declined to exercise supplemental jurisdiction over Continental’s breach of contract and other state law claims and, given that the court lacked diversity jurisdiction over the parties, dismissed those claims for lack of subject matter jurisdiction (Continental subsequently filed an action in the District of Delaware making those claims).

Judge Lynn next granted the defendants’ motion to dismiss, finding that Continental lacked antitrust standing to bring suit.  First, she held that Continental did not adequately plead an antitrust injury, as it did not suffer direct harm from Avanci’s alleged failure to grant it a SEP license.  She points out that despite Avanci’s alleged refusal, Continental continued to sell TCUs to automotive customers, and any indemnification claims by those customers were speculative.  Moreover, she found that any antitrust violation arising from Avanci’s charging SEP licensing rates in excess of FRAND were felt by the automotive manufacturers and not by Continental.  Accordingly, Continental was a “remote or indirect” victim of the alleged conduct, and therefor lacking standing to bring suit.

The court went on to find that, even if Continental had standing, its Sherman Act claims would fail.  Under Section 1, the rule of reason analysis as applied to patent pools is generally satisfied when pool members are free to license the pooled patents individually, as is the case with Avanci.  Citing Bell Atlantic v. Twombly, 550 U.S. 544 (2007), the court noted that “[t]o the extent the Licensor Defendants refused to negotiate with Plaintiff or only agreed to do so at the same prices at which they license to the OEMs, this alleges at best parallel conduct and the possibility of concerted action, which are insufficient to state a claim of an unlawful agreement to restrain trade” (485 F. Supp. 3d at 732).

Under Section 2, the court observed that the additional monopoly power that a SEP holder obtains through the inclusion of its patented technology in a standard is “inevitable as a very frequent consequence of standard setting, and is necessary to achieve the benefits served by the standard, including procompetitive benefits” (citing Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501 (1988)) (485 F. Supp. 3d at 733).  It further noted that “[a] lawful monopolist’s charging of monopoly prices, is not only not unlawful; it is an important element of the free-market system” and that “[a] patent owner may use price discrimination to maximize the patent’s value without violating antitrust law.” (485 F. Supp. 3d at 734).  Expressly disagreeing with other cases holding that “deception of an [SDO] constitutes the type of anticompetitive conduct required to support a § 2 claim”, Judge Lynn found that “[e]ven if such deception had also excluded Defendants’ competitors from being included in the standard, such harms to competitors, rather than to the competitive process itself, are not anticompetitive.” (Id. at 735). Accordingly, she found no violation of Section 2.   Continental appealed.

Fifth Circuit – Withdrawn Decision (27 F.4th 326 (5th Cir. 2022))

On February 28, 2022, the Fifth Circuit, in a surprising turn of events, vacated the district court’s judgment and remanded with instructions to dismiss Continental’s claims for lack of Article III standing. This holding obviated the Circuit’s need to address the district court’s holdings regarding antitrust standing and the merits.

The Fifth Circuit’s decision to reject standing on Article III grounds – a theory that was neither briefed by the parties nor addressed by the district court – surprised many.  This move was still more surprising given that the Circuit based much of its reasoning on facts that were not in evidence and assumptions that were not supported by the record.

For example, the Circuit reasoned that Continental was not an intended third party beneficiary of the FRAND commitments made by Avanci’s members because Continental was not a member of the relevant SDOs.  This conclusion contradicts numerous other cases, including the Fifth Circuit’s own decision in HTC Corp. v. Telefonaktiebolaget LM Ericsson, 12 F.4th 476, 481 (5th Cir. 2021), in which it held that “[c]ompanies seeking to license under [FRAND] terms become third-party beneficiaries of the contract between the standard-essential patent holder and the standard setting organization” and “are thus enabled to enforce the terms of that contract.”

Likewise, the Circuit reasoned that a component manufacturer like Continental “does not need SEP licenses” from SEP holders because those SEP holders “license the [automobile manufacturers]” that purchase its components.  This conclusion overlooks the fact that even if a SEP holder grants licenses to automotive manufacturers, not all manufacturers are licensed at any given time. Moreover, except in the unusual case in which a component supplier makes components to order for an automobile manufacturer, the manufacturer’s license does not necessarily insulate the component supplier from claims of patent infringement.

Rehearing and Withdrawal of Fifth Circuit Decision

These and other issues in the Fifth Circuit’s opinion led Continental and various amici to petition the Fifth Circuit for rehearing en banc.

On June 13, 2022, the Fifth Circuit treated the pending petition for rehearing en banc as a petition for panel rehearing, granted that petition, and withdrew its February 28 opinion in its entirety.

On June 21, the Circuit issued an unpublished, nonprecedential per curiam opinion in which it “affirm[ed] the judgment of the district court that Continental failed to state claims under Sections 1 and 2 of the Sherman Act.”  Thus, the Circuit’s prior discussion of Article III standing, as well as its statements regarding the nature and beneficiaries of the FRAND commitment, are nullified.  In addition, by mentioning only the district court’s substantive Section 1 and 2 holdings, the Circuit does not uphold the district court’s ruling on antitrust standing.

Conclusions

Continental v. Avanci is not necessarily over.  Additional appeals of the Northern District of Texas decision are still available, and the Delaware contractual breach case continues.  Yet, the Fifth Circuit’s unusual withdrawal of its February 28 decision is a positive development in the evolving law concerning FRAND and SEP licensing.  First, it reinforces the widely held understanding that all implementers of standards are intended third party beneficiaries of FRAND licensing commitments made to SDOs (or at least declines to introduce dicta contrary to that understanding).  Second, it fails to support the notion that a SEP holder may avoid its obligation to license the suppliers of standardized components by licensing their end customers.  And most importantly, it declines to support the abstemious construction of antitrust standing adopted by the district court.  While there is clearly more to come in this and other disputes between component suppliers and SEP holders, the Fifth Circuit has avoided further muddying the waters in this already murky area.

[Note: the author led a group of thirteen law and economics scholars advised by Setty Chachkes PLLC in the filing of an amicus brief supporting en banc rehearing of this case.]

The Federal Circuit’s Precedent/Outcomes Mismatch

By Paul R. Gugliuzza, Temple University Beasley School of Law; Jonas Anderson, American University Washington College of Law; and Jason Rantanen, University of Iowa College of Law

Recently, we wrote about the small number of mandamus decisions on transfer of venue that the Federal Circuit has designated as precedential and about how those precedential decisions are unrepresentative of overall outcomes. Specifically, the Federal Circuit has labeled only 15% of its venue mandamus orders as precedential. And, though the Federal Circuit grants venue mandamus less than a third of the time, the court has granted nearly 80% of the petitions it has decided in precedential orders.

As a comparison, we wanted to share some data on precedential opinion rates in regular Federal Circuit appeals (as opposed to mandamus petitions). Our data make two things clear.

  • First, opinions in regular appeals are more than twice as likely to be precedential than orders on venue mandamus.
  •  Second, the outcomes reported in those precedential opinions—like precedential mandamus orders—are skewed toward cases in which the Federal Circuit disagrees with the decision below.

On the first point, here’s the breakdown of precedential opinions, nonprecedential opinions, and Rule 36 affirmances for all Federal Circuit appeals from 2008 through 2021.

Table 1: Federal Circuit Panel Appeal Rulings, 2008 through 2021

Table 2 below breaks the data down by tribunal of origin.

Table 2: Federal Circuit Panel Appeal Rulings By Tribunal of Origin, 2008 through 2021

These two tables make clear that, overall, 30% of Federal Circuit appeals are decided in a precedential opinion. In district court cases—the most relevant comparator for venue mandamus petitions—the figure is 42%.

Either way, the proportion of appeals resolved in precedential opinions is substantially higher than for venue mandamus petitions. Moreover, the Federal Circuit decides more than a quarter of appeals in no-opinion affirmances—a mechanism the court does not employ for mandamus petitions. If we excluded Rule 36 affirmances from our calculations, the differences between appeals and mandamus orders would be even greater.

On the second point about skewed outcomes: Like with mandamus petitions, the results in precedential opinions disproportionately disagree with the lower court or agency. Table 3 below reports the outcomes and modes of disposition of all Federal Circuit appeals (excluding a few hundred appeals that were dismissed or that had an unusual outcome—namely, something other than affirmed, reversed, vacated, etc.) from 2008 through 2021.

Table 3: Federal Circuit Panel Appeal Rulings, Excluding Dismissals and Other Outcomes, 2008 through 2021

As the bottom row of the table makes clear, overall, the Federal Circuit fully affirms in 78% of appeals. Yet, as the first row of data indicates, only 53% of precedential Federal Circuit opinions affirm the lower tribunal; 47% vacate or reverse, at least in part. By contrast, nonprecedential opinions (the second row of data on the table) fully affirm 81% of the time. And, as indicated toward the bottom of the table, nearly 30% of Federal Circuit appeals are decided in no-opinion Rule 36 affirmances, which, by definition, also fully affirm across the board.

In short, looking only at precedential opinions, one might think that, in any given appeal, there’s about a 50-50 chance the Federal Circuit will at least partly disagree with the tribunal below. But, in reality, fewer than a quarter of the Federal Circuit’s decisions disagree with the tribunal below in any respect.

The disparity between the outcomes reported in precedential opinions versus overall results is equally stark when the data is limited to the primary sources of Federal Circuit patent cases—appeals from the district courts, the PTO, and the ITC. From those three tribunals, combined, only 48% of precedential opinions fully affirm. But the overall fully-affirmed rate in appeals from those tribunals is 73%. The figures below illustrate those vast disparities.

Figure 1: Federal Circuit Precedential Rulings in DCT, PTO, and ITC Appeals, 2008 through 2021

Figure 2: Federal Circuit Nonprecedential Rulings in DCT, PTO, and ITC Appeals, 2008 through 2021

The skew of precedential opinions toward decisions that disagree with the lower tribunal provide a misleading sense of what Federal Circuit’s rulings look like day in and day out, just like the Federal Circuit’s precedential venue mandamus orders provide an inflated sense of the likelihood of mandamus being granted. These findings also raise interesting questions about what happens to patent doctrine when it is developed in cases that are not representative of overall outcomes.

The data used in this post comes from the Federal Circuit Dataset Project, available at https://doi.org/10.7910/DVN/UQ2SF7 or empirical.law.uiowa.edu.

 

Who Escapes Texas? And Where Do They Go? Mandamus Petitioners and Transferee Courts in Patent Venue Disputes

By Paul R. Gugliuzza, Temple University Beasley School of Law; Jonas Anderson, American University Washington College of Law; and Jason Rantanen, University of Iowa College of Law. This is the second in a new series on venue transfer requests and mandamus at the Federal Circuit.

Litigants shouldn’t get to choose the judge who decides their case. To us, that seems like an uncontroversial proposition. The ability to “judge shop” is the primary reason patentees once flocked to the Marshall Division of the Eastern District of Texas to file their infringement suits and are now flocking to the Waco Division of the Western District of Texas, where they’re guaranteed to have their case assigned to Judge Alan Albright. Judge shopping, we’ve argued elsewhere, raises concerns about court bias and capture and can make litigation unnecessarily costly and inefficient.

Numerous scholars, members of Congress, and even the Chief Justice have raised concerns about judge shopping, with a particular eye toward patent cases. Likewise, the Federal Circuit has indicated skepticism about the rapid accumulation of patent suits in Waco. In the past two years, the court has used the extraordinary writ of mandamus to order over twenty patent cases filed in Waco to be transferred elsewhere under 28 U.S.C. § 1404(a), which permits transfer “[f]or the convenience of parties and witnesses, in the interest of justice.” (Over the same time period, the Federal Circuit granted only two § 1404(a) mandamus petitions arising from any other court, both from the Eastern District of Texas.)

Though we think the harms caused by a party being able to choose its own judge are clear and indisputable, there is a counternarrative. It goes something like this: the Federal Circuit is polluted with “anti-patent sentiment.” It is captured by the big tech companies that are the most frequent targets of infringement suits—Apple, Google, and the like. And the Federal Circuit is thwarting patentees (and innovation) by sending infringement cases away from patentees’ chosen courts in Texas to places that are friendlier to defendants, such as the Northern District of California.

Fortunately, data we have collected as part of our comprehensive empirical study of mandamus practice at the Federal Circuit can help us assess whether, when it comes to questions about patent venue, the Federal Circuit is really in the pocket of big tech.

First off, it is true that mandamus petitions seeking transfer from Texas to the Northern District of California are more likely to be granted than petitions seeking transfer to other districts. As the table below shows, from 2008 through 2021, the Federal Circuit granted 32.0% of mandamus petitions seeking to overturn a district court decision denying transfer from the Eastern District of Texas to the Northern District of California as compared to 25.6% of petitions seeking transfer from the Eastern District of Texas to any district besides the Northern District of California. Likewise, the Federal Circuit granted 63.2% of mandamus petitions seeking to overturn a district court decision denying transfer from the Western District of Texas to the Northern District of California as compared to 46.2% of petitions seeking transfer from the Western District of Texas to any district besides the Northern District of California.Overall, mandamus petitions seeking to overturn a district court decision denying transfer from either Texas district to the Northern District of California were granted 45.5% of the time, while petitions seeking transfer from either Texas district to any district besides the Northern District of California were granted only 30.8% of the time.

To be clear, this disparity in grant rates among transferee courts doesn’t establish that the Federal Circuit unduly favors Silicon Valley-based tech companies. Rather, it may be that cases filed against those companies in Texas present particularly strong cases for transfer given that the defendants’ offices, employees, documents, and R&D facilities tend to be located in California. Regardless, the data does make clear that a mandamus petition seeking transfer from Texas to the Northern District of California is nearly 40% more likely to be granted than a petition seeking transfer from Texas to any other district.

To better gauge big tech’s success at the Federal Circuit, we can also look at the grant rates for individual mandamus petitioners. We found these results, frankly, a little surprising. First of all, there are not as many repeat petitioners as one might think. In total, from 2008 through 2021, roughly 185 individual parties joined one or more petitions for a writ of mandamus seeking to overturn a decision by the Eastern or Western District of Texas denying transfer under § 1404(a). (For the purpose of this analysis, we combined obviously related corporate entities, such as Samsung Electronics and Samsung Electronics America. Also, because many petitions are joined by multiple parties, the total number of petitioners is much larger than the number of Federal Circuit decisions.)

The most frequent petitioner in our dataset is Apple, which filed 16 petitions over the 14 years covered by our study. The Federal Circuit granted 4 of those petitions. The most successful petitioner of note is Google, which prevailed on 4 of its 6 petitions. But those numbers are small, making it hard to draw definitive conclusions.

The table below shows the results of Federal Circuit mandamus decisions in which the Eastern or Western District of Texas denied transfer under § 1404(a), limited to petitioners who appeared in three or more decisions from 2008 through 2021.As indicated on the first table above, the overall grant rate for Federal Circuit mandamus petitions challenging denials of § 1404(a) transfer motions by the Eastern or Western District of Texas is 37.5%, so these frequent petitioners do about average. (Though of course the mandamus grant rates in cases out of the Eastern and Western Districts of Texas are much higher than in cases filed elsewhere.)

If we added the Federal Circuit’s mandamus decisions from 2022 (after we closed the dataset for our study at the end of 2021), the numbers would change somewhat. Apple is 2-0 this year, which ups its grant rate to 33.3%. Google also won its only petition in 2022, bumping its grant rate up even higher, to 71.4%. Samsung likewise is 1-0 this year, so its rate is now 50%. Still, we would hesitate to say that any of this establishes that the Federal Circuit is biased against patentees and in thrall to big tech.

To be sure, the world’s richest corporations, like Apple and Google, enjoy massive advantages any time they litigate; the notion that we have an impartial court system indifferent to litigants’ economic power is fanciful. But it’s also specious to claim that the Federal Circuit’s mandamus practice indicates court capture by big tech. More likely, the Federal Circuit is using the imperfect tools at its disposal to fix a real problem: the questionable incentives for both judges and litigants in a system where the party filing a case gets to choose its judge.

U Mass v L’Oréal: Avoiding indefiniteness through claim construction

By Jason Rantanen

University of Massachusetts, Carmel Laboratories, LLC v. L’Oréal, S.A., L’Oréal USA, Inc. (Fed. Cir. 2022) – opinion

Panel: Prost, Mayer, Taranto (author)

This opinion nominally addressing indefiniteness illustrates the power of de novo claim construction review at the Federal Circuit. UMass’s claimed invention is a topical skin care product containing adenosine that is applied to the skin. The district court concluded that the claim was indefinite, but on appeal the Federal Circuit negated the indefiniteness determination by adopting the claim construction proposed by L’Oréal – a victory for sorts of UMass but, based on the briefs, not the outcome it was looking for.

The difficulty in this case arose from the combination of the structure of the skin and the wording that UMass used to claim the invention. Starting with the skin structure, the relevant parts basically look like this:

Figure 1: “Artist”‘s representation of skin layers

Representative claim 1 of patent number 6,645,513 reads:

A method for enhancing the condition of unbroken skin of a mammal by reducing one or more of wrinkling, roughness, dryness, or laxity of the skin, without increasing dermal cell proliferation, the method comprising [1] topically applying to the skin a composition comprising a concentration of adenosine in [2] an amount effective to enhance the condition of the skin without increasing dermal cell proliferation, [3] wherein the adenosine concentration applied to the dermal cells is 10-3 M to 10-7 M.

(bracketed numbers and emphasis added).

Apparently seeking to avoid a noninfringement outcome, UMass argued that the “wherein” clause [3] referred to the concentration of adenosine that seeped into the dermis rather than the concentration of the product applied to the skin. But since  clause [1] and [3] thus referred to different concentrations, the result was an ambiguity in the meaning of composition clause [1] and “effective” clause [2]: what is a “concentration of adenosine in an amount effective to enhance the condition of the skin”?  Relying on the subjective determination precedent, the district court concluded that this phrase was indefinite: “Indeed, the determination of whether a person’s skin is enhanced provides a paradigmatic example of indefiniteness. Beauty, after all, is “in the eyes of the beholder.”” University of Massachusetts v. L’Oréal USA, Inc., 534 F. Supp. 3d 349 (D. Del. 2021). UMass appealed the indefiniteness determination, trying to thread the needle between a limiting claim construction and an indefiniteness outcome. L’Oréal both responded on the indefiniteness point and advanced its own claim construction argument.

The Federal Circuit could plausibly have affirmed on indefiniteness in my non-judicial opinion. However, instead the Federal Circuit focused on claim construction, walking through its standard claim construction analysis and concluding that clause [3] actually referred to the concentration of adenosine in the product applied to the skin, not the resultant concentration in the dermis. Because this removed a necessary predicate of the district court’s indefiniteness determination, the consequence was a remand to the district court for further proceedings.

The Federal Circuit first concluded that the claim itself was ambiguous about what clause [3] referred to: “We first conclude that the relevant claim language, es-pecially when viewed in the context of the whole claim, is not plain on its face, much less plain in supporting UMass’s interpretation of it.” Slip Op. at 8. The opinion spends several pages discussing this; worthwhile reading if you are making a text-based argument, but too much depth to go into in a blog post.

The next step in claim construction is to look at the specification. This didn’t provide much support for UMass’s claim construction position, however: “UMass has not shown that, even in this context, the specification makes clear that the inventors contemplated measuring the adenosine concentration after exposure to the cells, rather than in a solution before application to the cells.” Id. at 12.

The last step of the intrinsic evidence analysis, however, did produce a clear outcome to the court.  “Even more strongly than the specification, the prosecution histories of the patents in question resolve the ambiguity surrounding the meaning of “the adenosine concentration applied to the dermal cells” in the wherein clause.Id.  The Federal Circuit concluded:

The amendments and comments clearly convey that UMass was continuing the pre-amendment reliance on the concentration in the composition before application to the skin, rather than introducing a materially different, unexplained notion of concentration, no longer assessed before contact with the object of application. UMass’s proposed construction now cannot fairly be squared with the understanding that both it and the examiner expressed during prosecution, and on which skilled artisans are entitled to rely.

Id. at 14. Because the use of the prosecution history was to resolve a lingering ambiguity in the claim language, this was not a case where the “clear and unmistakable disclaimer” standard applied for overcoming an otherwise plain meaning of the claim.

Opinions Without Law: Federal Circuit Mandamus Decisions on Transfer of Venue

Guest post by Paul R. Gugliuzza, Temple University Beasley School of Law; Jonas Anderson, American University Washington College of Law; and Jason Rantanen, University of Iowa College of Law.

We’ve written here a few times about how the parties seeking Federal Circuit review use the writ of mandamus to get around the usual rule that only final, case-ending judgments can be appealed. The primary conclusion of our research (which will appear in the Washington University Law Review later this year) is that, though the Federal Circuit grants mandamus far more frequently than any other federal court of appeals, the Federal Circuit’s high grant rate is driven almost entirely by mandamus petitions in patent infringement cases out of the Eastern and Western Districts of Texas that raise questions about transfer of venue for convenience reasons under 28 U.S.C. § 1404(a).

For example, from late 2020 through the end of 2021, the Federal Circuit decided 34 mandamus petitions challenging § 1404(a) transfer decisions by Judge Alan Albright of the Western District of Texas, who now hears more patent cases than any other judge in the country. The Federal Circuit granted twenty of those petitions, or 58.9%. Overall, from 2008 through 2021, the Federal Circuit granted 37.3% of mandamus petitions out of the Eastern and Western Districts of Texas on § 1404(a) issues (38 of 102). Outside of § 1404(a) petitions from those two district courts, however, the Federal Circuit’s mandamus grant rate (on all issues, from all lower tribunals) was only 9.9% (30 of 304).

With the Federal Circuit issuing so many mandamus decisions on transfer of venue, one might presume that the law governing the standard for obtaining mandamus relief, as well as for evaluating transfer motions under § 1404(a), is robust and well-developed.

But that is far from true.

As an empirical matter, the Federal Circuit designated only 4 of the 34 recent mandamus decisions reviewing Judge Albright as precedential. And all 4 were grants. So not only is the quantity of precedential case law small, it’s not representative of overall results.

In fact, from 2008 through 2021, the Federal Circuit issued only 19 precedential decisions on § 1404(a) transfer out of 128 total decisions. And the precedential decisions disproportionately granted mandamus: 15 grants, only 4 denials. By comparison, in nonprecedential mandamus decisions, the grant rate was substantially lower: 26 grants, 83 denials. The figure below puts the unrepresentative nature of the Federal Circuit’s precedential § 1404(a) mandamus orders in stark relief.

Figure 1: Decision form for petitions for writs of mandamus at the Federal Circuit, 2008-2021This data raises the question: Does the lack of precedent and the skewed nature of the outcomes in it matter? Even if every Federal Circuit § 1404(a) mandamus decision were treated as binding precedent, the fact-intensive and case-specific nature of the § 1404(a) inquiry arguably permits a judge (whether a district judge or a Federal Circuit judge deciding a mandamus petition) to justify almost any outcome in a given case. Moreover, as a matter of Federal Circuit choice-of-law doctrine, transfer of venue issues that arise in patent cases, as well as the standard for obtaining the extraordinary writ of mandamus, aren’t even governed by Federal Circuit precedent—they’re governed by the precedent of the regional circuit from which the case arises.

Nevertheless, we think there are at least three reasons to be concerned about the current state of appellate precedent on mandamus and convenience transfer in patent cases.

First, it is strange that there is so little binding law on such important issues. In the regional circuits, mandamus decisions on transfer of venue are almost nonexistent. (From 2019 through 2021, there was only one, total.) And the same goes for mandamus more generally: as we report in more detail in our article, over the past three years, the Federal Circuit has granted roughly the same number of mandamus petitions (24) as every other federal court of appeals combined. Yet none of this Federal Circuit case law is “law” in the way lawyers usually think about appellate decisions that are labeled as “precedential.”

Second, the lack of binding precedent on venue-related mandamus illustrates the problematic nature of the Federal Circuit’s choice-of-law rules more generally, under which some legal issues that frequently arise in patent cases are not governed by the (often ample) Federal Circuit precedent on the issue. Other notable issues, in addition to venue and mandamus, that are not actually governed by Federal Circuit decisional law include: the standard for pleading a claim of patent infringement, the criteria for granting injunctive relief for patent infringement, and the substantive standards governing claims in other areas of federal IP law, such as copyright and trade secrets. (For a thoughtful critique of the entire concept of “circuit law,” see Tommy Bennett’s forthcoming article, There Is No Such Thing As Circuit Law.)

Finally, the Federal Circuit’s venue-related mandamus precedent (or, the lack thereof) provides another example of how the Federal Circuit’s decisions about whether to designate a ruling as precedential or nonprecedential can distort perceptions about what the court is really doing. For instance, as one of us showed in a prior study with Mark Lemley, the Federal Circuit upholds the validity of a patent over a challenge on patentable subject matter grounds about 20% of the time when it decides the case in a precedential opinion. In nonprecedential opinions and summary affirmances under Federal Circuit Rule 36, however, the court upholds the validity of a patent challenged as lacking patentable subject matter less than 2% of the time. Similarly, on § 1404(a) mandamus petitions, a review of precedential decisions makes it look like over three-quarters of them are granted. But, in reality, the grant rate is less than one-third.

What should be done to alleviate these concerns? For starters, the Federal Circuit should reconsider its needlessly complex, unpredictable—and arguably meaningless—choice of law regime. (We tend to think that most lawyers and judges treat the Federal Circuit’s § 1404(a) mandamus decisions as binding, even if they are not as a matter of formal doctrine.) Instead, the Federal Circuit should simply apply its own precedent to all federal issues that arise in patent cases. In addition, the Federal Circuit could be more conscientious when deciding whether to designate mandamus decisions as precedential, making sure that its precedential rulings are more representative of the population of mandamus decisions as a whole. More fundamentally, we might question whether the precedential/nonprecedential distinction continues to make sense in an age where the internet makes it easy to access the vast majority of federal appellate decisions (though certainly not all of them).

Thaler v Vidal: Oral Arguments on Monday

By Jason Rantanen

On Monday, June 6, the Federal Circuit will hear oral arguments in Thaler v. Vidal,  covered on PatentlyO here.  Dr. Thaler  claims that his AI system, DABUS, has invented a new technology and should be named as its inventor on the patent. Although access to the Federal Courts Building remains restricted, you can listen to the arguments live at https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/. The court’s long had a practice posting recordings of oral arguments, but it’s great that they’re also making the audio available in real time.

If you’re interested in more context, students in Professor Colleen Chien’s, AI and the Law class wrote a series of blog posts covering the issue, including a post on Dr. Thaler’s legal arguments, a post on the DABUS technology, patents and patent applications, and the results of a small survey of patent prosecutors on AI in their fields.

Read more at Santa Clara’s AI and the Law for Social Impact and Equity blog!

A patent small claims court – what do you think?

By Jason Rantanen

The Administrative Conference of the United States (ACUS) is an independent federal agency that’s charged with recommending improvements to administrative process and procedure.  The position of Chairman is currently vacant, so the Vice-Chairman, Matthew Lee Wiener, is serving as Acting Chair. A key aspect of ACUS is soliciting  input from the public.

ACUS is conducting a study on behalf of the USPTO to examine “issues associated with and options for designing a small claims patent court.”  It recently published a request for public comments on the idea of a small claims patent court.  From the notice in the Federal Register:

Since at least the late 1980s, concerns have been raised that the high cost of
patent litigation deters small- and medium-sized enterprises, including
those owned by traditionally underrepresented groups, from seeking
to enforce their patents. Policymakers, scholars, and organizations have studied
whether a small-claims procedure is needed for resolving patent disputes.

They have reached different conclusions and proposed different actions.
The Department of Commerce has also considered the possibility of a
small claims patent court. Most recently, in December 2012, the USPTO
issued a Federal Register notice requesting public comment on ‘‘whether
the United States should develop a small claims proceeding for patent
enforcement’’ (77 FR 74830 (Dec. 18, 2012)).

Given ongoing interest in the topic, USPTO has engaged ACUS to conduct
an independent survey and analysis of issues associated with and options to
consider in designing a small claims patent court. A report resulting from the
study will ultimately be submitted to Congress and will address, among other
topics, whether there is a need for a small claims patent court, the feasibility
and potential structure of such a court, and the relevant legal, policy, and
practical considerations in establishing a small claims patent court.

Although ACUS is seeking all comments on the topic, they’ve specifically pointed out these areas of interest:

1. Whether there is need for a small claims patent court;

2. The policy and practical considerations in establishing a small
claims patent court;

3. The institutional placement, structure, and internal organization of a
potential small claims patent court, including whether it should be
established within the Article III federal courts, as or within an Article I court,
or as an administrative tribunal;

4. The selection, appointment, management, and oversight of officials who preside over proceedings in a potential small claims patent court;

5. The subject-matter jurisdiction of a potential small claims patent court,
whether participation in such proceedings would be mandatory or
voluntary, and whether parties can remove cases to another administrative
tribunal or federal court;

6. The procedures and rules of practice for a potential small claims
patent court, including, as relevant, pleadings, discovery, and alternative
dispute resolution;

7. The remedies that a potential small claims patent court would be able to
provide;

8. The legal effect of decisions of a potential small claims patent court; and

9. Opportunities for administrative and/or judicial review of small claims
patent court decisions.

While I forsee lots of issues associated with a small claims patent court, I would imagine that the issue preclusion issues arising from an invalidity determination would be need especially carefully thought out, as well as whether patent owners could use this mechanism to bring large quantities of suits against consumers/end users who lack the resources to adequately defend themselves against a patent infringement claim.

Comments are due by July 5, 2022, and can be submitted at “info@acus.gov,” with “Small Claims Patent Court Comments” in the subject line of the message.  Remember that submitted comments may be made publicly available.

Credit to Jeremy Graboyes for bringing this to my attention.

Guest Post by Prof. Contreras: A Statutory Anti-Anti-Suit Injunction for U.S. Patent Cases?

Guest Post by Professor Jorge L. Contreras

On March 8, 2022, five U.S. senators[1] introduced the “Defending American Courts Act” (DACA) in the Senate Judiciary Committee.  If enacted, DACA would penalize parties that assert foreign anti-suit injunctions (ASIs) in U.S. patent infringement proceedings, effectively creating a statutory “anti-anti-suit injunction” (AASI) applicable in all courts across the U.S.  In this post, I briefly consider the reasons behind the DACA and its potential impact.

The Controversy over ASIs in FRAND Cases

The controversy over ASIs has been brewing for several years.  As I have discussed at length elsewhere, ASIs are in personam procedural remedies that have existed under the common law for centuries. Essentially, an ASI is issued by a first court to prevent a party from pursuing litigation in a second court when it would interfere with the proceedings in the first court. ASIs have been issued routinely by courts in the U.S. and UK, for example, to prevent a party from pursuing litigation over a matter that is subject to an arbitration agreement.

Beginning in 2012, however, ASIs emerged as litigation tools in suits involving the licensing of standards-essential patents (SEPs).  Under the rules of several major standards-development organizations (SDOs), SDO participants that hold patents that are essential to products implementing the SDO’s standards must license those patents to product manufacturers (implementers) on terms that are “fair, reasonable and nondiscriminatory” (FRAND).  Because SDOs, as a rule, do not specify the level of FRAND royalties, SEP holders and implementers sometimes disagree over the amounts that should be paid. Litigation ensues, both as to the SEP holder’s compliance with its FRAND commitment, and the implementer’s infringement of the SEPs (given that it does not yet have a license).  And because many of the markets for standardized products (e.g., smartphones, laptops and gaming devices) are international, litigation is often prosecuted in several countries simultaneously.

In 2012, Microsoft and Motorola were engaged in such a dispute.  Microsoft sued Motorola for violation of its FRAND commitments to two SDOs in a U.S. district court.  Motorola brought an infringement action against Microsoft in Germany.  The German court, finding infringement, issued an injunction against Microsoft’s infringing activity in Germany.  Microsoft then sought an ASI from the U.S. to prevent Motorola from enforcing the German injunction.  The district court granted the ASI on the basis that the parties were the same, the resolution of the U.S. matter would dispose of the German matter, and the continuation of the foreign litigation would frustrate U.S. policies against avoiding inconsistent judgments, forum shopping and engaging in duplicative and vexatious litigation (871 F. Supp. 2d 1089, 1098-100 (W.D. Wash. 2012), aff’d 696 F.3d 872 (9th Cir.)).

ASIs and FRAND Litigation in China

In 2017, the UK High Court (Patents) established a global FRAND royalty rate in Unwired Planet v. Huawei, a case involving the infringement of a handful of UK SEPs.  Courts in China soon followed suit, assessing FRAND rates applicable around the world (Peter Yu, Yu Yang and I discuss this trend here). In response, parties litigating FRAND cases in the U.S. sought ASIs to enjoin their counterparties from pursuing those actions in China, at least until U.S. courts could make their own FRAND determinations.  In at least two of these cases, U.S. courts issued ASIs prohibiting actions in China (TCL v. Ericsson, 2015 U.S. Dist. LEXIS 191512 (C.D. Cal.), and Huawei v. Samsung, No 3:16-cv-02787-WHO (N.D. Cal., Apr. 13, 2018) – both cases are discussed here).

Then, beginning in 2020, Chinese courts began to issue ASIs of their own, this time prohibiting competing actions in the U.S., Europe, India and elsewhere.  During the course of 2020, Chinese courts, including the Supreme People’s Court, issued an unprecedented five ASIs to prevent parties from pursuing foreign actions that could interfere with their own proceedings (these ASIs are discussed here).

In response to this move, courts in the U.S., Germany, France and India began to issue anti-anti-suit injunctions (AASIs), prohibiting the parties before them from seeking ASIs (discussed here and here and here).  Not surprisingly, some courts, including those in China, then issued anti-anti-anti-suit injunctions (AAASIs) to prevent parties from seeking AASIs – a procedural spiral that I have referred to as “anti-suit injunctions all the way down”.

Political Responses to Chinese ASIs

The increasing use of ASIs by Chinese courts has led to political responses in the U.S. and Europe.  In February, the European Union filed a complaint in the World Trade Organization over China’s lack of transparency in issuing ASIs against European parties. And in April 2021, the U.S. Trade Representative described China’s increasing use of ASIs as “worrying” in her Special 301 Report.

The DACA also seeks to address this situation.  Senator Thom Tillis, in introducing the bill, stated “The Chinese Communist Party’s attempt to make Chinese courts the world arbiter of intellectual property must be stopped.” The bill’s sponsors explain that its purpose is “to prevent China from stealing intellectual property from American companies through their corrupt court system.”  Thus, while the text of DACA speaks to all “foreign” ASIs, the bill seems targeted directly at Chinese proceedings.

The Defending American Courts Act

If enacted, DACA would impose two types of penalty on a party that seeks to restrict an action for patent infringement before a U.S. court or the International Trade Commission (ITC) through the assertion of a foreign anti-suit injunction.  First, the party is prohibited from challenging the asserted patent at the Patent Trial and Appeals Board (PTAB) (Sec. 2(c)).  Second, if the party is found to infringe the patent, the infringement will be presumed to be “willful” for purposes of enhancing damages under Section 284 of the Patent Act, and the action will be deemed “exceptional” when determining whether to award attorney fees under Section 285 (Sec. 2(b)).

The text of DACA is not particularly detailed, leaving open many questions regarding the proceedings, both foreign and U.S., that would be affected (e.g., Does DACA affect PTAB actions initiated prior to the assertion of a foreign ASI? If so, is there any effect on preclusion of district court invalidity challenges under the recent CalTech v. Broadcom case? Is an action still deemed “exceptional” for awards of attorneys’ fees even if the asserted patents are eventually invalidated?)  Hopefully some of these gaps will be filled as and if the bill moves through committee.  To this end, DACA also calls for the USPTO to conduct a study of “the harms resulting from anti-suit injunctions” (Sec. 3(a)(2)) within one year of the enactment of the Act.  Perhaps it would make sense for this study to be conducted before legislation like DACA is adopted, to determine what harm, if any, should be addressed, and what the most appropriate response might be.

DACA as a Legislative AASI?

Despite the rhetoric accompanying its introduction, the measures that would be imposed by DACA are relatively modest. While one could conceptualize DACA as a legislative version of the AASI, it does not actually prohibit parties from seeking or asserting foreign anti-suit injunctions in U.S. tribunals, nor would it direct U.S. courts to issue AASIs or take other actions in response to the assertion of foreign ASIs.

In fact, the AASIs already issued by courts in the U.S., Europe and India in response to Chinese ASIs are generally more punitive than the contingent measures that would be imposed under DACA.  For example, in Ericsson v. Samsung, No. 2:20-CV-00380-JRG (E.D. Tex. Jan. 11, 2021), a U.S. district court responded to an ASI issued to Samsung by a court in China by prohibiting Samsung from enforcing the ASI against Ericsson (under penalty of contempt) and ordering Samsung to indemnify Ericsson against any monetary penalties imposed by the Chinese court.

Thus, while the penalties imposed by DACA are meaningful and may, indeed, dissuade some litigants in U.S. matters from seeking foreign ASIs, it is not clear that they offer greater deterrents than the AASIs that U.S. courts are already empowered to issue.

DACA, of course, offers an ex ante deterrent, imposing a penalty before a foreign ASI is sought or asserted in the U.S.  However, courts in Germany have recently begun to issue preemptive AASIs ordering parties who have not yet initiated any actions in China not to do so, given the “prevalent trend of Chinese companies filing ASIs” (discussed here and here), and a Dutch court has also indicated that it might consider doing so.

What Goes Around Comes Around

A final thought: despite the explicit anti-China tenor of the comments accompanying DACA’s introduction, we should remember that ASIs are not Chinese inventions.  They are products of the common law and were first used in FRAND cases by U.S. courts against actions in China.  As my co-authors and I argue here, the Chinese courts effectively “transplanted” ASIs to China from the U.S. and UK.

Like ASIs themselves, it is not unlikely that the enactment of DACA in the U.S. will trigger foreign responses in kind.  What would happen if China, Germany and other countries adopted legislation similar to DACA, preventing U.S. companies in foreign courts from enforcing ASIs issued by U.S. courts? As a procedural mechanism in U.S. and foreign proceedings, the ASI has many legitimate uses.  Yet legislative deterrents imposed by other countries could limit the use of ASIs by U.S. parties when appropriate.  One risk of unilateral measures such as DACA is that they could trigger reciprocal actions by other countries that could cause more harm than good to U.S. companies and markets.  It is thus important that policy makers consider fully both the potential benefits of DACA, as well as its potential costs.  As noted above, the study called for under Section 3(a)(2) of DACA might be useful to conclude prior to the enactment of legislation of this nature.

[1] Thom Tillis (R-NC), Chris Coons (D-DE), Tom Cotton (R-AR), Mazie Hirono (D-HI), and Rick Scott (R-FL)

Writs of Mandamus, Data Accessibility, and the Federal Circuit

By Jason Rantanen

Spring 2022 is roaring forward – and this semester is an especially busy one for me. I’m teaching my usual Introduction to Intellectual Property course, together with an especially large Civil Procedure class (which at Iowa is 4 credit hours), and the Iowa Innovation, Business & Law Center is running an exciting speaker series on Genetics, Law and Society.  All of this has given me a terrific opportunity to really think about procedure, law, and data.  And it’s fortuitously come at a time when several related projects are coming to fruition.  In light of that, rather than write a bunch of mini-blog posts on my current projects, I thought I’d just write about them all at once.

A few months ago, Jonas Anderson, Paul Gugliuzza and I ran a series of posts on our project examining petitions for writs of mandamus at the Federal Circuit. I’m delighted that our paper, Extraordinary Writ or Ordinary Remedy: Mandamus at the Federal Circuit, forthcoming in the Washington University Law Review, is now available for everyone to read. (As usual with SSRN, if you get an infowall, you can bypass it by clicking the skip option on the login page; it’s there, although SSRN sometimes buries it).   We find that while overall mandamus is rarely granted by the Federal Circuit, in a key area–petitions involving venue arising from Texas–that is not the case.  We argue that the reason is not because the Federal Circuit is behaving in an “exceptionalist” way, but that the issue flows from systematic flaws in the patent litigation system that the Federal Circuit has little power to fix—namely, rules of venue and judicial case assignment that encourage plaintiffs to shop not just for favorable courts, but for individual judges.  There are lots of little nuggets of data in there as well for data fiends, including on the issue of petitions for permission to appeal.  Read it here:  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4049186

One of the issues that we observed while writing this paper was the reality that, as Merritt McAlister had pointed out in Missing Decisions, many appeal terminations are not readily accessible to the public.  While opinions are routinely posted to federal appellate courts’ websites, non-opinion orders terminating cases rarely are (including a number of terminations of petitions for writs of mandamus).  I dug into this issue in more depth in a response essay that the University of Pennsylvania Law Review published last month called Missing Decisions and the United States Court of Appeals for the Federal Circuit, in which I compared all appeals in PACER to what the Federal Circuit actually publishes on its website, as well as what’s available in WestLaw and Lexis.  Overall, I observed that while the Federal Circuit has historically been very good at making opinions and precedential terminating orders available on its website, and has also been very good at posting Rule 36 summary affirmances since 2007, nearly all other orders terminating an appeal (including dismissals for lack of jurisdiction) were not.

I’m thus thrilled that it appears that the Federal Circuit has changed its practice.  In the last few weeks, the Federal Circuit has changed its  opinions and orders page to include dispositive orders:

The Federal Circuit publishes online all opinions, precedential orders, dispositive orders in writs petitions, Rule 36 judgments, non-ministerial orders relating to rehearing or en banc petitions or actions, dispositive orders constituting either judgment or mandate, and any errata notice or revised version for any of the preceding document types. …

This is an excellent balance between the morass of data that the court made available on its website in 2011-2014 (including orders on motions to extend time), and just posting opinions & rule 36 affirmances as that the court had previously done.  And based on my review of what they’ve been posting, they seem to be carrying through with this goal of making all dispositive orders available. These orders will provide more context for attorneys about the Federal Circuit’s decisionmaking, especially when it comes to areas that folks may not have really focused on but which were actually determinative. It’ll also ensure that legal research databases contain these orders going forward. I really want to commend Chief Judge Moore and the whole Federal Circuit, its clerks office, and the data management folks for making these key orders available.  Thanks to Dmitry Karshtedt for alerting me to this change!

That all leads into my third project in this set: an empirical study of data accessibility in published scholarship – that is, the accessibility of data once a researcher or research team has gathered all the data, analyzed it, and a law journal has published the article using it.  The draft of that paper, entitled Legal Research as a Collective Enterprise: An Examination of Data Availability in Empirical Legal Scholarship, is now available.  To conduct our study, my co-author Abigail Matthews and I, together with my amazing team of research assistants, examined all articles published in top-20 law journals by impact ranking, together with articles published in the Journal of Empirical Legal Studies, to ascertain (1) whether the article was an empirical legal study, and (2) for empirical legal studies, whether the article explained where to obtain the final dataset used in the article.  Overwhelmingly, we found that empirical studies published in law reviews don’t provide access to the data used in the study–at least by telling readers in the article itself where to find the data. Our finding validates a smaller sample observation that Chin et. al. just released finding similarly low levels of data accessibility, and we also find that factors that we expected to make a difference, such as less data available for qualitative studies, increased data availability over time, and greater data availability in the Journal of Legal Education (which has had a “data encouragement” policy since its inception) were either neutral or actually significant in the opposite direction than we expected.  While this paper may not be for all readers, if this is a subject that’s interesting to you, you can read the draft here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4057663

Guest Post: Assessing Responses to the PTO’s 2021 Patent Eligibility Study

Guest Post by Victoria T. Carrington and Professor Jorge L. Contreras.

Background 

It should be no surprise to readers of Patently-O that many are unhappy with the Supreme Court’s jurisprudence regarding patent eligibility under Section 101 of the Patent Act. In response to various calls for “reform” of patent eligibility jurisprudence, on March 5, 2021, Senators Thom Tillis (R-NC), Mazie Hirono (D-HI), Tom Cotton (R-AR), and Christopher Coons (D-DE) requested that the US Patent and Trademark Office (PTO) conduct a study regarding public views on “how the current jurisprudence has adversely impacted investment and innovation in critical technologies like quantum computing, artificial intelligence, precision medicine, diagnostic methods, and pharmaceutical treatments.” The Senators also asked the PTO to evaluate the responses and provide a detailed summary of its findings by March 5, 2022. The PTO released its public request for information (RFI) on July 9, 2021. The original deadline for response was September 7, 2021, which the PTO extended until October 15, 2021. A total of 145 comments were submitted before the deadline. In advance of the official assessment, we have reviewed and tallied these public comments for those who are eager for the results in advance of the official release.  

Methodology 

We reviewed each submission that was made in response to the PTO’s 2021 Patent Eligibility RFI, as posted by the USPTO on Regulations.gov. Information that we noted and tracked included submitter name, submitter industry/specialty, date submission received, submitter location (if listed), and the general tenor of the submitter’s comments. 

Findings 

Demographics 

There was a total of 145 submissions. Some individuals submitted two comments, and one individual submitted four identical comments. Fifteen submissions were anonymous. We combined multiple submissions from the same commenter, yielding a total of 137 unique comments. 

Figure 1 below shows the breakdown of industry affiliation of submitters. The largest group of submitters (28%) were patent attorneys and/or law firms that did not have a clear industry affiliation. Companies and trade associations were broadly classified as “High Tech” (18%) or “Life Sciences” (14%). Submissions classified as “Business” (11%) identify those made by venture capitalists and submitters focused on finance or entrepreneurship like the Market Institute. “Other” (8%) industries represented included cross-industry trade associations such as the Association of University Technology Managers (AUTM) as well as individuals, organizations, and companies that otherwise did not readily fit into the other specified classifications such as the mining conglomerate Rio Tinto, and Acushnet, a which makes golf equipment and apparel. 

Sixty-three submitters specified a location. California had the highest number of submissions (11). Six submissions came from outside of the U.S.: Canada, Japan, Macedonia, Switzerland, and two from the United Kingdom. 

Analysis of Positions 

We analyzed the content of each submission to determine whether the submitter generally viewed current jurisprudence regarding patent eligibility in a positive or a negative light or adopted a neutral stance. Figure 2 below illustrates the breakdown of submissions among these categories, excluding 19 submissions that did not actually address the question of patent eligibility. 

Figure 3 shows the comparison of the general tenor of submissions made by industry classification. 

Below we discuss these findings in more detail. 

Neutral Comments 

Four submissions adopted a neutral standpoint, neither praising nor criticizing current patent eligibility jurisprudence. One such comment was submitted by Professors Maya M. Durvasula, Lisa Larrimore Ouellette, and Heidi L. Williams. It effectively critiques the empirical validity of the PTO study itself: “Many have argued—largely based on anecdotes or descriptive data—that recent changes in patent eligibility caselaw have either increased or decreased innovation. Here . . . we argue that neither view is supported by the available empirical evidence.” “It is unclear whether limits on patent eligibility increase or decrease innovation.” “Current evidence does not demonstrate whether the Alice/Mayo framework is good or bad for social welfare in contested fields [specifically the biomedical and software markets].” 

Positive Comments 

Forty submissions (27.6%) describe current patent eligibility jurisprudence in a positive light, noting general satisfaction with the Supreme Court’s eligibility case law and its application within the market. Notable commenters in this camp include the American Civil Liberties Union (ACLU), Google, and the Association of American Medical Colleges (AAMC). 

The ACLU also criticized the framing of the PTO study, observing that “[t]roublingly, the RFI seems to adopt the same framing as the Senators’ request, presupposing that patent-eligibility jurisprudence lacks clarity and consistent application and that this lack of clarity is causing harms. Neither the Senators’ letter nor the RFI provides any basis for the allegation that the law is inconsistent or unclear . . . .” The ACLU points to the fact that there is a high affirmance rate of subject matter eligibility decisions made by district courts and the PTAB to argue that current patent eligibility jurisprudence is relatively clear. It also points to statements in Federal Circuit Opinions showing that judges are able to apply 101 in a clear and consistent manner. 

Google commented that “robust data supports that the balance in our IP system has allowed patenting in emerging technologies to flourish. . . . We urge the PTO to reject the premise set forth in the RFI that ‘the current jurisprudence has adversely impacted investment and innovation in critical technologies like quantum computing and artificial intelligence.’” 

From the life and health sciences perspective, the AAMC drew on public health and access considerations, noting “that law and policy must protect and balance the public good, including access to timely patient care, with proprietary rights in support of science and technology, particularly in the fields of medicine and public health. We believe that these principles are reflected in current jurisprudence.” 

Negative Comments  

Eighty-two submissions (56.6%) expressed at least one major concern with the state of current patent eligibility jurisprudence. The two primary concerns were that (1) eligibility requirements are too unclear and/or uncertain and (2) too many useful inventions are currently ineligible for patent protection based on current eligibility requirements. 

International Business Machines (IBM) specifically critiqued the judicially created ‘abstract idea’ exclusion from patent eligibility, noting that it “continue[s] to unnecessarily generate wide uncertainty about the validity of information technology patents and to undermine the patent incentive. It is a significant concern to innovators and patentees, who rely on the patent system to protect their investment in computer-related innovations. This uncertainty reduces public confidence in issued patents, making it harder for inventors to benefit from those patents.” 

The “too-many-inventions-are-ineligible” camp includes the IP Law Section of the State Bar of Nevada. It specifically highlights that there has been an “[o]verly broad application of” In re Smith to reject electronic gaming machine inventions under Section 101. 

Novartis’s submission sums up both reasons most submitters are unsatisfied with patent eligibility: the uncertainty and the ineligibility of specific important inventions. 

Figure 4 illustrates the relative frequency of these different negative arguments made regarding patent eligibility. 

Conclusion 

This preliminary assessment shows a range of views expressed by public commenters in response to the PTO’s Section 101 Patent Eligibility Study. There is clearly no majority or consensus view, meaning that any legislative response to the dissatisfaction voiced by some over current judicial eligibility decisions should be taken with care and provide further opportunities for public input and debate. 

The data for this post is archived at Victoria Carrington, 2022, “Public Comments on PTO’s 2021 Patent Eligibility Study”, https://doi.org/10.7910/DVN/DQWHHO, Harvard Dataverse, V1.

Guest Post: Community Ties in Patent Litigation

Guest post by Professors J. Jonas Anderson and Paul Gugliuzza.  Their article Federal Judge Seeks Patent Cases was recently published in the Duke Law Review, and I’m currently working on a project with them on writs of mandamus at the Federal Circuit. – Jason

Following tradition, on the last day of 2021, Chief Justice Roberts provided his annual year-end report on the federal judiciary. In the report, he addressed three issues that have “been flagged by Congress and the press” over the last year. Among them was “the arcane but important matter” of judicial assignment and venue for patent cases.

Let the arcana commence! Let’s talk about judicial assignment of patent cases.

For those unfamiliar with how cases are assigned in district courts, let’s use the Western District of Texas as an example. The Western District of Texas is a vast district, stretching more than 600 miles across from El Paso (on the western limits of the state) to Waco (which is much nearer to Louisiana than New Mexico). When a plaintiff files a suit in the Western District, the suit is assigned to the judges within one of seven divisions that make up the district: Austin, Del Rio (Alpine), El Paso, Midland/Odessa, Pecos, San Antonio, and Waco. But the case is not assigned randomly to one of the divisions; rather, the plaintiff selects (from a drop-down menu) to which of the divisions the case will be assigned. Only after a division is selected by the plaintiff does random assignment occur, with each judge within the division receiving a certain percentage of the cases filed, per a standing order filed (and updated in 2021) by the Chief Judge of the Western District of Texas.

But for certain divisions within the district, individual judges receive 100% of the cases filed, meaning plaintiffs can pick their judge. In the Western District of Texas, this 100% assignment occurs in the Midland-Odessa division (assigned to Judge David Counts), the Pecos Division (also Judge Counts), the Del Rio Division (Judge Alia Moses), and—most importantly for patent law—the Waco Division (Judge Alan Albright). That means that Western District of Texas plaintiffs can “judge shop” for the judge they prefer, at least in those four divisions. Judge shopping is, shockingly, possible in a large portion of district courts across the land, not just in Texas.

Thus, it is great to hear that Chief Justice Roberts is investigating the problem of judge shopping. The practice of “judge shopping” has long been frowned upon by courts; unlike forum shopping, in which the plaintiff chooses the court that appears to be favorable, judge shopping refers to the practice of the plaintiff choosing the specific judge who tries the case. The due process and fairness concerns inherent with a plaintiff choosing who judges their case has recently been of interest to members of the Senate Judiciary Committee as well.

Yet despite the Chief Justice’s approval of random case assignment, he noted in his year-end report that there is an “important and sometimes competing” value at issue with mandating random assignment of patent cases: Congress has shaped the federal courts into districts and divisions “so that litigants are served by federal judges tied to their communities.” Thus, according to Chief Justice Roberts, randomization that severs litigants from federal judges in their communities presents a conflict of values that the judiciary must resolve.

This is largely irrelevant for patent cases.  There is generally little to no local community that would be inconvenienced by random assignment of cases. For proof, just take a look at Judge Albright’s docket. The overwhelming majority of patent plaintiffs in Waco are not from Waco, the Western District, or even Texas; they are filing in Waco because they know that they will get Judge Albright, not because Waco is their “community.” In fact, in reviewing the over 800 Waco patent plaintiffs in 2020, we could only find two plaintiffs with corporate headquarters in Waco (more on that later). To be sure, there are quite a few Waco plaintiffs with headquarters in Austin (within the Western District of Texas) or Dallas (in the Northern District of Texas). But, if one is truly concerned about judges being tied to local communities, the Austin division of the Western District of Texas or the Dallas division of the Northern District of Texas would be better venues in which to litigate for those companies.  If anything, current practice draws litigants away from local communities and into far-flung districts based on the perceived strategic and procedural peculiarities of particular judges.

The two exceptions to the no-Waco-connection rule actually prove that patent plaintiffs do not have special local ties to Waco. The two exceptions are WSOU Investments and Voip-pal.com. These companies filed 181 patent suits in Waco in 2020, 169 of which were filed by WSOU. WSOU opened an office in Waco, but apparently uses the office just to avoid having its cases transferred away from Waco.  WSOU is a litigation-funded assertion vehicle run by Craig Etchegoyen, who himself has run or controlled non-practicing entities like Uniloc and has filed hundreds of lawsuits in Texas, but who himself lives in California.  As the Federal Circuit explained in In re: Juniper Networks:

[WSOU]’s presence in Waco appears to be both recent and relatively insubstantial. The office was established only a few months before the [2020] complaints against Juniper were filed, and the activities of the office are largely tied to bringing lawsuits in that court. [WSOU] has only two employees who work from Waco, one of whom is its in-house attorney responsible for litigation. The principal officers of [WSOU] are located in California.

This is an example of a local office established simply for the purpose of judge-shopping. Certainly, these cannot be the sorts of community interests that Chief Justice Roberts is worried about undermining with randomization of case assignment.

In fact, the proliferation of intra-division transfers of patent cases from Waco to Austin demonstrates that Waco is not generally the location in which plaintiffs want to litigate; it is the place in which the judge they prefer is located. For roughly his first two years on the bench, Judge Albright had a practice of granting transfer from Waco and Austin, yet remaining the judge on the case. This practice appears to have resulted in other judges stepping in to end the practice, but the fact that plaintiffs were selecting Waco (and thus Judge Albright) and then turning around and requesting that the case be transferred to Austin—a division they could have selected in the first place—demonstrates that there is often not much convenience, or local interest, gained by having the case tried in Waco. The only thing many of these plaintiffs want with Waco is Judge Albright; as long as he is on the case, the plaintiffs would prefer to be in Austin.

We have recently written an article in which we proposed a two-prong solution to the judge shopping problem. We propose fixing the judicial assignment process by ensuring that patent cases are assigned randomly among multiple judges and by altering the patent venue statute to require that a plaintiff demonstrate that venue exists within the division (not merely the district) in which the case is assigned. These two changes are simple to implement and would make it harder for plaintiffs to shop for individual judges—a practice that is flatly inconsistent with notions of judicial fairness and impartiality.

Federal Circuit Dataset & Stats: 2021 Update

By Jason Rantanen

Happy 2022! As I’ve done for the last few years, below I provide some statistics on what the Federal Circuit has been doing over the past year. These charts draw on the Federal Circuit Dataset Project, which contains information on all Federal Circuit decisions posted to the court’s website and and the court’s dockets.

Figure 1

Figure 1

Figure 1 shows the number of Federal Circuit opinions and Rule 36 summary affirmances by origin since 2010. Once again, the highest number of merits terminations arose from the PTO. The most notable change for 2021 was a drop in the number of decisions arising from the district courts: from 197 in 2020 to 142 in 2021. These represent individual documents (i.e.: a single opinion or Rule 36), not docket numbers, but there’s also a 25% drop when looking at the data on a per-docket number basis.  Overall, the Federal Circuit issued 653 merits decisions in regular appeals in 2021 as compared with 690 in 2020.

Figure 2

 

Figure 2  shows the number of opinions versus Rule 36 summary affirmances arising from the District Courts and PTO. Relative to recent years, the portion of appeals that were summarily affirmed was substantially lower. Thirty-five percent of appeals arising from the PTO were summarily affirmed—much less than 2019, when almost half of the appeals arising from the PTO were Rule 36’d.

You’ll also notice that the number of written opinions that the Federal Circuit issued in appeals arising from the district courts was the lowest it’s been at least since 2010, while the number of written opinions arising from the PTO was the highest. The type of opinion paints a different picture, however: as Figure 3 shows, while around half of the opinions arising from the district courts were designated as “precedential,” only 25% of the opinions arising from the PTO were. To me, Figure 3 suggests that the Federal Circuit perceives that it has addressed many of the novel questions created by the AIA and inter partes review, and sees its jurisprudence as more settled than it was a few years ago.

Figure 3

Figure 3

Interestingly, this does not seem to mean that affirmance rates in appeals arising from the PTO are increasing. For one thing, they’re already quite high: over the past decade, the Federal Circuit has affirmed the PTO about 80% of the time.  Nor did they increase in 2021. Last year, the Federal Circuit affirmed the PTO in 78% of its decisions. Another observation is that even though the court’s use of Rule 36’s in appeals arising from the PTO has dropped over the past two years, its affirmance rate has remained about the same.

Figure 4

Figure 4

The Federal Circuit did, however, affirm district courts more frequently last year than any previous year.  The average rate at which the court affirmed-in-full district courts from 2010-2021 was 69% (indicated by the purple line); last year its affirmance rate in these appeals was 79%.

I didn’t create a separate graph for dissents and concurrences, but overall Federal Circuit judges wrote about the same number of dissents in 2021 as in 2020 (35 in 2021 versus 37 in 2022), but wrote a lot more concurring opinions (23 in 2021 versus 10 in 2020).

Figure 5

Figure 5

A new addition this year is a dataset of all Federal Circuit dockets since 2000 based on data from PACER. Figure 5 shows the number of appeals docketed at the Federal Circuit by origin. For the past few years, the court has received well over a thousand appeals per year. That number fell a lot in 2021—especially appeals arising from the PTO and the MSPB. (The MSPB has not had a quorum since 2017, and has not had any sitting members since 2019.)  The downstream consequence of this is that we can expect to see fewer Federal Circuit decisions in appeals arising from the PTO in 2022.

What about petitions for writs of mandamus? Jonas Anderson, Paul Gugliuzza and I are finishing the draft of our paper on those, but it’s no spoiler to say that orders on petitions for writs of mandamus are a big part of the Federal Circuit story for 2021.  Last year the court issued 52 merits orders on petitions for writs of mandamus, as compared with 35 in 2020 and 19 in 2019. For more on those, here’s a link to our series.

You can access the full document dataset here and generate a variety of charts using the widget, or download the data and plug it into your favorite analysis program.  In addition, both the docket and document dataset are archived on the Harvard dataverse, along with the Stata code for generating the tables for the above graphs.  Methodological details are provided in this working paper. Or, if there are specific aspects of the data that you’re curious about, email me or DM me on Twitter and if I’m able to, I’ll take a look.

Thanks to my research assistants for help reading and coding all of the court’s decisions especially Matt Fuentes, Daniel Kieffer, Brenna Kingyon, Lindsay Kriz,  Sara Leibee, Ryan Meger, Madison Murhammer Colon, Charles Neff, Riley Stanton, Connor Williams & Allison Williamson.

Guest Post: Design Protection and Functionality: Does the PTO or the Copyright Office Apply a More Rubbery Stamp?

Guest post by Peter S. Menell, Koret Professor of Law; Director, Berkeley Center for Law & Technology; Faculty Director, Berkeley Judicial Institute; University of California at Berkeley School of Law, and Ella Corren, University of California at Berkeley School of Law, J.S.D. Candidate

In Design Patent Law’s Identity Crisis, presented at the Berkeley Center for Law & Technology’s February 2021 “Design Patents” symposium, we traced the origins of design patent law’s ornamentality/non-functionality doctrine and showed how the Federal Circuit, the nation’s de facto design patent emperor over the past four decades, has turned the doctrine on its head: it has upended the 1902 Act’s intent and reversed three-quarters of a century of regional circuit jurisprudence. So much so that the post-1902 Act regional circuit design patent cases invalidating design patents on functionality grounds would come out oppositely under the Federal Circuit’s lax standards. Those standards led to the absurd result that Apple could disgorge Samsung’s profits on its smartphones because they employed rounded rectangular shapes. We showed that the Patent Act limited design protection to original, ornamental articles of manufacture, and excluded protection for functionality.

BCLT invited practitioners and academics to comment on our analysis. While none of the commentators questioned, no less refuted, our core finding that the Federal Circuit has flipped the ornamentality/non-functionality doctrine, several offered fig leaves to clothe the Federal Circuit’s lax standards for design patent eligibility and infringement. In responding to our article, practitioner Perry Saidman and Professor Mark McKenna suggested that the design patent regime can be justified in part based on the tighter functionality screen that the PTO applies to design patents than the low threshold that the Copyright Office applies to copyright registrations to useful articles.

We found the suggestion that the PTO is more rigorous than the Copyright Office in applying the functionality screen intriguing and decided to test it out: Does the PTO or the Copyright Office apply a more rubbery stamp?. This commentary presents some of our findings.

Before turning to some illustrations, we note that the Compendium of U.S. Copyright Practices, in contrast to the Manual of Patent Examining Procedure, implements limiting doctrines in relatively clear and concise terms. As regards originality, the Compendium states that copyright law does not protect “words and short phrases,” “familiar symbols and designs,” “mere variations of coloring,” spatial format and layout design, blank forms, and common geometric shapes, either in two-dimensional or three-dimensional form.” The Patent Office applies no such limitations, notwithstanding that the design patent statute specifically requires that articles of manufacture be original to obtain design patent protection.

Turning to our findings, we begin with Universal Robots’ “UR5” robot arm. In 2015, it sought copyright registration of this useful article as a sculptural work.

The Copyright Office refused registration on the ground that UR5 “is a ‘useful article’ which does not contain any separable authorship.” Universal Robots appealed the decision to the Copyright Office, arguing that the UR5 contains conceptually separable artistic elements that are not necessary to its performance of its utilitarian function, namely its “raised circular caps containing the stylized ‘UR’ design,” and the ‘“T’ shaped, modular interlocking wrist.” The Copyright Office affirmed its rejection, explaining that the UR5 “does not contain any separable, copyrightable features” because “the caps and wrist of the arm are both integrated parts of the ‘overall shape’ of the arm.” In September 2016, Universal Robots filed a second appeal for reconsideration, in which it contended that since the blue caps are “capable of being physically removed from the robotic arm without altering the useful aspects of the article,” and “are not necessary to the utilitarian functioning of the device,” they are “conceptually separable, artistic and protectable.” Universal Robots also asserted that the T-shaped piece was “designed to achieve a sleek, modem and aesthetically pleasing appearance,” is “not necessary to the utilitarian function of the article,” and could have been designed in many other ways, rendering this part protectable as well. Universal Robots claimed that these elements of the Work “embody more than the mere ‘modicum’ of creativity that is required for copyright registration,” highlighting that the designers are Danish and inspired by the Danish Modem movement.

In rejecting the second appeal, the Copyright Office concluded “that the elements Universal Robots identifies as expressive—namely the plastic caps and the T-shaped piece—could be visualized as works of authorship separate and independent from the Work’s utility.” And that “[e]ven if those features could be deemed separable, however, they simply are not sufficiently original to warrant copyright protection.”

Universal Robots then filed a design application for the UR5 in January 2020. See U.S. Design Patent No. D915,487 (Apr. 6, 2021). The Patent Office granted the design patent in April 2021.

Robotic arms with similar functional configuration have long been the subject of utility patents. See, e.g., U.S. Patent No. 4,273,506 (Jun. 16, 1981) (“Industrial Manipulator for Placing Articles in Close Proximity to Adjacent Articles”).

This pattern of copyright registration refusal/design patent grant is a common occurrence. In another poignant example, the Copyright Office declined registration for the Purple® pillow, concluding that the overall shape of the pillow—featuring an interior grid of hollow triangles—is unprotectable and not capable of conceptual separation from the useful article. The Copyright Office explained that the triangles have an “intrinsic utilitarian function” and thus are useful articles themselves,” noting that Purple’s marketing materials make “clear that these triangles are wholly utilitarian,” including that the Work’s “hundreds of little triangles . . . give the core of the pillow lateral strength so it retains its oh-so supportive, head-cradling comfort all night” and emphasizing the word ‘SCIENCE!’ in all capital letters; and “[e]ven if the grid of triangular prisms was not functional, however, it would not be a basis for copyrightability. The Copyright Office’s refusal to register quoted the Compendium of U.S. Copyright Practices: ‘The Copyright Act does not protect common geometric shapes’ including triangular prisms.”

Nonetheless, the design patent application for the Purple Pillow sailed through the Patent Office. See U.S. Design Patent 909,790 (Feb. 9. 2021) (“Pillow”).

The design patentee continues to emphasize the ergonomic advantages of its pillow design: “Unique to the Purple Harmony Pillow, the Deluxe Hex Grid is specially formulated and engineered for head and neck support. The soft hexagon-shaped air channels optimize the dynamic response and airflow for unbelievable comfort.”).

We explore these and other examples in The Design Patent Emperor Wears No Clothes: Responding to Advocates of Design Patent Protection for Functionality.

These minimalist designs raise serious functionality and originality concerns. They demonstrate the rubber stamp quality of the Patent Office and that the design patent system as currently administered results in significant overprotection of functional features and designs. And even though design patents have “only” 15 years of duration, that length of time can be an eternity in some design markets and substantially diminish competition. The utility patent supremacy/channeling principle is about preserving competition in exactly the same way as trademark’s functionality doctrine—the channeling of functionality protection exclusively to utility patents is meant to subject all other, not sufficiently innovative, functional features to unimpeded market competition.

Guest Post: Patents in Islamic Law

Professor Tabrez Y. Ebrahim is visiting at Iowa Law this semester, where he’s teaching Cybercrime & Security and Entrepreneurship Law & Ethics.  His research interests are broad, and he recently completed a comparative work examining patents in Islamic law.  Below he offers a synopsis of his work.

Companies and law firms with a transnational presence in Islamic countries should recognize that patents may present different considerations in countries with less secular legal systems. Islamic law has primacy in Islamic countries that comprise nearly one-fifth of the world’s population. Many of these countries are members of Trade-Related Aspects of Intellectual Property Rights (TRIPS), which excludes from patentability certain inventions that offend morality in that society. As Islamic countries have begun to embrace patents in recent decades, theories of patents have presented conceptual and theological debates under classical Islamic law, including for construing patentable subject matter and assessing patent infringement.

Patents in Islamic Law present religious considerations that are unique compared to U.S. patent law. First, there are tensions between intellectual property and Islamic law, which is silent on the permissibility of intangibles yet allows for their interpretation. Second, justifications for patents within Islamic law present ethical and morality considerations based on religious limitations that present public policy choices of patentable subject matter and the ordre public meaning of TRIPS Article 27.2 . Third, public interest should be a consideration not only in terms of a potential harm to plaintiff (who is seeking injunctive relief or preventing importation of an infringing article) in the patent infringement context, but also in terms of justification of patents in an Islamic legal system.

In my recent article, Intellectual Property Through a Non-Western Lens: Patents in Islamic Law, I explain these considerations, analyze why and how patents uncomfortably fit within a religious body of law, and provide a new perspective to the patent law community. The tensions of patents within Islamic law arise since Islamic legal systems are based on Shariah, which considers divine law as encompassing and guiding all aspects of human life, yet allowing for interpretation through fiqh, or human understanding of the divine law.  Below, I briefly summarize my observations and conclusions.

First, Islamic law does not explicitly recognize patents. In addition, there are complexities within Islamic law that impose a prohibition or limitations on patents: (1) one school of Islamic jurisprudence has traditionally required physical possession of a property right; and (2) some scholars have argued patents create monopolistic effects contrary to an Islamic vision of patents. In the article, I provide justifications and reasoning as to how patents can be implicitly derived within Islamic law by drawing upon its secondary sources of law, provide a framework and justifications for their recognition within Islamic law, and describe the gradual change in interpretation of property to include intellectual property within Islamic law.

Second, while recognizing that patentable subject matter is rife with indeterminacy in the U.S, I suggest that it is a social policy choice that that has yet to be molded in Islamic countries. In particular, ethically and morally controversial inventions should be excluded from patentability in Islamic legal systems, which I argue should have initial flagging of such inventions in the patent examination process and should be assessed by my proposed Patent Shariah Board (an independent board of specialized jurists that direct, review, and supervise Islamic jurisprudence pertaining to patents). As such, patent offices in Islamic legal systems should have a diminished role for assessment of patentable subject matter, which would require flagging (but not thorough evaluation) by patent examiners in such countries. Moreover, the interpretation of ordre public meaning of TRIPS Article 27.2 should have differential treatment among Islamic countries based on the underlying Islamic school of jurisprudence and by the degree of primary of religious law.

Third, I suggest that patent infringement, which is in a nascent and unclear state in Islamic legal systems, presents unique considerations in comparison to the U.S. patent system. I argue that public interest, which is a key consideration in Islamic law, is of greater importance in determining sufficient harm in patent infringement than in U.S. patent law (while also serves to provide a justification for patents within Islamic law).

In sum, while justifying patents within Islamic law, I provide theoretically and theologically sound justifications for patents in an Islamic legal system, while I reason that the reach of patents is narrower than in western legal systems due to more prominent morality, ethics, and public interest considerations. In developing the fiqh (or human interpretation of divine law) of patents, I develop a conceptual framework for patents in Islamic law, while recognizing limitations and institutional design for their administration. This project is part of a longer-term research project that seeks to compare the existing U.S. patent system with patents in Islamic law (including similarities between the systems and unique aspects of each system), and provide insights into how companies and law firms seeking to have a transnational patent presence can operate within nations that follow Islamic law.

Read the full article here on SSRN or the Georgia State University Law Review website.

Tabrez Y. Ebrahim is a law professor and a registered U.S. patent attorney. He is an Associate Professor of Law at California Western School of Law, a Scholar at George Mason University’s Center for Intellectual Property x Innovation Policy, a Senior Cyber Law Researcher at William & Mary Law School’s Center for Legal & Court Technology, an Ostrom Visiting Scholar at Indiana University, and a Visiting Fellow at the University of Nebraska.

Patent Law Textbooks: A Micro-Symposium

By Jason Rantanen

This Friday, November 5, the Iowa Innovation, Business & Law Center will be hosting a first-of-its-kind event (to the best of my knowledge at least): a panel discussion by patent law casebook authors about what makes their textbooks tick.  There are at least eight different patent law textbooks with editions published in the last few years, and we’ve brought their authors together to talk.  The program, entitled Patent Law Textbooks: A Micro Symposium, will be live-streamed via Zoom webinar on from 1:30-4 pm Central.  You can preregister or join here: https://tinyurl.com/PatentCasebookPanel.

The symposium will consist of two panels:

  • Panel 1: Exploring Patent Law Textbooks (1:30 – 2:45 p.m. CT): This panel will feature authors talking about the distinguishing features of their textbooks, the design decisions that they made in creating them, and the pros and cons of self-published and open-access casebooks versus traditional publishers.
  • Panel 2: Publishing Your Own Textbook.  (3:00 – 4:00 p.m. CT) This panel will feature authors talking about their experiences creating an open-access or self-published textbook and tips for others who are thinking about creating their own open-access or self-published textbook, including why they made the copyright license choices that they did.

These panels will feature authors of the following casebooks:

  • Martin J. Adelman, Randall R. Rader, & John R. Thomas, Cases and Materials on Patent Law (West Academic 2019)
  • Daniel H. Brean & Ned Snow, Patent Law: Fundamentals of Doctrine & Policy (Carolina Academic Press 2020)
  • Sarah Burstein, Sarah R. Wasserman Rajec, & Andres Sawicki, Patent Law: An Open Access Casebook (2021)
  • John F. Duffy & Robert P. Merges, Patent Law and Policy: Cases and Materials (Carolina Academic Press 2021)
  • John M. Golden, F. Scott Kieff, Pauline Newman, & Henry E. Smith, Principles of Patent Law: Cases and Materials  (West Academic 2018)
  • Mark D. Janis, Ted M. Sichelman, et. al., Patent Law: An Open-Source Casebook (Law Carta 2021)
  • Jonathan S. Masur & Lisa Larrimore Ouellette, Patent Law: Cases, Problems and Materials (2021)
  • Craig A. Nard, The Law of Patents (Wolters Kluwer 2020)

Hope you can join us!

Guest Post: How It Started…How It’s Going: Venue Transfers in the Western District of Texas

By Paul R. Gugliuzza, Professor of Law, Temple University Beasley School of Law and Jonas Anderson, Associate Dean for Scholarship and Professor of Law, American University Washington College of Law

The biggest story in patent law over the past three years has been the emergence of the Waco Division of the Western District of Texas as the undisputed capital of U.S. patent litigation. The lone district judge sitting in Waco, Judge Alan Albright, has engaged in an extensive campaign to entice patentees to file suit in his courtroom. And those efforts have succeeded. In 2016 and 2017, the two years before Judge Albright took the bench in 2018, the Waco Division received a total of five patent cases. In 2019, 217 patent suits were filed in Waco. In 2020, that number increased to 761—more than the number of patent cases filed in any other district court in the country and over 20% of patent cases filed nationwide. Judge Albright is on track to receive well over 700 cases again in 2021.

Most patent suits in Waco are filed by NPEs and involve computers and communication technology. Judge Albright’s courtroom is particularly attractive to NPEs because he moves cases quickly through litigation and his procedural rulings tend to favor patentees—both of which increase patentees’ leverage during settlement negotiations. Quicker settlements for larger amounts allow NPEs to more rapidly move on to their next target.

Not surprisingly, many defendants sued in Waco try to escape. The primary mechanism they use is 28 U.S.C. § 1404(a), which permits a district judge to transfer a case to another district (or to another division within a district) “[f]or the convenience of parties and witnesses, in the interest of justice.” In his three years on the bench, Judge Albright has developed a reputation for being less likely to transfer cases than other district judges. But as we, along with Jason Rantanen, discussed in a series of recent posts, the Federal Circuit has begun to push back, repeatedly using the extraordinary writ of mandamus to overturn decisions by Judge Albright denying transfer under § 1404(a).

The Federal Circuit’s interventions raise an interesting question: Does Judge Albright care? In an order issued earlier this week, he granted a defendant’s motion to transfer a case from the Western District of Texas to the Northern District of California, but not before criticizing appellate precedent on transfer as inconsistent and “out of touch” with modern patent litigation. But what do the numbers look like? Has Judge Albright become more inclined to transfer in the wake of the Federal Circuit’s mandamus grants? Or is he stubbornly refusing to change his approach?

As part of our on-going research on patent litigation in the Western District of Texas, we have collected all of Judge Albright’s orders deciding § 1404(a) motions that are publicly available. Interesting trends emerge when comparing Judge Albright’s grant rates to the Federal Circuit’s interventions through mandamus.

Overall, Judge Albright has decided sixty contested motions to transfer cases away from the Western District of Texas under § 1404(a) (excluding orders granting transfer after the Federal Circuit granted mandamus and orders involving contractual forum selection clauses). He has granted sixteen of those motions, for a grant rate of 26.7%.

Figure 1: Judge Albright Decisions on Contested Motions to Transfer Away from the Western District of Texas Under § 1404(a)

Looking at the numbers year-by-year, as in the figure above, it looks like Judge Albright’s transfer rates have changed over time, but not too much. Judge Albright decided only three § 1404(a) motions in 2019, his first full year on the bench, and denied all three. In 2020, he decided thirteen § 1404(a) motions, granting three and denying ten, for a grant rate of 23.1%. So far in 2021, he has decided forty-four § 1404(a) motions, granting thirteen and denying thirty-one, for a moderately higher grant rate of 29.5%.

What happens when we compare grant rates before and after key Federal Circuit decisions? The first mandamus petition the Federal Circuit granted overturning a transfer decision by Judge Albright was In re Adobe, which issued on July 28, 2020. But it was the second Federal Circuit decision—and first precedential decision—to grant mandamus and order Judge Albright to transfer a case that garnered the most attention. In that case, In re Apple, the Federal Circuit took the unusual step of holding oral argument. (Mandamus petitions are practically always decided on the briefs alone.) On November 9, 2020, the Federal Circuit granted Apple’s petition over a fiery dissent by Judge Moore, who accused the majority of setting precedent that will allow future mandamus petitions to be granted “based almost entirely on ad hominem attacks on esteemed jurists.”

Figure 2: Judge Albright Decisions on Contested Motions to Transfer Away from the Western District of Texas Under § 1404(a), Before and After In re Adobe

As the figures above indicate, before Adobe, Judge Albright had decided fifteen motions to transfer under § 1404(a), granting two and denying thirteen, for a grant rate of 13.3%. Since Adobe, he has decided forty-five motions to transfer under § 1404(a), granting fourteen and denying thirty-one, for a grant rate of 31.1%. Taking the Adobe decision as the critical date (between Adobe and Apple, Judge Albright decided only one contested § 1404(a) motion, and he granted it), it appears Judge Albright is clearly more willing to grant transfer in the wake of Federal Circuit skepticism about his decisions.

One final way of slicing the data: of the fourteen Federal Circuit grants of mandamus overturning transfer denials by Judge Albright, ten have occurred in the past four months, since June 30, 2021. Before the recent avalanche of mandamus grants began, Judge Albright had decided thirty-six § 1404(a) motions, granting seven and denying twenty-nine, for a grant rate of 19.4%. Since June 30, he has decided twenty-four § 1404(a) motions, granting nine and denying fifteen, for a noticeably higher grant rate of 37.5%.

Figure 3: Judge Albright Decisions on Contested Motions to Transfer Away from the Western District of Texas Under § 1404(a), Before and After June 30, 2021

*          *          *

While our dataset is not huge, it does seem that Judge Albright’s proclivity to grant § 1404(a) transfer motions is increasing. To be sure, any increase may not be caused by the Federal Circuit’s interventions. As the sheer number of patent cases on Judge Albright’s docket has increased over the past two years, many of those cases likely have more tenuous connections to the Western District than the cases filed early in Judge Albright’s tenure. Also, it’s possible that Judge Albright has become more willing to grant transfer to relieve caseload pressure on his docket and maintain the fast case schedule that is a reason his court is particularly attractive to patent plaintiffs. In addition, broader criticism of Judge Albright’s forum selling practices—separate and apart from the Federal Circuit’s interventions—could be having some effect on Judge Albright’s transfer decisions.

Moreover, even the 37.5% grant rate over the past few months is low compared to the grant rates in other districts with large dockets of patent cases, which hover around 50%. (We’re working on updating the transfer data for other districts and will share our results in the near future.) And, don’t forget, given the nature of patent litigation and the West Coast-based parties typically involved (Google, Apple, Microsoft, and Amazon are all among the most common defendants in cases before Judge Albright), we would expect to see significantly higher transfer rates in cases filed in Waco, Texas, as opposed to cases filed in, say, the Northern District of California.

So, how did it start? It was pretty hard to obtain transfer away from Judge Albright’s Waco courtroom. How’s it going? Still not easy, but not impossible. Time will tell whether the Federal Circuit’s interventions through mandamus will be sufficient to combat the unhealthy court competition that is causing patent cases to pile up in Waco. But, given the case-by-case nature of the writ, the nominally deferential standard of review, and the expense of pursuing an interlocutory appeal, count us as skeptical that mandamus is anything more than a band-aid for well-resourced defendants to challenge the most obviously incorrect transfer decisions by Judge Albright.

Extraordinary Writ or Ordinary Remedy? Mandamus at the Federal Circuit – Part 3

By Jonas Anderson, Paul Gugliuzza, and Jason Rantanen

This is the final post in a series about our new research project on mandamus practice in the federal courts of appeals generally and the Federal Circuit’s peculiar use of mandamus in patent cases specifically.  The two previous posts can be found here and here.

 

Even if a plaintiff has filed its case in a federal court in which personal jurisdiction and venue exist, 28 U.S.C. § 1404(a) permits the judge to transfer the case to another district “[f]or the convenience of parties and witnesses, in the interest of justice.” Transfer motions under § 1404(a) are a common tactic in patent litigation, particularly for California-based tech companies sued in the Eastern and Western Districts of Texas. When defendants lose those motions—as they often do in Texas—they frequently seek immediate review in the Federal Circuit by petitioning for a writ of mandamus.

Despite the writ’s extraordinary nature, our study shows that it’s a remarkably ordinary form of relief in the Federal Circuit—at least in cases involving denials of transfer by the Eastern or Western District of Texas. The first time the Federal Circuit ever granted mandamus to overturn a transfer denial was in 2008, in a case called In re TS Tech, which arose from the Eastern District of Texas. Since that time, the Federal Circuit has decided 105 mandamus petitions seeking to overturn a denial of transfer under § 1404(a). It has granted 34 of them, for a grant rate of 32.4%. Pretty high for an extraordinary writ that’s supposed to issue only if the lower court’s decision was a “clear abuse of discretion” that “produced a patently erroneous result,” as the Federal Circuit wrote in a 2009 decision, In re Genentech. (Cleaned up.) The figure below shows the outcomes of decisions on mandamus petitions challenging § 1404(a) transfer denials decided by the Federal Circuit each year since 2008.

Figure 1: Mandamus decisions by the Federal Circuit involving challenges to 1404(a) decisions

Mandamus petitions arising from the Eastern and Western Districts of Texas account for the vast majority of petitions challenging transfer denial: 88 of the 105 in our dataset (83.8%). The grant rate for mandamus petitions challenging transfer denials by those two districts is 35.2%. And for the Western District of Texas alone, the grant rate is a whopping 52.0% (13 grants, 12 denials). For all districts besides the Eastern and Western Districts of Texas, the grant rate is a mere 17.6% (3 grants, 14 denials). The table below shows, by district court of origin, the number of mandamus petitions decided by the Federal Circuit seeking review of a decision denying transfer under § 1404(a), along with the corresponding Federal Circuit grant rates. As you can see, the sheer number of petitions (and grants) from the Eastern and Western Districts of Texas dwarfs all other districts.The recent explosion of patent cases in the Western District of Texas is fueled entirely by Judge Alan Albright who, as Jonas and I have written, has actively encouraged patentees to file infringement suits in his Waco courtroom and has adopted numerous procedural practices that are attractive to forum-shopping patentees—to say nothing of the fact that the Western District’s lack of random case assignment allows patentees to know, with absolute certainty, that Judge Albright will hear their case.

When we exclude the two Western District mandamus petitions that didn’t involve Judge Albright, the grant rate gets even higher. For mandamus petitions challenging transfer denials by Judge Albright, the Federal Circuit’s grant rate is 56.5% (13 grants, 10 denials). And that grant rate excludes one petition, In re DISH Network, which the Federal Circuit nominally denied but effectively granted by demanding that Judge Albright “reconsider” his transfer denial in light of the “appropriate legal standard and precedent,” which the Federal Circuit outlined in its opinion denying the writ.

*          *          *

The Federal Circuit is exceptional among the federal courts of appeals in using an extraordinary writ to engage in what is essentially interlocutory error correction. On first glance, we might view this as a flaw with the Federal Circuit: the specialized court is too zealously exercising its final authority over patent law and wasting party and judicial resources by policing discretionary district court rulings on an issue that’s entirely separate from the merits of the case. But Judge Albright’s aggressive efforts to attract patent cases to Waco—and his seeming disregard of appellate precedent on transfer of venue—have forced the Federal Circuit’s hand. Predictable judge assignments have encouraged what is essentially a race to the bottom among district judges who want to attract patent infringement plaintiffs. The mechanism for competition is procedural rules—and procedural rulings—that are extremely favorable to plaintiffs. And so the stakes over transfer of venue decisions are unusually high in patent cases. This suggests that the writ of mandamus—a procedural mechanism from the dustiest corner of civil procedure—will play a crucial role in determining the future of the U.S. patent system.