Judge Finds McKool Smith Violated Prosecution Bar

This one is fun for me, since I teach civil procedure, patents, and ethics, and have written about prosecution bars way too much.

Prosecution bars are used when a court concludes that, although the usual rule is that lawyers will abide by provisions in a protective order that say “don’t use information disclosed in this suit for any other purpose,” there’s a risk that a lawyer will, perhaps even inadvertently, misuse the opposing party’s information disclosed in discovery because of work the lawyer does for his client.  Here, in a case Eolas (represented by McKool) filed for its client against Amazon (and others), it seems that as part of the protective order, McKool agreed that its lawyers were in such a position — they were prosecuting patents for Eolas in similar technologies, presumably, to what was involved in the suit — and so the protective order provided that no McKool lawyer who received certain categories of confidential information from Amazon would prosecute patents for Eolas in those fields, for a time.

And there is the issue: how long? The protective order stated (in part — I’d want to see the entire thing to really understand this), that the bar expired “one (1) year following the entry of a final non-appealable judgment…”

Eolas lost at trial, and the Federal Circuit affirmed and entered judgment on July 22, 2013.

If the one year date runs from there — which I so far think it does — then it expired on July 22, 2014.  And it was only after that date that McKool lawyers allegedly violated the prosecution bar.

However, Eolas could have petitioned for cert for the 90 days after July 22, 2013. If you use the expiration of those 90 days as the date for “entry” of the final judgment, then the “entry of a final non-appellable final judgment” occurred in October, and one -year later puts you in October, 2014.  Eolas didn’t seek cert, however. (I don’t think that matters, but I’ll come back to that.)

And of course, it was after July and before October 2014 that McKool allegedly started the work that violated the protective order. When Amazon saw a patent issue which, it seems, resulted from McKools’ pre-October 2014 work, Amazon moved for sanctions, asserting (among other things) that the patent should be unenforceable.

The judge ruled that entry of final judgment occurred in October 2013 and so there was a violation.  McKool has filed a motion to reconsider.

I honestly don’t think this is a close case: the judge got it wrong.  First, it says “entry.” That occurred in July.  It says “non-appealable”  A judgment from a circuit court, including the CAFC, isn’t appealable to any court: you can file a petition for cert, but that’s not an appeal. Finally, it could have said (and some protective orders do) “until everything at the Supreme Court is over and done,” but it seemingly didn’t do that.  I also have grave doubts that under Aptix and other cases from the Federal Circuit that Amazon’s request that the patent be held unenforceable as a result of litigation misconduct will fail, but, again, I think we never get there.

So, what’s this mean for your practice?

First off, suppose there isn’t an appeal in a district court case.  You go to trial, you get judgment on July 22, 2013, and nothing happens.  On July 22, 2014, can you start work?  Well, there’s 30 days after entry of final judgment that the other side could appeal, so don’t you have to wait until August 22, 2014 (or 21, whichever)?

If there is an appeal to the CAFC, do you need to add 90 days to the date of entry of judgment even though they don’t apply for cert, and even if it doesn’t say “and we’re done at the supreme court?”

I think this one is clear.  Do you?

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.

13 thoughts on “Judge Finds McKool Smith Violated Prosecution Bar

  1. 5

    I would suggest a slightly different analysis. The judge may have been wrong that the fact that the time for filing a cert. petition had not expired means the case was still ongoing; nevertheless, it is probably also incorrect to say that the case was over when the Rule 36 judgment was filed on 7/22/2013.

    Technically, a Federal Circuit appeal is not over until the mandate issues, which occurred in this case on 8/29/2013. Since this case was not remanded, the date of the mandate served as the date of the final judgment in the case. (This is also shown in the district court docket here.) This is why you move to stay the mandate when you are contemplating filing a cert. petition – if the mandate issues while your petition is pending, there is a final judgment that can be enforced. But, until the mandate issues, there is no final judgment — even though an opinion or Rule 36 “judgment” has been filed.

    The relevant question to me would be “Did they work on the application prior to 8/29/2013?”

    1. 5.1

      Please disregard this comment. On further review, the judgment that is entered is something different from the mandate.

  2. 4

    The judge got this one wrong. That said, I imagine most firms are going to simply wait the extra 90 days (or 30 days) until there are no more petitions or appeals available. Keeping an internal wall in place for an extra 90-days is a mild inconvenience at worst, particularly for a firm on the size of McKool. That is a small price to pay to avoid the hassle of being dragged into further litigation.

  3. 3

    The real danger for a firm its members in a case like this is action by the PTO Office of Enrollment and Disciple, and/or state bar disciplinary agencies, and they clearly need to fight that in this case, preferably with specialized attorney representation.

    I have a question here as to what authority a judge in a patent suit even has to impose sanctions affecting the validity or enforceability of a different patent owned by a different client? [Rather than sanctions against attorneys or clients IN the suit.]

  4. 2

    I totally agree. The judge got it wrong. Way, way wrong. At a minimum, the ambiguity in the timing provision should be construed in McKool’s favor since they certainly weren’t the ones that requested a prosecution bar in the first place.

  5. 1


    Pardon me for taking this immediately off topic, but concerning your statement, “A judgment from a circuit court, including the CAFC, isn’t appealable to any court: you can file a petition for cert, but that’s not an appeal. “. Does that not apply to finality when it comes to issues at the PTO after a CAFC opinion, specifically for issues of which claims can continue to be prosecuted in IPRs and reexams?

    1. 1.1

      35 USC 318(b)
      CERTIFICATE.—If the Patent Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal has expired or any appeal has terminated, the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.

    2. 1.2

      It’s David, not Dennis on this page, but the point is different: you get to appeal from a district court to the CAFC (or a regional circuit). There’s no “appeal” to the Supreme Court (except in weird cases – e.g., 28 USC 1253). Instead, under 28 USC 1254, the loser in federal regional circuit courts can petition the supreme court for review by writ of certiorari. The statute itself, in other words, distinguishes between an “appeal” and cert, and cert isn’t an appeal.

      1. 1.2.1

        Thanks David, I saw Dennis link to it on Twitter and never looked at the by-line before reading it, my apologies (twice). Looks like I need to be much more specific in my question.

        Patent Holder files infringement suit against defendant and wins a verdict of infringed and not invalid. Defendant has filed for reexams and joined IPRs against patents in suit (joining IPRs after you are time barred is a totally different beef, but also happened in this case). CAFC rules patent claims in suit are not invalid, but remands with one altered claim construction and damages. PH files for dismissal of the claims in suit at the PTO in the reexams and the defendant’s portion of the IPRs after time to file for Cert has passed, PTO refuses as “all appeals have not been exhausted”. So, if petition for Cert is not an appeal and CAFC has already ruled on patent claim validity, why is the PTO refusing??


          Patent Investor, if the Fed. Cir. has remanded a patent suit back to the D.C. for reconsideration, or, the damages part of the suit has not yet been tried, that case is simply not over yet, potential appeals are not over yet, and the PTO is correct to continue post-grant proceedings. As the Fed. Cir. has held. Note that the proper interpretation of claim scope is tied to the infringement decision, and thus tied to the [as yet undecided] extent of recoverable infringement damages, as well as tied to validity, and that scope might be asserted differently in the remand.


            I think the Fairchild decision back in April says differently.

            “Note that the proper interpretation of claim scope is tied to the infringement decision, and thus tied to the [as yet undecided] extent of recoverable infringement damages, as well as tied to validity, and that scope might be asserted differently in the remand”

            How can a CAFC affirmed ruling of not invalid be treated differently on remand?


              That does not make any difference, the case itself was not final, and that is what counts per the Fed. Cir.. [Also, here you indicated that claim construction was not fully sustained on appeal.] In any case, no patent litigation decision on claim validity is ever truly final, or applicable to any defendant other than that particular defendant, who gets an “invalidity not proven” [by him] decision. Only a claim invalidity decision applies to others.

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