In eBay v. MercExchange (2006), the Supreme Court ruled that an adjudged infringer should only suffer permanent injunctive relief once the traditional four-factor test of equity had been satisfied. This general priciple was recently supported by the non-patent Supreme Court case of Monsanto v. Geertson (2010). In Monsanto, the court wrote “An injunction is a drastic and extraordinary remedy, which should not be granted as a matter of a course.” The court’s apparent patent-law-centrist, Justice Kennedy, wrote a concurring opinion suggesting that times-have-changed and that courts may have good reason to frequently deny injunctive relief. With some flair, Justice Kennedy suggested that the “potential vagueness and suspect validity of some … patents may affect the calculus under the four-factor test.”
In many respects, Justice Kennedy’s statement from eBay seems odd. The issue of permanent injunctive relief only arises after trial — after the patents are deemed valid and infringed. The trial is intended to remove any question regarding potential invalidity of the patent rights. However, in a recent amicus brief to the Federal Circuit, Verizon attempts to provide some explanation and some teeth to Kennedy’s proposal. (Justice Kennedy’s statement has been quoted and discussed in over 80 law review articles over the past four years.)
The Verizon brief was filed in the pending en banc case of TiVo v. EchoStar. That case focuses on whether the infringement of new products introduced by an adjudged infringer should be analyzed through contempt proceedings or through a new trial.
Verizon’s brief does not focus on the questions at issue in TiVo, but rather addresses the broader question of whether injunctive relief should be issued in-the-first-place. Expanding on Justice Kennedy’s statements, Verizon argues that — even after a patent is determined valid at trial — the court must consider the possibility that the patent is invalid as part of the injunction analysis:
The need to ensure that equity “mould[s] each decree to the necessities of the particular case,” Hecht, 321 U.S. at 329, requires that a district court take into account the possibility that a patent – issued and adjudged to be valid in the context of an infringement trial – is, in fact, invalid.
To explain its position, Verizon points to a specific (and common) situation — where the infringed patent is pending reexamination at the USPTO. The brief states boldly that “the pendency of a PTO reexamination proceeding weighs strongly against imposition or continuation of an injunction.”
Notes:
-
Verizon filed its brief early, the first round of briefs are not due until July 26, 2010.
-
Read Verizon’s brief here [File Attachment: TiVo.Amicus.Verizon.pdf (150 KB)]
-
Edited to correct an error (I had said that Chief Justice Roberts wrote the eBay majority).
“Now, I would politely suggest that after a jury verdict, considerations of whether the PO has a valid patent and whether the defendant has infringed are not matters the court can consider.
And I would politely, well as politely as I care, direct you to more recent threads wherein the question of validity is posited by the esteemed Prof. Crouch to not be a question of mere fact. Sure facts are involved and the jury should delineate just what it considers the facts to be, but at the end of the day validity is a question of law.
“Let me be so bold as to again ask what the factors are that a court must consider in granting a permanent injunction? The eBay decision requires that these be considered and by implication also requires that no others be considered.
Ned,
Your logic always brings me chuckles. The eBay decision clearly requires the four items that must be looked at – clearly that decision was smacking the CAFC for trying to take a shortcut and for declaring that patents per se meet the four items.
However, there is no implication whatsoever that the court is limited to just those four items. “Must” is a word that says things have to be done – it is not a limiting word that means “only” – that woulda been a “must only” or an additional “must not”.
Ned,
The case you bring up is an interesting one, with several aspects that the court decided.
I am interested in which aspects you think were wrongly decided and why.
Let’s discuss.
iwasthere: agreed. I think link to openjurist.org was wrongly decided.
Wonderful article,thanks for putting this together! “This is obviously one great post. Thanks for the valuable information and insights you have so provided here.
Keep it up!”
Something like 3 years of examination, 3 years of district court litigation, 18 experts (and “fact” experts), 60 page markman order, markman hearing, 9 motions for summary judgment of invalidity, 2 day hearing concerning the special jury verdict instructions, a 4 to 1 defendant v plaintiff jury verdict form (for each infringement finding on a claim the jury had to reach thru an average of 4 alternative invalidity questions), unlimited third party depositions, paid fact witnesses permitted, sua sponte invalidity contentions permitted, 5 weeks of jury trial, 2 jmols, 2 jnovs, 2 reexaminations, unlimited expert reports and “supplements,” extended time for appeal granted, extended page length for appeal granted, appeals hearing, 3 judge appeal panel, en banc and rehearing motions, after all that the like 18 of the federal patent claim were “finally” adjudicated valid and infringed. Yet the patent ‘still’ suffered “potential vagueness and suspect validity.” Meh, guess there is no pleasing some people.
Should we file the “potential vagueness and suspect validity” standard under the procedural or substantive due process parts of the 14th. Or can we file it under the 13th?
Q to the blog: Name another federal justiciable right between two private parties that is subject to sua sponte review by the executive branch, i.e., another federal rights grant like a patent that is subject reexamination by the executive.
American, what you suggest might happen actually happens routinely.
There is a strong public policy argument for the finality of judgments, and that causes parties to give litigation everything they have. If the issue can be revisited, you don’t get a full airing of the issues in the litigation.
Under GE’s theory, the alleged infringer can lose in court and yet point to some ongoing reexam as an excuse not to be enjoined. That would encourage infringers to game the system by litigating, but not with everything they have. They could wait until judgment is about to be rendered and file a reexam request with some not-yet-considered piece of prior art they have been stockpiling and say, Whoa Judge, you can’t enjoin us — look at this new bit of doubt.
Or perhaps they will have an ally file the reexam to look like an independent third party request and so seem a bit less offensive…facially.
Yeaaaaa
Let me be so bold as to again ask what the factors are that a court must consider in granting a permanent injunction? The eBay decision requires that these be considered and by implication also requires that no others be considered.
Now, I would politely suggest that after a jury verdict, considerations of whether the PO has a valid patent and whether the defendant has infringed are not matters the court can consider.
Looking it up:
“In the Ninth Circuit, the requirements for the issuance of a permanent injunction are (1) the
likelihood of substantial and immediate irreparable injury, and (2) the inadequacy of remedies at
law.7”
link to justice.gov
There is also a recent Fed. Cir. case that, IIRC, held that the court cannot defer the decision to grant relief until a reexamination is complete. “Justice delayed is justice denied.”
IANAE: good point about the request to stay the proceedings. Strictly, 50/50 means what you write, I agree. But what in reality does your “has” mean?
My “50/50” was shorthand for “a case in which both sides sincerely believe they have a greater than 50% chance of winning”.
With near 100% legal certainty, yours and mine come to the same thing.
But when there is low legal certainty, both sides convince themselves they are going to win yet, in “reality”, their chances of winning are impossible to estimate.
However, the argument advanced by Verizon is that even though they lost the civil case for infringement, the injunction should be stayed pending the outcome of the PTO re-exam.
Which is, of course, a ridiculous argument.
The prevailing party at trial should not be required to answer for the possibility that it might have lost. That’s what the trial is for. This isn’t even an interlocutory injunction.
I don’t have a problem with courts issuing otherwise-permanent injunctions that melt away if the claims found to be infringed are later invalidated, but that’s about it. The defendant already had its chance to convince the court the patent was invalid, and presumably also had its chance to convince the court to stay the trial pending the re-exam. If it doesn’t think the decision was proper, that’s what the appeal process is for.
Max: Let’s not forget that likelihood of ultimate success on the merits is a factor in granting an interlocutory injunction, so you might want to re-think your 50/50 analysis. Also, since when is a “50/50 case” 50/50 on each individual question of fact? Isn’t a 50/50 case one where each party has a roughly equal chance of winning? For what a priori reason would “only 75/25 cases” go to trial?
“otherwise, it seems to me unconscionable for a court to enjoin an accused infringer even while validity is still under attack in re-examination proceedings.”
I’m sure Ned could give a proper cite to the effect that the Court and the Office operate under differesnt enough rules that any such “unconscionable”-ness is obviated.
Here’s my question, But.
Does the party seeking and obtaining injunctive relief prior to final adjudication on the validity of claims undergoing re-examination routinely have to give an undertaking in damages, fully to compensate the accused infringer for all losses suffered as a result of application of the injunction, in case the injunction turns out to have been imposed on the basis of an invalid claim?
If that were the case, I would agree with you.
But, otherwise, it seems to me unconscionable for a court to enjoin an accused infringer even while validity is still under attack in re-examination proceedings.
Thanks Max for the attempt. I am aware of the importance of any type of injunction. However, the argument advanced by Verizon is that even though they lost the civil case for infringement, the injunction should be stayed pending the outcome of the PTO re-exam. This makes no sense to me since the court, after the ruling is made, has the full power to issue the injunction (outside of patent validity, courts do this freely even when there are other pending cases on the same subject matter). The difference in my understanding is that a prelim injunction may require the plaintiff to post a bond and a perm does not.
I’ll answer your question But.
In the real commercial world, it is often decisive, and terminal to the litigation, whether the Plaintiff patent owner gets an injunction (and it doesn’t matter whether its interlocutory, preliminary, temporary, permanent or final). That’s because you can’t magic the world back to what it was, the day before the allegedly infringing product was pulled (by order of the judge) off the market. Enjoining before validity has been tried is, to my mind, an exceptional remedy. To my mind, a counter-claim of invalidity should be tried at the same time, and in the same court, as the claim of infringement. That’s because the claim can mean only one thing, and depending what that one thing is, the outcome will be one of four possibilities i) valid and infringed ii) valid but not infringed iii) not valid but covers the accused embodiment iv) not valid and not covering that embodiment.
If both validity and infringement are both tried on a preponderance standard, and only 50/50 cases go to trial, patent owner wins, one time in four.
Now that can’t be right, can it? Think about it!
[edited for those who prefer to read English instead of what is posted above]
IANAE or someone,
No one answered my question. Is there an easy work around? Can a court issue a temporary injunction that becomes permanent if the patent is held valid in the ongoing PTO re-exam? I fail to see any drawbacks to this since the inventor gets an injunction and the loser gets the injunction automatically lifted if the PTO finds the patent is invalid.
IANAE or someone,
No one answered my questioned. Is there an easy work by issuing a temporary injunction that becomes perminent if the patent is held valid in the ongoing PTO re-exam? I fail to see any drawbacks to this since the inventor gets an injunction and the loser gets the injunction automatically lifted if the PTO finds the patent is invalid.
I hear that the patent law says that only people can be patent applicants because corporations can’t think so they can’t invent. Funny, ain’t it, how the fictional person can think enough to make this determination.
The jury is supposed to think like a person that does not exist
You may be a simple country hyperchicken from a backwoods asteroid, but you got it right.
Jurors can’t think like themselves to determine obviousness, obviously, since they’re random-ish people off the street with no particular technical knowledge. They can’t be counted on to know anything about the relevant art.
As long as they have to think like someone else anyway, what difference does it make if that someone else is a fictional person with a body of knowledge determined by law?
Man, you city folks sure are smart: The jury is supposed to think like a person that does not exist in determining what was or was not obvious.
This ole cowpoke sure wouldna come up with that one.
It means whatever 12 people in a jury box say it means.
The level of skill and general knowledge of a person of ordinary skill is a question of fact for the jury. Whether a particular reference with a particular date is available to a person of ordinary skill is considerably more objective.
“Oridinary skill” is like “reasonable person.” It means whatever 12 people in a jury box say it means. So if there were an actual person having precisely oridinary skill in one case, they might have extraordinary skill in another, simply because of a change of cast.
Nobody has ordinary skill?
This is why we don’t hire cowboys to handle legal matters. They don’t have ordinary skill in understanding what words mean.
Nobody has ordinary skill? Toto, I think we must be in California. Or France.
My point had to do with the context of what people of ordinary skill in the art do in their real lives,
That’s exactly the problem. People of ordinary skill in the art don’t have “real lives”. The person of ordinary skill in the art is a fictional person who knows all the art, including the obscure art. He doesn’t run a business or have an employer. He’s also not an inventor, unlike most of the real people you’d probably consider to be “skilled in the art”.
It doesn’t matter what real people happen to look at from day to day. What matters is whether the claim of the patent encroaches into what used to be available for the public to use. You don’t need to find an actual inventor somewhere who can prove actual harm.
Ianae, I know the rules of what constitutes prior art that can be combined or referred to in making an obviousness determination in the context of patent litigation.
My point had to do with the context of what people of ordinary skill in the art do in their real lives, apart from when lawyers dragoon them into litigation efforts. If what a 1926 doctoral thesis (that is found nowhere else in the literature) suggests doing to modify the elements disclosed in a 2007 reference ends up being patented, I don’t think phositas or their employers are really hurt, since none of them ever look at 1926 doctoral theses. If the Court thinks that by clear and convincing evidence that combination would suggest the claimed invention and holds it invalid, that is the way the law is supposed to work. On the other hand, if the court is only convinced by a preponderance of he evidence, and says the patent is not proven invalid, my point is, so what? You are “improperly” taking from them the right to use the teachings of the 2006 thesis, but since they don’t look at it anyway, they are not losing anything.
Yes, if my client is the adjudged infringer, I will screem bloody murder, but from an objective viewpoint, no harm, no foul.
Malcolm, OK, I will grant you that. However, if you actually think about it for a while, how do large companies actually grow? Acquisitions. And who do they acquire? New business that have some success. So, just based on my understanding of the system, the study is consistent with my own observations.
It also makes sense. As businesses grow to acquire market share, competition arises to take it away. No one can long maintain a monopoly without the aid of the government. I actually know this to be a fact as I was part of the lawsuits against AT&T and saw just how they used government tariffs to block competition.
I was watching one of the financial channels the other day. The interviewee had just competed a study of job creation. It turns out that establish companies gain jobs and lose jobs cyclically, but the overall trend is down. All net new job growth come from new companies.
He said he had not expected this at all. It is completely new information, not only for him, but for economics in general.
I was reading some article which said that the cable financial channels were probably the least credible sources of information on earth. Given the other universally acknowledged evidence for this proposition, I submit that you’ve been suckered into reciting a bunch of self-serving bullcrxp.
Again.
Anyone care to list the factors a court must weigh in deciding a permanent injunction?
Let me take a crack at this.
(1) Whether the parties are American or foreign;
(2) Whether either party employs “innovators”;
(3) Whether, in spite of his finding that the patent is valid, the judge thinks the patent is invalid; and
(4) Whether the patentee has convincingly stated without anything to back it up that he would really really really like an injunction please.
Anyone care to list the factors a court must weigh in deciding a permanent injunction?
Malcolm, I was watching one of the financial channels the other day. The interviewee had just competed a study of job creation. It turns out that establish companies gain jobs and lose jobs cyclically, but the overall trend is down. All net new job growth come from new companies.
He said he had not expected this at all. It is completely new information, not only for him, but for economics in general.
legally found not to be invalid, and yet some judge harbors doubts as to its validity
I’m actually surprised this situation even troubles judges at all. Even “clear and convincing” is a lower standard than “beyond a reasonable doubt”, so it should happen quite frequently that a patent is clearly and convincingly found not-invalid in the face of a reasonable doubt as to its validity.
Such doubt should not affect the remedy phase of the trial at all. It’s not a bug, it’s a feature.
Usually, in patent litigation there is some refernce that is a big deal at trial that phosita would not consider part of the state of the art.
I don’t think you know what “PHOSITA” means. What the PHOSITA “would … consider part of the state of the art” is exactly coextensive with the term “prior art”. Obscurity of a reference is generally not a factor in whether the reference forms part of the knowledge of a PHOSITA. If the teaching of the reference is available to the public, a later applicant may not remove that teaching from the public by claiming it in a patent. Otherwise, it would be trivial to pore over obscure references and publications and patent the contents without ever inventing anything.
If you think awarding patent protection to knowledge that was formerly part of the public domain is not evil, inefficient, or nasty, I await some sort of coherent argument to that effect.
Max, recall the context of this string… patent obtained, infringed, legally found to be infringed, legally found not to be invalid, and yet some judge harbors doubts as to its validity and denies an injunction.
It is those judicial doubts of validity that I am talking about as well as the cases where some may say that the evidence shows invalidity by a preponderance of the evidence but not by the C+C standard.
That minority of cases.
Usually, in patent litigation there is some refernce that is a big deal at trial that phosita would not consider part of the state of the art. If the invalidity doubts are based on that kind of reference, my view is, so what? Issue the injunction. The harm caused is miniscule because phositas don’t really see that part of their stock in trade tools has taken from them.
I hope that most of us still favor a strong patent system.
Well, yeah. We generally want a strong patent system. But the system still has to be reasonable. The stronger the system, the more care we have to take to ensure that the system gets the important decisions right. We can’t sacrifice the fundamental principles of the system for “predictability” in the outcomes of litigation. The system is meant to reward giving the public something new and innovative, and to permit the public to continue using that which it already has.
We all generally want a strong criminal justice system, too. Harsh punishments for nasty criminals. Hard to be against that. But we don’t want to punish the innocent either. If it turns out that according to the law you should prevail in your criminal trial, you should go free every time, and that outcome should not be seen as a weakening of the system.
Ah Cowboy, so your position depends decisively on how “obscure” are the materials used in the obviousness attack? So, you confine yourself to a tiny sub-set of real-life disputes on validity of a claim?
Are we so short of things to argue about, in patent litigation, that we need to bolt on a whole new subject: how obscure is a reference?
Anyway, in my book, whether or not something was obvious on date X will depend on the stock of common general background knowledge of the PHOSITA on that date. The “mental furniture” of that person, a thing which can only emerge after cross-examination, which can only emerge in the course of litigation. Here, obscurity plays no role whatsoever.
And I don’t see how my reminding you that a fair patent law must take into account the interests of those resisting the grant of an injunction just as much as those urging an injunction can be construed as tantamount to xenophobia.
But, a recent study has shown, 100% of new jobs in America come from startups
What?
Let’s just call it as we see it.
There is a segment of the business community that sees little need for a patent system. They would prefer they do not exist at all, and would rather operate on trade secrecy.
They seek every opportunity to weaken the system as a whole; but absent that, they want to essentially do away with patents for anyone not like themselves who will only use patents to, in their view, mulct excessive royalties from them, the real producers.
These folks, the big business establishment types, to not like startups who steal their markets, especially when they are protected by patents. They like barriers to entry. They do not like protections for the small fry.
But, a recent study has shown, 100% of new jobs in America come from startups and almost all the new ideas and come from them as well. These statups at times fail, but their patents remain. They then seek value in these assets by licensing and are called trolls.
What the big business types are doing, while surely beneficial to them, is harmful to a free economy and very harmful to technological progress. We all have to step back and see the big picture and have to choose sides in this war, and there is a war, with Lemley and his types charging hard on behalf of his clients to weaken the system, and varying “coalitions” trying to pass “patent” reform to protect big business.
I hope that most of us still favor a strong patent system. It has stood the test of time.
If Phositas are not using the obscure references as part of their understanding of state of the art,
… then all you’re really doing is redefining the scope of ordinary skill in the art, and thereby redefining what it means for a patent to be legally obvious.
What does that have to do with either the clear and convincing standard, or holding infringers liable for patents that are legally invalid for obviousness?
Your assertion is essentially that it’s “no big loss” for courts to get the law wrong. I’ll agree with you that it’s not fattening, but I expect you to have some actual justification for everything else you said.
Max, I don’t think we should characterize what is good or bad patent law by what nationality gets the preponderance of patents. That too easily morphs into xenophobia, that we are trying to eschew.
You left out a critical part of my statement when you quoted me as saying “So, if occasionally an infringer is enjoined against selling a device that would have been obvious ….I don’t see that as being evil, inefficient, nasty or fattening.”
My recollection is that I was saying it would have been obvious only from obscure references that those of ordinary skill in the ordinary course of business don’t pay any attention to.
If Phositas are not using the obscure references as part of their understanding of state of the art, then you are not upsetting the understanding of phositas by denying them access to technology is that is obvious only by reference to documents that are not part of their understanding of the state of the art. No big loss.
the adverse possession analogy is enlightening that even in real property, injunctive relief is not always appropriate.
The adverse possession analogy is indeed enlightening, but it comes closer to supporting my point because in adverse possession the issue is not the remedy. In adverse possession you have no right to assert. It’s much more akin to the patent being held invalid than to the successful plaintiff being denied an injunction.
The adverse possessor merely needs to trespass persistently and openly, which is analogous to mere infringement of the patent.
The adverse possessor has to persistently and openly conduct himself as the owner. Mere patent infringement, i.e. practicing the invention, is not conducting oneself as the owner of a patent. In many cases the patentee is not even within his rights to practice the invention, for example because he would infringe other patents or because sale of the product would run afoul of some law or regulation. It’s not like realty, where the owner has the right to fully use and enjoy his property, and a trespasser inherently exercises that right. The only attribute of patent ownership is excluding others. The patent right is purely exclusive.
IANAE “And yet, NPEs still get a royalty.”
Patentees have rights. Patentees get royalties. Don’t act like that’s such a horrible thing.
If you want to make an adverse possession-type argument for patent rights, the infringer has to do a lot more than infringe. Practicing the claimed invention isn’t the essential quality of patent ownership, excluding others is. But hey, if you go around openly and notoriously seeking injunctions and licenses against other infringers for a continuous period of 20 years, tell you what, that patent’s yours now.
The point is, folks arguing that anything but an injunction is not an exclusive right have to deal with the NPE exclusion too, and the adverse possession analogy is enlightening that even in real property, injunctive relief is not always appropriate.
As far as having to seek injunctions and license, the adverse possessor does not have to charge rent to others or prevent others form tresspassing. The adverse possessor merely needs to trespass persistently and openly, which is analogous to mere infringement of the patent.
As far as 20 years being the required term in patents in the analogy, I don’t think the same amount of time would be required with patents, as patents expire in 20 years anyway.
So…can courts issue/continue a temporary injunction that automatically converts to a perm injunction if the patent is found valid in the PTO re-exam? Not sure how Verizon could argue against this.
Cowboy from where do you get the idea that all patent owners are deserving and all accused infringers are undeserving?
I assume that everybody gets the same treatment, under the judicial system of the USA.
Accused infringers are often the ones who have invested to bring new technology to the market. Often they are American boys.
Increasingly (see the stats), the owners of duly issued US patents are aliens, assiduously (as is the wont of your average Asian) patenting in the USA stuff that’s, well, obvious back home in China or Japan or Korea or Germany (and therefore also obvious to any good old American PHOSITA that can read Mandarin or Japanese or Korean). Why do you think that the EPO is spending so much of its budget making sure it can search Asian patent literature as thoroughly as it does the literature in English???
As you will tell us, Asians are good at copying. They are copying the American attitude to building a patent portfolio. Do you recall the Chinese research at ED Texas, bringing actions there in the name of Chinese owners of US patents?
With that in mind, let’s once again read what you wrote above:
“So, if occasionally an infringer is enjoined against selling a device that would have been obvious ….I don’t see that as being evil, inefficient, nasty or fattening.”
Come on Cowboy. Think a bit further.
“Verizon likes judicial tyranny just like most big companies. They fear and loath juries who are composed of the “common folk” who have no sense but common sense, and no education but experience.
Posted by: Ned Heller | Jul 13, 2010 at 07:06 PM”
Unfortunately, a lot of judges aren’t particularly fond of juries either. In my experiences as an appellate law clerk the past three years most judges I’ve spoken to have an extremely low regard for the intelligence and common sense of jurors, and ordinary folk generally. One of the ways this attitude affects the legal system is the growing tendency of courts to require expert testimony to establish factual issues which, thirty years ago, could have been established by lay testimony or judicial notice. Its getting to the point where it will require expert testimony to explain to a jury how to eat and to wipe your ass. Admittedly, in patent litigation, this is pretty much a non-issue, because expert testimony has a clear role. What I’m referring to are other areas of the law such as ordinary negligence cases and criminal cases. But the elitist attitude comes out in countless ways, including the 7th Amendment and its gradual erosion.
smashmouth, as Bork said, there are two ways to provide judicial tyranny. One: the judge decides liability regardless of the verdict. The other, the judge decides the remedy regardless of the verdict. Both are equally effective to nullify jury verdicts.
Verizon likes judicial tyranny just like most big companies. They fear and loath juries who are composed of the “common folk” who have no sense but common sense, and no education but experience.
If the PTO were as infallible as the Supreme Court, wouldn’t that be the right outcome?
Sure, why not?
Hey, you know what would really create certainty in patent infringement actions? Let’s also eliminate the defense of non-infringement. I bet before long we can design a system with judicial outcomes that are predictable to 100% certainty. Goodbye litigator gravy train, hello … justice, I guess?
If you made issued patents immune from any and all validity challenges, you’d have plenty of certainty of patent validity, but do you see the problem with that approach?
Not particularly. If the PTO were as infallible as the Supreme Court, wouldn’t that be the right outcome?
C+C provides some measure of certainty of patent validity.
That’s the problem, not the solution. If you made issued patents immune from any and all validity challenges, you’d have plenty of certainty of patent validity, but do you see the problem with that approach?
So, if occasionally an infringer is enjoined against selling a device that would have been obvious …
Sure, these things will happen occasionally. But that’s no reason to make it the law that this outcome must be reached in some cases. It should not be the law that a court could find in a civil action that the patent is probably invalid but the infringer is still liable for damages or subject to an injunction. That’s a bad law to have, and you can’t hand-wave it away by citing the legal maxim that “sh*t happens”.
If the patent is probably obvious, I have no sympathy for the patentee, however clever he may be. Let the party prevail who is most likely in the right, and let that predictably be the outcome in all infringement actions. That is the just, efficient, and sensible outcome.
Ned–
You raise an interesting argument about the 7th Amendment. Some of the so-called patent “reform” proposals likewise give the 7th short shrift. (IIRC, one of the “reforms” is to remove damages determinations from the jury.) I’m not familiar with the case law on point, but when the Rules of Civil Procedure were adopted (1938), and perhaps earlier (I’m not familiar with older Federal Rules except there were separate rules for law and equity), it was likely argued that rules permitting motions for new trial and motions for JNOV likewise were contrary to the 7th, but obviously that view did not hold sway. It’s possible if your issue were litigated, that a court might rely on similar reasoning (or even sophistry?).
It might implicate the Fifth Amendment if a subsequent change in the law were asserted to invalidate an issued patent.
It might, if it were a statutory amendment. I was thinking more along the lines of a new precedential court decision.
And don’t forget. In most of these cases there is no doubt that whatever the invention is, the patentee did it before the alleged infringer. I many of the cases — certainly not all — the infringer is a copier of the patentee.
So, if occasionally an infringer is enjoined against selling a device that would have been obvious from obscure reference A in view of a grad student poster B and nobody but the infringer guided by hindsight and a boatload of economic incentive would have hunted down A and B, I don’t see that as being evil, inefficient, nasty or fattening.
“A patent once upheld in court is always subject to later invalidation on such occasions as discovery of new art, reinterpretation of old art on the basis of new argument, and changes in the law, to name a few. . . . Posted by: IANAE | Jul 13, 2010 at 04:31 PM”
I wouldn’t be so sure of such a blanket statement. It might implicate the Fifth Amendment if a subsequent change in the law were asserted to invalidate an issued patent.
Nope, Max, C+C provides some measure of certainty of patent validity. Another extremely important aspect of it that is its reliability for investors. If I invent X and get a patent for it and go to an investor for funding to the tune of a wad of money to commercialize it, that investor wants to have confidence that the patent means something. C+C gives him that.
But in a particular case, as between the two parties before it, the court is bound by the jury verdict.
Right. But the actual verdict is to the effect that “the facts and arguments before us in this case are insufficient to invalidate the patent”, whether or not that’s what it really says. The finding of fact is never that the patent is valid.
And, yes, as between those two parties the patent is valid. I can see that raising issues for later inter partes PTO proceedings between those two parties, but that’s about it.
If one jury finds a patent not invalid over reference A, and another jury (or examiner) later finds the patent invalid over reference B that was not before the first jury, where are the inconsistent findings of fact?
IANAE, true about what a jury finds. But in a particular case, as between the two parties before it, the court is bound by the jury verdict. That court and the appellate courts cannot overturn the verdict either directly, or indirectly by denying a remedy, simply because they disagree with it.
There are cases where different juries determined the same patent not invalid and invalid. IIRC, the Supreme Court took at least one of these cases to “resolve” a conflict among circuits. I do not recall if they considered the 7th amendment.
And yet, NPEs still get a royalty.
Patentees have rights. Patentees get royalties. Don’t act like that’s such a horrible thing.
If you want to make an adverse possession-type argument for patent rights, the infringer has to do a lot more than infringe. Practicing the claimed invention isn’t the essential quality of patent ownership, excluding others is. But hey, if you go around openly and notoriously seeking injunctions and licenses against other infringers for a continuous period of 20 years, tell you what, that patent’s yours now.
Cowboy writes that the C+C standard “provides predictability”. Did he think for a minute before writing that tosh?
If you pass a) an examination with >50% of the available marks and b) get a commendation with >65%, which can you predict with greater confidence, a or b?
What C+C does is foment uncertainty, every time it frustrates a validity attack in court which would see the patent dished at the PTO. I can’t think of a better way to bump up the number of 750 dollar billable hours.
But that is exactly what a lot of lawyer readers here want, no?
The C+C standard provides predictability. Any of you ever have a client who wanted predictability of the outcome, regardless of whether they were the patentee or alleged infringer?
It provides predictability only in the sense that the patent will predictably be upheld even if it is shown to be invalid on a balance of probabilities. You’d get even more predictability if you removed invalidity as a defense/counterclaim altogether, but neither of these is the sort of predictability an infringer wants. An infringer wants to predictably be let off the hook if he can show that the patent is invalid.
Let’s don’t kid ourselves, clients paying lawyers is not a very productive use of their money.
Makes sense. So let’s give the patentees (who are usually the plaintiffs) less incentive to sue on doubtfully-valid patents.
As the Supreme Court keeps telling the Federal Circuit, bright lines aren’t always such a bright idea.
IANAE “You mean, under such circumstances that it is no longer my bedroom? In that case, I wouldn’t even have a right to exclude.”
And yet, NPEs still get a royalty. Orange ya glad?
The C+C standard provides predictability. Any of you ever have a client who wanted predictability of the outcome, regardless of whether they were the patentee or alleged infringer? They want to quit paying for litigation, because the outcome is clear — they win or they lose, but they get to quit paying $750/hour.
If the standards are fuzzy, the outcome is unclear and the need to pay $750/hour continues. Let’s don’t kid ourselves, clients paying lawyers is not a very productive use of their money. Let them build a new factory to make the product they are allowed to make or design around clear boundaries, instead.
The FedCir was created to help cure the uncertainty of appeals to the regional circuits, and they have tried to do that, for better or worse. They used the bright line rules of automatic injunctions against infringers, TSM on obviousness, MoT on defining patentable subject matter. These were attempts to make things clear for the business world, just like C+C is to make the validity of a patent clear, unless clearly and convincingly it is not.
Yes, the Supremes have frustrated a lot of these efforts, but that is error by the Supremes, not the FedCir.
when a jury has just determined it valid.
Juries never determine that patents are valid. Examiners never determine that patents are valid. The best anyone can ever say on behalf of a patent is that none of the art or arguments before them is sufficient to invalidate the patent.
A patent once upheld in court is always subject to later invalidation on such occasions as discovery of new art, reinterpretation of old art on the basis of new argument, and changes in the law, to name a few. Unless the reexam holds a claim invalid on a basis that was already rejected by a court that upheld the patent, which really shouldn’t happen anyway, I don’t see how this raises a Seventh Amendment issue.
ping, just to clarify: you can have a statutory presumption of validity without judge-made C+C. Just put the burden of proof on the petitioner for invalidity, but let him get there as soon as he can get over the preponderance.
That by the way is how every country does it (except the one that defines that gold standard of yours). So, if you want to maintain an exceptional position for the USA, stay with C+C.
IANAE I too think it was Ned. I remember it just the way you report.
thought, I’m not so much concerned with the clear and convincing standard of proof, but of what Verizon is advocating: They are asking that a judge consider that a patent is invalid based on pending reexamination when a jury has just determined it valid. This is exactly what the 7th Amendment was designed to avoid when it declared that no fact found by a jury shall be reexamined by a court.
See, link to en.wikipedia.org
See, the commentary of Bork:
“Judge Robert Bork has claimed that the United States is now a regime governed by a “judicial oligarchy”,[22] brought about by what he describes as a “judicial coup d’êtat”. [23] Whereas the English common law was built on the single incorrigible concept that if a subject enjoys a “right,” he must by “necessity have a means to vindicate and maintain it, and a remedy if he is injured in the exercise or enjoyment of it; and indeed, it is a vain thing to imagine a right without a remedy, for want of right and want of remedy are reciprocal,”[24] the lack of remedies to enforce rights in some cases makes the practical effectiveness of those rights questionable.”
I would be of less concerned about the denial of an injunction it was simply made clear that continued infringement would be per se willful unless the losing party returned to court to have their new product declared not a violation of the patent. But, that is not what is done in the ordinary case. Today we live in the world of compulsory licensing.
If it was Ned, and Ned’s out there, please post again if possible. Sounds interesting. Thanks!
TINLA: “… your bedroom that you have never entered or used and that lay vacant until I squatted there openly and notoriously for a very long time without you policing it …”
You mean, under such circumstances that it is no longer my bedroom? In that case, I wouldn’t even have a right to exclude.
James Daily: The clear and convincing standard is non-statutory.
Very much so. Someone posted a brief judicial history of the standard a couple months ago, tracing its origins from a special case to its misapplication as a general rule to its unquestionable status as established law in the finest traditions of the common law. I want to say it was Ned, but I can’t recall.
HOPB brings up a valid point concerning context – Wouldn’t that context also now need to be updated with the Bilski ruling, since now Kennedy’s views (and more importantly the Majority of the Supreme’s) have evolved to show no categorical exclusion of the so-called suspect [business method] patents?
Can someone explain the difference between adjudicated validity and factual invalidity? Couldn’t the same argument be made in any injunction request in any civil matter where new facts could arise after judgment?
Also, the result from re-exam is unknown. Some re-exams result in no claim change, and many result in only minimal change or partial modification of the claims. Seems unfair to consider the re-exam during injunction proceedings.
Interestingly, the reverse argument could be made by the patentee if the patentee has a broadening reissue pending. “You honor, we believe an injunction is appropriate because we have a broadening reissue application pending and even _more_ of the defendent’s products/activities will then become infringing”. Or, “we believe the re-exam will affirm the validity of our claims and so an injunction is further justified”?
Finally, Kennedy statement should be considered in context. Kennedy was referring to possible problems with some business method patents: “The potential vagueness and suspect validity of some of these [business method] patents…”.
PS: Anyone have a link to Verizon’s A.B. ?
PPS: creepy having Dennis automagically “recommended” to me as a facebook friend when I’ve only posted to this blog anonymously and have no known public association with the good professor…
35 USC 282: “A patent shall be presumed valid. Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim”
Note that the statute doesn’t say what the presumption entails, exactly. The clear and convincing standard is non-statutory.
Personally I think it should be overturned and replaced with a rule that patents are presumed valid only with respect to invalidity arguments considered by the PTO, whether during prosecution or reexam.
Sure it be by Statute.
Ned, wontcha give me a hand and get me a proper cite?
ping i had no idea that C+C was laid down by Statute. I thought it was judge-made law. Or are you telling me something else entirely? (You will have to bear with me because I haven’t had your education).
“No, balance is what you have to have, in civil litigation on patent validity and infringement, just to be fair to the members of the user community.”
Sorry maxie – it aint up to the courts to rewrite the explicit legislative action based on what they perceive a proper balance is. Sure, the Court can say “Hey, that’s not constitutional and ya gotta change that”, but that’s not the story here.
IANAE “It’s well established that “right to exclude” (a) means something, and (b) doesn’t mean ‘injunction’ under all circumstances.”
^fixt^
American Cowboy: “Ianae, I concede that you have a right to exclude me from your bedroom, so I will get a judge to say that it is OK for me to be in your bedroom that you have never entered or used and that lay vacant until I squatted there openly and notoriously for a very long time without you policing it as long as I pay you some amount of money set by the judge. I sure hope it is worth the fee.”
^fixt^
The Verizon brief was filed in the pending en banc case of TiVo v. EchoStar. That case focuses on whether the infringement of new products introduced by an adjudged infringer should be analyzed through contempt proceedings or through a new trial.
Is this really a difficult question? Obviously there *could* be a new trial with respect to infringement but unless a new term needs to be construed, the previous claim construction should not be revisited.
Can’t understand the Wallach assertion. Does one then require that a USPTO Examiner have clear and convincing evidence before permitting him to use his hindsight to formulate obviousness attacks?
I had thought that the real reason for C+C (and the Presumption of Validity) was a pragmatically-driven realisation at CAFC level that district court judges and jurymen are simply not capable of balancing scientific and high technological probabilities. It’s a job for specialists, like those at the USPTO.
Besides, if you skew the system so that those who survive a preponderance standard at the PTO thereafter get C+C in the courts, it just makes the PTO the obstacle to be ruthlessly eliminated by every member of the community of Applicants. Does the CAFC show no appreciation of the burden carried by those public servants at the USPTO, when it throws the Examiners to the lions, and then not only enjoys the “sport” but also criticises them for not resisting the lions enough?
No, balance is what you have to have, in civil litigation on patent validity and infringement, just to be fair to the members of the user community. In the real world, corporations are just as often asserting their own patents as they are worrying about infringing those of their competitors, and they expect to be treated fairly, regardless whether it is a day they are asserting their patent or a day when they are saying they do not infringe any valid claim of the asserted patent.
using BRI wrt issued patents is wrong as it potentially damages a patent onwer thru loss of past damages to unnecessarily clarify the claims.
How is the same concern not relevant to the examination of a published regular application?
We have a 7th Amendment that flatly states that facts found by a jury shall not be reexamined by a court.
Please don’t tell me we need to have that conversation again.
I haven’t read Verizon’s brief, but I would sincerely doubt that they pointed out the huge difference between claim construction in the courts and in the PTO.
I have repeatedly said, using BRI wrt issued patents is wrong as it potentially damages a patent onwer thru loss of past damages to unnecessarily clarify the claims.
But Verizon goes beyond the pale into pure demagoguery and blatant unconstitutionality. We have a 7th Amendment that flatly states that facts found by a jury shall not be reexamined by a court. So, what is is post validity reexamination but that what the 7th amendment forbids?
“But you’re forgetting that trespassing on real property is one of those special cases where irreparable harm is presumed”
What??? – How is that equitable? Isn’t that hte same type of presumption that patents have? The same type that led the CAFC to wrongly short-cut the equity steps?
Since I be lazy, can someone find the million and a half posts to the “real” property versus “intellectual” property, rights versus remedy discussion? I think we all need to just go back to that thread rather than rehash everything here.
Steven: One reason for a clear-and-convincing burden of proof on invalidity is to guard against hindsight coloring the obviousness analysis.
Isn’t “no hindsight” already a rule in the obviousness analysis? And since when is hindsight magically incapable of being “clear and convincing”?
Cowboy: I sure hope it is worth the fee.
It is. But you’re forgetting that trespassing on real property is one of those special cases where irreparable harm is presumed. So I would actually get that injunction. Which is good, because I don’t want you in my bedroom even if you would treat me like reasonable royalty.
Dear thought,
American Cowboy wrote:
“The right to receive compulsory license royalties is NOT the right to exclude. It is a bastardization of a patent.”
Patently-O’s American Cowboy commentor hit the nail squarely on the head. I couldn’t have said it better. Bravo AC!
It seems we’ve come full circle since the Blonder Tongue case. If you’ll recall, in that case SCOTUS first gave its blessing to defensive non-mutual collateral estoppel, and it was in the context of a patent infringement case. Here, however, the import of Justice Kennedy’s dicta seems to be against giving claim preclusive effect to a final judgment of validity. I’m skeptical. (I presume that if the re-examination subsequently invalidated the patent, the injunction would have to be dissolved. Of course, by then, the damage to the enjoined party is likely already done. Re-examination is definitely a wildcard, calling into question what would otherwise be a final judgment.)