Avoiding IPR via Contract

by Dennis Crouch

Kannuu Pty. LTD v. Samsung Electronics Co., LTD (Fed. Cir. 2021)(KannuuSamsungDecision)

US Courts typically enforce choice-of-forum provisions found within contracts between two business entities.  Here, Kannuu and Samsung entered into a non-disclosure agreement as part of a potential deal, and the contract included a choice-of-forum provision that directed “any legal action” stemming from the agreement to courts located in New York City “and no other jurisdiction.”  The potential deal fell apart and Kannuu eventually sued Samsung for patent infringement.  Samsung responded with an inter partes review (IPR) petition. Kannuu then asked the USPTO to drop the petition based upon the forum-selection-clause and, failing that, also petitioned the district court for an order that Samsung drop the IPR.  The district court denied Kannuu’s motion for preliminary injunction and then appealed.

On appeal, the court centers-in on the issue:

The underlying question that this case presents is one of first impression: Does the forum selection clause in the non-disclosure agreement between the entities prohibit Samsung from petitioning for inter partes review of Kannuu’s patents at the Board?

Slip Op. Apart from the general legal question of whether such a clause can operate to keep the case out of IPR, Kannuu’s case has a more fundamental problem identified by the district court — “the plain meaning of the forum selection clause in the NDA [does] not encompass the inter partes review proceedings.” Slip Op.

The district court case is only at the preliminary injunction stage, and the appellate panel found no abuse of discretion in the district court’s finding that the IPR proceedings are not covered by the agreement since the agreement focuses on confidentiality rather than intellectual property rights.

On the bigger question of whether such a contract, if properly drafted, might be enforceable, the court explains that it “might” work:

Had Kannuu and Samsung entered a contract which applied to inter partes review proceedings, a forum selection clause in that hypothetical contract might permit Kannuu to avoid inter partes review and its inherent features. But, they did not enter such a contract.

Id.  The court has previously found such a clause enforceable to prevent a post-grant-review proceeding, but only in a non-precedential opinion. Dodocase VR, Inc. v. MerchSource, LLC, 767 F. App’x 930 (Fed. Cir. 2019).

The majority opinion was written by Judge Chen and joined by Judge Prost.

Writing in dissent, Judge Newman argued that “the forum selection clause is clear and unambiguous, and law and precedent require that it be respected and enforced.”

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I should note that the patent at issue here has the auspicious title of “Process and apparatus for selecting an item from a database.” [Link]

Federal Circuit Further Eases Path for Obtaining Design Patents

by Dennis crouch

In re Surgisil, LLP, — 4th — (Fed. Cir. 2021).

This is an important design patent decision that substantially narrows the scope of prior art available for anticipation rejections in design patent cases.  The result is that it should become easier to obtain design patent protection.  The decision is only about 600 words long — fewer than may writeup about the case. 

My children have a variety of paper stumps that they use for smoothing and blending their pencil drawings. The first image below shows a typical paper stump that artists have been using for many decades. The second image shows the design for Surgisil’s article of manufacture that it is attempting to patent (design patent).  I also recall being fascinated by double-sharpened pencils that you can see in the third image. 

Although the three are basically identical in shape, Surgisil still believes it should be able to obtain a design patent because its patent is directed toward something different, the “ornamental design for a lip implant.” 

The USPTO examiner rejected Surgisil’s claims and the Patent Trial & Appeal Board affirmed. The PTAB held particularly that for anticipation purposes, “it is appropriate to ignore the identification of the article of manufacture in the claim language.” Further, although these might not be analogous art, “whether a reference is analogous art is irrelevant to whether that reference anticipates.”

On appeal the Federal Circuit reversed and instead held that the Surgisil’s claim language limited its invention to a design for “lip implants.” As such, prior art directed to drawing stumps and pencils do not anticipate a lip implant.  The court explains:

Here, the claim identifies a lip implant. The claim language recites “a lip implant,” and the Board found that the application’s figure depicts a lip implant, As such, the claim is limited to lip implants and does not cover other articles of manufacture. There is no dispute that Blick discloses an art tool rather than a lip implant. The Board’s anticipation finding therefore rests on an erroneous interpretation of the claim’s scope.

Slip Op.

The decision here goes a bit further than Court’s 2019 decision in Curver Luxembourg, SARL v. Home Expressions Inc., 938 F.3d 1334 (Fed. Cir. 2019).  Curver Luxembourg held that a particular claim was limited to the wicker pattern applied on an the article of manufacture recited in the claim (a chair) and thus did not cover the use of the same pattern on a basket or other non-claimed article.  The PTO had attempted to distinguish that case as applying to the particular situation where the drawings do not actually show the claimed article of manufacture. In particular, the court held we “that claim language can limit the scope of a design patent where the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.”  The drawing in Curver was an abstraction showing only the wicker design, and so the claim was important to tie the design to a particular article of manufacture.

The terse Surgisil decision did not attempt to explain why this case extends beyond the language of Curver.

For many years, the USPTO has followed the same policy — the claimed article does not make any difference for anticipation purposes.  That rules stems from an old CCPA case known as In re Glavas, 230 F.2d 447, (CCPA 1956).

It is true that the use to which an article is to be put has no bearing on its patentability as a design and that if the prior art discloses any article of substantially the same appearance as that of an applicant, it is immaterial what the use of such article is. Accordingly, so far as anticipation by a single prior art disclosure is concerned, there can be no question as to nonanalogous art in design cases.

Id.  One problem with Glavas is that it was an obviousness case and so the statement above is dicta. The court previously recognized this dicta in Curver. The court also suggested that Glavas had been implicitly overruled by Egyptian Goddess.  In Egyptian Goddess, the en banc court held that the ordinary observer test applies to anticipation analysis. In that regard, an ordinary observer would not be likely to confuse a sharpened pencil with a lip insert. (Note, this last sentence is implied by the court in Curver, but not expressly stated).

Surgisil is in some tension with precedent holding that the claim scope should be limited only to ornamental features. See, e.g., In re Zahn, 617 F.2d 261 (CCPA 1980) (“[35 U.S.C] 171 refers, not to the design of an article, but to the design for an article.”);  OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396 (Fed. Cir. 1997) (design patent scope is limited to the ornamental features).  The appellate panel here did not address that argument presented by the USPTO on appeal.

Generally, the USPTO will see this case as a major change to anticipation analysis.  In the end, it will make it even easier to obtain design patents — and seemingly permits someone to obtain a design patent by grabbing a design that is known in the art and applying it to a new article of manufacture.



Wag the Dog: The Federal Circuit’s Advancement of Fifth Circuit Law

by Dennis CrouchThe Federal Circuit has been tearing through mandamus petitions on the issue of inconvenient venue under Section 1404(a). The issue comes up in cases where venue is proper and the court has personal jurisdiction over the defendant, but for whatever reason the particular venue chosen by the plaintiff is inconvenient. Thus, the statute provides a district court with discretion to move venue “[f]or the convenience of parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404.  Section 1404 appeals are traditionally quite rare. The issue comes up at the very beginning of the case, but there is no immediate right appeal the grant or denial of the transfer motion. By the time the district court reaches final judgment any harm due to litigating in an inconvenient forum is typically water-under-the-bridge leaving no cognizable harm for the appeal.  The shortcut then is to petition for mandamus as soon as the district court grants or denies a motion to transfer.

An oddity of patent litigation jurisprudence is that Section 1404 determinations are not deemed patent-law specific.  Thus, the district court is bound to follow the law of the regional circuit court. And, although patent-litigation mandamus petitions go to the Federal Circuit, the appellate court purports to apply the law of the relevant regional circuit court.  Since most of the transfer cases before the Federal Circuit are originally filed in Texas, the Federal Circuit regularly applies Fifth Circuit law.

The chart above comes from a simple Westlaw case search of appellate decisions referencing both Section 1404(a) and mandamus.  What you’ll notice is a relatively large number of decisions from the Federal Circuit, the vast majority of these out of the Fifth Circuit region.  Anyone following the cases will also know that the Federal Circuit has substantially advanced the doctrine over the past 4 years, even though during that time the FifthCircuit has not decided any Section 1404 cases.  By the time the Fifth Circuit hears another mandamus petition, I expect that the court may be a bit shocked to see where their doctrine has gone.

One note on this data – Prof. Jason Rantanen has written about missing appellate decisions, and mandamus decisions are right in the sweet-spot of  decisions that potentially don’t find their way into Westlaw.  So, bottom line is that these numbers are likely an undercount. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3927406

Eligibility: Turning Application On-and-Off for Authentication Patent Eligible

by Dennis Crouch

CosmoKey Solutions v. Duo Security (Fed. Cir. 2021)

Patentee wins this one–with the Federal Circuit reversing the district court and finding the claims on patent-eligibility under Alice step-two.  This is another case that serves as a data-point, but I struggle to differentiate it from similar cases finding claims ineligible.

CosmoKey’s U.S. Patent No. 9,246,903 is directed a low-complexity, high-security method of authenticating a user transaction. (2011 priority filing date).  The basic idea here is two-factor-authentication that uses a second communication channel (mobile phone) to authenticate a transaction.  This general idea was already in the prior art, but the claims add a couple of additional features:

  • Authentication function is normally inactive on the mobile device but is activated by the user for the transaction; and when once the transaction is done the authentication function is automatically deactivated.  This on/off function is designed to both save power on the device and also help prevent hacking.
  • As part of the authentication, there is a check on how long the user takes to respond (whether a predetermined time relation exists between the transmission of the user identification and a response from the second communication channel);

See ‘903 Patent Claim 1.

The district court found the claim ineligible under Section 101 after finding them closely parallel to the authentication method claims invalided in Prism Techs. LLC v. T-Mobile USA, Inc., 696 F. App’x 1014 (Fed. Cir. 2017) (nonprecedential opinion).  In particular, the district court found the claims directed to “the abstract idea of authentication—that is, the verification of identity to permit access to transactions”  (Alice Step 1) and that the claims recite generic computer functionality that were all well understood, routine, and conventional activities at the time of the invention (Alice Step 2).

On appeal, the Federal Circuit has reversed — holding that the patent “discloses a technical solution to a security problem in networks and computers.”  That statement suggests reversal on Alice Step 1; but the court actually leapt to Step 2 without a clear holding on Step 1.  Here, the court found that the claimed steps were (1) developed by the inventors; (2) not admitted prior art; and (3) yield advantages over the described prior art.  The court noted the difficulty with this case — the purpose of the invention was to “reduce significantly” “the complexity of the authentication function.”  But, simplification can quickly suggest abstraction.

Eligibility Jurisprudence: It has been quite difficult to nail down the meaning of “abstract idea.”  The Supreme Court suggested that we look back to prior cases to find the answer, and that is the same approach that has been followed by the lower courts as well as the USPTO.  Here, however, the Federal Circuit cautioned that analysis:

While prior cases can be helpful in analyzing eligibility, whether particular claim limitations are abstract or, as an ordered combination, involve an inventive concept that transforms the claim into patent eligible subject matter, must be decided on a case-by-case basis in light of the particular claim limitations, patent specification, and invention at issue. Here, the  claim limitations are more specific and recite an improved method for overcoming hacking by ensuring that the authentication function is normally inactive, activating only for a transaction, communicating the activation within a certain time window, and thereafter ensuring that the authentication function is automatically deactivated.

Slip Op.

The court’s opinion was written by Judge Stoll and joined by Judge O’Malley.  Judge Reyna penned a concurring opinion arguing that the two step Alice approach should be taken in-order:

The majority skips step one of the Alice inquiry and bases its decision on what it claims is step two. I believe this approach is extraordinary and contrary to Supreme Court precedent. It turns the Alice inquiry on its head.

Concurring Opinion. Judge Reyna goes on to explain how Step 2 should be seen as a “lifeline” that only comes into play to save claims that are directed toward abstract ideas.  But, we can’t know if there is “something more” without first answering the question “more than what.”

Step two is rendered superfluous and unworkable without step one. Without the benefit of a step-one analysis, we are hobbled at step two in reasonably determining whether additional elements transform the nature of the claim into a patent-eligible application of the abstract idea. And by skipping step one, we create a risk that claims that are not directed to an abstract idea might be deemed to “fail” at
step two.

Id.  Judge Reyna then goes on to conclude that the claims are not directed to an abstract idea. Id. Quoting the majority statement that “the claims and specification recite a specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity.”

Patent Eligibility Jurisprudence

The USPTO is seeking comments on “the state of patent eligibility jurisprudence” and how eligibility law impacts both innovation and investment-in-innovation.  The deadline for submissions is October 15, 2021..

The USPTO is planning a report to Congress and the agency is hoping that these comments will serve as fundamental building blocks for the report.


FRANCE.COM: Trademark Transferred to French Government without Recourse in US Courts

When you visit the website france.com, you’ll be quickly redirected to the French government’s explore-France travel site: france.fr.  But, the US-company France.com, Inc. believes that the country stole the .com site.  The case is now pending before the Supreme Court on petition for writ of certiorari is France.com v. The French Republic, Docket No. 21-448 (Supreme Court 2021).

Jean-Noel Frydman registered the domain back in 1994 and began using it to operate his commercial tourism business. Frydman eventually registered the domain as a trademark — primarily in the travel related field. During that time the French National Tourist Office lauded Frydman’s work and and website.

In 2016, France.com was pursuing a private trademark claim in a French-based court.  The French Government intervened in the lawsuit and was able to convince the French court to order the domain name to be transferred to the French Government.  The petitioner here calls that decision “in contravention of and hostile to United States law.”

Subsequently, France.Com filed the present lawsuit in U.S. Federal Court seeking an order transferring the domain name back.  Rather than delving into the merits, 4th Circuit ordered the case be dismissed. In particular, the district and appellate courts found the lawsuit barred by the Foreign Sovereign Immunities Act (FSIA). And, that the FSIA’s commercial activity exception to sovereign immunity did not apply.  The petition for writ of certiorari focuses on that question:

Whether the United States Court of Appeals for the Fourth Circuit and other lower federal courts have misapplied this Court’s decision in OBB Personenverkeher v. Sachs, 577 U.S. 27 (2015), as allowing courts to determine the gravamen of Foreign Sovereign Immunities Act “commercial activity” exception suits without analyzing distinct claims presented.


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§ 1604. Immunity of a foreign state from jurisdiction

Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.

§ 1605. General exceptions to the jurisdictional immunity of a foreign state

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case — (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States;

New PatentlyO L.J. Article: The AIA at Ten – How Much Do the Pre-AIA Prior Art Rules Still Matter?

New Patently-O Law Journal article by Colleen V. Chien, Professor of Law and Co-Director, High Tech Law Institute, and Janelle Barbier and Obie Reynolds, both second-year JD students; all at Santa Clara University School of Law.  Below they summarize their findings.

As the America Invents Act (AIA) turns 10, patent students across the country may be asking: if the law is already a decade old, why am I spending so much time learning pre-AIA law? Though patents filed before the transition date will remain in force up through March 2033, a good 10+ years away, teachers may also be wondering which regime to emphasize and for how long the pre-AIA rules will still be considered fundamental rather than footnote material. We address these questions empirically by analyzing the effective dates of patents and patent applications currently being litigated or pursued. Our analysis resoundingly confirms that both regimes matter and that the pre-AIA prior art regime appears likely to continue to be relevant for much of the next decade. But how much it matters depends: as the graphs below show, patent lawsuits overwhelmingly continue to feature pre-AIA patents. We estimate that ~90% of patent litigations initiated in 2020 included a patent with an effective filing date before the AIA transition date of March 16, 2013. But the inverse is true of patents currently being  prosecuted: ~94+ of applications currently pending before the USPTO, we estimate, are governed by the AIA. In the accompanying PatentlyO Bar Journal article, The AIA at Ten – How Much Does the Pre-AIA Prior Art Regime Still Matter?, 2021 Patently-O Patent Law Journal 35, we explain our methods, sources, and approach and how pre- and post-AIA law are likely to both remain important for some time but that the distinction doesn’t necessarily matter in the vast majority of cases.

Figure 1: Percentage of Patent Litigations Including a Pre-AIA Patent, by Year Litigation Initiated

Figure 2: 2021 Pending Patent Applications Pre- vs. Post-AIA (Point Estimate)

We thank LaTia Brand of Harrity Analytics and the Stanford NPE Database, described in Shawn 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) for sharing data with us. Our data can be found at: https://doi.org/10.7910/DVN/3HJ2PB.

Read: Colleen Chien, Janelle Barbier, and Obie Reynolds, The AIA at Ten – How Much Does the Pre-AIA Prior Art Regime Still Matter?, 2021 Patently-O Patent Law Journal 34. (Chien.2021.Pre-AIAPatents)

Prior Patently-O Patent L.J. Articles:

  • Nicholas Shine, Covid-19 Pandemic’s Impact on the U.S. Patent System Through November 2020, 2021 PatentlyO Law Journal 27 (2021) (Shine.2021.COVID-19Impact)
  • Thomas F. Cotter, Is Global FRAND Litigation Spinning Out of Control, 2021 PatentlyO Law Journal 1 (2021) (Cotter.2021.GlobalFRANDLitigation)
  • Colleen V. Chien, Nicholas Halkowski, Maria He, and Rodney Swartz, Parsing the Impact of Alice and the PEG, 2020 Patently-O Law Journal 20 (2020) (Chien.2020.ImpactOfAlice)
  • Paul R. Michel and John T. Battaglia, eBay, the Right to Exclude, and the Two Classes of Patent Owners, 2020 Patently-O Law Journal 11 (2020) (Michel.2020.RightToExclude)
  • Thomas F. Cotter, Two Errors in the Ninth Circuit’s Qualcomm Opinion, 2020 Patently-O Patent Law Journal 1 (2020). (Cotter.2020.TwoErrors.pdf)
  • Jasper L. Tran & J. Sean Benevento, Alice at Five, 2019 PatentlyO L.J. 25 (2019) (Tran.2019.AliceatFive.pdf)
  • Bernard Chao, Implementing Apportionment, 2019 PatentlyO L.J. 20 (Chao.2019.ImplementingApportionment)
  • Jeremy C. Doerre, Is There Any Need to Resort to a § 101 Exception for Prior Art Ideas?, 2019 PatentlyO L.J. 10. (2019.Doerre.AnyNeed)
  • Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
  • David A. Boundy, Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem, 2018 Patently-O Patent Law Journal 20. (Boundy.2018.BadGuidance)
  • Colleen Chien and Jiun-Ying Wu, Decoding Patentable Subject Matter, 2018 PatentlyO Patent Law Journal 1.
  • Paul M. Janicke, Patent Venue: Half Christmas Pie, And Half Crow, 2017 Patently-O Patent Law Journal 13. (Janicke.2017.ChristmasPie.pdf)
  • Paul M. Janicke, The Imminent Outpouring from the Eastern District of Texas, 2017 Patently-O Patent Law Journal 1 (2017) (Janicke.2017.Venue)
  • Mark A. Lemley, Erik Oliver, Kent Richardson, James Yoon, & Michael Costa, Patent Purchases and Litigation Outcomes, 2016 Patently-O Patent Law Journal 15 (Lemley.2016.PatentMarket)
  • Bernard Chao and Amy Mapes, An Early Look at Mayo’s Impact on Personalized Medicine, 2016 Patently-O Patent Law Journal 10 (Chao.2016.PersonalizedMedicine)
  • James E. Daily, An Empirical Analysis of Some Proponents and Opponents of Patent Reform, 2016 Patently-O Patent Law Journal 1. (Daily.2016.Professors)
  • Tristan Gray–Le Coz and Charles Duan, Apply It to the USPTO: Review of the Implementation of Alice v. CLS Bank in Patent Examination, 2014 Patently-O Patent Law Journal 1. (GrayLeCozDuan)
  • Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law Journal 1 (Stoll.2012.estoppel.pdf)
  • Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29.  (Morgan.2011.AIAAmbiguities)
  • Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12 (sarnoff.2011.derivation.pdf)
  • Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent Patent Law Journal 6 (chao.sealedrecords.pdf)
  • Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC):  Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent Law Journal 1 (levi.ftcunsound.pdf)
  • Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent Law Journal 111 (Collins.KingPharma.pdf)
  • Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent Law Journal 95 (matthews.falsemarking.pdf)
  • Kristen Osenga, The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89 (Osenga.pdf)
  • Peter S. Menell,  The International Trade Commission’s Section 337 Authority, 2010 Patently-O Patent L.J. 79
  • Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently‐O Patent L.J. 72
  • Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24
  • Etan Chatlynne, Investigating Patent Law’s Presumption of Validity—An Empirical Analysis, 2010 Patently-O Patent L.J. 37
  • Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24 (Kasdan.Casino.Damages)
  • Dennis Crouch, Broadening Federal Circuit Jurisprudence: Moving Beyond Federal Circuit Patent Cases, 2010 Patently-O Patent L.J. 19 (2010)
  • Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently‐O Patent L.J. 7  (2010) (Reines.2010)
  • Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) (Nominee Diversity)
  • Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1. (Cole.pdf)
  • John F. Duffy, The Death of Google’s Patents, 2008 Patently O-Pat. L.J. ___ (googlepatents101.pdf)
  • Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
  • Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O Patent L.J. 36
  • Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30 (Download Sarnoff.BIO.pdf)
  • John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. (Duffy.BPAI.pdf)
  • Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1 (Casino-Seagate)


Preclusion; Customer Lawsuits; and the Kessler Doctrine

by Dennis Crouch

PersonalWeb Technologies, LLC v. Patreon, Inc., Docket No. 20-1394 (Supreme Court 2021).

This is a core civil procedure case pending before the Supreme Court.  Of course, procedure can and often does have a major impact on substantive rights.  The Supreme Court has now issued a Call for the Views of the Solicitor General (CVSG)–seeking the government’s input on whether to hear the case.  Although certiorari is certainly not guaranteed, CVSG is generally seen as a major step in that direction.

We know about issue preclusion and claim preclusion. This case is about a quirky intermediary known as the Kessler Doctrine. See, Kessler v. Eldred, 206 U.S. 285 (1907).

  • Claim Preclusion (res judicata) prevents a party from re-litigating a claim once a court has issued a final judgment on that claim.  Claim preclusion is powerful, in part, because it does not require the claim to be actually litigated (just be subject to the final judgment).  Further, claim preclusion bars both those claims that were brought as well as claims stemming from the same transaction or occurrence that could have been brought in the earlier lawsuit.  However, claim preclusion is quite narrow because it does not apply in the non-mutual setting.
  • Issue Preclusion (collateral estoppel) prevents a party from re-litigating an issue of fact or law that was already determined in a prior case.  Issue preclusion is powerful because it applies in non-mutual settings.  Issue preclusion can prevent a patentee from later arguing in a new lawsuit that its patent is valid after an earlier finding of invalidity, even if the new lawsuit is against a different party.  The major weakness of issue preclusion is that it requires that the issue have been actually decided in the prior lawsuit, with a full-and-fair opportunity to litigate, and be essential to the prior judgment (not just dicta). As an example, issue preclusion does not attach following a settlement.
  • Kessler Doctrine is particular to patent law and falls somewhere in-between issue and claim preclusion–allowing preclusion in instances where it would not be traditionally available.  In particular, the doctrine bars a patent infringement lawsuit suit against the customer of a seller who had previously prevailed against a patentee in an earlier patent infringement suit. Kessler v. Eldred, 206 U.S. 285 (1907).  In that situation claim preclusion would not apply because of non-mutuality; and issue preclusion might not apply if the issues being barred were not actually litigated in the first case.

One justification for the Kessler doctrine back in 1907 was that issue preclusion generally did not apply to unrelated parties.  However the 20th century saw a great expansion of issue preclusion that culminated with the Supreme Court’s 1971 decision in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1971) (“the principle of mutuality of estoppel … is today out of place”).  However, rather than relegating Kessler to a prior time, the Federal Circuit has recently substantially expanded the doctrine even beyond its usual bounds.  That revival began with the 2014 decision in Brain Life, LLC v. Elekta Inc., 746 F.3d 1045 (Fed. Cir. 2014), but has subsequently been relied upon in a series of cases from the appellate court. SpeedTrack, Inc. v. Office Depot, Inc., 791 F.3d 1317, 1323-1329 (Fed. Cir. 2015), cert. denied, 577 U.S. 1063 (2016); SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1169-1170 (Fed. Cir. 2018); Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1301 (Fed. Cir. 2017), cert. dismissed, 139 S. Ct. 44 (2018);  Xiaohua Huang v. Huawei Techs. Co., 787 F. App’x 723, 724 (Fed. Cir. 2019); In re PersonalWeb Techs. LLC, 961 F.3d 1365 (Fed. Cir. 2020); ABS Glob., Inc. v. Cytonome/ST, LLC, 984 F.3d 1017, 1022 (Fed. Cir. 2021).

The Supreme Court has repeatedly declined (in other situations) to expand preclusion beyond its traditional bounds without congressional intervention. See Lucky Brand Dungarees v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589, 1594-95 (2020) (rejecting “defense preclusion” as a cognizable doctrine).  Likewise, the court has rejected patent-specific procedural rules.  Those lines of cases all suggest a good likelihood that the court cabin-in the doctrine.

Preclusion cases always involve two lawsuits, and the question is whether something that happened in the first lawsuit precludes a party from taking some action in the section lawsuit.   Here, PersonalWeb sued Amazon for patent infringement back in 2011 based upon Amazon’s use of its S3 cloud storage services. However, after a narrow claim construction, PersonalWeb stipulated to dismissal of its case with prejudice.  In 2018, PersonalWeb sued a number of Amazon customers for post-2011 activities.  The courts dismissed the case — holding that the action was barred by the Kessler Doctrine.

PersonalWeb’s petition for certiorari begins with a preamble and then asks two questions:

This Court has repeatedly held that, absent guidance from Congress, courts should not create special procedural rules for patent cases or devise novel preclusion doctrines that stray beyond the traditional bounds of claim and issue preclusion. Nonetheless, over the past seven years, the Federal Circuit has created and then repeatedly expanded a special, patent-specific preclusion doctrine that it attributes to this Court’s 114-year-old decision in Kessler v. Eldred, 206 U.S. 285 (1907)—a case this Court has not cited for almost 70 years. The Federal Circuit now routinely applies its so-called “Kessler doctrine” to reject suits like this one that would survive under ordinary preclusion principles.

The questions presented are:

1. Whether the Federal Circuit correctly interpreted Kessler to create a freestanding preclusion doctrine that may apply even when claim and issue preclusion do not.

2. Whether the Federal Circuit properly extended its Kessler doctrine to cases where the prior judgment was a voluntary dismissal.

[Petition for Certiorari]

In its responsive briefing, Amazon and its customers have rewritten the questions in slightly different form, emphasizing their arguments.

In Kessler v. Eldred, 206 U.S. 285 (1907), this Court held that a patent-infringement judgment establishing the right of a manufacturer to make and sell a product includes “the right to have others secure in buying that article, and in its use and resale.” Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co., 232 U.S. 413, 418 (1914). Accordingly, “a judgment in [the manufacturer’s] favor bars suits against his customers.” Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 185 (1952). The questions presented are:

(1) whether the Federal Circuit properly interpreted Kessler as a bar on suits against customers for use of the same articles that were the subject of the prior judgment, rather than a mere application of non-mutual issue preclusion;

(2) whether Kessler should be overruled, despite stare decisis, when Congress has never revised the Patent Act to overrule Kessler, and when its rule is necessary to prevent the kind of vexatious litigation in which the district court found Petitioner to have engaged; and

(3) whether Kessler applies to judgments of voluntary dismissal with prejudice, which this Court has long held to have the same preclusive effect as an adjudication on the merits of a claim.

[Brief in opposition].

Next stop in this case is input from the Biden Administration via the Solicitor General.  That brief probably won’t be submitted until Spring 2022.

= = =

Note – Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 185 (1952) was decided prior to the Patent Act of 1952.

Timbs: Iconic Enough for Trademark Protection?

by Dennis Crouch

TBL Licensing, LLC v Hirshfeld, Docket No. 1:21-cv-00681 (E.D. Va. Jun 04,

I previously wrote about the TTAB decision denying TBL’s attempt to register the shape of its Timberland Boots as a protectable trade mark. Crouch, Iconic Timberland Boots–Trade Dress Worthy? Now, the company has filed a civil action in the Eastern District of Virginia seeking a court order that TBL is entitled to a registration. TBL provides its basic argument as follows:

The TTAB wrongly disregarded TBL’s potent evidence of secondary meaning, including extensive sales, advertising, and third-party recognition (with diverse examples of high-profile unsolicited media coverage and attention) that TBL amassed from over four decades of consistent and substantially exclusive use of the Timberland Boot Trade Dress. In so doing, the TTAB refused to register what has been deemed “one of the most recognizable shoes of all time.” The TTAB’s decision should thus be reversed and, because the Timberland Boot Trade Dress is not de jure functional, TBL’s application should be approved for publication. Alternatively, the case should be remanded for consideration of the issue of functionality.

TBL Complaint.

The TTAB gave little weight to the fact that the agency has issued registration certificates on many different shoe designs.  On the other hand, that same history-based argument will likely be more convincing to a district court judge.

There is no right to a jury trial in this type of case. To further save costs, the parties have agreed to waive a live trial completely and instead decide the case based upon the submitted record.

The parties have agreed to authorize the Court to adjudicate this matter on summary judgment and to resolve any disputes concerning material issues of fact on a submitted record.

This is apparently the same process used in other recent trademark civil actions. Booking.com B.V. v. Matal, 278 F. Supp. 3d 891, 900 (E.D. Va. 2017) (“The parties have ‘expressly agree[d] that if the Court determines after reviewing the briefs and evidence on summary judgment that any material issue of fact exists, the Court is authorized to resolve any such factual dispute.'”); Seacret Spa Intl. v. Lee, 1:15CV405(JCC/IDD), 2016 WL 880367, at *2 (E.D. Va. Mar. 8, 2016) (“The parties have agreed that . . . the Court may resolve those disputes on the basis of the record before it.”); Autodesk, Inc. v. Lee, 1:13-CV-1464 AJT/JFA, 2014 WL 5500799, at *1 (E.D. Va. Oct. 30, 2014) (parties “stipulated that the Court should resolve any material factual disputes without any further proceeding based on the summary judgment record.”).

I expect final briefing in February 2022 and a decision later in the spring.

= = =

Iconic Timberland Boots — Trade Dress Worthy?

Hyatt; Prosecution Laches; and more Civil Actions

by Dennis Crouch

In a June 2021 decision, the Federal Circuit supported the USPTO in its arguments that Gilbert Hyatt long-pending patent applications could be rendered moot based upon the doctrine of Prosecution Laches. Hyatt v. Hirshfeld, 998 F.3d 1347 (Fed. Cir. 2021).  Those cases are now on remand and the district court is setting up for trial on the question of whether the 20+ year delay in prosecution was due to Hyatt’s unreasonable behavior and whether the delay has resulted in prejudice.  The parties now are arguing about whether the court will allow a full presentation of new evidence or limit the trial only to Hyatt’s justifications of his actions.

Hyatt has now also filed additional Section 145 actions seeking a district court order that the USPTO issue his patents in two other pending applications.

  • Hyatt v. Hirshfeld, Docket No. 1:21-cv-01019 (E.D. Va. Sep 03, 2021), (Application No. 08/433,307).
  • Hyatt v. Hirshfeld, Docket No. 1:21-cv-01084 (E.D. Va. Sep 24, 2021), (Application No. 08/458,549).
  • Hyatt v. Hirshfeld, Docket No. 1:21-cv-00936 (E.D. Va. Aug 17, 2021),(Application No. 08/423,235).
  • Hyatt v. Hirshfeld, Docket No. 1:21-cv-00892 (E.D. Va. Aug 03, 2021), (Application No. 08/460,768).
  • Hyatt v. Hirshfeld, Docket No. 1:21-cv-00884 (E.D. Va. Jul 30, 2021), (Application No. 08/426,450).

Each of these cases involve a PTO refusal to issue the patent based upon prosecution laches.

Another E.D.Va. patent case recently filed against the USPTO is Daiichi Sankyo, Inc. et al v. United States Patent and Trademark Office et al, Docket No. 1:21-cv-00899 (E.D. Va. Aug 05, 2021).  Daiichi Sankyo is an Administrative Procedure Act (APA) case arguing that the PTO has adopted two AIA-trial-related rules rules that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).  Challenged rules:

  • NHK-Fintiv rule that allows the PTAB to deny institution based upon parallel patent infringement litigation.
  • Arthrex rule regarding PTO’s approach to director review.  The particular concern in the lawsuit is that the PTO does not provide for director review of institution denials.


Guest Post by Prof. Trimble: The False Sense of Victory in Bypassing The Hague Convention on Service of Process

Guest Post by Professor Marketa Trimble, Samuel S. Lionel Professor of Intellectual Property Law, University of Nevada, Las Vegas William S. Boyd School of Law.  Professor Trimble specializes in international intellectual property law, and is the author of Global Patents: Limits of Transnational Enforcement (Oxford Univ. Press 2021) and co-author with Paul Goldstein of International Intellectual Property Law, Cases and Materials (Foundation Press 5th ed. 2019).

On September 10, 2021, the U.S. Court of Appeals for the Federal Circuit denied mandamus in In re OnePlus Tech. (Shenzhen) Co., confirming that the plaintiff may bypass Article 5 of the Hague Convention on the Service of Process and serve the Chinese defendant through alternative service to attorneys located in California who had represented the defendant in the past. Commentators heralded the decision as an important improvement in the enforcement of patent rights against foreign, and in particular Chinese, defendants (Law360). However, in many IP cases involving foreign defendants, this sense of victory might be premature.

What ultimately matters is whether a judgment resulting from a U.S. dispute is enforceable—either in the United States or abroad. If a foreign defendant has assets in the United States and a U.S. judgment can be enforced in the United States, bypassing The Hague Convention does not matter. But if a foreign defendant has no assets in the United States and a plaintiff must seek enforcement of a U.S. judgment abroad, bypassing the Convention—even if the end run is sanctioned by a U.S. court and is legal under U.S. law—might be for naught. Once a plaintiff requests recognition and enforcement of a U.S. judgment abroad, a foreign court may deny recognition and enforcement of the judgment if a defendant was not served in accordance with The Hague Convention. Avoiding recognition and enforcement abroad is not always possible; the August 2021 decision in Next Investments, LLC v. Bank of China shows that seizing a defendant’s foreign accounts by using the U.S. branches of Chinese banks might not work.

Countries entered into The Hague Convention to ensure that documents would be served on their citizens in a manner that comports with the countries’ sense of due process. The Convention (the full title is Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters) allows countries to permit easier and faster alternative means of service if they wish to do so, but China is one of the countries that filed a declaration opposing the use of such alternative means. Therefore, in China the only service that is compliant with the Convention is through the Convention’s Article 5 mechanism via the Central Authority.

The penalty for not using the Convention’s Article 5 mechanism can be high. Not surprisingly, countries that are parties to the Convention (currently, 79 countries) want to ensure that the Convention is being followed, and courts in these countries may therefore deny recognition and enforcement to a foreign judgment that stems from a proceeding in which a defendant (who is foreign to the court that issued the judgment) was not served in accordance with the Convention. Courts in some countries are willing to recognize and enforce a foreign judgment even if service was not compliant with the Convention if proof of actual service abroad exists from the original court proceeding. A defendant’s voluntary acceptance of alternative service might also satisfy a court’s expectations of due process, and apparently the Supreme Court of the People’s Republic of China has also made such a decision in a case when a Chinese court permitted an alternative means of service on a defendant outside of China.

The Hague Convention’s age of 56 years raises legitimate questions about its utility in today’s world. However, the likelihood that countries will replace it with an updated convention seems remote; the negotiations of the new Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (not yet in force) proved that an agreement by countries on conflict-of-laws issues in transnational disputes remains difficult, and the new Convention was achieved only when IP disputes were excluded from the scope of the Convention. With the anti-suit injunction war raging in SEP cases and Chinese courts being more assertive in transnational litigation, the U.S. IP bar’s view might finally evolve in favor of an international convention on transnational conflict-of-laws matters in IP disputes. Some models exist in academic projects that have developed principles and guidelines for such matters; the latest and most international of the projects resulted in the Kyoto Guidelines that the International Law Association adopted in December 2020.

Restoring the America Invents Act

by Dennis Crouch

Sen. Leahy and Sen. Cornyn have introduced the “Restoring the America Invents Act” designed to further address problems caused by the USPTO’s issuance of “poor-quality patents.”

The proposal is basically a wish list of patent-killers seeking to cancel patent rights via inter partes review.

Key elements of the proposal:

  • Removal of Discretional Denials of Institution.  The proposal would substantially limit PTO Director’s discretion to deny institution.  The new provision would state that “a petition that meets the requirements of this chapter shall be instituted …”  The Director would maintain limited discretion to deny or alter institution based upon multiple proceedings involving the same patent or member of the same patent family pending before the Office.  The statute would create a rebuttable presumption of consolidation.
  • Expanding the Scope of Inter Partes Review.  Currently, IPR’s can only focus on patentability grounds “raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.”   The proposal would expand this to also include “admissions in the patent specification, drawings, or claims” and also “statutory or obviousness-type double patenting.”
  • More Powerful Stays. The new statute would list factors that a district court should consider when determining whether or not to grant a stay, all the changes would tend to promote stays of the litigation.  The provisional would also permit an immediate right to appeal the district court’s stay decision.
  • Codifying the Rules on Amending Claims: The patent owner will have the burden of proving the patentability of any amended claim, including Sections 101, 102, 103, and 112 before the PTAB who will act as an examiner in that regard.
  • Prior Dismissal of Without Prejudice: A lawsuit involving the patent that was dismissed without prejudice would no longer trigger 1-year deadline for filing an IPR petition.
  • Codify a procedure for Director Review under Arthrex.  Although the procedure requires the director to provide a “written opinion” setting forth any reasoning, it does not appear to require director review or reasons for denial of review.
  • Rejecting Return Mail.  The proposal would add “a governmental entity” to the people who can petition for IPR.  This would overturn the Supreme Court decision in Return Mail which held that the U.S. Gov’t was not a “person” for the purposes of this portion of the statute.
  • Extend timing of ending proceedings before the office until the conclusion of any appeal. 325(e)(1).
  • Expanded Estoppel against the Patent Owner: “The Office may not issue to a patent owner any claim that is not patentably distinct from a claim that was issued and was subsequently—(i) found to be unpatentable; or (ii) canceled in any proceeding before the Office, including under section 135, 251, 253, 301, 311, or 321.’”
  • Attempting to Eliminate Outside Influence on Panels from Within the USPTO: “EX PARTE COMMUNICATION.—An officer who has review authority, supervisory authority, or disciplinary authority with respect to an administrative patent judge of the Patent Trial and Appeal Board (or a delegate of such an officer), and who is not a member of a panel … shall refrain from ex parte communication with such a judge who is a member of that panel concerning any pending matter before that panel, except as allowed under the Code of Conduct for United States Judges.”
  • Standing to appeal: The new law would attempt to cobble-together additional injury by presuming injury in fact based upon the estoppel, etc.
  • No Standing then No Estoppel: The new law would open the door further to speculative filing of IPR petitions. In particular, the proposal would modify the law so that a party who lacks standing to appeal its loss before the PTAB would not later be estopped based upon the IPR outcome.

Preserve Access to Affordable Generics and Biosimilars Act

The House Judiciary Committee has voted in favor of H.R. 2891, the Preserve Access to Affordable Generics and Biosimilars Act.  The Bill was also referred to the House Energy & Commerce Committee and so may have a few more hurdles before it moves to the House Floor.

The key aspect of the proposal is to create a presumption of anticompetitive behavior anytime a generic ANDA/biosimilar filer “receives anything of value” while also agreeing to forgo any “research, development, manufacturing, marketing, or sales of the ANDA product or biosimilar biological product.”  The proposal appears to limit use of this presumption only to situations where the FTC brings an action, and not a private antitrust claim.

A parallel bill  proposed by Sen. Klobuchar is pending in the Senate.

Eligibility: Which Case Will the SCT Choose as its Vehicle?

ENCO Systems, Inc. v. DaVincia, LLC (Supreme Court 2021)

In March 2021 the Federal Circuit sided with the patent challenger DaVincia — affirming that ENCO’s patent claims were invalid as directed to an abstract idea. Now, ENCO has petitioned the Supreme Court with the following general question:

What is the appropriate standard for determining whether a patent claim is directed to a patent-ineligible concept when determining whether an invention is eligible for patenting under 35 U.S.C. § 101?


ENCO and DaVincia compete in the market for automated captioning of audio signals.  ENCO did not invent the general concept, but its patent brings together a number of important features make it workable and with a 2000 application priority filing date.

In some ways, this case reminds me of the Supreme Court’s Barbed-Wire decision in Washburn & Moen Mfg. Co. v. Beat ‘Em All Barbed-Wire Co., 143 U.S. 275 (1892) where the court explained:

The difference between the [prior art] Kelly fence and the Glidden fence [at issue] is not a radical one, but, slight as it may seem to be, it was apparently this which made the barbedwire fence a practical and commercial success.

Id. The 1892 case focused on obviousness rather than abstraction.  And, barbed-wire was generally seen as a fundamental and transformative invention of American westward expansion. It allowed for ‘taming’ of the land and closing of the open range.

The invention here is directed to a method of automated captioning of an AV signal. The inventors did not invent this general idea, but the claims include a number of features that make it more workable.

  • Choosing how many lines of text to see at once;
  • automatically identifying voice and speech patterns;
  • training on new words and using that training to improve the captioning;
  • synchronizing the caption data with one or more cues in the AV signal;
  • etc.

Unlike Barbed-wire Glidden who did have a novel way of wrapping wire compared with the prior art, I don’t believe that any of ENCO’s individual elements have a point of novelty. Rather, the novelty of the invention involves putting them all together into a method that works.

In its decision, the Federal Circuit ruled that ENCO’s claims were directed to “simply the abstract idea of automating the AV captioning process.”  But, the claims did not provide any specific technological improvement: “The advance is only at the abstract level of computerization because claim 1 fails to set forth specific techniques for processing the data, instead reciting known computer techniques for automation of known processes.”

ENCO’s petition argues that “the Federal Circuit reached the wrong result” since the patent claims a “method of solving a technological problem using physical components executing defined steps to produce a tangible result.”

The petition also boldly makes a prediction: “The question is not whether the Court will review its eligibility test, but which case it will choose as its vehicle.”


Serial Filing of IPRs and as Reexamination

In re Vivint, Inc. (Fed. Cir. 2021)

Vivint sued Alarm.com for infringing its US Patent 6,717,513. Alarm.com responded with three different inter partes review (IPR) petitions.  Those three petitions were denied at the institution stage.  Two of the petitions were denied on the merits, the third petition was denied based upon the “abusive” IPR filing practices of Alarm.com (noting that there were 15 total IPRs filed involving ‘incremental petitioning’).

A year later Alarm.com petitioned for ex parte reexamination of the ‘513 patent.  Most of the reexamination petition was word-for-word identical to the IPR petitions, although there was one new reference added for two of the four patentability questions.  The PTO ordered the examination and eventually concluded that that the challenged claims were not patentable.

Inter Partes Review and Ex Parte Reexamination both involve an initial threshold stage where the patent office must decide whether the petition presents a sufficient case to move forward with the full review.  But, the standard for IPR is much higher than that of reexamination.  IPR’s are only initiated upon a finding of a “reasonable likelihood” that at least one claim will be cancelled while reexaminations require only a “substantial new question of patentability.”  Thus, it logically makes sense that a challenge might fail the IPR threshold, but still be sufficient to surpass the reexam requirement.

On appeal, the Federal Circuit offers an interesting opinion.  On the one hand, the court agreed that a substantial new question of patentability was presented in the reexam.  At the same time, the court found that the PTO abused its discretion in hearing the reexamination.

SNQP: Here, the decision was easy once the court ruled that the “new” portion focused on whether a particular issue had been previously decided on the merits.  Although the same questions had been presented in the IPR petitions, denial of an IPR doesn’t count as deciding the issue on the merits.

Discretion to Deny: The reexamination statute provides the PTO with discretionary authority to reject petitions based upon questions previously presented to the office.  35 U.S.C. § 325(d).  The most interesting part of the decision here is the ruling that sometimes discretionary denial becomes mandatory — when denial would be “an abuse of discretion or arbitrary and capricious.”

Here, the court looked to the dismissal of the last IPR petition based upon “Alarm.com’s abusive filing practices.”  Alarm.com should not then be allowed to take the same approach in yet another new incremental filing — even if the new petition was in reexamination form.

Our holding today is narrow. Section 325(d) applies to both IPR petitions and requests for ex parte reexamination. Thus, the Patent Office, when applying § 325(d), cannot deny institution of IPR based on abusive filing practices then grant a nearly identical reexamination request that is even more abusive. We see no difference between the IPR and ex parte reexamination processes that would justify such conduct and nothing short of termination of the  reexamination would be appropriate.

Slip Op.

Cancellation of Vivint’s claims is Vacated.



The proper standard for willful infringement: “deliberate or intentional infringement”

by Dennis Crouch

Today’s decision in SRI Int’l., Inc. v. Cisco Sys., Inc. (Fed. Cir. 2021) is an important Federal Circuit decision regarding enhanced damages for willful infringement.  It also adds further to the complexity of Federal Circuit doctrine on enhanced damages — despite the Supreme Court’s warning against an “unduly rigid” approach in Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016).

The basics here is that the jury originally sided with the patentee SRI over Cisco awarded $23 million in damages.  The jury also found the infringement willful. The district court then doubled the damage award in accordance with 35 U.S.C. § 284’s statement that “the court may increase the damages up to three times the amount found or assessed.”

That original decision was vacated by the Federal Circuit in a 2019 appeal.  The appellate panel included a few big statements.  The biggest of these was instructing the court to focus on whether the adjudged infringer’s “conduct rose to the level of wanton, malicious, and bad-faith behavior required for willful infringement.”  On remand, the district court took that statement as a mandate requiring “wanton, malicious, and bad-faith behavior” as a prerequisite to a willful infringement award.  That standard had not been met and so the district court refused to enhance damages.

On appeal the second time, the case returned to the same three-member panel (LOURIE, O’MALLEY, and STOLL) and the panel has written to “clarify that it was not our intent to create a heightened requirement for willful infringement.”  Rather, the court emphasized the actual standard that “willfulness requires a jury to find no more than deliberate or intentional infringement.”  Quoting Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367 (Fed. Cir. 2020).  Note that that seeming heightened requirements will still be relevant as a district court determines the amount of enhanced damages to award following a jury finding of willfulness.

Based upon the lower-standard for willfulness, the appellate panel reinstated the jury verdict of willfulness and also reinstated the district court’s award of double-damages.*

The appellate panel also affirmed the award of attorney fees as an “exceptional case” under Section 285.   In addition to the willfulness, the district court also found that Cisco’s litigation approach was unduly aggressive in a way that required excess work for both SRI and the Court.

There can be no doubt from even a cursory review of the record that Cisco pursued litigation about as aggressively as the court has seen in its judicial experience. While defending a client aggressively is understandable, if not laudable, in the case at bar, Cisco crossed the line in several regards.

Cisco’s litigation strategies . . . created a substantial amount of work for both SRI and the court, much of which work was needlessly  repetitive or irrelevant or frivolous. . . .

Examples included:

  • Maintaining 19 different invalidity theories until the eve of the trial, but ultimately only presenting two at trial;
  • Presenting weak non-infringement theories that were contrary to the prior claim construction;
  • Exhaustive summary judgment and sanctions efforts;
  • Over designating deposition testimony for trial; and
  • Pursuing every possible post-verdict defense.

In the end, there was no abuse of discretion to find this case exceptional and award attorney fees.

= = =

* Note that in the original appeal the appellate panel drew a hard line against enhancement of damages that accrued prior to Cisco’s knowledge/disregard of the patents at issue.  It turns out that issue was not even up on appeal in the original case. The court now writes that “[t]he parties informed this court for the first time in this appeal that the district court’s award of double damages in SRI I applied only to damages for infringing activity after notice was given to Cisco.”



In re: Juniper Networks

By Jason Rantanen

In re: Juniper Networks (Panel: Judges Lourie, Bryson, Taranto)

By my count, it’s been over a month and a half since the Federal Circuit issued a decision granting a petition for writ of mandamus arising from the Western District of Texas.  (That decision was In re: Hulu on August 2, 2021.)  That streak has come to an end, as today the court issued In re: Juniper Networks.

Like other petitions for a writ of mandamus arising from the Western District of Texas, Juniper Networks, Inc.’s petition concerned the denial of a request for transfer under 28 U.S.C. § 1404(a).  The case itself involves an assertion of patent infringement by WSOU Investments LLC (referred to as “Brazos”) against Juniper that was filed in the Western District of Texas.  Juniper, a Delaware corporation headquartered in Sunnyvale, California (for those who aren’t familiar with the area, that’s Silicon Valley), moved to transfer to the Northern District of California.  Judge Albright denied the motion, reasoning that under the four private interest and four public interest factors governing which district is more convenient, Juniper had not established that the Northern District of California was a clearly more convenient forum for this litigation.

The Federal Circuit reversed in a per curium opinion.  Under the law of the Fifth Circuit, “a motion to transfer venue pursuant to section 1404(a) should be granted if ‘the movant demonstrates that the transferee venue is clearly more convenient.'” Slip Op. at 6, quoting In re Radmax, Ltd., 720 F.3d 285 (5th Cir. 2013).  Here, Judge Albright committed legal errors that required the granting of the petition.

Starting at the top, “the relative convenience for and cost of attendance of witnesses between the two forums is ‘probably the single most important factor in transfer analysis.'”  Slip Op. at 7, quoting In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009).  Here, the district court didn’t give it the appropriate weight, especially since there was a big imbalance in terms of witness convenience.  Instead, the district court cited its own prior decisions for giving little weight to the identified witnesses – which was a problem since those propositions had previously been directly rejected by the Federal Circuit.

The district court also erred in its application of the local interest factor.  Most of the events forming the basis for Brazos’s infringement claims occurred in the Northern District of California and none occurred in the Western District of Texas.  This was enough to give the tranferee court a local interest.  Contrary to the district court’s reasoning, Juniper’s lease of a small office in Austin by the defendant for something that had no connection with the accused products wasn’t sufficient to establish a local interest.  A company’s general presence in a district are not enough to establish a local interest comparable to the events that gave rise to the suit.  Nor was Brazos’s status as a Waco-based entity incorporated in Texas entitled to significant weight: “The office was established only a few months before the complaints against Juniper were filed, and the activities of the office are largely tied to bring lawsuits in that court.  Brazos has only two employees who work from Waco, one of whom is its in-house attorney responsible for litigation.  The principal officers of Brazos are located in California.”  Slip Op. at 10.  “We have noted in other mandamus cases that little or no weight should be accorded to a party’s ‘recent and ephemeral’ presence in the transferor forum, such as by establishing an office in order to claim a presence in the district for purposes of litigation.”  Id.

The Federal Circuit also concluded that the district court erred in its assessment of the sources of proof and need for compulsory service factors, but the most interesting to me was the the final error that the Federal Circuit identified: the district court’s conclusion that the court-congestion factor weighed against transfer based on Brazos’s assertion that the Texas forum had a faster median time to trial than the California forum.  But, the Federal Circuit pointed out, the district judge’s “faster time to trial” statistic was based on scheduled trial dates (my emphasis), i.e.: those set out in Judge Albright’s aggressive scheduling order.  In any event, the Federal Circuit concluded that the relative speed with which this case may be brought to trial was not of particular significance, as the “court congestion” factor is the “most speculative of the factors bearing on the transfer decision.” Slip Op. at 14.

Ultimately, the Federal Circuit concluded, this was essentially the same as the recent decisions in Samsung and Hulu, both of involved situations in which several of the most important factors strongly favored the transferee court and no factor favored retaining the case in the transferor court.

As an ending note, the Federal Circuit also denied a petition for a writ of mandamus arising from the Court of Appeals for Veterans Claims in In re: Fermin on the basis that “mandamus relief is not appropriate when a petition fails to seek relief through the normal appeal process.”  Here, the petitioner’s prior appeal to the Federal Circuit had been dismissed for lack of subject matter, the petitioner had filed a motion to reconsider at the Veterans’ Court (which the court denied), and had not appealed the Veterans’ Court’s denial of that motion.  “Because [the petitioner] here failed to seek review of the Veterans Court’s order by way of a timely filed direct appeal, we must deny his request for this extraordinary relief.”  Slip Op. at 2.

Missing Decisions and the Federal Circuit

By Jason Rantanen

Last week the Federal Circuit issued two interesting orders in appeals from the USPTO.   In the first, In re Zhu (Appeal No. 2021-1761), Sept. 13, 2021, the Federal Circuit vacated the decision of the PTAB and remanded the case to the PTO “for reconsideration of whether the claims are directed to an improvement in computer functionality, especially in light of this court’s recent case law.”  (internal quotations and brackets removed).  The context of this, according to Tiffany Hu, was the Federal Circuit’s 2020 Uniloc v. LG ruling together with the PTO’s own request for a remand “to permit further proceedings” – i.e: this was a patent eligible subject matter issue that the PTO decided to take another look at while the appeal was pending.

The second, In re Boloro (Appeal nos. 2019-2349, -2351, -2353), Sept. 16, 2021, was an order by the Federal Circuit remanding the case to allow Bolero to request Director rehearing of the final written decisions in light of the Supreme Court’s decision in United States v. Arthrex, Inc., 141 S.Ct. 1970 (2021).   The Federal Circuit had previously issued an order remanding the case for assignment to a different panel, its earlier remedy for the Constitutional appointments issue with patent judges.  As Andrew Karpan recently wrote, this order extends the effects of Arthrex to ex parte appeals.

On their own, neither of these orders are that notable.  They are nonprecedential orders that contain little more explanatory reasoning than a summary affirmance under Rule 36.  On the other hand, they were enough for Law360 authors to write about.

What’s more interesting is that neither was posted to the Federal Circuit’s website.  They’re only available in PACER.  This is not itself all that unusual.  Historically, dispositive orders like these would vanish into the ether – becoming what Merritt McAlister recently characterized as Missing Decisions.  They are never published in reporters, including the Federal Appendix, and aren’t in the major research databases.  Indeed, I didn’t find either of these decisions in Westlaw or Lexis when I searched yesterday afternoon.  Yet, they are judicial decisions, and in an age where lawyers, judges and scholars have come to think that all law (or at least, all appellate decisions) is easily accessible, they highlight that it’s not.

In a forthcoming essay response to Professor McAlister’s Missing Decisions, I examine the one federal appellate court that for technical reasons McAlister didn’t  include: the Federal Circuit.  What I find is that the Federal Circuit is quite good about putting its opinions and Rule 36 summary affirmances on its website.  But there are also a lot of missing decisions, which are concentrated in certain areas.  This is concerning if our frame of reference for judicial decisionmaking is defined by what’s readily available on court websites and commercial legal databases.

Here are my main findings:

  • Based on a comparison of docketed appeals filed between 2008 and 2018 to decisions posted to the Federal Circuit’s website, 45% of docketed appeals are decided in an opinion released on the court’s website, 17% are decided in a Rule 36 summary affirmance released on the court’s website, and the remaining 37% have neither an opinion nor Rule 36 available on the court’s website.
  • The number of documents released by the court on its website are about the same as the number of documents available in the big commercial legal databases (Westlaw, Lexis & Bloomberg).  This may be because, as McAlister describes, these sites tend to pull directly from the same pool that is posted to the court’s website or just collect directly from the court’s website.
  • Taking a closer look at appeals filed in 2015, of the 497 docketed appeals without a terminating document available on the court’s website (31% of the total), a large portion involved voluntary dismissals by the appellant (303) or the parties jointly or dismissal for failure to prosecute (72).  However, there were a moderate number of appeals dismissed for lack of appellate jurisdiction (31), transferred (23), and even decided by a merits order (16).  None of these were released on the court’s website and when I looked for some of them in Westlaw and Lexis, they weren’t there either.  All were designated as “nonprecedential.”

The bottom line is that when it comes to substantive merits decisions and decisions designated by the court as “precedential,” almost all of these appear to be on the court’s website.  But there’s a host of other nonprecedential decisions–many dealing with jurisdictional issues–that aren’t.  There are also decisions in petitions for writs of mandamus, which the court currently appears to mostly be releasing on its website although that hasn’t always been the case.

Given all this, my recommendation parallels that of McAlister: the Federal Circuit should release all dispositive orders on its website, not just decisions labeled as “opinions” or summary affirmances under Rule 36.  This would be consistent with both its practice of releasing Rule 36 summary affirmances (which contain less judicial reasoning than most of the dispositive orders that it doesn’t release) and the overall goal of judicial transparency about decisions.  And for those who think that having access through PACER alone is enough, Prof. McAlister and others have described in depth why that’s not the case.

There’s more in the essay itself, which also contains links to the data I used archived on the Harvard Dataverse.    Here’s a link to the preprint of the essay: Missing Decisions and the Federal Circuit.

Thanks to Dmitry Karshtedt for calling these two Law360 articles to my attention.  And here are copies of In re Zhu and In re Boloro that I pulled from PACER.

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