Dann v. Johnston, 425 U.S. 219 (1976): Invention as the Absolute Prerequisite to Patentability

Patent,

In the past 50 years, the Supreme Court has decided about 70 patent cases (depending upon how you count).  One of the least cited is the 1976 case of Dann v. Johnston, 425 U.S. 219, 225 (1976). The case was set-up as a showdown on questions of patent eligibility in the “highly esoteric field of computer technology.”  Id. But, in the end, the court focused on the more mundane question of obviousness — a doctrine it continued to refer to as “invention.”

Johnston was seeking to patent a “record-keeping machine system for financial accounts.”  Basically, this was software installed on a bank-owned IBM 1400 that allowed its customers to categorize their income and expenses for better reporting.

The Patent Office rejected the claims, but the CCPA revived them. That 3-to-2 decision included a narrow interpretation of Gottshalk v. Benson, 409 U.S. 63 (1972), concluding that the case only applied to process or method claims.

The issue considered by the Supreme Court in Benson was a narrow one, namely, is a formula for converting binary coded decimal numerals into pure binary numerals by a series of mathematical calculations a patentable process?

In re Johnston, 502 F.2d 765 (C.C.P.A. 1974). Since Johnston was patenting a system, Benson was deemed irrelevant by the CCPA majority.  Judge Rich wrote in dissent, and argued that the invention was barred under Benson. To be clear, Judge Rich was not a fan of Benson, but he took the Court’s decision as law, albeit warty.  He explained:

As the author of the opinion of this court in Benson, which was wholly reversed, I have not been persuaded by anything the Supreme Court said that we made a “wrong” decision and I therefore do not agree with the Supreme Court’s decision. But that is entirely beside the point. Under our judicial system, it is the duty of a judge of a lower court to try to follow in spirit decisions of the Supreme Court— that is to say, their ‘thrust.’

Id. (Judge Rich in dissent).   Still, the big question was what to take-away from Benson and Judge Rich suggested that the focus should not be limited by the Supreme Court’s wording.

I am probably as much – if not more – confused by the wording of the Benson opinion as many others. What the Court did in its decision … contains a message that is loud and clear. If those claims are not to patentable subject matter, neither, in my view, are the claims here, regardless of difference in form.

Id.  Judge Markey also wrote a dissent that foreshadowed the eventual Supreme Court decision. Markey argued that Johnston’s claims were invalid based upon the prior art and that the eligibility questions should be avoided.

After losing before the CCPA, the government then petitioned for Supreme Court review in the name of Marshall Dann, who was President Nixon’s Commissioner of Patents.  The petition includes three questions:

  1. Whether the Supreme Court’s holding in Benson, that a new idea to be implemented by programming an existing computer is unpatentable when claimed as a new “process,” also applies when the programmed computer is claimed as a new “machine system.”
  2. Whether programs for existing general purpose digital computers, however claimed, are patentable under present law.
  3. Whether respondent’s idea of having banks provide an additional bookkeeping service by programming their computers to sort check and deposit data in accordance with category codes was in any event no more than an obvious improvement over the prior art.

Johnston’s attorney Morton Jacobs drafted the patent application and also argued the case all the way to the Supreme Court (eventually losing).  The responsive brief recategorized the questions in an interesting way:

  1. Whether in the absence of specific congressional exclusion, a special purpose computer machine can be excluded from the general class of machines constituting statutory matters under 35 U.S.C. 101 by reason of its construction with software rather than hardware for its programming elements.
  2. Whether the Patent Office denial of patents for “software” emobidments of special-purpose computers while granting patents to “hardware” embodiments is a denial of equal protection of the patent laws.
  3. Whether an automatic record-keeping machine for all types of small-volume users (e.g., merchants, professionals, farmers) that enables each to use an individualistic record-keeping format and bookkeeping procedure, and that employs, inter alia, a general control for directing the processing operations that are common to most users, which control interacts with and is directed by a master control located in the data files for directing the operations that very with each user, is an unobvious improvement over the prior art.

The unanimous Supreme Court decision was authored by Justice Thurgood Marshall and expressly avoided the questions of patentability of software or computer programs.  Rather, the court found the claims obvious.

The opinion began with a recitation of the doctrine:

As a judicial test, “invention” – i.e., “an exercise of the inventive faculty” – has long been regarded as an absolute prerequisite to patentability. However, it was only in 1952 that Congress, in the interest of “uniformity and definiteness,” articulated the requirement in a statute, framing it as a requirement of “nonobviousness.” . . .

This Court treated the scope of § 103 in detail in Graham v. John Deere Co., 383 U.S. 1 (1966). There, we held that § 103 “was not intended by Congress to change the general level of patentable invention,” but was meant “merely as a codification of judicial precedents… with congressional directions that inquiries into the obviousness of the subject matter sought to be patented are a prerequisite to patentability.” While recognizing the inevitability of difficulty in making the determination in some cases, we also set out in Graham, the central factors relevant to any inquiry into obviousness: “the scope and content of the prior art,” the “differences between the prior art and the claims at issue,” and “the level of ordinary skill in the pertinent art.”

Dann v. Johnston, 425 U.S. 219, 226 (1976). In analyzing the claims, the court concluded that it need not find a prior art equivalent to each and every claim limitation.  Rather, the focus of the test is the significance of the differences to one of skill in the art.

[I]t must be remembered that the “obviousness” test of Section 103 is not one which turns on whether an invention is equivalent to some element in the prior art but rather whether the difference between the prior art and the subject matter in question “is a difference sufficient to render the claimed subject matter unobvious to one skilled in the applicable art. . . .”

Id. (quoting Judge Markey’s dissent in Johnston).  It is not entirely clear what point the court was making in noting that the referenced prior art were “closely analogous” but not “equivalent.”

[T]he mere existence of differences between the prior art and an invention does not establish the invention’s nonobviousness. The gap between the prior art and respondent’s system is simply not so great as to render the system nonobvious to one reasonably skilled in the art.

Reversed.

Of note, the court’s statement here of the foundations for obviousness from Graham did not include includes secondary indicia such as commercial success.  Later in the opinion, Justice Marshall added a footnote recognizing that their potential relevance in an obviousness analysis.  However, the opinion also reiterated the statement from the checkout-counter case – Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147 (1950) – that “commercial success without invention will not make patentability.”  Justice Jackson’s concluding statement in that case may be equally applicable to Johnston: [The patentee had] “a good idea, but scores of progressive ideas in business are not patentable, and we conclude on the findings below that this one was not.” Id.

In the end, Dann v. Johnston is something of a dud, a sloppy reverb of Graham. The key takeaways going forward:

  1. Obviousness does not require equivalence in the prior art.
  2. Patentees are charged with awareness of the prior art, even in fast-moving technologies.
  3. “[E]xercise of the inventive faculty [is] an absolute prerequisite to patentability.”
  4. “[C]ommercial success without invention will not make patentability.”

[Read it here]

More Venue and Corporate Games: This time with ANDA filing

Patent

Celgene Corp. v. Mylan Pharma (Fed. Cir. 2021)

The 2017 Supreme Court decision in TC Heartland gave renewed teeth to the venue statute governing litigation. 28 U.S.C. 1400(b). There are two different ways to show proper venue:

  1. Venue by Residence: Venue is proper if the defendant(s) reside in the district where the case is filed. If a non-human person, this requires being incorporated within the state (or the like).
  2. Venue by Infringement and Place of Business: Alternatively, venue is proper in a district where the defendant has (allegedly) “committed acts of infringement” and also “has a regular and established place of business.”

It is usually fairly straightforward to determine some location for the “acts of infringement” if we’re talking about making, using, selling, etc.

This case focuses on the unique paper-filing infringement of Section 271(e)(2)(A).   That provision defines infringement as seeking approval from the FDA to market a drug that is covered by a patent. Thus, a generic drug distributor infringes by simply submitting its ANDA application with a Paragraph IV certification.

It shall be an act of infringement to submit . . . an [Abbreviated New Drug Application] for a drug claimed in a patent or the use of which is claimed in a patent  . . . if the purpose of such submission is to obtain approval … to engage in the commercial manufacture, use, or sale of a drug … claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.

Id. For venue, we need to know the location of that “act of infringement.”

Celgene markets a drug treatment for multiple-myeloma (pomalidomide) covered by several of its patents. Mylan created and submitted an ANDA to the FDA, requesting permission to make a generic version of the drug and arguing that the Celgene’s patents were invalid.

Celgene then sued in D.N.J. and Mylan argued improper venue.  Notably, Mylan argued that it is not incorporated in N.J., it does not have any regular-and-established place of business in N.J., and it did not commit acts of infringement in N.J. The state-of-incorporation was not contested, but the other two factors were hotly debated.

Lets talk first about acts of infringement.  Remember for 271(e), the act of infringement is submitting the ANDA to the FDA.  Here, Mylan created its ANDA documents at its West Virginia office and submitted them electronically from that location.  The FDA is headquartered in Maryland, and that was the office that received the ANDA documents.  Thus, it is clear that Mylan’s acts were in W.V., and probably also in Maryland, but not in N.J.

Celgene had a couple of OK arguments:

(1) The intent and effect of the Hatch-Waxman process is national, and thus the acts of infringement should be deemed to have been committed in all states.  This argument was quickly rejected by the court.

(2) The ANDA process requires mailing of a Paragraph IV notice letter to the patentee listed in the Orange Book. And, that letter is required to trigger the Hatch-Waxman timeline.  Mylan did so — sending the letter from W.V. to N.J.   Although the notice letter is a critical aspect of the Hatch-Waxman process, the Federal Circuit found that the letter was not an “act of infringement” as required by the venue statute.  Rather, Section 271 is clear that the act of infringement is submitting the ANDA to the FDA.

Thus, Mylan did not commit any acts of infringement in N.J., and therefore venue in that state is improper.

With regard to the regular-and-established place of business, the court found that the home-offices of several Mylan employees were not sufficient to satisfy that prong of the venue statute.  “Allowing” employees to work in a particular judicial district is not sufficient to find that their homes were the defendant’s place of business.

Celgene also pointed to a wholly owned Mylan subsidiary that, until 2017, did have a  HQ and regular place of business in N.J. On appeal, the Federal Circuit agreed with the lower court that the venue requirement strictly follows corporate lines absent a successful “alter-ego or veil-piercing theory.”  Here, there was not sufficient evidence to consider the sub as the parent’s alter ego.   Sharing marketing and receiving administrative support is insufficient.  Likewise, two separate companies can share the same directors or executives.

= = = =

In the lawsuit, the patentee sued Mylan Pharmaceuticlas Inc. (MPI), Mylan Inc., and Mylan N.V.   This is just a chain of subsidiaries: Mylan N.V. owns Mylan Inc.; Mylan Inc. owns MPI.   MPI is the company that submitted the ANDA, but the complaint does not explain how Mylan N.V. was involved with the submission.  Thus, the district court properly dismissed the claims against Mylan N.V. for failure to state a claim upon which relief could be granted.

Patently-O Bits and Bytes by Juvan Bonni

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It Works: The Value of “Effective” Claim Limitations

Patent

by Dennis Crouch

University of Strathclyde v. Clear-Vu Lighting LLC (Fed. Cir. 2021)

The Federal Circuit’s recent Strathclyde decision focuses on claim limitations that require the invention to be effective.  One oddity of the decision is that the court (and the PTAB below) treat the limitation with full respect just like any other structural limitation.

Researchers at Strathclyde conducted a set of experiments and found that certain blue light (~405 nm wavelength) was effective at inactivating methicillin-resistant Staphylococcus aureus (MRSA) even at low intensity and without first applying a photosensitizing agent.  The resulting method claim focuses on this discovery and includes one simple step — inactivating MRSA bacteria by exposing it to blue (400-420 nm) light and without using a photosensitizer. U.S. Patent No. 9,839,706.

It turns out that the prior art (Nitzan) discloses a series of experiments using the same blue light and testing its effectiveness at inactivating MRSA bacteria. The tests compared the response of untreated bacteria as compared with bacteria treated with a photosensitizing agent.

Nitzan’s prior art procedure was identical to that claimed by Strathclyde with only one key difference.  Nitzan found that none of the MRSA bacteria were killed by the blue light without first applying a photosensitizing agent.  The patentee  (Strathclyde) later used the same frequency of blue light without a photosensitizing agent, and this time it worked to inactivate MRSA.

Thus, the only difference between Strathclyde’s claimed invention and the prior art is the requirement that the invention actually work to “inactivate” the bacteria.

1. A method for disinfecting … by inactivating … pathogenic Gram-positive bacteria … comprising exposing the … bacteria to visible light without using a photosensitizer … and wherein a portion of the visible light that inactivates the … bacteria consists of wavelengths in the range 400-420 nm. . .

Claim 1 of the ‘706 patent.  Traditionally, a functional “resulting” or “whereby” clause is only given patentable weight if it provides some structure or acts that are used to define the invention itself.  For instance, in drug treatment cases, “effective amount” limitations can be used to define the amount of drug given to the patient. Here, however, the “inactivating” limitation does not appear to change any particular structure or acts and so, in my view, does not add patentable weight.

The invention here seems quite important–treating MRSA using otherwise harmless light and without potentially toxic chemical pre-treatment.  And, Strathclyde should be able to patent the  advances that it introduced that actually contributed to the success. I suspect that Strathclyde did do something different than Nitzan in terms of light intensity or frequency of treatment, or some other conditions.  But, the claims here do not require a person of skill in the art to do anything different than Nitzan except achieve a different outcome. Clear-Vu did not make these patentable weight arguments to the Federal Circuit and the Federal Circuit did not raise them sua sponte.

This case was before the PTAB via IPR. The PTAB originally sided with the patent challenge Clear-Vu.  The PTAB concluded that Nitzan taught all of the elements of the invention except for actual success at killing MRSA.  However, another reference Ashkenazi suggested ways that someone of skill in the art would find obvious in terms of increasing light intensity to kill some of the bacteria.  Thus, the PTAB found the claims obvious.

On appeal, the Federal Circuit has reversed and reinstated the patent.  The court noted the complete absence of any prior art indicating that blue light alone would kill MRSA without a chemical pre-treatment to sensitize the bacteria.  Further, there was evidence that such an approach would fail.  Still Strathclyde succeeded and, according to the Federal Circuit, deserve its patent.

On this record, we conclude that no reasonable fact finder could have found that the combination of Ashkenazi and Nitzan discloses inactivating one or more Gram-positive bacteria without using a photosensitizer. The Board’s finding to the contrary is not supported by substantial evidence.

Slip Op.

Guest Post: Patents in Islamic Law

Patent

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

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

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

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

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

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

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

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

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

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

Letter to the Chief Justice about Judge Albright. 

Patent

For anyone looking for legislative action supporting patent holders.  Let me tell you, not this year.

Rather, in a bipartisan letter Senators Tillis and Leahy have asked Chief Justice Roberts to provide a report on the “extreme” and “problematic” situation in the Western District of Texas where pro-patentee Judge Albright is hosting about 25% of all pending district court patent litigation.

Letter to the Chief Justice about Judge Albright.

Hon. Judge Stark to be Appointed to the Federal Circuit

Patent

by Dennis Crouch

Delaware was already a popular venue for patent cases before the Supreme Court’s 2017 venue decision in TC Heartland. Since 2017, it has moved from popular to hot since so many companies are formally incorporated in the state.  (State of incorporation => proper venue in patent cases).  Delaware particularly been seen as a fair jurisdiction where both plaintiffs and defendants receive a full and fair hearing.  Thus, it is a popular spot for operating companies to sue as plaintiffs, knowing that they may face affirmative counterclaims in the same lawsuit.

The Federal Court in Delaware has four judges, all of whom now have a substantial patent litigation caseload. This includes the most senior, Hon. Leonard P. Stark who was appointed by President Obama back in 2010.  At the time, Joe Biden was Vice President of the United States and I am confident that he had a hand in selecting Judge Stark for that position.   Judge Stark was previously a magistrate judge and an assistant US attorney, all in Federal Court in Delaware.

The White House has announced that it intends to elevate Judge Stark–nominating him to serve as a Circuit Judge on the Court of Appeals for the Federal Circuit.  He will replace Judge Kathleen O’Malley who has indicated her intent to retire in March 2022.  Judge O’Malley is the only current Federal Circuit judge with extensive experience at the trial court level, and Judge Stark brings that same type of background.

The following comes from the White House press release:

Judge Leonard Stark: Nominee for the United States Court of Appeals for the Federal Circuit

Judge Leonard Stark has served as a United States District Court Judge for the District of Delaware since 2010. Judge Stark served as Chief Judge for the District of Delaware from July 2014 to June 2021. Previously, he served as a United States Magistrate Judge for the District of Delaware from 2007 to 2010. From 2002 to 2007, Judge Stark served as an Assistant United States Attorney in the United States Attorney’s Office for the District of Delaware, where he worked in both the criminal and civil divisions. From 1997 to 2001, Judge Stark was an associate in the Wilmington, Delaware office of the law firm Skadden, Arps, Slate, Meagher & Flom LLP. He served as a law clerk for Judge Walter Stapleton on the United States Court of Appeals for the Third Circuit from 1996 to 1997.

Judge Stark received his J.D. from Yale Law School in 1996., a D. Phil. from the University of Oxford as a Rhodes Scholar in 1993, and a B.A., B.S., and M.A., summa cum laude and Phi Beta Kappa, from the University of Delaware in 1991.

Congratulations Judge Stark.

Venue Mandamus Petitions Continue to Flow to the Federal Circuit

Patent

by Dennis Crouch

We’ve been writing a lot about venue and mandamus petitions at the Federal Circuit.  The cases continue to flow to the court, and will continue so long as appellate panels continue to entertain them.

In October 2021, 10 new mandamus petitions were filed to the Federal Circuit in patent cases.

  • 22-100 In re: Overhead Door Corporation (E.D. Tex.) (proper but inconvenient forum);
  • 22-101 In re: Advanced Micro Devices, Inc. (W.D. Tex.) (proper but inconvenient forum);
  • 22-103 In re: Arista Networks, Inc. (W.D. Tex.) (proper but inconvenient forum);
  • 22-104 In re: Google LLC (W.D. Tex.)  (proper but inconvenient forum);
  • 22-105 In re: Amperex Technology Limited (D.N.J.) (proper but inconvenient forum);
  • 22-106 In re: Juniper Networks, Inc. (E.D. Tex.) (proper but inconvenient forum);
  • 22-107 In re: Medtronic, Inc. (W.D. Tex.) (arguing both improper venue and also inconvenient forum);
  • 22-108 In re: Volkswagen Group of America, Inc. (W.D. Tex.) (improper venue; are dealerships a place of business for VW);
  • 22-109 In re: Hyundai Motor America (W.D. Tex.) (improper venue; are dealerships a place of business for Hyundai); and
  • 22-110 In re: Netflix, Inc. (E.D. Tex.) (arguing both improper venue and also inconvenient forum).

I’m quite skeptical of parties use of Section 1404 in patent litigation. All of the parties listed above are major nationwide companies that have successfully litigated in courts across the country.  The motivation behind “convenient forum” litigation is all about judge shopping.  Patentees want certain judges; defendants want different judges.  But, that motivation does not provide any legal basis for transfer of venue.  So, instead parties argue that the file server location in California and the lack of non-stop flights makes it too hard to litigate in Texas.  Truthfully, it is hard for me to believe that the Federal Circuit is so engaged with rescuing these folks from burdensome file transfers.

Patent Law Textbooks: A Micro-Symposium

Patent

By Jason Rantanen

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

The symposium will consist of two panels:

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

These panels will feature authors of the following casebooks:

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

Hope you can join us!

CardioNet’s Signal Transform Invention is Ineligible

Patent

by Dennis Crouch

CardioNet v. InfoBionic (Fed. Cir. 2021)

CardioNet lost at the district court with a summary judgment of non-infringement. On appeal, the Federal Circuit has shifted its judgment–now finding the heart monitor claims ineligible under Section 101.  U.S. Patent Number 7,941,207.

The patent covers a heart monitor that includes a “T wave filter” that helps make sure the signal processor does not confuse the T-wave with the R-wave.

Asserted claim 20 is directed to a “cardiac monitoring apparatus” with the T wave filter.   In particular, the claim requires four elements:

  • a communications interface;
  • a real-time heart beat detector;
  • a frequency domain T wave filter; and
  • a selector that activates the T wave filter.

The claim also has a resulting wherein clause: “wherein the activated frequency domain T wave filter preprocesses a cardiac signal provided to the real-time heart beat detector.”

The district court found an abstract idea of “filtering raw cardiogram data to optimize its output;” but concluded that the claim also included a curative “something more” and so survived under Alice step two. In particular, the district court found that the claim was “tied to a machine” and therefore satisfied “the machine-or-transformation test.” On appeal, the Federal Circuit found this to be the wrong test.

The Federal Circuit agreed that the claims are directed to an abstract idea.  In particular, the court effectively held that any computational signal transformation is an abstract idea:

At bottom, filtering the data requires only basic mathematical calculations, such as “decompos[ing] a T wave into its constituent frequencies and multipl[ying] them by a filter frequency response.” And such calculations, even if “[g]roundbreaking,” are still directed to an abstract idea.

Slip Op.   At step two, the Federal Circuit disagreed with the lower court and found that the claimed invention lacked any inventive concept beyond the excluded abstract idea.  On this point, the court noted the existence of prior art for attenuating the T-wave.  In other cases, the court has held that such a comparison with prior art is not relevant to the eligibility inquiry.

Machine or Transformation: In Bilski, the Supreme Court explained that the machine-or-transformation test was an important “clue” to patent eligibility.  However, the court there was clear that machine-or-transformation was not the test.

This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible “process.”

Bilski v. Kappos (2010).   In this case, the court found that the claim is “technically tied to a machine” but its focus is actually the abstract signal transformation. The court explained that merely “formulating a claim in the form of an apparatus” does not protect it from eligibility challenge.

To the extent that formulating a claim in the form of an apparatus insulates it from an ineligibility attack if it only recites conventional components for performing an abstract idea, the Supreme Court has closed that door, at least for now.

Slip Op.

This is the third CardioNet case before the Federal Circuit and so the trio offers a good set of comparisons.  Although all three relate to heart monitor patents, the patents and claims differ from one another.

CardioNet v. InfoBionic: Patenting a Diagnostic Tool

Patent Patent Patent

Patent

For these numbers, I aggregated all opinions filed with each decision.  The leading decision appears to be Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) with several hundred “patent” repeats across the four opinions in that en banc decision.

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

Patent

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*          *          *

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

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

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

Patent Law at the Supreme Court October 2021

Patent

The Supreme Court has not granted a writ of certiorari in any patent cases this term, and has now denied certiorari in two dozen.  Still, there are a number of important cases pending that could be transformative if granted.

Two leading petitions before the court are:

  • American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, No. 20-891 (eligibility); and
  • PersonalWeb Technologies, LLC v. Patreon, Inc., No. 20-1394 (issue and claim preclusion).

In both of these cases, the Supreme Court has requested that the Solicitor General offer the views of the U.S. Gov’t on whether the court should grant certiorari.  Although I am not privy to the exact timeline, I believe that there is a good chance that the SG’s brief in American Axle will be submitted by the end of December 2021.  The PersonalWeb brief is unlikely to be submitted until later in the spring.  American Axle clearly has the largest potential impact if the Supreme Court were to either (1) change course on eligibility; or (2) double-down on an expansive doctrine.

Two petitions will be considered by the court in upcoming days:

  • ENCO Systems, Inc. v. DaVincia, LLC, No. 21-457 (eligibility); and
  • Ultratec, Inc. v. CaptionCall, LLC, No. 20-1700 (R.36 and retroactive IPR).

I believe that American Axle is a better vehicle for Section 101 issues rather than ENCO, and I expect that the Supreme Court not will give much consideration to the ENCO petition.  It will likely denied even before any action taken on American Axle. Ultratec is interesting to me personally because it relates to some of my prior academic work, and the Supreme Court called for responsive briefing in the case. That said, the Gov’t brief in opposition is extremely dismissive of Ultratec’s arguments.  This suggests that the Supreme Court will not hear the case.

The Supreme Court has requested responsive briefing in three additional cases:

  • Warsaw Orthopedic, Inc. v. Sasso, No. 21-540 (on petition from the Indiana Supreme Court; arising under jurisdiction)
  • Infinity Computer Products, Inc. v. Oki Data Americas, Inc., No. 21-413 (indefiniteness); and
  • Olaf Sööt Design, LLC v. Daktronics, Inc., No. 21-438 (using claim construction to overturn a jury verdict).

Responsive briefs are expected in the next couple of weeks for these cases.  Although a request for responsive briefing is indicative of some interest in the case, the threshold is quite low and so it is much too early to suggest that these cases are likely to be granted certiorari.  Infinity could be quite big if the Supreme Court took the case and again recalibrated the doctrine of indefiniteness.  In Nautilus, the Supreme Court found that the lower court was too easy on patentees; Infinity argues that the court is now being too hard on patentees.

The remaining four patent petitions are listed roughly in order of their likelihood of being granted certiorari (in my opinion). I expect that the Mylan and Apple petitions would be granted as a pair, if granted at all.

  1. Mylan Laboratories Ltd. v. Janssen Pharmaceutica, N.V., No. 21-202 (NHK-Fintiv rule for denying petitions; appealability of IPR petition denial);
  2. Apple Inc. v. Optis Cellular Technology, LLC, No. 21-118 (mandamus review of IPR petition denial);
  3. Infineum USA L.P. v. Chevron Oronite Company LLC, No. 21-350 (mid-Arthrex issue, potential for GVR with instructions for PTO Director to place his imprint on the decision); and
  4. Bongiorno v. Hirshfeld, No. 21-6050 (pro se; eligibility).

There is one final case that has some filings at the Supreme Court:

  • Apple Inc., v. Qualcomm Inc., No 21A39 (Standing of portfolio licensee to challenge individual patents in court).

Apple has not yet filed its petition but did indicate its plan to do so in a request for extension of time.  Its initial petition is now due November 17, 2021.

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A few non-patent IP cases pending before the Supreme Court of some interest:

  • Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., No. 20-915 (referral of copyright litigation issues to copyright office) (this is the only one granted certiorari, oral arguments set for November 8, 2021);
  • Ezaki Glico Kabushiki Kaisha v. Lotte International America Corp., 19-3010 (functional trade dress)
  • Sulzer Mixpac AG v. A&N Trading Co. (functional trade dress);
  • Impax Laboratories, Inc. v. Federal Trade Commission, No. 21-406 (reverse payment patent settlement).
  • Belmora LLC, et al. v. Bayer Consumer Care AG, No. 21-195 (impact of foreign use on trademark rights in the US);
  • Australian Leather Pty. Ltd., et al. v. Deckers Outdoor Corporation, No. 21-513 (impact of foreign use on trademark rights in the US);

Next UPSTO Director: Kathi Vidal

Patent

by Dennis Crouch

President Biden has nominated leading patent litigator Kathi Vidal as the next USPTO director.  Vidal is currently at Winston & Strawn, leading the company’s Silicon Valley office. She was previously with Fish & Richardson. [Announcement]

Vidal has all the qualifications.  Bachelor’s and Master’s degrees in electrical engineering (starting college at age 16); JD from Penn (EIC of the law review); Federal Circuit clerkship (Judge Schall); registered patent attorney; and litigated patent cases in courts across the country, including the PTAB.  She represented Chamberlain whose garage door opener patents were obliterated by the eligibility revolution of Bilski–Mayo-and-Alice.  At the same time, Vidal has represented many accused infringers.

Great pick.  I have known Vidal for years, and am confident that she will be an amazing leader of the agency.

The Senate will need to confirm this appointment, but I do not foresee any holdup for this candidate.

 

The U.S. Court of Appeals for the Federal Circuit assesses the equitable powers of a legislative court: the Court of Appeals for Veterans Claims.

Patent

This guest post was authored by Joel Smith, a 3L at the University of Missouri School of Law, with support from the team at the Mizzou Law Veterans Clinic.

Why is there a post about a veterans law case on a patent law blog? The U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”), of course! Like patent office cases, when decisions of the Veterans Administration (“VA”) are appealed to the federal court system, the cases are not heard in your everyday district courts, but instead in everyone’s favorite court with nationwide jurisdiction. Currently pending before the en banc Federal Circuit is Taylor v. McDonough, No. 2019-2211 (Fed. Cir.).

The case involves the plight of Bruce R. Taylor, a Vietnam era Army veteran seeking compensation for disabilities resulting from his service. Before serving two tours overseas, Mr. Taylor volunteered to serve his country in a unique fashion—as a test subject. In 1969, the Army sought soldiers on which it would test toxic chemicals such as nerve gas. The Army’s purpose was to learn how its soldiers would function when exposed to agents that combatants might experience in service. Soldiers were given doses of an array of toxic substances and subjected to training exercises to measure performance. As a result of Mr. Taylor’s participation, he suffers from disabilities that the VA found eliminate his ability to work. In accordance with statute, the VA awarded Mr. Taylor monthly compensation.

Since the VA awarded benefits, what is the problem?

In addition to monthly compensation, the VA is required to pay lump sum compensation covering the time before benefits were awarded. Despite Mr. Taylor having suffered from his disabilities since he left the Army in 1971, the VA is refusing to provide backpay for the time between his service and when he filed his benefits claim in 2007. The VA cites a statute that limits the effective date of claims–which determines the start date for back pay–to when the veteran filed for benefits. 38 U.S.C. § 5110(a)(1) provides that “the effective date of an award…shall not be earlier than the date of receipt of application[.]”

Mr. Taylor claims the government interfered with his statutory right to disability compensation. Prior to participating in the tests, Mr. Taylor was required to sign an oath of secrecy that, if broken, would subject him to criminal prosecution and a dishonorable discharge—a rating that would render him ineligible for benefits. To file an adequate claim for disability benefits, Mr. Taylor would have needed to disclose his test participation. The “catch-22” of being unable to file for benefits without becoming ineligible for benefits left Mr. Taylor with an inability to exercise his statutory right to request disability compensation.

In 2006, the Department of Defense finally declassified the names of the test participants and instructed the participants to file for benefits. Mr. Taylor did so in early 2007. The VA responded to the claim by awarding monthly disability benefits with an effective date of 2007. Mr. Taylor requested the VA to instead award an effective date of the day after his discharge due to the aforementioned government interference. After exhausting his administrative remedies without relief, Mr. Taylor petitioned a legislative court created for the sole purpose of reviewing decisions of the VA, the Court of Appeals for Veterans Claims (the “Veterans Court”).

Mr. Taylor asked the Veterans Court to apply the doctrine of equitable estoppel to prevent the VA from asserting § 5110 as a defense against his claim for an earlier effective date. Mr. Taylor indicates that but for the oath he would have filed for benefits in 1971. The Veterans Court denied his request because it interpreted its jurisdictional and scope of review statutes as excluding equitable estoppel as an available remedy. The present case is Mr. Taylor’s appeal to the Federal Circuit.

Initially, a three-judge panel held the Veterans Court does possess the power to apply equitable estoppel. The Federal Circuit then voted to rehear the case en banc and the panel decision was vacated. In response to the court’s request for new briefs, the NLSVCC and the Mizzou Law Veterans Clinic filed an amicus brief in support of Mr. Taylor.

The amicus brief argues that the scope of review statute for the Veterans Court, 38 U.S.C. § 7261, does not foreclose the use of equitable estoppel. The legislative history of the statute indicates that Congress initially desired judicial review of VA decisions to occur in Article III courts, with their full judicial power, and fashioned the legislative court that is the Veterans Court only out of concerns regarding the expertise of federal courts and the burden on the federal court system. The history indicates a strong overriding concern for fairness and no concern regarding limiting the use of equitable remedies in veterans cases. The brief also addresses that other legislative courts, such as the bankruptcy and tax courts, possess equitable powers and the Veterans Court’s powers should be evaluated in light of those general designs.

A primary legal hurdle for Mr. Taylor is a precedent in the Federal Circuit. In Burris v. Wilkie, 888 F.3d 1352 (Fed. Cir. 2018), the court determined that applying equitable estoppel was outside the jurisdiction of the Veterans Court. The amicus brief distinguishes Mr. Taylor’s case from Burris by relying on a Supreme Court precedent that held that procedural claims-processing rules do not limit jurisdiction. See Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428 (2011). Characterizing the effective date statute as a procedural rule, the amicus argue that, unlike the substantive statutes relevant to Burris, deviating from the effective date statute would not expand the Veterans Courts jurisdiction because the effective date limit is procedural.

The amicus brief concludes:

In 1990, the Supreme Court left for another day, “whether an estoppel claim could ever succeed against the Government.” Off. of Pers. Mgmt. v. Richmond, 496 U.S. 414, 423 (1990). Three years ago, this Court stated that it had not yet determined “just how far the equitable powers of the Veterans Court, as an Article I tribunal, extend.” Burris v. Wilkie, 888 F.3d 1352, 1361 (Fed. Cir. 2018). In Burris, that question was left for another day.

That day has arrived. Veteran Taylor’s case presents the strongest possible facts upon which this Court should determine equitable estoppel against the Government may succeed, and the Veterans Court has the power to provide such relief.

Briefing is ongoing in the appeal.

= = =

On Oct 29, 2021, the Veterans Clinic is hosting its 8th Annual Symposium.  The symposium is online and free.  Because of their link with the Federal Circuit, veterans cases offer an excellent place for patent attorneys to do pro bono work.  More information here: https://law.missouri.edu/faculty/symposia/2021-veterans-clinic-symposium

 

 

Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

 

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

Patent

By Jonas Anderson, Paul Gugliuzza, and Jason Rantanen

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

 

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

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

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

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

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

*          *          *

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

Modified Opinion for Hyatt on Purposeful Submarining

Patent

Hyatt v. Hirshfeld, 9 F.4th 1372, 1374 (Fed. Cir. 2021), opinion modified and superseded on reh’g, 2020-2321, 2021 WL 4737737 (Fed. Cir. Oct. 12, 2021) [New Opinion]

Earlier this month, the Federal Circuit released a revised opinion in the most recent edition of Hyatt v. Hirshfeld.  The opinion originally released in August 2021 denied the USPTO’s petition to recoup expert witness fees under the “all the expenses” provision of 35 U.S.C. 145.  The original opinion called out Hyatt for “efforts to submarine his patent applications and receive lengthy patent terms.”  Following that decision, Hyatt petitioned for rehearing, asking for removal of that language from the opinion.  The PTO did not file a brief in opposition and the court released a modified opinion with the language removed.  The redline below shows the change:

In the briefing, Hyatt explained that the statement was incorrect, unnecessary, unsupported, and prejudicial to his position on remand.  The petition is a very good example of how to seek targeted relief from a panel for a narrow, but potentially important issue. [HyattRehearingPetition]

Extraordinary Writ or Ordinary Remedy? Mandamus at the Federal Circuit – Part 2

Patent

By Jonas Anderson, Paul Gugliuzza, and Jason Rantanen

This is the second post in a series about our new research project on mandamus practice in the federal courts of appeals generally and the Federal Circuit’s peculiar use of mandamus in patent cases specifically.

Yesterday’s post described the high number of petitions for a writ of mandamus that the Federal Circuit has granted relative to other federal appellate courts over the last few years.  In this post I’ll give further context and detail about the petitions for writs of mandamus at the Federal Circuit.

While Westlaw is a terrific resource, one of its big limitations for empirical research is that it doesn’t necessarily contain all dispositions.   We confirmed that almost all of the granted petitions from recent years are on Westlaw, but a portion of the other terminations are not.

In order to make sure that we had a complete set of all petitions for a writ of mandamus, we started by creating a set of all petitions docketed at the Federal Circuit.  Full details on how we did this will be in the paper, but essentially we began with a set of all dockets at the Federal Circuit from 2000 to the present from PACER, narrowed them to just those with a miscellaneous docket number, then reviewed that those dockets to determine which involved a petition for a writ of mandamus. This gave us a complete set of all petitions for a writ of mandamus filed at the Federal Circuit.  Using this set, we collected any dispositive orders from PACER that we didn’t already have.

Figure 1 shows the number of petitions for a writ of mandamus docketed at the Federal Circuit by year.  It breaks out petitions (1) arising from the Eastern District of Texas (red), (2) arising from the Western District of Texas (blue), and all other origins (which includes all other district courts plus origins such as the PTO, CAVC, etc.).

Figure 1: Petitions for a Writ of Mandamus filed at the Federal Circuit, 2008-September 30, 2021

How many petitions for a writ of mandamus arose from the Eastern District of Texas?  The answer is “a lot,” especially in 2010, 2014 and 2015.  More significant, however, is the enormous increase in petitions arising from the Western District of Texas over the past year.  For 2021, in particular, petitions arising from the Western District of Texas make up almost double the other origins combined.  Overall, the Federal Circuit has already received more petitions for a writ of mandamus this year than it has ever received in any year prior…and there are still three months to go.

Grant Rates of Petitions

The next thing we looked at were outcomes. For this, we switched to looking at the data on a per-document level rather than a per-docket level.  By “document,” we just mean the opinion or order deciding the appeal or petition. For petitions for writs of mandamus, the results are essentially the same when examined at the per-docket level because very few orders decided multiple petitions.

Overall, the Federal Circuit’s grant rate in merits determinations (those that granted, denied or granted in part a petition) was 15% over the period from 2008-2021—that is, the Federal Circuit granted the petition in whole or in part in 58 of the 384 total decisions on the merits.  For an “extraordinary” form of relief, we were surprised at how high this was.

To investigate grant rates further, we started by comparing the grant rates of petitions for a writ of mandamus when the petition originated from a district court to the grant rate for other origins.  Figure 2 shows the outcomes on a per-document basis for 2008 – September 2021.  The top pie charts show the outcomes of merits determinations, while the bottom bar graphs show the other types of dispositions of these petitions.  Most other dispositions consist of voluntary dismissals, but there are also dismissals for lack of appellate jurisdiction and other reasons.

Figure 2: Outcomes in Federal Circuit decisions on petitions for writs of mandamus, 2008-Sept. 30, 2021

There are clear differences in the grant rates for petitions for writs of mandamus between the district courts and other origins.  Whereas the Federal Circuit granted the petition in whole or part in 19% (51 out of 268) of its merits decisions when the petition arose from the district courts, it granted them only 6% (7 out 116) of the time for other origins.

To examine what was going on, we conducted preliminary issue coding to identify those decisions involving some issue relating to venue (all of which originated from a district court).  Figure 3 shows the outcomes for merits decisions when venue was and was not at issue in the decision.

Figure 3: Outcomes in Federal Circuit decisions on petitions for writs of mandamus arising from district courts, 2008-Sept. 30, 2021

The difference is stark: When venue was at issue, the Federal Circuit decision granted the petition in whole or in part 27% of the time.  When venue was not at issue, the grant rate was 7%.

Put another way, for petitions for a writ of mandamus involving an issue other than venue, the grant of a writ of mandamus is a rare event.  But when venue is at issue, the court has granted petitions at a much higher rate.  But is this historically the case or is it a recent event?  In our third post we’ll conclude with additional detail on what’s going on with mandamus on transfer of venue issues at the Federal Circuit.