In re Katz: Managing Complex Patent Suits

By Jason Rantanen

In re Katz Interactive Call Processing Patent Litigation (Fed. Cir. 2011)
Panel: Newman, Lourie, Bryson (author)

Patent litigation is often an astonishingly complex affair.  As proof, one need look no further than In re Katz, an opinion that demonstrates both the heavy burden that patent infringements suits can place on the courts, and the remarkable job that trial and appellate courts do in dealing with those suits.  This post will discuss the CAFC's ruling regarding trial court claim selection procedures in complex patent infringement actions; a subsequent post will focus on the CAFC's review of the summary judgment rulings.

At the core of In re Katz resides the relatively simple concept of a patent holder asserting its patent rights against a group of alleged infringers.  In this instance, however, the patent rights consisted of  "a total of 1,975 claims from 31 patents" asserted against "165 defendants in 50 groups of related corporate entities."  Slip Op. at 6.  Although initially filed in Delaware and Texas, the Judicial Panel on Multidistrict Litigation transferred the actions to the Central District of California for coordinated pretrial proceedings before Judge Klausner.  

In an effort to manage the vast numbers of claims and infringement allegations, Judge Klausner imposed limitations on the number of claims to be addressed in the litigation.  The court "ordered Katz initially to select no more than 40 claims per defendant group, and after discovery to narrow the number of selected claims to 16 per defendant group."  Slip Op. at 7.  Katz was further limited to a total of 64 claims to be asserted against all defendants, although the court included a proviso that Katz could add new claims if they "raise[d] issues of infringement/validity that [were] not duplicative of previously selected claims."  Id. at 7. Katz sought to sever and stay the disposition of all the unasserted claims, contending that the limitations violated its due process rights.  The district court denied Katz's motion, and after granting summary judgment in the defendants' favor on the selected claims, Katz appealed.

On appeal, the Federal Circuit affirmed the district court's ruling on the motion to sever and stay, implicitly approving the court's claim selection procedure.  Focusing primarily on Katz's argument that the claim selection procedure violated its due process rights with respect to the unasserted claims, the CAFC held that the district court appropriately allocated to the patent holder the burden of showing that the issues raised by the new claims were not duplicative.  "When the claimant is in the best position to narrow the dispute, allocating the production burden to the claimant will benefit the decision-making process and therefore will not offend due process unless the burden allocation unfairly prejudices the claimant’s opportunity to present its claim."  Slip Op. at 11.  Here, Katz identified no errors in the district court's initial assessment, which revealed that the patents contained many duplicative claims.  Thus, it was efficient and fair to allocate the burden to Katz.  Furthermore, because Katz made no effort to identify any claims raising non-duplicative issues, the district court acted appropriately in denying Katz's motion.

Typical of several recent Federal Circuit decisions, the opinion includes a cautionary note.  "In approving the district court’s procedure, we do not suggest that a district court’s claim selection decisions in a complex case such as this one are unreviewable."  Rather, the panel comments that its holding is directed at broad assertions that courts may not impose claim selection requirements: 

Katz chose to make the “all or nothing” argument that the entire claim selection process was flawed from the start and that it is impermissible to give the judgments effect as to the unselected claims regardless of Katz’s failure to make any showing as to the uniqueness of any of those claims. That sort of global claim of impropriety is unpersuasive. In complex cases, and particularly in multidistrict litigation cases, the district court “needs to have broad discretion to administer the proceeding.” In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 460 F.3d 1217, 1232 (9th Cir. 2006).

Slip Op. at 14.

31 thoughts on “In re Katz: Managing Complex Patent Suits

  1. 31

    It’s a miracle – “So, there remains a good reason for dependent claims.” Ned actually makes a valid legal point without a misquoted case law cite anywheres in sight.

    Congrats on getting the reds blues and greens correct today!

  2. 30

    Ping, suppose the claim 1 said “rigid” and claim 2 said “having stiffness in the range, etc.” where the spec showed how to measure stiffness. Using BRI, the PTO would ignore the spec range and just might read the claim on what we would consider “non rigid.” If we had to amend the claim to add the stiffness range, there would be a good possibility that we could lose intervening rights. However, the presence of the dependent claim saves us here — provided it is asserted against the infringer both before the lawsuit and during the case itself.

    So, there remains a good reason for dependent claims.

    Now, if we could simply employ the European law regarding damages, I would have no problem with what happened in this case, or in general just eliminating dependent claims with the understanding that they embrace all narrowed definitions.

    However, and this is where I find the law bizzare, if the dependent claim relies on matter added after a priority date, it loses that date. We now have what I think is absurd, the parent claim potentially being patentable due to its priority date, and the narrowed dependent claim being unpatentable because if its loss!!!

  3. 28

    In that perfect one, obviousness of the child claim is analyzed as if the parent were prior art. And I believe this is the way most of the world sees it, too.

    I don’t believe a whole lot of the world sees it that way.

    The entire concept of a dependent claim is nothing more than a shorthand method of drafting to save paper and reading/analysis time (and agent/PTO fees). A dependent claim is to be read by itself, as if it were drafted in independent form.

    It’s certainly not “perfect” for two claims with the exact same wording to have different prior art applied depending on whether or not they’ve been drafted to incur an extra PTO fee. That’s form over substance at its very worst.

    Don’t even get me started on the problems inherent in using what the applicant regards as his invention as prior art against a claim in that same application.

  4. 26

    Ned: “Also, a minor point here, the obviousness is vis-a-vis the prior art, not the independent claim. There is an important difference.”

    Sure. That’s the present world. I’m talking about a perfect one. 🙂

    In that perfect one, obviousness of the child claim is analyzed as if the parent were prior art. And I believe this is the way most of the world sees it, too.

  5. 24


    Aren’t you assuming what you set out to prove?

    Is not that which is anticipated, also obvious?

    I think Babel Boy’s logic still applies, and I agree with his sentiment.

  6. 22

    Sorry Ned-O not following you – if the indi is ruled out, then the even more limited dependi should be ruled out too, no?

    I be picturin in my mind the Venn diagrams a while back the Big D put up – and thinkin that Babs be sayin that all dependi’s must be inside the circle of the indi circle, and that if the indi circle be blown away by the rejection, then the inner dependi circle simply cannot escape the same fate.

  7. 21

    Babel, the added limitation just may be enough vis-a-vis the prior art to save the claim. This doubly true when BRI is afoot in reexaminations, where the dependent claim makes expressed what is implicit in the parent but which is sorely needed when the claim is read broadly and is thereby rejected. If the dependent claim is allowed, no intervening rights.

    Also, a minor point here, the obviousness is vis-a-vis the prior art, not the independent claim. There is an important difference.

  8. 19

    pingaling the patent fluffer things that make the whole of mankind better

    Yes, it’s so hard to imagine how humans lived in the age of darkness before machines told them what to buy.

    Keep fluffin’, ping!

  9. 18

    The algorithm: don’t leave home without it.

    And by “algorithm”, weza mean a nice flow chart, ya know, the kind that takes about 5 seconds to make, yet allows those having ordinary skill to understand the invention.

    Doncha just love the software patents and how easy they be to invent? It’s like the Office mandate of promotion having a wet dream and the ability for tons of people to be creative.

    Oh wait, according to some, that’s a bad thing. Someone will have to esplain why lots of promotion and sharin of things that make the whole of mankind better be such a bad thing.

  10. 17

    Ah, ha. A part of history of which I was unaware.

    We need to hear more about this. Is Douglas the one who made such a hash-job of obviousness?

    Douglas . . . it’s coming back now. Wasn’t he the one who wrote the Slaughter House opinions?

    He said some brilliant things, but he was like the monkeys and typewriters parable — he was on the bench long enough that chance was on his side. He was bound to say something worthwhile eventually. But he sure had his arrogant side.

  11. 16

    Ah, the law of unforseen consequences. If the Justice Douglas’s of the world were not so very anti-patent, the 1952 Act would not have been needed to save the patent system from the Supreme Doom that was happeneing to it.

    Bable likes to bash the Act, but the bigger picture and the context must also be kept in mind. The Boy would be content on building his tower of incomprehensible languages.

    Had the Douglas mindset continued, we would not have a patent system at all. And no, that would not be a good thing.

  12. 15

    “Only independent claims should be evaluated as a whole. The analysis of dependent claims should be whether each one contributes something non-obvious OVER AND ABOVE the non-obvious subject matter of its parent. Dependent claims ought to be evaluated as if their parent claims are prior art.”

    Amen to that brother.

    Now, there remains the small matter of whether or not you were the one antagonizing Hawk into baleting his comments section. Was it you going on and on about his ‘practicin” on the lawl?

    “My recurring comment: the 1952 patent act was drafted by a bunch of monkeys. ”


    The more I hear about the legislating done in the period between 1940 to 1965 the more I lose faith in our entire system of government. It’s like the common man won WW2 and came home to a bunch of politicians ransacking his government in toto.

    Greatest generation applies, apparently, only to the non-politicians of that era.

  13. 14

    While the complex litigation issues raised by this case are interesting, the case is much more significant for what it says about the interplay between means-claiming and computer programs. A helpful summary of the case law to date.

    The algorithm: don’t leave home without it.

  14. 13

    If the Federal Circuit would encourage, rather than discourage, serious D.C. sanction awards of defendant’s costs for defending against patent claims for which a serious, adequate, pre-trial infringment investigation was not made, I wonder if a rare draconian asserted claims limitation like this would ever be necessary?

  15. 12

    Max, I don’t think the problem is with astonishingly complex litigation. The problem is with unnecessarily complex litigation.

    I hardly think it would be sound public policy to encourage unnecessary complexity as a means of minimizing litigation.

  16. 10

    “If the independent claim is nonobvious, then the dependent claim with the variation that is obvious OVER THE INDEPENDENT claim has to be nonobvious. ”

    Well, yes, according to 103 as written with the “claim as a whole” requirement.

    Without that, no. You look at the additional limitation or element of the dependent claim and ask is that additional limitation/element obvious in view of the parent claim AND the prior art; i.e., does the dependent claim make a contribution to the art on the basis of what it claims over the parent?

    If you think about it, it is inane to have a system where inventors get an additional valid and enforceable claim to attack alleged infringers with where the additional claim contributes absolutely nothing to the art over its parent.

  17. 9

    The single biggest contributor would be the strong economic disincentives to filing multiply dependent claims

  18. 8

    If the independent claim is nonobvious, then the dependent claim with the variation that is obvious OVER THE INDEPENDENT claim has to be nonobvious.

    My solution is to eliminate the USPTO’s irrational aversion to multiply dependent claims. They make it cost an arm and a leg, but a lot of these patents with dozens of claims would be greatly reduced by the use of such claims.

    By the way, most of my applications have had 20 – 25 (and of the ones that had 20, I was simply trying to get my money’s worth in some of those cases)

  19. 7

    Ned, I recall that Dennis had a post a while back in which he asked “Why do you use dependent claims?” or something of the sort. It struck me as one of those dumb questions that when you actually think about it, you don’t have a good answer, which turns the dumb-pointing finger 180 degrees.

    As I recall, there weren’t a lot of good answers, certainly not from me, but it got me thinking, which is what these blogs are all about.

    But let’s do a hypothetical along your lines. I have sued you for infringing my claims 1 and 2. In litigation you produce prior art that knocks out my independent Claim 1 as obvious. Claim 2 is narrower, of course, but it adds nothing that is non-obvious over Claim 1. It was allowed only because it was the child of what was originally deemed non-obvious Claim 1.

    So how does falling back on the obvious narrower claim help if the parent turns out to be obvious? If the child claim does not contribute something non-obvious over the parent claim, then merely being narrower is not gonna’ save my bacon as a fall-back position.

  20. 6

    I’m grateful to Ned Heller for pointing out the US-special factors (loss of damages, intervening rights) that are responsible for the peculiarly high number of patent claims found in the USA.

    What would happen, if these US-special factors were to be done away with? Are they what makes the US patent system the Gold Standard?

  21. 5

    Bable, is it a foregone conclusion, that “astonishingly complex” is a bad thing?

    Perhaps, on balance, it is a good thing if it deters litigation by encouraging the presence, in each patent application, of an inordinate number of claims that are not patentably distinct from each other, and then encouraging, on top, an inordinate number of patents in each patent family.

    For is not every deterrent to litigation, and everything which encourages parties in dispute to settle rather than go to trial, inherently a good thing.

    Would there be more, or less, US patent litigation, if the litigation precess were to be made quicker and cheaper?

  22. 4

    Babel Boy, Dependent claims would be unnecessary provided

    1) claims could be narrowed during litigation without loss of past damages; and

    2) claims could be narrowed during reissue and reexamination without intervening rights.

    Fat chance, that.

    Obviousness, I think, has very little to do with why we have lots of claims.

  23. 1

    “a total of 1,975 claims from 31 patents” asserted against “165 defendants in 50 groups of related corporate entities.”

    63.7 claims per application?? This sort of thing drives me nuts, and I’m not an examiner.

    This non-sense derives from the totally wacked-out section 103 requirement that obviousness be judged with respect to the claim as a whole, which leads necessarily to the judicial conclusion that if an independent claim is non-obvious, then all of its dependent claims must also be non-obvious because they include all the limitations of the parent.

    Only independent claims should be evaluated as a whole.
    The analysis of dependent claims should be whether each one contributes something non-obvious OVER AND ABOVE the non-obvious subject matter of its parent. Dependent claims ought to be evaluated as if their parent claims are prior art.

    Implement this rule and you cut total examination time and litigation costs by 80% — just a guess — but a whole lot, for sure.

    My recurring comment: the 1952 patent act was drafted by a bunch of monkeys.

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