Chestnut Hill Sound Inc. v. Apple Inc.

Chestnut Hill Sound Inc. v. Apple Inc. (Supreme Court 2019)

In an appeal from an inter partes review decision of unpatentability, a losing Patent Owner-Appellant is more than three times as likely to receive a one-word summary affirmation than a losing Petitioner-Appellant. The Federal Circuit issues these one-word summary affirmations under Federal Circuit Rule 36.

This Court has already requested briefing on a related question regarding Federal Circuit Rule 36(e) in Straight Path IP Group, LLC v. Apple Inc., et al., Sup. Ct. No 19-253.

The Questions Presented below address disparities of outcomes for Patent Owners versus Petitioners, but they may be considered companion issues.

1. Can a court ever choose to write reasoned opinions for one class of losing appellants and not another under the Due Process and Equal Protection Clauses; and if so, how disparate can the issuance rates of reasoned opinions, versus summary affirmations, be for different classes of appellants?

2. Is the Public entitled to reasoned opinions when the absence of those opinions diminishes the Public’s right of access to the courts and ultimately results in the erosion of the Rule of Law?

ChestnutHillPetition Oct292019.

[Note, the Federal Circuit issued eight judgments on appeals today: Six R36 affirmances without opinion; and two non-precedential opinions.]

From the Petition:

62 thoughts on “Chestnut Hill Sound Inc. v. Apple Inc.

  1. 9

    Cert. denied today in Straight Path v. Apple. Seems that the Court is no more interested in considering this question now than it was before.

  2. 8

    The statistical difference between the percentage of Fed. Cir. affirmances by Rule 36 versus formal opinions of PTAB IPR decisions of patentee-appellants versus petitioner-appellants is apparently intended here to imply prejudice against the former. But of course the statistic which would even be arguably relevant is the relative percentage of decision affirmances to reversals, not the format of the affirmances.

    1. 8.1

      But of course the statistic which would even be arguably relevant is the relative percentage of decision affirmances to reversals, not the format of the affirmances.

      The relevance or irrelevance of a statistic is really quite beside the point here. Certain folks just do not like IPRs, and any stick will do to beat that particular dog. The relevance of the stick is not important, merely its use in beating. If one figure cannot be pressed into service of trashing IPRs, there is always another that can be fitted up for the purpose.

      1. 8.1.1

        You offhand treatment is both correct and incorrect Greg.

        It is correct in that the point here IS the subject of IPRs.

        It is NOT correct in that you seem to be implying that the “beat that dog” is somehow an unjustified action.

      2. 8.1.2

        Indeed Greg, and the point was that this asserted stick to beat on IPRs is not even prima facia a wet noodle.

        1. 8.1.2.1

          Quite true. Some here will enthusiastically flog that wet noodle at the IPR system, regardless of the buffoonish light in which this casts them. That is because these people are buffoons, and it is in the nature of buffoons to do buffoonish things.

        2. 8.1.2.2

          This is not even hitting on the right target, since the use or non use of Rule 36 by the Fed. Cir. is entirely at their discretion and has nothing to do with the PTO or anything in the AIA/IPR statute.

          1. 8.1.2.2.1

            since the use or non use of Rule 36 by the Fed. Cir. is entirely at their discretion

            No. It is not.

            C’mon Cheerleader, you should know better than that from at least Prof. Crouch’s writing pointing out that Congress wrote in that appeals must contain a reasoned response.

            Your playing patty-cake with Greg here is not doing anyone any favors.

            1. 8.1.2.2.1.1

              Which separate [and losing] argument against the Fed. Cir. use of ANY Rule 36 decisions, is, of course, completely irrelevant to to the subject here of only the ratio of IPR Rule 36 appeal decisions for patent owners versus petitioners.

              1. 8.1.2.2.1.1.1

                is, of course, completely irrelevant to to the subject here

                ?

    2. 8.2

      No Paul, the format of the reversals is an item directly at point here.

  3. 7

    Can anyone with knowledge please share Josh Malone’s estimated net worth with us all?

    He’s downstairs complaining about how hard life is for the contemporary “innovator.” Last time I checked dude was living in a gated community with ten kids or something.

    1. 7.1

      Thank goodness for good, honorable Americans like Josh willing to stand up for others even though they have little if anything to gain personally by doing so.

      Most if not all of our Founding Fathers did the same.

      1. 7.1.1

        To be clear, are you suggesting that Malone has little to gain from anti-IPR advocacy, and that the Founding Fathers had little to gain from the American Revolution?

      2. 7.1.2

        Pro Say: You said it brother. I could not agree with you more.

        The patent system is in the same boat as infrastructure except that there are giant gains to be made by a few if the patent system is burnt down (Lemley admits he is making many millions burning it down.)

        1. 7.1.2.1

          Careful there Night Writer, as you may invoke Greg “I use my real name and whip out credentials showing no substance in computing” DeLassus to produce another Groklaw article that is based on Lemley views confusing and conflating patent law with what the Efficient Infringers want patent law to be (detailed engineering documents exhaustively detailing all pertinent prior art for a ‘ready to copy’ blueprint because after all, software “should be” free to all).

    2. 7.2

      I hope you never have kids of your own …
      who might aspire to achieve anything for themselves which might …
      and God forbid… tip them into the evil ranks of those who have succeeded in life to a degree that they can live in a gated community … with ten of your grandchildren… for I’m sure that would be such a living nightmare for you.

  4. 6

    Try to imagine how cr-a-ppy the underlying claims here must be.

  5. 5

    This is definitely one of the worst cert petitions on the issue of Rule 36 affirmances.

  6. 4

    What a silly set of “questions”.

    People actually pay attorneys to come up with this self-serving dreck? And they expect judges to answer the bogus questions?

  7. 3

    This is not a strong petition. If the briefs were anything like the petition, then this case deserved a Rule 36 affirmance. I wonder what the economic calculation was behind the choice to prepare and file this petition, and also somewhat wonder whether the Supreme Court is on track to summarily affirm in the Straight Path case just to get these petitions to stop.

    There are good arguments out there that the Federal Circuit uses Rule 36 too much, or even that it should get rid of the rule entirely and write something in every case. The Third and Ninth Circuits, for example, issue a lot of 2-to-5- page opinions (sometimes reversals) that more or less announce the result and let the losing party know that the court has heard your arguments and simply disagrees. Those decisions can be somewhat unsatisfying to losing appellants, and poorly-written summary affirmances can sometimes feel result-driven–but they’re still an improvement over Rule 36 from an appellant’s perspective. On the other hand, very few other circuits are as generous with oral argument as the Federal Circuit is. With extremely rare exceptions, every case with lawyers on both sides gets oral argument. And whatever one thinks of the court’s opinions, at a minimum the Federal Circuit judges are generally engaged and well-prepared at oral argument. If the Federal Circuit were to start denying oral argument to give itself more time to write opinions in every case, I think that would be an unfortunate trade.

    …but whatever one thinks of all of this, the idea that the Federal Circuit’s Rule 36 practice is unconstitutional seems almost sanctionably frivolous. Below are the questions presented and some suggested answers.

    1. Can a court ever choose to write reasoned opinions for one class of losing appellants and not another under the Due Process and Equal Protection Clauses; and if so, how disparate can the issuance rates of reasoned opinions, versus summary affirmations, be for different classes of appellants?

    Drafting tip: if your question begins with a dubious premise, and ends with a prompt that sounds like an essay exam (“if so, how…”), your petition is not off to a great start.

    I’m unaware of any policy (i.e., any “choice”) to deliberately issue more R36 dispositions in PTAB cases than district court cases.

    Many things could explain the statistical differential, assuming that it’s accurate. Here’s my best guess:

    PTAB cases are mostly IPRs, which are mostly fact-intensive 102/103-type arguments that don’t need opinions. The AIA is relatively new legislation, and there have been a bunch of cases like Cuozzo, Aqua Products, SAS, and Thryv that raise interesting administrative law, statutory interpretation, or constitutional issues that need be worked worked out. But most are fact-intensive 102/103-type cases that present only factual questions of whether the PTAB’s comparison of the prior art to the claims was supported by substantial evidence. Sometimes the PTAB gets it wrong, but usually they get it right or close enough to right to clear the substantial-evidence standard of review. When the PTAB is right enough, an opinion explaining that is likely not the best use of the Federal Circuit’s time. District court cases, by contrast, are generally more complex, generally present a wide variety of issues, and may be more likely to present legal issues on which an opinion would be useful.

    The “strict scrutiny” references and the election law analogy in the body of the brief are almost sanctionably bad.

    2. Is the Public entitled to reasoned opinions when the absence of those opinions diminishes the Public’s right of access to the courts and ultimately results in the erosion of the Rule of Law?

    Drafting tip: if your question presented doesn’t even allude to any specific law, your petition is not off to a great start. Again, maybe the Federal Circuit should use Rule 36 less or not at all, but the Supreme Court is more interested in what the Federal Circuit must do. It’s easy to say that more written decisions would better for some policy, but the petition never really says how much is required and what tradeoffs would be acceptable. If other circuits were as generous as the Federal Circuit with oral argument, that might improve “access to the courts” and the “Rule of Law.” Does it follow, then, that “the Public [is] entitled to [oral arguments] when the absence of [oral arguments] diminishes the Public’s right of access to the courts and ultimately results in the erosion of the Rule of Law?” Unlikely.

    The public has the final written decision from the PTAB invalidating your patents. At page 19, the petition says “While the PTAB provides some opinions, these opinions are insufficient.” Why are they insufficient? The petition doesn’t provide a clear answer.

    Maybe the Supreme Court is about to prove me wrong in Straight Path, but I think that the complaints about Rule 36 are shortsighted and better addressed to the Federal Circuit or Congress than to the Supreme Court.

    1. 3.1

      On the disparity between petitioner-appellants and patentee-appellants, there’s probably a bit of selection bias going on. Petitioner-appellants are probably more likely to give up after losing at the PTAB, and are probably also less likely to lose in the first place. It often happens that final written decisions are by the same panel as the institution decision and follow similar reasoning. Unappealable non-institution decisions filter out a lot of weak petitions; there’s nothing similar on the other side that’s unappealable and filters out weak patentee-side arguments. In other words, not all PTAB appeals are likely to be created equal.

      1. 3.1.2

        dcl, your observation – that far more weak patent owner IPR arguments are appealed to the Fed. Cir. and get Rule 36d because weak arguments are denied IPR institutions only to petitioners – is better than mine listed at 1 below.

    2. 3.2

      Great comment.

      Who’s the brilliant attorney who came up with the idea of accusing judges of impropriety in the very question?

      My effin gob grow up already.

  8. 2

    Inventors lose after many wins and infringers win after many losses. There are exceptions, but that is the rule.

    1. 2.1

      There are exceptions, but that is the rule.

      Er, no, that is not the rule. The “rule” is no more than one IPR challenge per patent. Multiple petitions against a single patent are the exception, not the rule, and multiple petitioners against a single patent are even more exceptional.

    2. 2.2

      That was confusing. I was thinking that inventors usually lose at the PTAB and it is usually affirmed. The Federal Citcuit tends to trust the agency. On the other hand inventors often win in district court but it is usually reversed. The Federal Circuit tends to distrust juries and real judges.

      1. 2.2.1

        I was thinking that inventors usually lose at the PTAB…

        Also not true. Approximately 51% of IPR petitions result in no claims invalidated, and an additional 3% result in some claims invalidated, some not. I would hardly characterize a situation in which the patentee finishes with all claims intact more often than not as the inventor “usually” losing.

        1. 2.2.1.1

          The numbers are roughly:
          6,000 patents undecided, not final written decision
          2,100 patents invalidated in part or whole
          340 patents exonerated

          Stop counting failed and settle petitions, it means nothing for the inventor.

          1. 2.2.1.1.1

            [F]ailed and settle petitions… mean[] nothing for the inventor.

            Counterpoint: in a world where only a small fraction of challenged patents see more than one challenger (see 2.1 above), failed and settled petitions actually mean the end of the IPR experience for most inventors.

            1. 2.2.1.1.1.1

              Correct, because they are broke and were forced to drop their infringement claims against the petitioner.

              1. 2.2.1.1.1.1.1

                The observant reader will note that so far in this exchange, I have backed up my every assertion with actual data, and you have backed yours with… well, nothing, actually. I leave it to the impartial observer to adjudicate between us on this point.

                1. Incidentally, your data are part of the aggregates linked in my 2.1 and 2.2.1. In other words, no one is ignoring your data. I am just trying to place your experiences into the broader context of the experiences of all PTAB-affected inventors.

              2. 2.2.1.1.1.1.2

                The statistics also show that only a small % of actually declared IPRs are settled in time to avoid any final decision.

              3. 2.2.1.1.1.1.3

                Is Balloon Boy “broke”?

          2. 2.2.1.1.2

            The very large numbers of IPR petitions denied are petitions on which the PTAB decides that the petitioner does not even present a good enough case to even get an IPR declared, hence no trial and no decision. That is clearly a win for the patent owner.
            [How many times in how many years have those statistics been miss-represented by now?]

            1. 2.2.1.1.2.1

              What did the patent owner win?

              1. 2.2.1.1.2.1.1

                The right to continue to expensively sue for infringement in a District Court, or to sell the patent to someone who can, the only right any patent owner has.

                1. Actually they started with an idea. The patent right is an entitlement that is granted only after examination of the description of the idea. And because humans make mistakes, the right is subject to revocation upon a proper showing.

        2. 2.2.1.2

          Greg,

          While I am not the first to make this point, your stats show that the PTAB is declaring a 50% defect rate for patents that their own organization (the PTO) has issued.

          Any other business that was experiencing even a 10% defect rate would be shuttered (or at a minimum, completely re-tooled).

          The QA process either needs to be moved to the front (read: pre-issuance) or we leave it to the courts to determine validity of economically viable patents.

          The current tax on inventors/inventions is highly ill-advised. The numbers are just too skewed to be ignored.

          1. 2.2.1.2.1

            “Any other business”

            The PTO isn’t a business. Think carefully before suggesting it be run like a business.

            1. 2.2.1.2.1.1

              The PTO isn’t a business. Think carefully before suggesting it be run like a business.

              +1

            2. 2.2.1.2.1.2

              That “think carefully” sounds like you have plenty of drawbacks in mind IF the USPTO were run as a business.

              Mind sharing any?

          2. 2.2.1.2.2

            News flash: the PTOs “customers” DEMAND this kind of “error” and if it ever changed signicantly the people who complain most about the AIA woul complain even louder.

            Note: this is not a prediction. It’s a historical fact.

            1. 2.2.1.2.2.1

              Malcolm’s post here is an absolute
              L
              I
              E

              It is rather inconvenient for him that the opposite is true.

              1. 2.2.1.2.2.1.1

                Bildo screeching like a banshee when the truth is told about him and his cohorts.

                Also predictable, and predicted, and proven time and time again. Now let’s watch him deny that these same people are mostly glibertarians and Re-pu-k-k-kes.

                1. Except for the plain fact that you speak NO truth — and certainly no truth about my position on improving examination quality and the strong desire therein which goes directly against your assertion).

                  Calling your statement out for what it factually is:
                  a
                  L
                  I
                  E

                  is not screeching.

          3. 2.2.1.2.3

            “Tax on inventors”…

            LOL

            It’s called a “handout”, genius.

            Wow. Better tr 0lls please.

            1. 2.2.1.2.3.1

              Wow – your cognitive dissonance is on full display.

              Entitlement…
              Handout…

              Do you inform your clients of your beliefs?

          4. 2.2.1.2.4

            [Y]our stats show that the PTAB is declaring a 50% defect rate for patents that their own organization (the PTO) has issued.

            Er, no, the stats linked at 2.2.1 above do not show that. Read them again.

            Those data show a snapshot in time—the pendency/outcome from all IPRs within a certain time frame. At that time of that snapshot, ~30% of trials were pending without any sort of outcome, so one simply cannot say anything about the status of those claims based on these data. Another 51% of proceedings ended without any challenged claims being repudiated.

            In other words, north of 80% of the claims involved at the time of that snapshot are not declared problematic. How, then, do you look at those data and characterize them as “declaring a 50% defect rate”?

            1. 2.2.1.2.4.1

              80% of the claims involved at the time of that snapshot are not declared problematic.

              Hm, that was the wrong way to characterize the data. Please allow me to rephrase. ~80% of proceedings did not involve any finding of defective claims, as of the time of that snapshot.

              1. 2.2.1.2.4.1.1

                The caveat of “as of that time” makes your own “correction” to 80% every bit as in error of the comment that you respond to, Greg.

                (You are committing a fallacy of statistics)

            2. 2.2.1.2.4.2

              I’d also like to hear how NTP arrived at their 50% calculation. After reviewing the data, it’s not clear to me how to arrive at this number in good faith.

              1. 2.2.1.2.4.2.1

                I expect that he looked at the infographic, saw the “Patent Owner Win 3,468 50%” line at the bottom of the graphic, and reasoned “if patent owners win 50% of the time, then the other 50% must be a ‘loss’.” Not very sophisticated, but probably not actually bad faith. He is wrong by virtue of sloppiness, not malice.

                1. That number is immediately adjacent to “Petitioner Win 1,325 19%”. That’s not an unsophisticated analysis, it is selective reading.

  9. 1

    A possible reason for more summary affirmances for one side than the other in appeals from administrative tribunal proceedings? The statutory APA requirement for reversal of administrative tribunal fact-findings, and, which side had the burden of proof there?
    A Petitioner-Appellant who could not even convince the PTAB to cancel infringing claims is more likely to make a due process or some other legal argument than wasting time trying to re-argue losing fact issues that would only get a summary affirmation. Also, some Petitioner-Appellants got written decisions due to their appeals being attacked on other legal issues such as lack of sufficient standing for an Article III court, time bars, real party in interest, etc.

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