Does an appeal deserve an opinion?

Fote v. Iancu (Supreme Court 2020)

In this case, the PTO refused to grant Charles Fote’s patent covering a Broker-Mediated Payment System after concluding that the claims lacked eligibility.  On appeal, Fote argued otherwise — especially considering the PTO’s new (limited) approach to eligibility examination.  The Federal Circuit though refused to bite and simply affirmed the PTO determination without issuing any opinion under its internal R. 36.

In a recent request for extension of time, Fote has indicated his plans to ask the Supreme Court to review the propriety of the Federal Circuit’s no-opinion judgments:

The petition for certiorari will contend that in cases like this one, where the administrative agency arguably erred in its analysis of the proposed patent claims and failed to properly apply the law, the use of one-word summary affirmances under Federal Circuit Rule 36, which effectively prevents review of the merits of the panel decision en banc or by this Court, is impermissible.

[Fote petition to Supreme Court for extension of time]  Although the patent application appears to be unpublished, the file-history was included in the Federal Circuit briefing. [JointAppx].

Representative claim 8 is directed to a “telecommunication system” that includes a brokerage server, a funding server, and also an electronic communications devices that are designed to provide certain authentication signalling to facilitate a payment. The claim itself is 1,200+ words 5x longer than a typical independent claim. In briefing, Fote explained that:

By dividing responsibilities for the payment and the information among multiple third parties, the payment system invented by Fote avoids the privacy and security vulnerabilities that would otherwise arise if a conventional third-party intermediary were employed in an electronic environment. . . .

[Although the] system involves conventional computer components[;]… [t]he system’s
novelty and inventiveness, which have been acknowledged by the Patent Office, lie
in the specific payment techniques it implements.

In its briefing, the PTO responded that the claims can be seen as parallel to the settlement risk mitigation system in Alice Corp. and that the Board’s decision was correct:

The Board properly concluded that the claimed invention is directed to patent ineligible subject matter. Claim 8 recites a system for transferring electronic payment from a payer to a payee that utilizes a third-party intermediary to prevent disclosure of the payer’s confidential information (i.e., the identity of the payer’s
funding source and real account) to the payee.

Under step one of the Supreme Court’s two-step framework, the Board rightly determined that the claim is directed to a fundamental economic practice, which is an abstract idea. As the Board found, the use of a third-party intermediary to securely transfer funds between two parties is akin to the use of a third party to mitigate settlement risk, which was held to be abstract in Alice. . . .

At step two of the eligibility analysis, the Court rightly determined that the additional claim limitations do not transform the abstract idea into an inventive concept. Each of those limitations merely recite conventional computer components that perform generic computer functions. Although the Board did not cite to this Court’s decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), the Board did provide factual support in the specification to support its findings that the claim elements were well-known, routine, and conventional.

Gov’t Brief before the Federal Circuit.  The actual merits are rough here for the petitioner, but these are the cases that often make good procedural law.

 

27 thoughts on “Does an appeal deserve an opinion?

  1. 7

    The patent troll vaccination program:
    OT but significant. Reportedly 626 companies, now including IBM and Toyota, have joined the LOT Network, which immunizes its members from PAE lawsuits filed by patent assertion entities (PAEs) on 2.3 million [and increasing] global patents should those patents ever be sold to any company that make more than half of their gross revenue from patent assertions.

    1. 7.1

      Also reported,the license-on-transfer-to-PAE agreement that LOT members sign is explained in this article on the organization: link to ipwatchdog.com

    2. 7.2

      . . . leading one to wonder just how LOT — or any of their sued members — is going to be able to substantiate that a non-public company / entity earns more than half their gross revenue from patent assertions . . . including because such companies / entities are (presumably) not a party to LOT’s agreement.

      1. 7.2.1

        When you are sued you get discovery.

        1. 7.2.1.1

          Dunno know ’bout that Paul; given that income would be proprietary / privileged / would not be made public / would not be available to LOT member/s.

          Unless I’m missing something . . .

          1. 7.2.1.1.1

            They would not need to ask about incomes, just if more than half of their gross revenue is from patent assertions. Better yet, especially since most PAEs are self-evident from other sources, assert their LOT license as an affirmative defense and move to terminate the suit. A normal judge is not going to pass up such a fast and easy case disposal by allowing the PAE to refuse to admit or deny that more than half of their gross revenue is from patent assertions.

      2. 7.2.2

        The most important point about the whole “tr011” vaccination program is reflected in the first comment, which (paraphrased) is that ANY such message that the LOT group (or its cheerleaders) provide MUST be “de-spun” (and consideration of the source must be undertaken).

  2. 6

    Does anyone know what happens next if Fote wins this one? That is, imagine that the SCotUS takes cert. here and reverses the CAFC. The SCotUS “remand[s] the case for further proceedings consistent with this opinion…” or some such.

    Does the CAFC have to re-hear the appeal? Or can they just issue a new opinion affirming the PTAB, without taking any additional briefing or argument?

    1. 6.1

      I’d rather imagine something more likely. Like a unicorn army flying around New York City while a giant pink panda plays Stairway to Heaven on a tiny banjo.

      1. 6.1.1

        Sure, I agree. I am just trying to figure out what Fote is hoping to achieve here. Unless the CAFC is obliged to receive new arguments on remand, it seems to me that he is just going to end up with a new, short affirmance on the merits of the PTAB’s rejection. In other words, even a “win” in front of the SCotUS is not actually likely to get him anything worth the effort. Is there good reason for him to believe that a remand from SCotUS to CAFC has to result in a second bite at the merits apple.

        1. 6.1.1.1

          It’s about building the record for not only a shot in the forum below, but all along the appeal line (up to and including the Supremes — should they so deign).

          C’mon Greg, think a little.

    2. 6.2

      Well, without reading the claim its hard to say. But the blog post seems to be describing PayPal, which has been around a while.

  3. 5

    From this Board panel’s decision:

    “We have considered all of the Appellant’s remaining arguments and have found them unpersuasive.”

    . . . and there go yet some more unconstitutionally-appointed PTAB “judges”; acting like real, constitutionally-appointed judges in refusing to specifically address each and all of the patent applicant attorneys’ arguments.

    Welcome to the no-smoke-and-mirrors-permitted agency world you elected to work in.

    No IP attorney’s worth their salt let Board panels get away with this baloney.

    Keep fighting the good fight Charles — your claims are all easily eligible.

    Even under the unconstitutional Alice/Mayo test.

  4. 4

    A “brokerage server”?

    ROTFLMAO

    Totally different from “a computer programmable to follow instructions.”

    SOoper techno!!! Yes let’s waste more judicial resources talking about the patentability of “authorized payment” (lol) “technology” using … computers. In 2020.

  5. 3

    Is it semantic (or pedantic even) to distinguish between “deserve” and “required”…?

  6. 2

    This Rule 36 pony has had numerous floggings here, and is still unlikely to get anywhere.

    1. 2.1

      Clearly the issue has not been put to bed.

      Is this a case of “The floggings will continue until morale improves”…?

    2. 2.2

      Why would the Supreme Court want force any of its appeal courts to add a meaningless sentence or two of non-precidental [and thus non-citeable] “opinion” to a decision that makes no difference whatsoever to the outcome of the case?

      1. 2.2.1

        …maybe because there might be a specific law passed by Congress requiring such…

        I know that sounds ‘silly’ and all, but last I checked, Congress could do that (as well as many other ‘silly’ things).

        1. 2.2.1.1

          “We adopt the opinion of the Patent Trial and Appeal Board as our own. AFFIRMED”

          1. 2.2.1.1.1

            Apotu,

            You do realize that your quip is even more a knock on Rule 36 practice, right?

            After all, even such direct (but nonetheless complete) writing obviates the use of a Rule 36 and removes an excuse for using that vehicle.

      2. 2.2.2

        “[1] An independent, fair and impartial judiciary is indispensable to our system of justice. The United States legal system is based upon the principle that an independent, impartial, and competent judiciary, composed of men and women of integrity, will interpret and apply the law that governs our society. Thus, the judiciary plays a central role in preserving the principles of justice and the rule of law. Inherent in all the Rules contained in this Code are the precepts that judges, individually and collectively, must respect and honor the judicial office as a public trust and strive to maintain and enhance confidence in the legal system.”

        ABA Model Code of Judicial Conduct – Preamble, paragraph [1].

        Do Rule 36 opinions undermine confidence in the legal system? I believe they do.

        1. 2.2.2.1

          Right. An alleged failure to follow a pointless law is what’s really hurting confidence in our country.

          It’s definitely not hypocritical lying glibertarian and Repuk-ke pricks and their enablers!

          Nope.

          Heckuva job, Dennis.

          1. 2.2.2.1.1

            Welcome back Malcolm. Enjoy your vacay?

            Whether or not the law is “pointless” is NOT yours (or the judiciary’s) to say.

            This has NOTHING to do with any poli-rant that you wish to indulge yourself in.

          2. 2.2.2.1.2

            ahh glad to see this. was getting a little boring around here.

        2. 2.2.2.2

          Do Rule 36 opinions undermine confidence in the legal system? I believe they do.

          I agree.

          If there is any indication of a Congressional mandate to have a complete record (even if — or especially if — the merely reflects the quip of Apotu), then the court indulging in a ‘time-saving mechanism (that may NOT save any time at all) IS problematic.

          All this does is show that the fire-hose-of-simians-in-a-cage training has been effective in spreading the “The only valid patent is one that has not yet appeared before us” mindset.

  7. 1

    It’s like they just ignore why Rule 36 decisions are a perfectly valid means to dispose of an appeal. link to jetlaw.org

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