GS Cleantech v. Adkins Energy LLC (Supreme Court 2020)
This pending petition for certiorari focuses on the civil procedure question: What is the standard for review of a partial summary judgment that is not reopened at trial? Normally summary judgment is reviewed de novo on appeal, but this is a case where the Federal Circuit switched the standard.
The patentee here intentionally failed to disclose its its pre-filing sales-activity to the PTO during prosecution. Those prior sales barred patenting of a number of claims (on sale bar) and the remaining were found unenforceable (inequitable conduct). That outcome was affirmed on appeal by the Federal Circuit and the court denied a petition for rehearing (without opinion). Now comes the petition for writ of certiorari. Prof. Hricik and I have both written about the Federal Circuit decision:
- David Hricik, “The Many Mistakes in the Panel Decision in GS CleanTech Corp v. Adkins”;
- David Hricik, “Will the Court Correct the Mess that is GS CleanTech Corp. v. Adkins Energy LLC”;
- Dennis Crouch, “They Chose Advocacy over Candor”.
Here is the relevant procedure at the district court:
- Summary Judgment of Invalidity: A number of claims found invalid based upon the GS-Cleantech’s pre-filing commercial offer for sale (made after the invention was ready for patenting).
- Bench Trial for Inequitable Conduct: The remaining claims were found unenforceable due to inequitable conduct at trial. Inequitable conduct requires a showing of both intent-to-deceive and that the deception was material to patentability. At trial, the district court relied upon its summary judgment determination as evidence of materiality.
When appealed, inequitable conduct determinations are generally reviewed for abuse of discretion — providing substantial deference to the district court determination. The patentee argued that things should be different on the issue of materiality – particularly on the issue of whether the undisclosed prior sales rendered the claims invalid. The difference here, is that issue was decided on summary judgment, and summary judgment is generally reviewed de novo on appeal.
The Federal Circuit gave full deference — noting that the district court “held an eight-day bench trial in which materiality was squarely before it.” Further, the district court did not simply apply its prior summary judgment determination but rather it incorporated the summary judgment evidence and admitted additional relevant evidence, including previously unheard testimony relating to materiality and ultimately “confirmed” its summary judgment determination in finding materiality. On appeal, the Federal Circuit found this sufficient to move the on-sale determination fully under the abuse-of-discretion shelter of the inequitable conduct trial and identified the patentees arguments as lacking nuance. (“This argument is jejune.”).
The patentee also directly appealed the summary judgment of invalidity, but the appellate panel did not hear that issue (which it would have given de novo review). Rather, the appellate panel found the issue moot based upon the unenforceability holding.
All that sets up the current petition for writ of certiorari:
Until the Federal Circuit’s decision in this patent case, every Circuit had held that an issue resolved on partial summary judgment, and not reopened at trial, must be reviewed de novo. Here, the district court resolved the issue of patent invalidity on partial summary judgment, and did not reopen it at trial. Yet, the Federal Circuit expressly refused to review the issue de novo, and instead reviewed it under the “abuse of discretion” standard governing review of the decision at trial.
The question presented is: Whether the Federal Circuit, in cases arising under the Patent Act, may depart from the uniform rule of the other Circuit Courts that an issue resolved on partial summary judgment, and not reopened at trial, must be reviewed de novo on appeal.