Reviewing Summary Judgment for Abuse of Discretion?

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:

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.


8 thoughts on “Reviewing Summary Judgment for Abuse of Discretion?

  1. 4

    The District Court’s decision was based on the misguided, misleading and false premise that had the USPTO known of the offer to test letter, the patents wouldn’t have issued.

    This inconvenient truth was barred by the District Court. This begs the question: would a jury determine the USPTO had been deceived when the USPTO denies it?

    Would a jury determine the July, 2003, testing a success when the gyro clogged? Would a jury find the parameters of the patented methods were practiced when the syrup sample sat, settled and cooled before a (none substantial/few milliliters) portion of oil was separated in a non-continuous fashion as required by the patent?

    Lastly, would a jury see GS ‘s non-disclosure/confidential testing as an offer to sell? Or, would they be convinced by other evidence? Specifically, GS’s statement that Agri-Energy was their testing partner. That the results of the test were to be kept confidential until GS knew it worked for it’s intended purpose in an operating ethanol plant, in real-time, without fouling the test centrifuge. That GS wanted to keep it confidential until they were ready to solicit the entire industry at once (Which happened shortly after the 2004 test). That in early 2004, Agri-Energy was still testing centrifuging thin stillage (not syrup).

    This invention is worth $20 billion in corn oil for the life of the patents. Yet the judge on the federal circuit panel couldn’t even pronounce the inventors name (Winsness is easy to pronounce). He couldn’t take the time to learn the pronunciation of a name nor did he take the time to review the facts under proper procedures.

    1. 4.1

      Correction: Would a jury find the parameters of the patented methods practiced when the syrup sample sat, settled and cooled before a (non-substantial/few milliliters) portion of oil was separated in a non-continuous fashion?

      The syrup sample was collected in 2 quart pitchers which cooled to below the patents minimum temperature requirements within minutes. Testing took hours due to the gyro clogging, repeatedly. The patents require evaporating and centrifuging to be performed in a continuous fashion. This didn’t happen of course, the samples were collected with pitchers in an intermittent fashion. The District Court’s own claim construction requires a majority of the oil to be extracted leaving the de-oiled syrup “substantially free of oil” This also didn’t happen during the July, 2003, test. A few milliliters of oil were extracted from 2 gallons of syrup.

      The testing was not a reduction to practice because it didn’t remove a majority of oil in a continuous fashion at the required temperature, without clogging the gyro. The de-oiled syrup wasn’t substantially free of oil and it wasn’t returned to the process for drying as required by the patent.

      The inventors needed to test this in an operating ethanol plant to know if it would work for it’s intended purpose and determine exactly what parameters to patent. Hence, the offer to test letter.

      The Supreme Court needs to correct the many mistakes of the District Court and apparently the USPTO agrees.

  2. 3

    The District Court determined that had the USPTO been aware of the offer to test letter, that the patent would never had issued.

    The very same examiner, supposedly deceived by GS, reviewed the offer letter and determined she was not deceived at all.

    This evidence was barred by the district court. Why?

    It’s obvious a jury could rule in GS’s favor and GS was robbed of their constitutional right to trial by jury.

    The Court’s findings have been proven false. Another patent was issued to GS in May of 2020.

    The USPTO did a complete review. The Court refused to admit their faults, barred evidence and violated GS’s 7th amendment rights.

    If their were ever a case the Supremes should review, it’s this travesty of so called justice.

  3. 2

    Cert denied, as this petition is based on a misguided (and misleadingly presented) procedural argument. It’s common for a trial court to make factual findings in a bench trial, reviewed with deference on appeal, that happen to rely on evidence that was previously submitted with summary judgment motions. The consideration of such overlapping evidence doesn’t magically transform bench trial findings into summary judgment rulings subject to de novo review.

    The petition repeatedly and falsely suggests that the CAFC reviewed the on sale bar summary judgment ruling for abuse of discretion. But the CAFC didn’t review that ruling at all, as the trial court’s inequitable conduct finding after the bench trial was sufficient to resolve the entire case. And the district judge didn’t just blindly adopt its previous summary judgment on sale bar ruling, either; it heard additional evidence during the bench trial including live testimony from several witnesses, and weighed all of the evidence to make independent factual findings on the on sale bar/materiality elements. This petition is a waste of everyone’s time.

  4. 1

    Given SCOTUS’s post-Alice propensity to scatter like birds at the sight of a cat whenever they detect even a whiff of “patent” (Arthrex being the rare exception), the odds of cert be near zero.

    1. 1.1

      The “scattering like birds” is only when the topic coincides with the Court cleaning up its own mess.

      When the topic is piling on the mess, there is no problem gathering the flock (see Oil States).

      Throughout the history of the United States, the Court has maintained a largely anti-patent view.

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