By Jonas Anderson, Paul Gugliuzza, and Jason Rantanen

This is the first post in a series about our new research project on mandamus practice in the federal courts of appeals generally and the Federal Circuit’s peculiar use of mandamus in patent cases specifically.

There has been a lot of talk recently about the Federal Circuit and mandamus. Our current research project aims to answer whether the Federal Circuit is an outlier among the circuit courts in its use of mandamus, and if so, what explains the court’s apparent infatuation with mandamus?

Mandamus Generally

Mandamus—literally, “we command”—is an extraordinary event. Federal appeals courts have authority to review “final decisions” of district courts (or of the PTAB, in the Federal Circuit’s case). Mandamus provides a way for litigants to take their appeal before an appeals court while their case continues at the district court below. This can be a great thing for litigants who feel that an issue has been wrongly decided and who don’t want to wait for a final decision to take their case before the appellate court. However, if mandamus is granted too frequently, it risks compromising judicial efficiency by placing the appellate court in the awkward position of arbiter of disputes rather than reviewer of final decisions.

The Supreme Court has said three requirements must be satisfied in order for an appellate court to grant mandamus. First, the party seeking mandamus must have “no other adequate means” to obtain relief. Second, the party must show that its right to mandamus is “clear and indisputable.” Third, the court must be satisfied that mandamus is “appropriate” under the circumstances.

Typically, the federal courts of appeals will reserve their use of mandamus for important issues that are likely to arise again in future cases. For instance, attorney-client privilege is a relatively frequently reviewed issue on mandamus, because it is an issue that district courts frequently encounter. In addition to importance, the issue under mandamus review ought to be one that is not reviewable after a final verdict, or at least one in which such post-verdict review would be inefficient. For instance, the choice of venue in litigation is one such issue that is reviewable post-verdict, but oftentimes would be inefficient for the appealette court to wait for a final verdict before deciding that the wrong court heard the case. Oftentimes the use of mandamus centers on new, undecided issues.

Ideally, mandamus gives lower courts appellate guidance so that mandamus review is not needed on the issue addressed in the future. Sparing use of mandamus allows appellate courts to preserve the extraordinary character of the practice. Ideally, appellate courts avoid excessive supervision of lower court proceedings while at the same time sending a forceful message when granting mandamus. Thus, granting a writ of mandamus is an “extraordinary remedy,” reserved for clear errors in which the moving party has no other adequate means to obtain relief.

Federal Circuit Mandamus

But, this extraordinary remedy is becoming quite common, at least in the Federal Circuit. In beginning our study of the Federal Circuit’s mandamus practices, we wanted to get a sense of how the court compares to other circuit courts in granting mandamus. Using Westlaw, we collected all the decisions on writ of mandamus and hand coded them for whether mandamus was granted and what the issue the grant concerned. We found that the Federal Circuit has granted mandamus over twice as often as any other circuit.

The Federal Circuit has clearly been more activist than any other court when it comes to granting mandamus. Over the past three years, the Federal Circuit has been granting mandamus, the extraordinary remedy, at a rate more than double that of the next most frequently granting circuit (the 5^th circuit and the 9^th circuit).

And the numbers are even more stark when we consider just one issue on which mandamus may be granted: venue. Patent cases often meet the jurisdictional requirements of personal jurisdiction, subject matter jurisdiction, and venue in a number of different district courts. While the plaintiff typically selects her preferred venue to litigate the case, defendants may bring a motion to transfer the case to another district court that also has venue. Alternatively, the defendant may argue that the court selected by the plaintiff lacks venue. Decisions on these motions are often challenged, if at all, on mandamus.

Looking at the grants of mandamus concerning motions to transfer presents a stark look at the difference between the Federal Circuit and every other circuit court. Below is a graph of grants of mandamus by circuit court that direct a district court to transfer venue in a case.

Clearly, venue is a confounding issue for the Federal Circuit, and no other circuit court. It is odd that the Federal Circuit has issued mandamus on one issue so frequently over the past three years while only one other circuit court has granted mandamus on this issue. And that circuit did so only once.

In the next post we will give come further context and detail about the petitions for writs of mandamus at the Federal Circuit. And specifically look at the issue of venue mandamus in greater detail.

by Dennis Crouch

Edible IP v. Google (GA 2021)

This interesting case is pending before the Supreme Court of Georgia over the question of keyword advertising under Georgia law.  The following comes from Edible’s brief:

Edible’s claim is simple. It owns valuable intangible property associated with the trade name “Edible Arrangements.” The law [of Georgia] protects its right to exclude others from trading on that name and its associated good will for profit. The Complaint alleges that when Google auctions off that name and the associated business goodwill, Google violates Edible’s rights to exclude others from its property and appropriates the value of Edible’s goodwill for itself. As a matter of fact, this is an illegal [theft-by-]taking, and Edible can introduce evidence within the framework of the Complaint to prove each cause of action.

The trial and appellate courts both sided with Google, holding that keyword advertising is akin to permissible sponsored product placement in grocery stores.  The Supreme Court is set to hear oral arguments in the case on November 10, 2021.

Google argues that any decision in Edible’s favor would be contrary to federal trademark law and be in violation of the free speech provision of the First Amendment of the U.S. Constitution.

Google may have cleaned-up its advertising in the lead-up to the Supreme Court arguments. My search on Oct 18, 2021 revealed no ads showing up for “Edible Arrangements” but one of the top hits is a rhetorical question from Google “Is Edible Arrangements overpriced?”

= = =

Briefs:

• Edible Appellant Brief
• Edible Appellee Brief
• Edible Reply Brief
• Edible Amicus

= = =

NOT a TM Case: A key aspect of the case is that Edible is not on suing trademark law.  Rather the cause of actions center on state statutes involving theft of personal property.  “Customer confusion is not an element of any of Edible’s claims.”  Edible’s Brief.   In its argument, Google argues for a bright line rule that Georgia courts cannot enforce rights to trade-names absent fraud, deception, or confusion.  According to Google, any broader rights would impinge upon the company’s freedom to sell competitive advert-space tied to Edible’s name as protected by the First Amendment.

= = =

Edible International, LLC is the company that franchises the basket delivery.  The plaintiff here Edible IP, LLC is the company that owns the trademarks. Edible IP licenses the marks to Edible International.   It is not clear to me the exact relationship between these two companies, but they are obviously related.

Edible International opened an advertising account with Google, and clicked “I agree” to Google’s terms that included an agreement to arbitrate any resulting disputes.  The district court found this was binding on Edible IP, and that issue is also before the Georgia Supreme Court. Edible IP argues that it should not be bound by the actions of its Edible International relation.

= = =

The International Franchise Association filed a brief in support of Edible: “Google’s advertising model is profiting directly from using the trade names and goodwill of established companies for profit. This use is antithetical to fair business practices and the law, and it should not be allowed.”

by Dennis Crouch

This decision suggests that the Federal Circuit is acceding to the Supreme Court’s approach giving broad discretion to the district courts in attorney fees cases rather than nit-picking individual elements of the totality-of-the-circumstances test.  But, we’ll see. 

Energy Heating, LLC v. Heat On-the-Fly, LLC (Fed. Cir. 2021)

In a prior appeal in this case, the the Federal Circuit affirmed the lower court’s holding that Heat On-The-Fly’s U.S. Patent No. 8,171,993 was unenforceable due to inequitable conduct.  By the critical date (1-year-before-filing), the patentee had done about $2 million in jobs using the invention, but did not disclose those sales/uses to the USPTO during prosecution.

On remand, the district court awarded attorney fees to the defendants — finding the large number of undisclosed sales sufficient to constitute “affirmative egregious conduct” and then pursued aggressive litigation despite knowing that the patent was invalid.

The patent act provides a district court with discretion to award “reasonable attorney fees to the prevailing party” in “exceptional cases.”  Once you have a prevailing party, the district court needs to determine whether the case is “exceptional.”  If so, the district court will then determine whether to award attorney fees, and the amount to award.  These determinations are within the district court’s equitable discretion based upon a broad “totality of the circumstances”  test.  On appeal, the district court’s factual and equitable determinations are given deference and only overturned based upon an abuse of discretion. Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014); Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559 (2014).

On appeal, the patentee challenged the “exceptional case” finding, but the appellate panel found no abuse of discretion.

Inequitable conduct is an equitable defense that is traditionally decided by a judge rather than a jury.  An oddity of the case is that the jury was actually asked whether the patentee had represented in bad faith that it held a valid patent as part of the defendant’s state law claim counterclaim of “deceit.”In the appeal, the patentee argued that it was improper for the district court to rely upon the jury’s bad faith determination. I don’t understand that argument and neither did the Federal Circuit.

The jury found bad faith, but actually sided with the patentee on the ultimate question of deceit under N.D. Law.  On appeal, the patentee argued that the no-deceit conclusion should be determinative of no inequitable conduct as well. Of course, the prior appeal determined inequitable conduct and the Federal Circuit did not allow the issue to be relitigated in this appeal. The Federal Circuit did rule though that “the jury’s finding of no state-law ‘deceit’ simply has no bearing on inequitable
conduct.”

Finally, the patentee noted the absence of an express finding of litigation misconduct absent continuing to litigate losing positions. On appeal, the Federal Circuit found no problem with finding the case exceptional even absent particular litigation misconduct issues.

by Dennis Crouch

US Inventor Inc. v. Hirshfeld, No. 21-40601 (5th Cir. 2021)

In February 2021, US Inventor and others collectively sued the USPTO asking the court to order the USPTO to issue rulemaking regarding discretionary considerations at the institution stage of AIA Trials.  That case is now on appeal.

Standards for Discretionary Dismissals: The statute particularly requires the PTO Director to issue regulations “setting forth the standards for the showing of sufficient grounds to institute a review [and] shall consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office.” 35 U.S.C. 316.  Although the USPTO has issued regulations about what counts as “sufficient grounds” to institute, the regulations do not consider discretionary denials, a potentially key aspect of the institution decision.  Of course, the importance of discretion depends upon how discretion is wielded.  The PTO has declared a “standard operating procedure,” and the plaintiff here argues that the SOPs were illegal rulemakings (“promulgated without lawful adherence to the strictures of the Administrative Procedure Act.”).

Abuse of Discretion: Courts and administrators are often given discretionary authority to make decisions.  But, discretion still requires that the decision-maker make a non-arbitrary decision that at least has a rational basis after considering both the law and the evidence at hand.  Arbitrary decisions represent an abuse of discretion and are regularly overturned on appeal.  AIA Trial Institution decisions are problematic to that general scheme because institution decisions are not appealable. Administrative Procedure Act (APA) to the rescue with 5 U.S.C. 706 authorizing actions to compel agency to stop any behavior that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

Hurdle of Concrete Harm: Although the APA permits an action to compel agency action, the statute typically requires that the plaintiff be “a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action.” 5 U.S.C. 702.  In addition to this statutory injury requirement the Supreme Court has also interpreted Article III of the U.S. Constitution to require that the plaintiff identify some concrete harm caused by the defendant’s action (or inaction).  The case must be dismissed for lack of standing absent that concrete harm.

In this case, the PTO argued (1) that the statute does not require rules on that discretionary aspect of institution. And, (2) even if it was supposed to put the rules in place, the plaintiffs here have not suffered any concrete harm due to the lack of regulations.

Case Dismissed: Judge Gilstrap dismissed the case in July 2021 — agreeing with the USPTO that the plaintiffs lacked standing. The court’s opinion suggests that a patentee might never have standing for such a challenge:

For patentees, the notion of a concrete interest in discretionary denials of AIA petitions is particularly tenuous. Although the institution decision is a step on the road to invalidation, there is no dispute that discretionary denials under §§ 314(a) and 324(a) necessarily occur in situations where the PTAB has proper authority to institute. There is also no apparent dispute that the PTAB can exercise that discretion, at least on a panel-by-panel basis. As a result, the factors considered in the challenged PTAB decisions are neither dispositive nor exclusive. In the case of a discretionary denial, there is no harm to patentees because the proceeding ends and the patent rights are unaffected; the status quo is maintained.

District Court Dismissal Order. I struggle to understand the court’s logic associated with panel-to-panel variance. If that variance is due to different standards being applied then the situation seems to be begging for agency regulation.  Judge Gilstrap’s decision is now on appeal.

Where to Appeal?: One quirk of the appeal is that it is not entirely clear whether the case should go to the Fifth Circuit or the Federal Circuit.  US Inventor’s attorney Robert Greenspoon decided to play-it-safe to make sure he preserved his right to appeal by filing a notice of appeal in both courts.  Greenspoon asked the Federal Circuit to then pause the appeal deadlines until the Fifth Circuit determines whether jurisdiction is appropriate. And, the Federal Circuit has granted that motion.

In the Fifth Circuit, the USPTO filed a motion to dismiss the appeal–arguing that the case arose under the patent laws and therefore should go to the Federal Circuit.  Rather than deciding that issue directly, the Fifth Circuit has announced that it will carry that motion to the merits oral arguments and decided it all together.

Section 1295 provides statutory guidance as to when an appeal is directed to the Federal Circuit.

(a)The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction—(1) of an appeal from a final decision of a district court of the United States … in any civil action arising under, or … in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection.

28 U.S.C. 1295 (Jurisdiction of the United States Court of Appeals for the Federal Circuit).

Arising under the Patent Laws: A key underlying issue in the case is the extent that the patent laws require the USPTO to issue certain regulations.  In other words, the patent laws are integral to the lawsuit.  At the same time, the actual cause of action does not stem from the patent laws but rather from the Administrative Procedure Act (APA).  The Supreme Court has explained that the first go-to for arising under jurisdiction is the cause of action. Nonetheless, a case may still arise under the patent laws if “plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law.” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988).

The Federal Circuit has repeatedly held that APA cases such as the one here do arise under the patent laws–meaning that any appeals should be heard by the Federal Circuit.  See, for example, Helfgott & Karas v. Dickinson, 209 F.3d 1328 (Fed. Cir. 2000) and Star Fruits S.N.C. v. United States, 393 F.3d 1277 (Fed. Cir. 2005) (Because APA claim “involves the Director’s duties ‘[i]n the course of examining or treating a matter . . . in a reexamination proceeding,’ it raises a substantial question under the patent laws” over which the Federal Circuit has exclusive jurisdiction).  However, those decisions were released prior to the Supreme Court’s most recent statement on the issue. Gunn v. Minton, 568 U.S. 251 (2013).

Gunn was an attorney negligence case brought under Texas state law, but the case was depend upon whether the attorney erred in his application of federal patent law. The Federal Circuit had previously found that this type of case raised substantial patent law questions and therefore should be heard in Federal Court with appeals going to the Federal Circuit. In Gunn, the Supreme Court disagreed with that approach and explained instead that state-law based attorney malpractice “will rarely, if ever, arise under federal patent law.”  Gunn paralleled its analysis to that of a the prior non-patent arising under case Grable & Sons Metal Prod., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005) and concluded that the patent issues at stake in the malpractice case were not “substantial” in the context of the patent system as a whole. Although the patent issues in the malpractice case may have been important to the parties involved, nothing from that case was going to make any difference to the patent laws or federal patent litigation.

The USPTO does not cite or mention the Gunn decision in its motion in the 5th Circuit appeal in US Inventor.  One reason perhaps is that Gunn focuses on a slightly different situation.

• Gunn: Whether the lawsuit “arises under” the patent laws and thus gives a Federal District Court original jurisdiction under 28 USC 1338.
• US Inventor: Whether the lawsuit “arises under” the patent laws and thus gives the Court of Appeals for the Federal Circuit appellate jurisdiction under 28 USC 1295.

Both Section 1338 and Section 1295 use the identical “arising under” language and nothing in the legislative history suggests to me that they should be interpreted differently. Both of these provisions channel patent cases into certain courts for the purpose of “the development of a uniform body of law.”  Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989). In Gunn, the court explained that:

Congress ensured such uniformity by vesting exclusive jurisdiction over actual patent cases in the federal district courts and exclusive appellate jurisdiction in the Federal Circuit.

Gunn (referring to Section 1338 and Section 1295 respectively). Still, there is some tension between the two provisions that comes out of Gunn. In particular, the Supreme Court’s reticence to expansive federal jurisdiction was grounded in principles of federalism. The Court recognized that a local interest of states in having state courts decide cases arising from state law.  In order to deprive states of those cases, the patent issue must be substantial.   One outcome of Gunn is that state courts are now more often hearing patent law issues as they arise in various non-patent causes of action.

This state vs federal debate is only relevant in the context of original jurisdiction questions under Section 1338 where a case might be filed in state court or instead in federal court.  There are no such federalism concerns in US Inventor – rather the question is which of two federal appellate courts will hear the appeal. This difference offers one reason to interpret the two statutes a bit differently, perhaps requiring more substantiality in one situation than in the other. But, I would suggest that tweaking is not worth the candle and probably not what Congress intended. And, the Federal Circuit has agreed in post-Gunn decisions that the Gunn analysis impacts both Section 1295 and 1338.  Bottom line here is that the USPTO should not have simply relied upon its pre-Gunn APA decisions.

In his 2019 article, Prof. Paul Gugliuzza proposes a simple rule that is consistent with both statutes and the requirements of Gunn.

For a case that does not involve claims of patent infringement to nevertheless arise under patent law, it must present a dispute about the content of federal patent law or a question about the interpretation or validity of the federal patent statute; questions about the validity or scope of a particular patent are not sufficient.

Paul R. Gugliuzza, Rising Confusion About “Arising Under” Jurisdiction in Patent Cases, 69 Emory L.J. 459 (2019).  Although Gugliuzza’s proposal here is straightforward, the parties in US Inventor disagree as to the outcome of the test.

The 5th Circuit appeal is now in-briefing and we’ll will likely not see a decision in the case until 2022.

by Dennis Crouch

In Australia, the term “ugg boots” refers to a general style of sheepskin shoe with the fleece turned in for warmth.  It is a generic term, and not a trademark – in Australia.  And, there are dozens of companies that make and sell ugg boots in that country, including Australian Leather Pty. Ltd..  The original name “ugh” came from 1970s surfer Shane Stedman who has been quoted as saying “We called them Ughs because they were ugly.”

UGG is a registered trademark in the USA, now owned by Deckers Outdoor Corp. Back in 2016, Deckers learned that Australian Leather had imported 12 pairs boots labelled “ugg boots” into the USA and sued for trademark infringement.  The defendant argued that it should be able to import its boots to the US since the term is generic in Australia, but the district court sided with the plaintiff in rejecting that defense. On appeal, the Federal Circuit affirmed in a R.36 Judgment without any opinion (the original complaint included some design patents as well).

Australian Leather has now petitioned to the U.S. Supreme Court, asking two questions:

1. Whether a term that is generic in the English-speaking foreign country from which it originated is ineligible for trademark protection in the United States.

2. Whether and, if so, how the “primary significance to the relevant public” standard in 15 U.S.C. § 1064(3) for determining whether a registered trademark has “become” generic applies where a term originated as generic before registration.

[Petition]. This is an interesting new trademark petition that suggests some nuance from the Court’s 2020 decision in BOOKING.COM.

by Dennis Crouch

Infernal Tech LLC v. Sony Interactive Entertainment LLC (E.D.Tex. 2021)

Today’s jury verdict in E.D. Tex. favored the accused infringer Sony.  The patentee alleged that Sony’s Spider-Man and God of War games infringed its U.S. Patent Nos. 6,362,822 (claim 1) and 7,061,488 (claims 1, 27, and 50.  The jury found, however, that neither game infringed.

The more interesting part of the jury verdict was Question 2 where Judge Gilstrap asked the jury to opine on the factual underpinnings of Alice Step 2. In particular, the jury was asked whether Sony had proven “by clear and convincing evidence that the Asserted Claims only involve technologies and activities that were well-understood, routine, and conventional, from the perspective of a person of ordinary skill in the art, as of [the Filing Date].”   The jury sided with the defendant and answered “yes.”  The case will next go through some post-verdict motion practice (JNOV/New-Trial) and then will likely be appealed. However, barring some claim construction problem it will be difficult to overcome this non-infringement decision on appeal.

Claim 1 of the ”822:  A shadow rendering method for use in a computer system, the method comprising the steps of:

providing observer data of a simulated multi-dimensional scene;

providing lighting data associated with a plurality of simulated light sources arranged to illuminate said scene, said lighting data including light image data;

for each of said plurality of light sources, comparing at least a portion of said observer data with at least a portion of said lighting data to determine if a modeled point within said scene is illuminated by said light source and storing at least a portion of said light image data associated with said point and said light source in a light accumulation buffer; and

then combining at least a portion of said light accumulation buffer with said observer data; and

displaying resulting image data to a computer screen.

The plaintiffs in the case are represented by Buether Joe LLP out of Dallas and the Defendants by Erise IP out of Kansas City. 

by Dennis Crouch

Kannuu Pty. LTD v. Samsung Electronics Co., LTD (Fed. Cir. 2021)(KannuuSamsungDecision)

US Courts typically enforce choice-of-forum provisions found within contracts between two business entities.  Here, Kannuu and Samsung entered into a non-disclosure agreement as part of a potential deal, and the contract included a choice-of-forum provision that directed “any legal action” stemming from the agreement to courts located in New York City “and no other jurisdiction.”  The potential deal fell apart and Kannuu eventually sued Samsung for patent infringement.  Samsung responded with an inter partes review (IPR) petition. Kannuu then asked the USPTO to drop the petition based upon the forum-selection-clause and, failing that, also petitioned the district court for an order that Samsung drop the IPR.  The district court denied Kannuu’s motion for preliminary injunction and then appealed.

On appeal, the court centers-in on the issue:

The underlying question that this case presents is one of first impression: Does the forum selection clause in the non-disclosure agreement between the entities prohibit Samsung from petitioning for inter partes review of Kannuu’s patents at the Board?

Slip Op. Apart from the general legal question of whether such a clause can operate to keep the case out of IPR, Kannuu’s case has a more fundamental problem identified by the district court — “the plain meaning of the forum selection clause in the NDA [does] not encompass the inter partes review proceedings.” Slip Op.

The district court case is only at the preliminary injunction stage, and the appellate panel found no abuse of discretion in the district court’s finding that the IPR proceedings are not covered by the agreement since the agreement focuses on confidentiality rather than intellectual property rights.

On the bigger question of whether such a contract, if properly drafted, might be enforceable, the court explains that it “might” work:

Had Kannuu and Samsung entered a contract which applied to inter partes review proceedings, a forum selection clause in that hypothetical contract might permit Kannuu to avoid inter partes review and its inherent features. But, they did not enter such a contract.

Id.  The court has previously found such a clause enforceable to prevent a post-grant-review proceeding, but only in a non-precedential opinion. Dodocase VR, Inc. v. MerchSource, LLC, 767 F. App’x 930 (Fed. Cir. 2019).

The majority opinion was written by Judge Chen and joined by Judge Prost.

Writing in dissent, Judge Newman argued that “the forum selection clause is clear and unambiguous, and law and precedent require that it be respected and enforced.”

= = =

I should note that the patent at issue here has the auspicious title of “Process and apparatus for selecting an item from a database.” [Link]

by Dennis CrouchThe Federal Circuit has been tearing through mandamus petitions on the issue of inconvenient venue under Section 1404(a). The issue comes up in cases where venue is proper and the court has personal jurisdiction over the defendant, but for whatever reason the particular venue chosen by the plaintiff is inconvenient. Thus, the statute provides a district court with discretion to move venue “[f]or the convenience of parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404.  Section 1404 appeals are traditionally quite rare. The issue comes up at the very beginning of the case, but there is no immediate right appeal the grant or denial of the transfer motion. By the time the district court reaches final judgment any harm due to litigating in an inconvenient forum is typically water-under-the-bridge leaving no cognizable harm for the appeal.  The shortcut then is to petition for mandamus as soon as the district court grants or denies a motion to transfer.

An oddity of patent litigation jurisprudence is that Section 1404 determinations are not deemed patent-law specific.  Thus, the district court is bound to follow the law of the regional circuit court. And, although patent-litigation mandamus petitions go to the Federal Circuit, the appellate court purports to apply the law of the relevant regional circuit court.  Since most of the transfer cases before the Federal Circuit are originally filed in Texas, the Federal Circuit regularly applies Fifth Circuit law.

The chart above comes from a simple Westlaw case search of appellate decisions referencing both Section 1404(a) and mandamus.  What you’ll notice is a relatively large number of decisions from the Federal Circuit, the vast majority of these out of the Fifth Circuit region.  Anyone following the cases will also know that the Federal Circuit has substantially advanced the doctrine over the past 4 years, even though during that time the FifthCircuit has not decided any Section 1404 cases.  By the time the Fifth Circuit hears another mandamus petition, I expect that the court may be a bit shocked to see where their doctrine has gone.

One note on this data – Prof. Jason Rantanen has written about missing appellate decisions, and mandamus decisions are right in the sweet-spot of  decisions that potentially don’t find their way into Westlaw.  So, bottom line is that these numbers are likely an undercount. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3927406

by Dennis Crouch

CosmoKey Solutions v. Duo Security (Fed. Cir. 2021)

Patentee wins this one–with the Federal Circuit reversing the district court and finding the claims on patent-eligibility under Alice step-two.  This is another case that serves as a data-point, but I struggle to differentiate it from similar cases finding claims ineligible.

CosmoKey’s U.S. Patent No. 9,246,903 is directed a low-complexity, high-security method of authenticating a user transaction. (2011 priority filing date).  The basic idea here is two-factor-authentication that uses a second communication channel (mobile phone) to authenticate a transaction.  This general idea was already in the prior art, but the claims add a couple of additional features:

• Authentication function is normally inactive on the mobile device but is activated by the user for the transaction; and when once the transaction is done the authentication function is automatically deactivated.  This on/off function is designed to both save power on the device and also help prevent hacking.
• As part of the authentication, there is a check on how long the user takes to respond (whether a predetermined time relation exists between the transmission of the user identification and a response from the second communication channel);

See ‘903 Patent Claim 1.

The district court found the claim ineligible under Section 101 after finding them closely parallel to the authentication method claims invalided in Prism Techs. LLC v. T-Mobile USA, Inc., 696 F. App’x 1014 (Fed. Cir. 2017) (nonprecedential opinion).  In particular, the district court found the claims directed to “the abstract idea of authentication—that is, the verification of identity to permit access to transactions”  (Alice Step 1) and that the claims recite generic computer functionality that were all well understood, routine, and conventional activities at the time of the invention (Alice Step 2).

On appeal, the Federal Circuit has reversed — holding that the patent “discloses a technical solution to a security problem in networks and computers.”  That statement suggests reversal on Alice Step 1; but the court actually leapt to Step 2 without a clear holding on Step 1.  Here, the court found that the claimed steps were (1) developed by the inventors; (2) not admitted prior art; and (3) yield advantages over the described prior art.  The court noted the difficulty with this case — the purpose of the invention was to “reduce significantly” “the complexity of the authentication function.”  But, simplification can quickly suggest abstraction.

Eligibility Jurisprudence: It has been quite difficult to nail down the meaning of “abstract idea.”  The Supreme Court suggested that we look back to prior cases to find the answer, and that is the same approach that has been followed by the lower courts as well as the USPTO.  Here, however, the Federal Circuit cautioned that analysis:

While prior cases can be helpful in analyzing eligibility, whether particular claim limitations are abstract or, as an ordered combination, involve an inventive concept that transforms the claim into patent eligible subject matter, must be decided on a case-by-case basis in light of the particular claim limitations, patent specification, and invention at issue. Here, the  claim limitations are more specific and recite an improved method for overcoming hacking by ensuring that the authentication function is normally inactive, activating only for a transaction, communicating the activation within a certain time window, and thereafter ensuring that the authentication function is automatically deactivated.

Slip Op.

The court’s opinion was written by Judge Stoll and joined by Judge O’Malley.  Judge Reyna penned a concurring opinion arguing that the two step Alice approach should be taken in-order:

The majority skips step one of the Alice inquiry and bases its decision on what it claims is step two. I believe this approach is extraordinary and contrary to Supreme Court precedent. It turns the Alice inquiry on its head.

Concurring Opinion. Judge Reyna goes on to explain how Step 2 should be seen as a “lifeline” that only comes into play to save claims that are directed toward abstract ideas.  But, we can’t know if there is “something more” without first answering the question “more than what.”

Step two is rendered superfluous and unworkable without step one. Without the benefit of a step-one analysis, we are hobbled at step two in reasonably determining whether additional elements transform the nature of the claim into a patent-eligible application of the abstract idea. And by skipping step one, we create a risk that claims that are not directed to an abstract idea might be deemed to “fail” at
step two.

Id.  Judge Reyna then goes on to conclude that the claims are not directed to an abstract idea. Id. Quoting the majority statement that “the claims and specification recite a specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity.”