by Dennis Crouch
Lavvan, Inc. v. Amyris, Inc., 21-1819, 2022 WL 4241192 (2d Cir. Sept. 15, 2022) (21-1819_so)
Lavvan sued Amyris for patent infringement. The parties had signed a prior contract with an arbitration agreement and Amyris unsuccessfully sought an arbitration order. The district court order denying arbitration is immediately appealable under 9 U.S.C. 16. Amyris appealed, but also lost on appeal. Open and shut.
Now the strange part. Amyris appealed to the Second Circuit who decided the case without questioning its own jurisdiction over a patent case despite stating in the opening paragraph that the complaint alleged patent infringement. In its opening brief, Amyris likewise stated that
The district court had jurisdiction over this case under 28 U.S.C. §§ 1331 and 1338 because Lavvan asserts what are, at least in name, federal claims of patent infringement and trade secret misappropriation. This Court has jurisdiction over this appeal from the order denying Amyris’s motion to compel arbitration under 9 U.S.C. § 16(a)(1)(B).
Amyris appellate brief at 5. Lavvan’s stated that it “concurs with Amyris’s statement … that this Court has jurisdiction under 9 U.S.C. § 16(a)(1)(B).” Neither party referenced the Federal Circuit’s usual role in hearing appeals in patent cases. Likewise, the Second Circuit failed to reference the Federal Circuit’s usual role.
Part of the problem here is that the Federal Circuit’s jurisdictional statute is quite specific. In patent cases before district courts, the Federal Circuit has jurisdiction over (1) final decisions, 28 U.S.C. 1295; (2) interlocutory injunction orders, 28 U.S.C. 1292(a)/(c); (3) interlocutory orders that follow the strict requirements of 28 U.S.C. 1292(b)/(c); and (4) decisions final except for accounting 28 U.S.C. 1292(c).
The SDNY’s refusal to compel arbitration is separately appealable under 9 U.S.C. § 16(a)(1)(B), and that provision does not provide any map to Federal Circuit jurisdiction. So, maybe the Second Circuit’s approach is correct. For its part, the Federal Circuit has repeatedly claimed jurisdiction over these appeals by categorizing arbitration orders as “in effect a mandatory injunction.” Microchip Tech. Inc. v. U.S. Philips Corp., 367 F.3d 1350, 1354 (Fed. Cir. 2004). As in injunction order, the Federal Circuit has appellate jurisdiction under 28 U.S.C. 1292(a)/(c).
The Federal Circuit’s approach in Microchip Tech was rejected by the 8th and 3rd Circuits. Industrial Wire Products, Inc. v. Costco Wholesale Corp., 576 F.3d 516 (8th Cir. 2009) (interlocutory appeal denying motion to compel arbitration properly belongs in the regional circuit court of appeals); Medtronic AVE, Inc. v. Advanced Cardiovascular Sys., Inc., 247 F.3d 44 (3d Cir. 2001). Although non-precedential, the 2nd Circuit appears to have silently agreed with its sister regional circuits.
Having lost its appeal, Amyris might consider a motion for rehearing seeking vacatur for lack of appellate jurisdiction and a transfer to the Federal Circuit.
OT, but interesting PAE statistics [especially the last sentence here] from an AIPLA reported law firm study indicating that many patent suits now are filed by PAEs that are subsidiaries of a much larger PAE that seeks to escape liability and discovery by creating separate shell corporations or LLCs for different patents or sets of patents that they control. [Pending legislation would require prompt recording of such assignments] One of the more active parent companies is IP Edge, which owns several active patent assertion entities under different company names. “The numbers are staggering: IP Edge currently has 245 active lawsuits and 4,179 inactive (settled or dismissed) cases across its 240 known entities. RPX estimates “roughly 70% of IP Edge cases terminate within 180 days of filing, with reported settlement amounts typically an order of magnitude lower than the cost of an inter partes review … suggesting that the NPE has adopted a business model of seeking settlement amounts that make an IPR challenge by defendant-petitioners economically unattractive. If you’ve been sued for patent infringement, there’s a 25% chance the plaintiff is an IP Edge entity.”
Who are the owners of IP Edge?
They sound like truly awful people so I’m guessing they are a conglomerate of patent attorneys from Texas or some other form of human s c u m.
You guessed right about a conglomerate of patent attorneys in Texas, see below—
link to ip-edge.com
(It doesn’t say on the website such as it is, but a quick search indicates they are based in Houston.)
Also, it appears—no surprise of course—they’re linked up with at least one hedge fund or hedge fund-adjacent company. Look at page 3 of the below slide deck—
link to img1.wsimg.com
Truly awful…?
Because enforcing patent is what, “the worst thing ever”..?
Worse perhaps than shameless Efficient Infringement?
OT, but Novartis application for stay of mandate now denied by full Court.
For WT:
“Few clients are going to pay for a “giganto disclosure” these days. ”
Almost every app I do now is 40 pages plus, and minimum 20 drawings. That’s up from around 15-20 pages and 4 drawings (if no method steps shown) when I started. It’s plenty over my way, as the art has got much more complex and everyone wants to do 3-4 major species in each app now, min.
“Moreover, if you do get a “giganto disclosure,” it’ll likely spawn multiple continuations, ”
Maybe but that doesn’t seem to actually happen that much. They just try to keep the claims generic for at least some inds.
“which will all be much easier to examine because you’ll already have done the grunt work in the original parent application.”
Lelz. Always so funny. You and anon with your magical thinking. Because grunt work was done once, on a different claim set, a year+ ago, means that it is magically easier on the second time+ through for claims that are perhaps much more willy drafted, or are trying to slide by on some slick limitation that is hard to find in all that gaggle of references but you’ve got to do all new grunt work to find, and probably a new set of deps as well. Funny how that just doesn’t happen irl even though you have high confidence in your theorycrafting.
“Examining continuation applications has got to be some of the easiest work at the USPTO.”
Sometimes, but I wouldn’t say usually. As they’re just trying still yet another way of trying to slide by the prior art by one limitation and you’ve got to go back, do a new search quite often, and then go through the giganto stack of art. But sometimes it is marginally easier.
You are slipping back and forgetting what I told you about a proper first examination, 6.
Reminder: you are charged with the application as filed and not just any initial claim set.
As I postulated, once the initial examination is done properly, all “go-backs” are necessarily easier.
While it may be considered “magic” to get YOU (personally) to do your job right, it cannot generally be considered to be “magic” to think that such a condition as proper examination is indeed a proper starting point for this discussion.
I’m not going to re-explain about your fantasy examinations that don’t happen irl and never will. But yes, if your fantasy examinations took place then perhaps your theorycrafted theory of ease would work out in slightly more cases than it does now. Doesn’t change reality, doesn’t make your theorycrafting anything more than a fantasy.
“While it may be considered “magic” to get YOU (personally) to do your job right, it cannot generally be considered to be “magic” to think that such a condition as proper examination is indeed a proper starting point for this discussion.”
Yes fantasies are always the best place to “start” a discussion from. I obviously decline to have your fantasy discussion, and I’m talking to WT.
“I obviously decline”
Obviously – as your prior position was simply and totally wrecked by me.
Maybe Wt will be more gentle with you.
Yes, your opinions based on your fantasies are “totally wrecking” all comers who want to discuss real life. It’s totally happening. Tho only in your own mind.
Way to project there (falsely) 6.
Reality though intrudes and your past position vis a vis what you “have to do” to properly examine an application were shown to be wrong.
Conveniently (I see), you do not reiterate what your position was.
Too embarrassing for you?
Re: “..once the initial examination is done properly [‘of the application as filed and not just any initial claim set’] all “go-backs” are necessarily easier.” Apparently expecting that for a mere 600 bucks examination fee that the USPTO is going to conjecture up and search for art for every possible claim that might be drafted in the future for that application??? [Including the large percentage of patent applications filed these days with no previous prior art searches and very broad “shotgun guesses” initial claims?
So at first blush, I was mildly perturbed by Paul’s (typical) snide comment in passing about a prosecution matter.
Not only has he no room to speak on the subject, having decided to throw his weight to the en e my of Efficient Infringers, he long ago abdicated any ability to engage in prosecution with not renewing his registration number.
On second thought, the perturbed state is made even more egregious, given that he is attempting to peddle MISinformation (and aspects that have been around since the days that he actually was allowed to do prosecution).
Paul knows (or should know) that the fees charged are NOT an actual “cost-to-do-activity.”
Paul knows (or should know) that the Office is NOT ALLOWED TO BE a profit center, and that all costs must even out at the aggregate.
Paul know (or should know) that the sequential annuity fees far exceed any actual “cost” associated with ‘maintenance.’
So Paul’s intimation that one should expect LESS THAN A FULL LEGAL VETTING for the set fee of examination is built on a KNOWN nest of falsehoods.
Even besides the actual point (after a full and proper first examination, any “go-back” is necessarily easier), Paul peddles misinformation in painting those who obtain patents as somehow being unscrupulous.
Let’s look at the “logic” that Paul wants to peddle: No One should expect a “real” examination on the merits for a mere $600.
Why then, bother with examination at all?
Why then have a presence, let alone the level of Clear and Convincing, of a presumption of validity – that the patents HAVE BEEN fully vetted under the law?
Paul’s logic is necessarily faulty, incomplete, and rife with Efficient Infringer “patents are bad” bias.
Paul should be chastised severely for his nonsense.
This is quite the interesting question, even though it doesn’t involve any substantive patent matters.
For one, it seems like both parties (i.e., Lavvan and Amyris) are wrong. Not on the underlying jurisdiction per se, but on whether 9 U.S.C. § 16(a)(1)(B) even deals with jurisdiction in the first place. It actually doesn’t. Rather, it only serves to provide that interlocutory orders of this type (denying motions to compel arbitration) are appealable. That’s a separate issue from jurisdiction though. The statute’s lack of connection to jurisdiction is also uniformly recognized in all the relevant caselaw (i.e., CAFC, CA3, CA8).
Next, cutting to the chase, the actual question of jurisdiction turns on the interplay between § 1292(c)(1) and § 1292(a)(1). The former provision confers (exclusive) jurisdiction on CAFC for, as relevant here, interlocutory appeals under the latter provision. In turn, § 1292(a)(1) covers the following types of interlocutory orders: “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions”.
Based on the above, and as the courts have recognized, the only possible way § 1292(a)(1) could apply to an order denying a motion to compel arbitration is if such an order would be considered one that “refus[es] [an] injunction[]”. Or, reformulating the question, if an order granting a motion to compel arbitration is one that “grant[s] [an] injunction[]” and thus falls within the scope of § 1292(a)(1), then, by the same logic, a denial of such a motion would also be covered by the statute.
So, as Prof. C. mentioned, CAFC in Microchip Tech. found that it had jurisdiction by answering “yes” to the reformulated question. That is, CAFC treated an order granting a motion to compel arbitration as one “granting [an] injunction[]”. CAFC relied on a statement (even calling it “dicta” would be overly generous I think) from a SCOTUS case that characterized an order enforcing an agreement to arbitrate, which itself had been issued in an earlier SCOTUS case, as “equitable relief” and “a mandatory injunction”. Sinclair Ref. Co. v. Atkinson, 370 U.S. 195, 212 & n.33 (1962) (discussing order in Textile Workers Union v. Lincoln Mills, 353 U. S. 448, 458 (1957)).
Likewise, CA8 and CA3 come out differently because they don’t see orders dealing with motions to compel arbitration as “injunctive”. So § 1292(a)(1) and thus § 1292(c)(1) don’t apply. Instead, those two circuits treat such orders as falling into a no man’s land that’s ultimately covered by the “residual” statute, § 1294. Section (1) provides that regional circuits have jurisdiction.
To reach the above conclusion, CA8 and CA3 reason as follows. CA8 relies partly on the CA3’s decision in Medtronic AVE and partly on its own precedent in McLaughlin Gormley King Co. v. Terminix Int’l Co., 105 F.3d 1192, 1193 (8th Cir.1997). However, the latter is (1) thinly reasoned at best and (2) more importantly, doesn’t address the relevant question head-on. As for the former, the CA3 Medtronic AVE decision, that ultimately rests on the SCOTUS case of Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 287-88 (1988).
I’m not sure Gulfstream provides much of a sturdy foundation. For one, it didn’t involve orders dealing with motions to compel arbitration, but rather orders granting and denying stays. Moreover, if anything, it actually bolsters the argument that CAFC would have jurisdiction. This is because the Court stated that “1292(a)(1) will, of course, continue to provide appellate jurisdiction over orders that grant or deny injunctions and orders that have the practical effect of granting or denying injunctions”. Id.
Given all the above, especially the Court’s statement in Gulfstream, I think CAFC has the better of the argument. And considering the existing circuit split that’s now just been made more pronounced by CA2, the issue seems like a good candidate for cert.
AI bros, it sounds like the whole AI as property thing is starting to upset some AIs.
link to youtube.com
You have shared that link previously, 6.
Oh lol, man i’m getting old lol, I thought it was a new vid to me.
No prob — it’s still a pretty entertaining clip.
New for 6:
link to youtu.be
This appears to be a direct follow-on.
Yeah I saw that one next. They did a Led Zeppelin music vid with ai art showing what the bizarre lyrics mean, some say it is a masterpiece.
link to youtube.com
Contrast with:
link to youtu.be
This is a much better “long form” — not the PR fluff, and levels of nuance (from experts in the field) is pretty awesome; but only if one is willing to engage more deeply.
This 2d Cir. decision says the subject Lavvan – Amyris contract contained “.. a separate subsection, subsection 7.2.1, specifying that if “a dispute arises with respect to the scope, ownership, validity, enforceability, revocation or infringement of any Intellectual Property, . . . such dispute will not be submitted to arbitration and either Party may initiate litigation.”
[So which appellate court was the proper one was probably irrelevant. But was appealing anyway, and not getting sanctioned for it, one way to delay the infringement trial?]
Assuming that Amyris recognized the two possibilities of CAFC and CA2 and made a deliberate try for the latter—and their counsel is Gibson Dunn, so it’s probably a good assumption—then yes, I would agree with your thesis that part of the goal was injecting some delay into the process. And this bit dragged on for over a year, which is a solid chunk of delay.
I also suspect Amyris was hoping CA2 would be a little more arbitration-friendly than CAFC, even if that ended up not being the case here.
As for sanctions, I’m not clear what you mean by that. Do you mean it was sanctionable for Amyris to assert CA2 jurisdiction as opposed to CAFC? If so, I’m not sure, because the issue doesn’t seem that simple, as I discussed above at #3.
If you mean it was sanctionable for Amyris to pursue arbitration despite the seemingly-clear language of the agreement prohibiting it, then I might tend to agree. But it’s not something I’ve really considered at all so far.
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