The Emperor’s New Judgments: Rule 36 and the Invisible Cloth of Patent Law

by Dennis Crouch

The Federal Circuit’s practice of issuing no-opinion affirmances under Rule 36 is facing renewed scrutiny in two recent petitions for rehearing en banc. In UNM Rainforest Innovations v. ZyXEL Communications Corp. and Island Intellectual Property LLC v. TD Ameritrade, Inc., the petitioners argue that the court’s use of one-word Rule 36 judgments allowed it to sidestep key legal and factual issues raised on appeal. These petitions highlight ongoing concerns about the Federal Circuit’s frequent use of Rule 36 and its impact on patent law development.  The failure to provide an explanatory opinion is an appellate-procedure issue – the two patentees also argue that the lower tribunal made substantive legal errors.

I don’t see the court as having a truly nefarious reason for its common no-opinion judgments, but the situation does call to mind the ancient fable about the emperor’s new clothes adapted and popularized by Hans Christian Andersen.  In the story, two swindlers convince an emperor they can weave the finest, most beautiful cloth which is invisible to anyone unfit for their position or hopelessly stupid.  The emperor and his officials, not wanting to appear unfit or stupid, pretend to see the nonexistent cloth. The emperor parades through town in his “new clothes,” with townspeople also pretending to see them to avoid appearing unfit or foolish.  Finally, it takes a child  to point out that the emperor is actually naked.  Here we have an invisible rule-36 judgment that comes with a pretending that the result is so obvious that there is no need for an explanation.  But, I tend to agree with the petitioners that in many of these cases the court is hiding behind the summary affirmance because of difficulty in explaining the ‘right’ result.  I was also recently rereading Homer’s Iliad, including the beauty contest between the goddesses Athena, Aphrodite, and Hera. It seems obvious that Paris would choose Aphrodite who was the goddess of beauty. But, by winning the favor of Aphrodite, he lost the favor of Athena and Hera, leading to the Trojan war.  Paris chose Aphrodite not simply because of her beauty, but also because of his love and desire for Helen that outweighed gifts of power and might offered by the other two goddesses.  We cannot relive mythological history, but Paris may have avoided the war by explaining the heart-felt basis of his decision rather than simply handing Aphrodite the golden apple.

In UNM Rainforest, petitioner argues that the PTAB failed to properly apply the claim construction framework of Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). Specifically, UNM contends the PTAB erroneously construed the terms “quantization” and “compression” as overlapping rather than mutually exclusive, contrary to the patent’s disclosure.

This distinction between “compression” on the one hand, and “quantization” on the other is clearly taught by a reading of the ’204 Patent in its entirety, which Phillips requires, and which the PTAB did not do.

UNM argues this flawed claim construction led to an improper invalidity finding that the Federal Circuit summarily affirmed without addressing the alleged errors.

In Island Intellectual Property, petitioner asserts the district court failed to properly apply the summary judgment standard under Rule 56 when it concluded that the claims lacked eligibility under Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). Island contends the court ignored over 1,400 pages of evidence supporting patent eligibility and failed to view the evidence in the light most favorable to the non-moving party as required at summary judgment.

US Inventor, Inc. filed an amicus brief in support of Island IP’s petition for rehearing, arguing that the Federal Circuit’s use of Rule 36 summary affirmances is problematic and should be reconsidered en banc. The brief contends that Rule 36 is “illogical and constitutionally unsound” because it allows the court to affirm even when it should reverse or remand due to factual errors. It also argues that Rule 36 affirmances fail to settle disputes with collateral estoppel effect and systematically bias outcomes toward affirmance by preventing “vote fluidity” among judges. The brief cites TecSec, Inc. v. International Business Machines Corp., where the Federal Circuit acknowledged that a “Rule 36 judgment simply confirms that the trial court entered the correct judgment. It does not endorse or reject any specific part of the trial court’s reasoning.” 731 F.3d 1336 (Fed. Cir. 2013).

Critically, both petitioners and amicus emphasize that the Federal Circuit’s Rule 36 affirmances prevented meaningful appellate review of the lower tribunal decisions. UNM suggests that the court could not have issued a proper written opinion affirming the PTAB construction. “The PTAB’s  violations of this Court’s rules of claim construction prevented this Panel from issuing a proper written opinion, rather than a summary Rule 36 affirmance.”  Island similarly contends that the lack of reasoned explanation means that “neither the parties nor the reviewing court can know the actual basis upon which the decision was rendered.”

Island relies heavily on Supreme Court precedent emphasizing the importance of reasoned decision-making by appellate courts. For instance, Island cites Carter v. Stanton, where the Court vacated and remanded an order that was “opaque and unilluminating as to either the relevant facts or the law.” 405 U.S. 669 (1972). Both petitions argue that one-word Rule 36 affirmances conflict with this principle and deprive parties of their right to understand the basis for the court’s ruling.

The Island petition does a particularly good job of providing a circuit-by-circuit survey of approaches to summary affirmances, arguing that

The Panel’s use of a one-word decision under Rule 36 in this case conflicts with the practice of a majority of other Circuits and continues to be the subject of multiple challenges to the Supreme Court.

Island contends that most other circuits provide at least some explanation when affirming, either by rule or established practice. Federal Circuit’s frequent use of Rule 36 no-opinion affirmances is an outlier among appellate courts.  Island argues its case “provides an opportunity for [the Federal Circuit] to either finally eliminate the practice, or else state for high court review why it believes it is proper. The time
has come to address this issue en banc.”

Read the briefs:

25 thoughts on “The Emperor’s New Judgments: Rule 36 and the Invisible Cloth of Patent Law

  1. 7

    Totally off topic, but I recently noticed a 2021 paper in the American Economic Review entitled “Knowledge Spillovers and Corporate Investment in Scientific Research” that should be of interest to regulars around these parts. The authors conclude

    [P]rivate returns to corporate research depend on the balance between two opposing forces: the benefits from the use of science in [their] own downstream inventions, and the costs of spillovers to rivals. Consistent with this, firms produce more research when it is used internally, but less research when it is used by rivals. As firms become more sensitive to rivals using their science, they are likely to reduce the share of research in R&D.

    In other words, companies do more R&D investment when they are less worried about competitors appropriating their discoveries. If only there were some sort of legal regime to give them that confidence…

    1. 7.1

      Patents prevent spillover.

      1. 7.1.1

        +1

    2. 7.2

      As for R”&”D, more Sprint Left balderdash.

      (It gets pretty easy to follow / anything that Sotomayor does not like, is most often good)

  2. 6

    The previous comments regarding Rule 36 judgements were very interesting and were well done. The Fed. Cir. is not a busy court but they often lack the technical background to understand or appreciate the contribution to technology of the patent applicants. Rule 36 judgements by the CAFC is a way for the CAFC to maintain power and leverage over IP matters they don’t fully understand with minimal effort. My modest proposal would be for Congress to do something (unlikely at best given political division) and create an appeals court solely dedicated to IP matters staffed by judges with technical backgrounds. Is it so much to ask that the court managing 90% of the value of US businesses be staffed with minimally competent judges equivalent in technical competence of patent examiners? (I miss judge Newman.)

    1. 6.1

      “The Fed. Cir. is not a busy court but they often lack the technical background to understand or appreciate the contribution to technology of the patent applicants.”

      How often? Answer: very rarely.

      Every time people look closely at a body of cases (including oral arguments) where the lower court was upheld with Rule 36 decisions, what is revealed is NOT that the CAFC or the District Court was struggling with the (LOL) “technology” in those cases but rather the patent holder is struggling to bury the truth about their awful indefensible claims.

      1. 6.1.1

        Every time?

        Bury the truth?

        That does not even make sense as the one you are accusing of “burying” are the ones wanting explicit information.

        But go on again and try to gaslight how you are not anti-patent.

        1. 6.1.1.1

          “That does not even make sense as the one you are accusing of “burying” are the ones wanting explicit information.”

          It makes total sense once you open your eyes to reality and understand that all of the “explicit information” needed is in the district court decision. In a just world, many or most the plaintiffs in these cases would have their suits thrown out as frivolous. Plus sanctions.

          Question: now that Federal administrative decisions are treated as arbitrary under the law (until approved of by the Supreme Court, of course), why should we have a “presumption of validity” for patents?

          1. 6.1.1.1.1

            You are doing that opposite thing again.

            Read my post please – slowly if need be, grab a third grader (NOT literally) if you still have trouble (and you are permitted to approach under any of your current restrictions)

  3. 5

    All the outrage about what the Federal Circuit is doing. How about what the Art Units are doing every day through abusive tactics employed by Examiners (and rubber stamped by their SPEs and Primaries) that PTO Management knows that applicants will most likely not spend any time filing a petition against. They know that it costs time and money to fight these things and that cost-sensitive applicants will cave in to the Examiner.

    1. 5.1

      Not only that, but petition practice has no teeth, and is rarely useful (with or without a willing client).

    2. 5.2

      It’s almost as if spending resources to fight for change is more effective than whining.

      Who would have guessed?

      1. 5.2.1

        Says Ben – the examiner – who whines and attempts to shift the burden of internal metrics to be a problem for my clients…

        Irony much there Ben?

    3. 5.3

      +1 ipguy

  4. 4

    Re: “Island contends that most other circuits provide at least some explanation when affirming, either by rule or established practice.”
    That explanation could be as simple as saying “we agree with the decision below” which is implict in a one word affirmance, and tells the appellant that if they want to appeal further they need to argue with the opinion below.

  5. 3

    “ Island contends the court ignored over 1,400 pages of evidence supporting patent eligibility ”

    Deep stuff! That’s a lot of pages! So many pages yet still somehow ineligible. How could such a thing happen?

    Very, very mysterious.

    1. 3.1

      The alleged invention is a method of using math and logic to calculate “tiered interest rates.”

      [gags on own vomit while writing sentence]

  6. 2

    Re: the briefs allegation the “The Panel’s use of a one-word decision under Rule 36 in this case conflicts with the practice of a majority of other Circuits ..”
    Is that due in part to the Fed. Cir. having so many cases under APA statute requirements regarding their treatment of fact issues decided by the PTO?

    1. 2.1

      No. If you compare the Federal Circuit to other circuits, you will find that the Federal Circuit is by no means a “busy” court, comparatively speaking. You can pull the judicial caseload statistics from uscourts.gov, they are published each year pursuant to 28 U.S.C. 604.

      The Federal Circuit has a lower appellate caseload than all but the D.C. and First Circuits, which cover very small geographic areas. The Federal Circuit usually handles around 1,400 appeals per year; if you compare that to the Second and Third Circuits that have about the same number of active judges, those circuits handle more than double the number of appeals on an annual basis, according to 2023 statistics. Some courts, like the Fifth and Ninth Circuit, have many times more cases on a case-per-judge basis when compared to the Federal Circuit.

      The lower caseload is attributable in large part to the limitations of the Federal Circuit’s appellate jurisdiction. They don’t do criminal appeals, or the vast majority of civil appeals from district courts that don’t have patent claims. More than half of their annual case load (about 1,400 filings per year) comes from PTO and district court appeals in patent matters, another big chunk from U.S. Court of Claims appeals, and then the rest is divided up among a grab bag of other categories including veterans benefits appeals, Court of International Trade appeals, Merit Systems Protection appeals, and other smaller categories. I will note that a lot of these types of non-patent administrative appeals are not complex and/or are subject to fairly deferential review, which may be one of the reasons the Federal Circuit has occasion to invoke Rule 36 summary affirmance more frequently than other regional circuits.

      None of this is to say that the Federal Circuit’s summary affirmance practice is good or bad; all I’m saying is that their judicial case load does not really provide a valid justification for it.

      1. 2.1.1

        Thanks, but my question was not about Federal Circuit judicial case load, it was about the effect of the “fairly deferential review” you also noted, in particular their many PTO and other administrative agendy decisions below in which that deferential review is required by the APA statute.

        1. 2.1.1.1

          Interesting theory. One issue with your argument is that the regional circuits do hear a large number of administrative appeals that the Federal Circuit will never see, such as Social Security Disability decisions, immigration, tax, as well as appeals of APA challenges from agency decisions such as the EPA, among other agencies. But on a percentage basis, it does seem that more of the the Federal Circuit’s case load is devoted to administrative agency appeals than the regional circuits.

          But the fact that agency decisions get deference alone doesn’t really provide a satisfying explanation for the Federal Circuit’s more frequent use of summary affirmance. With the exception of cases that turned on legal issues or were decided summary judgment, most appeals of district court judgments decided by regional circuits involve issues of discretion or fact finding that likewise receive deferential review on appeal.

          1. 2.1.1.1.1

            Good point, but with all the D.C. decisions sumarily decided on 12(b)(6) Alice-based motions that the Fed. Cir. gets on appeal, does that move the needle more towards your “With the exception of cases that turned on legal issues or were decided summary judgment” ?

            1. 2.1.1.1.1.1

              You’re not going to find a very good reason for the disparity of the Federal Circuit vs regional circuits, today, beyond historical practice and the acquired comfort with summary affirmance. Because the Federal Circuit has historically used summary affirmance more frequently than the other regional circuits since at least the 1990s, they’re far more comfortable invoking the procedure. And like any procedure, its use inevitably expands over time. It may have started as an outgrowth of a certain category of appeals (at this point what difference does it make), but today it’s just a custom and practice they invoke for certain appeals across the full range of their appellate jurisdiction.

  7. 1

    >Here we have an invisible rule-36 judgment that comes with a pretending that the result is so obvious that there is no need for an explanation

    Just to add my $0.02, if the result really that obvious, the Court doesn’t have to write 100 pages to say so. We should remember how concise most of our foundational opinions actually are, both at the CCPA level and at the SCOTUS level.

    1. 1.1

      +1

      The CAFC doesn’t have to write a book to explain itself (in particular with non-precedental decisions). In the great majority of such non-prec appeals, a short, concise, “Cliff’s Notes,” explanation would be sufficient.

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