Tag Archives: due process

Certiorari Denied in Eligibility Cases

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by Dennis Crouch

In spite of robust amicus backing, including from the US Solicitor General, the Supreme Court has declined to review two pending patent-eligibility petitions: Interactive Wearables v. Polar and Tropp v. Travel Sentry. These cases contended that the Alice/Mayo framework produced (1) instability and unpredictability in the law; (2) facilitated non-evidence based judgments by district courts; and (3) prohibited patenting of subject matter that has traditionally been eligible for patents.

In my perspective, these cases wouldn’t have led to pro-patentee opinions from the Supreme Court as the inventions involved were not firmly rooted in technology. Rather, the court would likely have regarded the appellate cases as correctly denying eligibility.

The case of utmost importance still awaiting judgment, in my opinion, is CareDx Inc. v. Natera, Inc. CareDx is centered around the eligibility of an important diagnostic method for early detection of transplant organ failure. In this instance, the patent holder (Stanford University) solved a significant, longstanding problem that others had been unable to resolve. However, the lower courts determined that the patent claims were improperly directed towards a law of nature. Another petition pending before the Court is the eligibility appeal in Avery Dennison Corp. v. ADASA Inc. In the Avery Dennison case, the patent for RFID unique-ID encoding was deemed eligible and therefore valid on debatable grounds. The patent challenger has petitioned the Supreme Court, arguing that the lower courts are unduly narrowing their eligibility assessment.

A further petition, Killian v. Vidal, was reportedly filed in April but has yet to appear on the Supreme Court docket. Killian’s patent application proposes a computerized algorithm for detecting “overlooked eligibility for social security disability insurance.” The petition contends that the uncertainty created by the courts, along with the non-statutory eligibility exceptions, amount to violations of the Administrative Procedure Act (APA) and Due Process. Furthermore, the petition asserts that these judge-made exceptions “overstep the constitutional authority of the courts.” This petition has a minimal likelihood of being granted.

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The court also denied certiorari in the skinny-label FDA-Patent case of Teva Pharmaceuticals USA, Inc. v. GlaxoSmithKline LLC.

Claim Construction and Due Process: Examining NST Global v. Sig Sauer Inc. in the Supreme Court

Patent, , , , , , ,

by Dennis Crouch

NST Global, LLC, dba SB Tactical v. Sig Sauer Inc. (Supreme Court 2023)

This case has a low chance of being granted certiorari, but it still has some interesting elements regarding claim construction and procedure.  This is a perfect case for the Supreme Court to issue a GVR (Grant-Vacate-Remand) with an order to the Federal Circuit to explain its reasoning.

The setup is common. Tactical sued Sig Sauer for patent infringement; Sig Sauer responded with an IPR petition that was eventually successful.  Tactical appealed based upon the PTAB’s sua sponte claim construction that found the preamble to be limiting, but the Federal Circuit Affirmed without opinion.

The Supreme Court petition asks three questions:

  1. Whether the claim construction finding the preamble limiting was improper.
  2. Whether the PTAB violated due process by construing the term sua sponte and failing to give the patentee with notice or an opportunity to present evidence.
  3. Whether the Federal Circuit’s use of Rule 36 violates constitutional guarantees  of due process and the statutory protections of 35 U.S.C. 144.

The Tactical patents cover a forearm stabilizing brace that can be attached to a pistol. U.S. Patent Numbers 8,869,444 and 9,354,021. Sig Sauer initially was a distributor of Tactical’s product, but later began making its own competing product. At that point Tactical sued.

In the IPR petition, Sig Sauer did not request any claim construction. Likewise, the petition decision granting the IPR stated that no claim terms needed any express construction.  “We agree—we need not expressly construe any claim term
to resolve the parties’ dispute.”  During briefing, neither party requested construction of any aspect of the claim preambles.  Eventually though, in its final written decision, the PTAB interpreted the preambles as limiting and then used that construction to conclude that the claims were invalid as obvious.

Yes, I said that the narrow construction led to the claims being found invalid.  That is unusual — usually the addition of limitations helps to avoid the prior art. In this case though the focus was on objective indicia of non-obviousness. NST’s sales; copying by Sig; praise; etc.  But, by giving weight to the preamble terms, the PTAB was able to destroy the presumed nexus between the claims and NST’s product.  The result, those secondary indicia were found wanting because NST had not provided additional evidence “commensurate with the claims” as newly construed.

For context, the claims are directed to the attachment, but the preamble recites “a handgun” and “a support structure extending rearwardly from the rear of the handgun:”

1. A forearm-gripping stabilizing attachment for a handgun, the handgun having a support structure extending rearwardly from the rear end of the handgun, the forearm-gripping stabilizing attachment, comprising: . . .

The PTAB ruled that the claims require the handgun and also the support structure  as recited in the preamble along with the forearm attachment described in the body.  The problem for the patentee is that its objective indicia evidence focused on the forearm attachment, not the whole package.  Thus, no nexus and no weight given to those secondary factors.  In its decision, the PTAB when through the whole life and meaning analysis: “we conclude that the preambles of claims 1, 3, and 5 are ‘necessary to give life, meaning, and vitality to the claim[s],’ and, as such, are limiting.”

The case was already close because there is a long history of this sort of stabilizer going back to the 19th Century, and so the absence of secondary considerations led to the obviousness conclusion.

During the IPR trial, Sig Sauer had argued that the high sales were due to an odd regulatory scheme against semi-automatic rifles, and the pistol attachment was actually popular primarily because it allowed the pistol to be shouldered.  On appeal, that was raised as an alternative justification for the judgment. But, in my view, the PTAB did not actually rule on that issue in the first place.

The patentee appealed, but the Federal Circuit panel of Judges Reyna, Schall, and Chen affirmed without opinion.

Cancelling a Patent Claim

Patent, , , ,

by Dennis Crouch

The pending case of Jump Rope Systems v. Coulter Ventures is fascinating to me as someone who teaches both property and civil procedure. The basic questions: (1) As an inter partes review (IPR) proceeding draws to a close – toward cancellation – at what point are the claims no longer enforceable? (2) What is the effect of cancellation, in particular, is it like canceling a magazine subscription where the former subscriber isn’t off the hook for past-due bills; or, is it like an annulment – an Ab Initio Extinguishment?  The case also (3) raises a straight-up due process challenge to the IPR system.

A typical IPR where the petitioner prevails includes the following three-step sequence:

  1. Unpatentable Decision: PTAB issues a final written decision concluding that the challenged claim has been proven unpatentable with a preponderance of the evidence.
  2. Affirmed on Appeal: On appeal, the Federal Circuit affirms that judgment.
  3. Certificate of Cancellation: Once the appeal is complete, the USPTO Director then issues a certificate canceling the claim. 35 U.S.C. 316.

The first question — if the patentee is involved in concurrent district court infringement litigation, at what step is the patent no longer enforceable?

Clearly, the patent claim is canceled at Step-3 and by that point cannot be enforced going forward. The Federal Circuit though has held that the claim is already unenforceable at Step-2 based upon the court’s questionable application of collateral estoppel.   I call it questionable because of the different standards  of proof applied in the PTAB vs the District Court.  The affirmed PTAB decision found the claim invalid with a preponderance of the evidence.  But, in district court litigation invalidation requires clear and convincing evidence, a substantially higher standard. And, a conclusion of invalidity under a lower standard does not conclusively tell us that the same claim would have been proven invalid under a higher standard.  Using a standard approach such as found in the Restatement (Second) of Judgments, collateral estoppel would not apply here because of the difference in standards.  Here, we tend to use an exacting standard for res judicata principles because of their due process implications — the result bars a party from making their argument in court.  The Federal Circuit’s fudging of the rule makes some practical sense – the statute appears to make the issuance of the cancellation certificate a ministerial process with its “Director shall” language.  And yet, fudging the rules in a way that undermines due process is troubling.  I’ll note here that courts appear to generally be waiting for the appeal decision before announcing preclusion, although it is unclear whether that approach is somehow required or simply prudential (since district courts generally see the Federal Circuit as unpredictable).  I’ll also note that I previously called out the Federal Circuit for improper expansion of preclusion law with regard to the Kessler Doctrine – they did not listen to me there either.

The second question at issue in Jump Rope Systems involves the impact of cancellation — what about infringement that occurred (and lawsuits pending) prior to the cancellation?

The reissue system is a somewhat-close relative to inter partes review and has the benefit of 150 years of case law, including numerous Supreme Court decisions.  With reissues, courts have clearly held that cancellation of claims during reissue render those claims entirely moot.  See, for instance, Moffitt v. Garr, 66 U.S. 273, 283 (1861) and Meyer v. Pritchard, 23 L. Ed. 961 (1877).  But, the reissue system has a significant difference — a reissue begins with a patentee surrendering its patent as required by statute. 35 U.S.C. 251.  It is that surrendering that makes the cancellation of claims in a reissue so dramatic.

With inter partes review, the patentee does not surrender the patent and so we have a potentially different situation.  Still, courts have regularly treated cancellation of claims as voiding the claims backward and forward through time.  But, it is not so clear that approach is correct and there are many situations where the courts have given “cancel” to only prospective effect.  In its briefing, Jump Rope cites a long string of cases in various areas of law as well as simple plain meaning of the word:

Plain English is in accord. “Canceling” a magazine subscription stops future deliveries, but past issues remain in hand.

Jump Rope Reply Brief. If Jump Rope wins on this, an IPR petition that cancels claims would only cut-off prospective damages and injunctive relief.  The patentee could still recover pre-cancellation damages so long as the defendant failed to prove the claims invalid in district court at the higher standard.

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The briefing also includes an important due process challenge — arguing that the use of IPRs to prevent infringement lawsuits violate due process.  In Oil States, various the patentee raised various challenges to the system, but did not bring a due process challenge. Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, 138 S. Ct. 1365 (“We emphasize the narrowness of our holding. . . . Oil States [has not] raised a due process challenge.”).

Here, the patentee makes two arguments:

  1. “First, front-line adjudicators are not sufficiently insulated from political forces. United States v. Arthrex, Inc., 141 S. Ct. 1970, 1993 (2021) (Gorsuch, J., concurring in part & dissenting in part) (‘The Court’s decision in Oil States allowing executive officials to assume an historic judicial function was always destined to invite familiar due process problems. . . . [P]owerful interests are capable of amassing armies of lobbyists and lawyers to influence (and even capture) politically accountable bureaucracies.’) (citations and internal quotation marks omitted).”
  2. “Second, by not permitting traditional live cross-examination of witnesses
    (instead, relying on written depositions), IPR procedures violate due process in view of the importance of the property right at issue. See Goldberg v. Kelly, 397 U.S. 254, 269 (1970) (‘In almost every setting where important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses.’)”

Great questions from petitioner.

Robert Greenspoon (Dunlap Bennett) is counsel for the patentee Jump Rope Systems. Louis DiSanto (Banner Witcoff) is representing the accused infringer Coulter Ventures.   Their offices are a few blocks apart in downtown Chicago.