Tag Archives: Federal Circuit En Banc

Judicial Disability and the “Great Dissenter”

Guest Post by Paul R. Gugliuzza, Professor of Law, Temple University Beasley School of Law

The judicial disability proceedings instituted against Federal Circuit Judge Pauline Newman have now spilled into litigation. As Dennis reported yesterday, Judge Newman filed a complaint in D.C. federal district court seeking, among other things, to enjoin and terminate the proceedings.

Judge Newman’s complaint contains previously unreported details about the events giving rise to the disability proceedings against her. For instance, the complaint discloses an allegation, which was previously redacted from an order written by Chief Judge Moore in the disability proceedings, that, in the summer of 2021, Judge Newman had a heart attack and underwent coronary stent surgery.

Judge Newman’s complaint responds to that allegation by stating that “[d]uring the period (June 2021 through September 2021) when Chief Judge Moore claims that Judge Newman suffered a heart attack, Judge Newman sat on ten panels and issued at least eight (including majority, concurring, and dissenting) opinions.” Chief Judge Moore’s order, for its part, noted that Judge Newman wrote many fewer majority opinions than her colleagues over the past few years.

This dispute over Judge Newman’s ability to perform her judicial duties is an unfortunate tarnish on Judge Newman’s reputation and on the image of the Federal Circuit. And, because many of the relevant events occurred behind closed doors, we might never know for sure what’s been happening.

Is Judge Newman slowing down at age 95? Quite possibly. But is she “unable to discharge all the duties of office”—the standard set by law for instituting disability proceedings?

For some insight into Judge Newman’s workload as compared to her colleagues, I used Jason Rantanen’s Compendium of Federal Circuit decisions to collect and analyze data on the number of opinions written by individual Federal Circuit judges from June 2021 (the time of Judge Newman’s alleged heart attack) through the end of 2022. Those numbers tell a complicated story.

First off, Judge Newman’s assertion in her complaint that she wrote eight opinions from June 2021 through September 2021 is pretty much accurate. Over that time period, Judge Newman wrote one majority opinion (in a veterans case) and six dissenting opinions (either partial or full). In the eighth and final case that I was able to find, Judge Newman concurred in the result but didn’t write an opinion.

How does Judge Newman’s rate of opinion writing compare to her colleagues? The table below reports the number of opinions (precedential or not) written by each Federal Circuit judge who was in active service for the entire time period of June 1, 2021 through December 31, 2022—ten judges in total.

Opinions by Federal Circuit Judges (June 1, 2021 through December 31, 2022)

As the table makes clear, Judge Newman is an outlier, having written only nine majority opinions over that 19-month period. The judge with the next lowest number of majority opinions, Judge Chen, wrote three times as many as Judge Newman. In a group of ten active court of appeals judges, we would expect that, on average, each judge would write roughly 10% of the majority opinions. Yet Judge Newman wrote barely 2% (9 of 387).

Looking at concurring and dissenting opinions complicates things though. From June 2021 through the end of 2022, Judge Newman wrote 23 of those separate opinions. (And she concurred or dissented without opinion in four additional cases.) The two judges with the next most separate opinions, Judges Reyna and Dyk, wrote roughly half as many (13 and 11, respectively).

Overall, then, Judge Newman wrote 32 opinions from the time of her supposed heart attack through the end of 2022. That’s on the low side for an active Federal Circuit judge, but it’s worth noting that Judge Chen actually wrote fewer total opinions (30) over that same period.

Is a judge who writes, on average, more than one dissent or concurrence a month “unable” to discharge her duties? Arguably not. But, then again, there are underlying questions about Judge Newman’s physical and mental health that we can’t possibly know the answers to at this point.

And nothing is helped by the often-salacious framing of these disability proceedings as, essentially, a personal dispute between a famously headstrong—and female—Chief Judge quarreling with another female judge who, regardless of recent events, is indisputably a titan of the patent bar.

Rather, Judge Moore is acting in her official capacity as chief judge of a federal court of appeals and is proceeding in accordance with the framework set by statute and by the rules governing judicial disability proceedings. Judge Newman, for her part, is contesting both the process and merits of those proceedings, as she has every right to do. It’s not a judicial “cat fight.” It’s a legal dispute among judges—including other judges on the Federal Circuit—who genuinely disagree about what’s best for the court and the litigants who appear before it.

Turning back to the opinion numbers, the nub the conflict might be Judge Newman’s propensity to dissent. Each one of her 23 separate opinions reported on the table above dissented, at least in part. Because a dissenting judge, by definition, can’t write the majority opinion, a judge who dissents a lot creates a lot more work for her colleagues. And judges are, in the end, just people. A judge who does less work on majority opinions and who regularly refuses to compromise is unlikely to win many friends. Nor is a judge who constantly dissents likely to respond well to colleagues who suggest she take senior status or retire. Even if none of the Federal Circuit’s judges say so, frustration with Judge Newman as the court’s “great dissenter” is probably at least part of the reason for this sad saga.

CBM Review Keeps its Narrow Scope: Narrowly Surviving En Banc Challenge

Secure Axcess v. PNC Bank (Fed. Cir. 2017) (en banc denied)

In its original panel decision, the Federal Circuit narrowly construed the Covered Business Method statute – holding that CBM review is only available when the claims themselves are directed toward a financial service.  I previously wrote:

In its decision, the court walked through the statute – noting that the focus is on the claimed invention rather than the asserted marketplace or potential uses of the invention.  Thus, the relevant question is not how the invention is used, but rather whether the claims are directed to a financial service.  According to the court, any other reading, would “give the CBM program a virtually unconstrained reach.”

The challengers then petitioned for en banc review.  That petition has now been denied – although over vigorous dissent.  (6-5 denial, with Judge Stoll not participating). As the Federal Circuit continues to be divided, it is most interesting to consider the sides that have formed:

  • Supporting Rehearing (and broader scope of CBM review, and broader 101 application): Chief Judge Prost and Judges Lourie, Dyk, Wallach, and Hughes
  • Against Rehearing (for narrower CBM review and reduced 101 application): Judges Moore, Taranto, O’Malley, Reyna, Newman, and Chen.

Judge Plager also sat on the original panel, but his senior status precluded his voting on the en banc rehearing question.


For CBM Review: _Claims_ Must be Directed to Financial Service

CBM Review: Must the Claims Be Expressly Limited to Financial Services?


Moot the Dispute? Not with a conditional covenant-not-to-sue

ArcelorMittal v. AK Steel Corp. (Fed. Cir. 2017)

In a split decision, the Federal Circuit has affirmed a district court judgment invalidating ArcelorMittal’s U.S. Patent No. RE44,153 (claim 24 and 25).  The primary disputed issue was whether the district court possessed subject matter jurisdiction when it granted summary judgment of invalidity and non-infringement.  The majority (Huges + Moore) found a sufficient case-or-controversy, while the dissent (Wallach) would have found appellant’s covenant-not-to-sue sufficient to moot the dispute.

A fundamental Constitutional limitation on the power of American courts is the requirement of a “proper case and controversy.”  US Courts only have jurisdiction over cases that involve “a substantial controversy, between [the] parties having adverse legal interests, of sufficient immediacy and reality.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (focusing on declaratory jurisdiction).

The district originally invalidated all the claims of the ‘153 patent, but that holding was vacated in a prior appeal as to claims 24 and 25. On remand, the patentee moved to dismiss the case for lack-of-jurisdiction since all it wasn’t asserting those claims in the lawsuit and all its asserted claims had been found invalid.  At the same time, however, Defendant moved for summary judgment of non-infringement of claims 24 and 25.   Seeking to avoid such a judgment, the patentee then executed and delivered a covenant not to sue Defendants and their customers under the RE’153 patent.  Although “facially unconditional,” the delivery included a statement that the covenant was tendered on condition that its motion to amend was resolved. (That motion would amend the complaint to totally remove assertion of claims 24 and 25 from the patent).  Importantly, the delivery included a statement that the patentee would be “ready to deliver the covenant unconditionally” upon resolution of the motion and also that the point of the conditional delivery was to ensure that the district court maintained jurisdiction over the case.   Following all that posturing, the district court went ahead an held the claims invalid and denied the motion to amend as moot.

On appeal, the Federal Circuit has agreed with the district court that it still held subject matter jurisdiction over the case since the covenant-not-to-sue wasn’t fully delivered.

Although a patentee’s grant of a covenant not to sue a potential infringer can sometimes deprive a court of subject matter jurisdiction, the patentee “bears the formidable burden of showing” “that it ‘could not reasonably be expected’ to resume its enforcement efforts. . .  In this context, that requires ArcelorMittal to show that it actually granted a covenant not to sue to Defendants, and that the covenant enforceably extinguished any real controversy between the parties related to infringement of the RE’153 patent. . . .

At no time before the court entered summary judgment did ArcelorMittal unconditionally assure Defendants and their customers that it would never assert RE’153 claims 24 and 25 against them. ArcelorMittal certainly had ample opportunity to provide the unconditional assurances required to defeat jurisdiction. It did not. . . . The district court, well within its discretion in managing its docket, resolved the … summary judgment motion without having first resolved the motion to amend.

As the court notes, the outcome here was fully within the patentee’s control and for strategic reasons it chose not to actually issue the covenant-not-to-sue.

Writing in Dissent, Judge Wallach disagrees with the majority’s interpretation of the cover-letter as creating a condition precedent that must be met before the covenant takes effect.  Rather, Wallach focused on the language of the covenant that was appropriately signed and submitted and its terms extinguish “any substantial controversy of sufficient immediacy between the parties concerning the RE153 patent, the only patent at issue in the instant action.”

In discerning a covenant’s scope and effect, we rely on its terms, not evidence extrinsic to the stipulation such as terms in an accompanying cover letter. See Already v. Nike. . . . When as here a covenant’s terms are unambiguous, we may not interpret those terms using extrinsic evidence, such as a cover letter. See, e.g., Coast Fed. Bank, FSB v. United States, 323 F.3d 1035, 1040 (Fed. Cir. 2003) (en banc) (contract analogy); see also Restatement (Second) of Contracts § 285 (Am. Law Inst. 1981) (describing a covenant not to sue as a “contract”).

My take is that Judge Wallach is substantially on the right path here, but he also misses important issues by focusing on the content of the covenant rather than its mechanism of delivery.  An alternative way to see the facts is that the covenant was wrapped in a separate contract that required resolution of the motion-to-amend prior to the covenant becoming effective.  In the property context, there are differences between the states as to whether conditional-delivery is permissible (outside the escrow context).



Federal Circuit Refuses to Hear Private Right Issue

by Dennis Crouch

Cascades Projections v. Epson America (Fed. Cir. 2017) (en banc denial)

In a split decision, the Federal Circuit has denied Cascades petition for initial en banc hearing.  The petition asked one question: “Whether a patent right is a public right.” Because a Federal Circuit panel already decided this decision in MCM, Cascades asked the court to bypass the initial panel appeal and head straight to the en banc question.  See MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied 137 S. Ct. 292 (2016).  The issue is important because the answer to the private right question could lead to a judgment that the administrative patent trial system is an unconstitutional violation of due process rights.  I previously discussed the case on Patently-O.

Whether a Patent Right is a Public Right


For judges wrote separately on the case:

Judge Newman Concurring in Denial: The important question here is “whether the statutory scheme created by the America Invents Act, in which the Office is given an enlarged opportunity to correct its errors in granting a patent, with its decision subject to review by the Federal Circuit, meets the constitutional requirements of due process in disposition of property.”  Judge Newman suggests that she would vote for re-hearing after “full opportunity for panel rehearing.”

Judge Dyk (Joined by Judges Prost and Hughes) Concurring in the Denial: “MCM was correctly decided. . . . [T]here is no inconsistency in concluding that patent rights constitute property and that the source of that property right is a public right conferred by federal statute.”

Judge O’Malley, Dissenting from the Denial: Patent rights are likely “core private rights only subject to adjudication in Article III courts.”

Judge Reyna, Dissenting from the Denial: “The state of current law compels en banc review.”   According to Judge Reyna, the clear statement from Supreme Court’s 1898 decision in McCormick Harvesting that “The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.” McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606, 609 (1898).

We’ll look for the upcoming panel decision in the case and subsequent en banc hearing.



Written Description, Disclosed Embodiments, and BRI

By Dennis Crouch

The vast majority of written description problems arise when the patentee amends or adds claims with limitations not found in the original claim set and using language that does not directly map to specification disclosure.  In Cisco Systems v. Cirrex (Fed. Cir. 2017), the Federal Circuit provides an example of this in practice.

[The Decision: Cisco]

After the PTO initiated an inter partes reexamination, the patentee (Cirrex) dropped the original claims (1-34) and added new claims (35-124) of its ‘082 patent.[1]  In its final decision, the PTAB affirmed the examiner’s decision that most of the added claims were invalid as lacking written description support.  The Board did, however, find five of the claims patentable.  On appeal, the Federal Circuit partially reversed – finding all of the claims invalid as lacking written description support.

35 U.S.C. § 112(a) serves as the statutory source for three patentability doctrines: Written Description, Enablement, and Best Mode.

(a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.

In Ariad, the Federal Circuit wrote that the original written description filed by the patentee must “clearly allow persons of ordinary skill in the art to recognize that [he] invented what is claimed.”[2]  Channeling the old fox-law case of Pierson v. Post, courts have held that the requirement is intended to show “possession” of the claimed invention at the time of filing.  Whether the written description is sufficient is a question of fact – with the level of detail depending upon “the nature and scope of the claims and on the complexity and predictability of the relevant technology.”  Thus less description is necessary to show possession in simple technologies in predictable areas.  More description is likely required to show possession of novel structures and arrangements as compared to elements found in the prior art.

Here, the added claims at issue here are related to either equalization or discrete attenuation of fiber optic signals inside a lightguide (PLC).

The problem for Cirrex, according to the court, is that the original specification “lacks any disclosure or suggestion of how placing attenuation material inside the PLC … would result in equalizing the intensities of different wavelengths traveling in the PLC, or discretely attenuating a particular wavelength in the PLC.”  Rather, the disclosed embodiments teach equalizing to light energy outside the PLC and only collective (rather than discrete) attenuation within the PLC.   As such, the Federal Circuit held the claims lacked sufficient written description.

= = = = =

Alt: Essential Element Test: An interesting issue that the court avoided stems from an odd line of written description cases that center on what the Federal Circuit repeatedly denies is an “essential element” test.  In Gentry Gallery, Inc. v. Berkline Corp.[3], the patentee amended claims to remove a previously recited limitation (placement of recliner controls between two recliners).  In that case, the court held that the broader claim lacked written description since the specification indicated possession of only a much narrower invention.  The basic conclusion is was that since the specification consistently described the invention as including “A, B, and C all connected together,” the patentee cannot broaden its claims to claim just A and B connected together (even if there would be no enablement problem).  Whenever the court cites Gentry, it almost always restates the seemingly contrary statement that this test should not be seen as an ‘essential element’ test but rather merely an inquiry as to whether the inventor possessed the invention now claimed.

Here, the challenger argued, in the alternative, that if the claims should also be invalid if interpreted to be broad enough to include equalizing activity whether inside or outside the PLC.  The problem is that all disclosed equalizing includes operating on signals outside the PLC, and the challenger argued that the disclosure does not then extend to the full scope of the claims.  This argument roughly follows the LizardTech decision where the court held that a broadened claim lacked written description because there was no showing of possession of the “full breadth of the claim.”[4]

This alternative argument was avoided in the appellate decision because the court more narrowly interpreted the claims as discussed above.

= = = = =

Broadest Reasonable Interpretation vs. Interpretation Most Likely to Invalidate: The court here did not discuss how BRI applies to its claim construction approach.  The theory behind BRI is that a broader claim interpretation typically makes it more likely to invalidate claims, and that approach helps ensure that patents released by the PTO are more likely to be upheld as valid.  The interpretation issue is typically the opposite for written description issues.  Let me explain – since the standard written description problem involves adding new particular limitations into the claims that are absent from the specification, a more narrow interpretation of the claims is actually more likely to invalidate.  (Here, I set aside the aforementioned LizardTech improper broadening issue.)  The query here is whether the PTO should be applying the reasonable interpretation most likely to invalidate rather than broadest reasonable interpretation.

= = = = =

[1] U.S. Patent No. U.S. Patent No. 6,415,082.

[2] Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc) (quoting Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991)).

[3] Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473, 1479 (Fed. Cir. 1998).

[4] LizardTech  v.  Earth Resource  Mapping,  Inc., 424  F.3d  1336 (Fed.  Cir.  2005).

Court-Agency Allocations of Power and the Limits of Cuozzo

Guest post by Saurabh Vishnubhakat, Associate Professor at the Texas A&M University School of Law and the Texas A&M College of Engineering.  Although Prof. Vishnubhakat was an advisor at the USPTO until June, 2015, his arguments here should not be imputed to the USPTO or to any other organization.

Prof. Vishnubhakat was counsel of record for the amicus brief by patent and administrative law professors in this case.

= = = =

Yesterday’s argument in Wi-Fi One, LLC v. Broadcom Corp. suggested that the en banc Federal Circuit are grappling with at least three important issues as they consider the reviewability of PTO decisions to institute inter partes review that arguably violate the one-year bar of 35 U.S.C. § 315(b):

  • How does the IPR statute allocate power between the PTAB and the district courts to reevaluate patent validity?
  • How does the Supreme Court’s opinion last Term in Cuozzo Speed Techs., LLC v. Lee allocate power between the USPTO Director and the Federal Circuit to oversee the PTAB?
  • How might this case resolve (or aggravate) rule-of-law concerns that the Federal Circuit has recently expressed, especially as to separation of powers under the Chenery doctrine?

The Federal Circuit’s panel decision in Achates Reference Publ’g, Inc. v. Apple Inc. held that PTAB decisions to institute IPR are unreviewable even where the § 315(b) time bar may have been violated.  The en banc question here is whether to overrule Achates.

The USPTO’s interest in the case was clear from the large group of agency employees in attendance, including members of the PTAB and the Solicitor’s Office as well as Director Michelle Lee herself.  The USPTO also formally intervened in the case and designated Mark Freeman from the DOJ Civil Division’s Appellate Staff to argue.

The PTAB-District Court Balance of Power

Historically, of course, the power to invalidate patents in the first instance resided in the district courts.  An opening exchange with Chief Judge Prost laid the groundwork that although the AIA sought efficient patent validity review outside the courts, it also constrained the administrative alternatives in a variety of ways.  The USPTO would later elaborate this point as well, that challenges that would have gone to court would now go to the agency, but this reallocation of power would not be total.  District-court defendants and their privies would have to act within a year, or never at all.  Judicial review can police this balance of power—but not without disruption of its own, and so the dispute over appealability.

The Main Cuozzo Exception: Relatedness to Institution

From early in Wi-Fi’s argument, several members of the court starting with Judge Dyk explored whether the § 315(b) time bar is distinguishable from the § 312(a)(3) particularity requirement that was found nonappealable in Cuozzo.  A well-known passage in Cuozzo orients the holding toward institutions that are made “under this section [§ 314]” or that are “closely tied” to institution-related statutes.  Meanwhile, several types of “shenanigans” may still merit review, such as constitutional defects, interpretations of less closely related provisions, or decisions whose scope and impact reach well beyond institution.  As a result, arguments to limit Cuozzo and afford review have often focused on these exceptions, especially on framing the statute as “less closely related” to institution “under this section [§ 314].”  Judges Chen and Stoll also followed up at several points with Broadcom and the USPTO about the “under this section” limitation.

Reconciling Cuozzo’s Majority and Dissent

Judge Chen also took an interesting further approach to how closely related a statute must be for Cuozzo to apply.  He noted that the dissent in Cuozzo complained specifically that the majority’s approach swept broadly and harmfully.  The Cuozzo dissent argued that the majority’s position would foreclose review even of issues such as the § 315(b) time bar because timeliness is “no less . . . closely tied” to institution.  The majority disclaimed various other horribles but was silent about the alleged relatedness of the one-year bar to institution.  Was this colloquy from Cuozzo a signal of consensus that the time bar is, indeed, the type of PTAB decision that is immune from review?

One sensible answer is that the Cuozzo dissent’s argument about the one-year bar should be seen as hortatory, intended first to build a majority and later, when the case was lost, to cabin the impact of the majority’s reasoning.  In other words, the dissent did not merely read the majority’s logic broadly but read it broadly as a reason to reject that logic.  To accept part of the Cuozzo dissent’s premise now while continuing to reject the dissent’s urged conclusion may itself be problematic cherry-picking, especially if any supposed agreement by the Cuozzo majority were to be inferred from its silence on the matter.  Indeed, Wi-Fi answered Judge Chen along just these lines by discussing what the Cuozzo dissent was trying to accomplish—limiting nonappealability to a prohibition of interlocutory review—not merely what the dissent said.

The Other Cuozzo Exception: Scope and Impact

Apart from “less closely related” statutes, the argument also started at times to explore Cuozzo’s “scope and impact” exception, particularly where the PTAB might act outside its statutory authority and thereby lose immunity from review.  It was the USPTO to whom Judge Chen suggested that the one-year bar of § 315(b) may well have been a Congressional allocation of power between the agency and the district courts to resolve patent validity disputes.  This view of the time bar would make it a statutory limit on the agency’s authority, a violation of which would render the PTAB susceptible to appellate review despite Cuozzo.

The scope and impact of § 315(b) are also stark when seen through the lens of court-agency substitution.  Arti Rai, Jay Kesan, and I have reported in recent research that a substantial share of petitioners (about 30%) seek PTAB review before being sued in district court on the patent in question.  This and related findings indicate that, in addition to ordinary court-agency competition over who resolves the validity of a patent in an ongoing infringement lawsuit, the PTAB also competes with the courts over who should resolve preemptive strikes against patents.  As the law professors’ amicus brief argued in this case, the one-year bar of § 315(b) sets an important boundary line in this competition and—as Judge Chen suggests—preserves an inter-branch allocation of power.  Thus, its scope and impact reach well outside the walls of the agency and into the federal courts, empirically as well as analytically.

The USPTO Director-Federal Circuit Balance of Power

One of the most significant aspects of this case, and why it was an apt choice for en banc review, is that the Federal Circuit is shaping its own ability to shape future cases.  Much like the balance of power between the PTAB and the district courts to evaluate patent validity in the first instance, also at stake is the power to correct errors and bring uniformity to the decision-making of the PTAB.  This latter power, too, was reallocated away from the Federal Circuit by the AIA’s nonappealability provisions.

The Source(s) of Uniformity

One might suppose, as Wi-Fi began to argue, that the absence of judicial oversight would leave individual PTAB panels to generate consensus in a common law fashion, and that consensus is unlikely to emerge because of the PTAB’s sometime disregard for its own prior analogous precedents and for prior court judgments regarding the validity of the same patent.  (Even a Federal Circuit panel endorsed the latter as recently as a month ago in Novartis AG v. Noven Pharms. Inc.)

Judge Wallach, however, strongly rejected Wi-Fi’s view that nonreviewability might leave uniformity and oversight to individual panels of the PTAB.  Instead, he noted, the Director of the USPTO can impose uniformity by assigning additional judges to particular panels to resolve contentious issues in a certain way.  To this, one might add that the Director can also generate uniformity directly through the ordinary chain of administrative command as an ex officio member of the PTAB and through the process for designating PTAB opinions as precedential, representative, or informative.  Judge Wallach raised the issue with Broadcom as well, asking whether “stacking the panel” to reach certain outcomes would qualify as judicially reviewable shenanigans.

This alternate view of uniformity is significant for its implicit but direct potential not only for displacing the Federal Circuit but also for making patent validity decisions more responsive to political constituencies.

The APA Presumption of Reviewability

The counterargument to this potential injection of politics into patent adjudication came in the closing minutes of the hearing.  For all the discussion about Cuozzo and its enumerated exceptions, Wi-Fi argued that the Cuozzo holding did not make nonreviewability the new baseline in administrative reviews of patent validity.  Rather, Cuozzo was one instance where the Administrative Procedure Act’s ever-present presumption favoring judicial review was rebutted clearly and convincingly enough as to institution decisions.  To construe the nonappealability statute as to timeliness under § 315(b) or any other issue would require a fresh analysis of statutory text, purpose, legislative history, etc.

Judge Moore engaged this argument, suggesting that Cuozzo need not be limited entirely to its facts with nonappealability decided from scratch each time.  She suggested, for example, that Cuozzo could be seen as precluding a range of appeals from institution and institution-related decisions, but that the opinion’s limitations apply here and thus dispel the indications that were clear and convincing in the Cuozzo case itself.

Notably, Judge Moore was also one of several, including Judges Newman and Reyna, to ask whether PTAB actions that are plainly invalid or ultra vires would enjoy immunity from review.  This concern, too, is of a piece with the balance of power between the Federal Circuit as judicial overseer and the Director of the USPTO as political overseer because it highlights a necessary choice between correcting agency errors and tolerating them in the name of Congressionally intended agency autonomy.

Making the PTAB Better Explain Itself

Finally, the en banc court referred at various points to the need for greater transparency in the PTAB’s own decision-making.  This is a concern that Federal Circuit panel decisions increasingly voice in PTAB appeals.  An early colloquy with Chief Judge Prost explored whether the PTAB might be shielded from review of certain issues in final written decisions simply by omitting discussion of those issues from its final written decisions, in light of the APA’s general requirement that an agency articulate its “findings and conclusions, and the reasons or basis therefor.”  Similarly, in the discussion over political panel-selection by the USPTO Director, Judge Wallach suggested that rule-of-law values such as predictability, uniformity, and transparency of judgments and the neutrality of decision-making may be threatened.

These concerns are also consistent with recent decisions finding fault with the PTAB’s failure to explain its reasoning with enough detail even to enable meaningful review.  For example, citing the Chenery doctrine, the In re NuVasive, Inc. panel decision last December reversed a finding of obviousness not because it was necessarily wrong, but because the reasoning that the PTAB had articulated could not support the decision, while the separation of powers forbade the Federal Circuit to supply its own rationale.  Similarly, in the Shaw Indus. Group., Inc. v. Automated Creel Sys., Inc. panel decision early last year, Judge Reyna wrote separately to chastise the USPTO for its opaque practice of making partial institutions while denying certain grounds or prior art as “redundant.”


The opportunity to clarify these allocations and reallocations of power is likely to be a welcome aspect of en banc consideration.  The power in question may be to adjudicate (as between the PTAB and the district courts), to oversee (as between the USPTO Director and the Federal Circuit), or simply to force a clearer account of the PTAB’s own reasoning.  All of these powers have seen significant revision under the AIA, reflecting the more general ascendancy of administrative adjudication in patent law.  In seeking the right balance for each of these powers, the Federal Circuit appears to be taking seriously the warning that “no legislation pursues its purposes at all costs” and that if the goals of the AIA are important, so also are the particular means that Congress enacted to achieve those goals.

Case Information

  • Oral Argument Recording
  • En Banc Panel: Prost, Newman, Lourie, Bryson, Dyk, Moore, O’Malley, Reyna, Wallach, Taranto, Chen, Hughes, Stoll
  • Arguing for Appellant Wi-Fi One, LLC: Douglas A. Cawley (McKool Smith)
  • Arguing for Appellee Broadcom Corporation: Dominic E. Massa (WilmerHale)
  • Arguing for Intervenor Michelle K. Lee, Director of the USPTO: Mark R. Freeman (DOJ Civil Division, Appellate Staff)

Without Offering Any Reasons, Federal Circuit Denies Rehearing on Issue of Judgments Without Opinion

by Dennis Crouch

The Federal Circuit has denied Leak Survey’s petition for rehearing en banc on the issue R.36.  Perhaps ironically, the court has continued to remain silent on its justification for issuing judgments without opinion.  Although the Supreme Court has generally empowered appellate courts to issue summary affirmances without explaining reasoning for their judgment, the statutes provide special rules for cases arising from patent and trademark cases.  On the patent side, 35 U.S.C. § 144 requires the Federal Circuit to hear appeals from the PTO, “review the decision,” and, once a decision is reached “the court shall issue to the Director its mandate and opinion.”

First Rehearing Request Challenging No-Opinion Judgments

I argue (as did Leak Survey) that Section 144 requires the court to write opinions in these cases — as was the longstanding standard practice of both the Federal Circuit and its predecessor court the CCPA before the 1989 internal rule changes by the Federal Circuit.

In my article on the topic, I recognize the argument’s weakest point: since the statute requires issuance of “its opinion”, the requirement might only only kick-in if the court actually has an opinion.  In his thoughtful challenge to my approach, Matthew J. Dowd argues that the statute only requires issuance of an opinion once such an opinion exists — but absent an opinion, the statute only requires issuance of the mandate. Matthew J. Dowd, An Examination of the Federal Circuit’s Use of Rule 36 Summary Affirmances (Feb. 19, 2017). Thus, Dowd would clarify that the statutory requirement that, after reviewing the case, “the court shall issue … its … opinion” only kicks-in if the court decides to write an opinion.  I think Dowd is wrong.

In my article, I write:

For a patentee, providing the written description is part of the quid pro quo exchange for receiving patent rights. In the same way, forming a reasoned decision is the role of every appellate court, and the statute simply requires that those reasons be written and released.

Reaching a judgment in each merits case is both an inherent duty of the appellate court and a statutory requirement, and that judgment requires the court to at least form a reasoned opinion that justifies the outcome. In other words, the court must make its judgment based upon the law at hand applied to the facts presented. Even when issuing a judgment without releasing an opinion, the court must have formed reasons for its judgment that are at least self-satisfyingly sufficient. Anything less would be a reversible arbitrary judgment and likely a violation of the due process rights of the parties.

The statutory requirement of issuing “its … opinion” is not an illusory request that can be avoided by simply not writing an opinion. Rather, the statute requires a transformation of the court’s internal decision justifications into a document that becomes part of the record of the case as it returns to the PTO.

By now, the court has had many opportunities to justify its approach.  It is now becoming more than simply ironic that the Federal Circuit continues to avoid explaining its justifications for a lack of transparency.

CBM Review: Must the Claims Be Expressly Limited to Financial Services?

Secure Axcess v. PNC (Fed. Cir. 2017) (en banc petition)

In an important February 2017 decision, the Federal Circuit limited the scope of Covered Business Method Review (CBM) — requiring that the claimed invention be focused on financial transactions.  In my original review, I wrote:

This case represents an important decision limiting the scope of Covered Business Method reviews.  However, its short consideration of agency-deference leaves it open to further challenge. 

Crouch, For CBM Review: _Claims_ Must be Directed to Financial Service, Patently-O (Feb. 2017).  The case focuses on U.S. Patent No. 7,631,191.

U.S. Bank has now challenged the decision with an en banc request – raising the following question:

Whether a method patent whose claims are worded to avoid reference to financial activity, but whose specification makes plain that it is a patent “used in the practice, administration, or management of a financial product or service,” qualifies for post-grant review as a covered business method (CBM) patent under Section 18 of the Leahy-Smith America Invents Act (AIA), Pub. L. No. 112-29, § 18, 125 Stat. 284, 329-31 (2011).

The petition directly challenges the Federal Circuit’s anti-CBM Jurisprudence, writing:

This is not the first questionable decision by a panel of this Court concerning to scope of the CBM program. In Versata Dev. Grp. v. SAP Amer., Inc., 793 F.3d 1306 (Fed. Cir. 2015), another divided panel disagreed over whether this Court even has jurisdiction to review the Board’s CBM determinations. And a petition for rehearing en banc, with robust amici support, is currently pending in Unwired Planet, LLC v. Google Inc., 841 F.3d 1376 (Fed. Cir. 2016), which asks this Court to address the level of deference owed to Board determinations that a patent qualifies for CBM status and to reconsider the holding in Versata.

Two additional amicus briefs have also been filed supporting the petition.  EFF argues (1) that the panel decision contorts the statutory text; and (2) ignored the consideration of deference to an agency’s interpretation of its governing statute.  Clearing House Payments Company and Financial Services Roundtable joined together and argue (1) CBM institution rates are alredy down; and (2) the case allows artful claim drafting to effectively avoid CBM.  (The artful drafting issue is largely moot since CBM will sunset in September 2020).

The key here is interpretation of Section 18(d)(1) of the America Invents Act that limits the scope of Covered Business Method Reviews to patents “that claim[] a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.” Does the statute require that the claim include the financial product or service use?  Note here that the argument is not based upon a statute codified in the United States Code since it is only a temporary provision that will sunset after three more years.




En banc denial in Challenge to Versata-Review of CBM Decisions

by Dennis Crouch

Unwired Planet v. Google (Fed. Cir. 2017) (en banc denied)

The Federal Circuit has denied Google’s petition for rehearing en banc.  The patent challenger asked the Federal Circuit to overturn Versata in light of the Supreme Court’s decision in Cuozzo.  The issue is well known to attorneys involved in the post-grant review of covered-business-method (CBM) patents.

According to the statute, the CBM process begins with a petition and institution decision by the Director.  Once instituted, the PTAB holds trial and issues a final decision.  The statute indicates that CBM review may be instituted “only for” CBM patents but that the Director’s institution decision “shall be final and nonappealable.”

In Versata, a divided Federal Circuit panel held that the CBM question could be reviewed since – a non-CBM patent is “outside the PTAB’s invalidation authority.”  In its briefing, Google argued that Versata was wrong when it was decided, and was extra-wrong following the Supreme Court’s Cuozzo decision that gave substantial force to the non-appealable provision of the statute.  Of course, Cuozzo offered a number of ‘outs’ – suggesting generally that there will be times when appeals of initiation decisions may still be allowed.

Versata v. SAP: Federal Circuit Claims Broad Review of CBM Decisions

In what appears to be a unanimous denial, the Federal Circuit has rejected Google’s petition. Judge Hughes wrote a short concurring opinion in dissent – arguing (as he did in the original Versata case) that the statute no-appeal provision should be given more weight.

I continue to believe that Versata was incorrectly decided. I further believe that Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016) confirms that our review of the Patent Trial and Appeal Board’s decision should be limited to the ultimate merits of the patent validity determination and should not, with narrow exception, extend to any decisions related to institution. Those exceptions may include the rare circumstances where the agency acts unconstitutionally or in complete disregard of the limits on its statutory authority.

I expect that the Supreme Court would agree with the Federal Circuit on this particular issue based upon how the court sees eligibility as a threshold and almost jurisdictional issue and the close tie between the CBM definition and patent eligibility.  In the eyes of the Supreme Court, these issues are categorically different from the likelihood-of-invalidation question that is the substantive focus of initiation decisions.

Despite my prognostications here, Google is likely to petition for writ of certiorari.  Top Supreme Court Litigator Neal Katyal handled the failed petition here that particularly asked two questions: (1) Whether the Federal Circuit has jurisdiction to review a PTAB determination that a patent is a “covered business method” patent. (2) Whether the Federal Circuit should defer to the Patent and Trademark Office’s reasonable interpretation of the definition of a “covered business method” patent.

I have discussed the first question above. The second question is also an interesting issue of administrative law that may be mooted if Congress enacts the Separation of Powers Restoration Act of 2017.

Separation of Powers Restoration Act

Modified Opinion: Federal Circuit Won’t Enjoin Non-Party

Asetek Danmark v. CMI USA (“Cooler Master”) (Fed. Cir. 2017)

The Federal Circuit has updated its original decision in Asetek, with Judge Prost deleting her dissent and her points being incorporated into the majority opinion.  The change here relates to the injunction pending remand.

Asetek sued CMI/Cooler-Master for infringing its computer fan patents. U.S. Patent Nos. 8,240,362 and 8,245,764 (“cooling systems”).  A jury sided with Asetek and the patentee was awarded damages as well as an injunction against specific Cooler Master products.  The problem – is that the injunction was awarded against CMI USA as well as “Cooler Master Co., Ltd.”, a Taiwanese company who was no longer a party to the lawsuit.   On appeal, the Federal Circuit substantially affirmed but remanded on the injunction since it applied to a non-party and went beyond that non-party’s ‘abetting a new violation’ by the adjudged infringer.

The oddity of the original Judge Taranto opinion was that it did not actually vacate the injunction but kept it in-force until modified by the lower court. “We do not think it appropriate to vacate the injunction at present.”  Writing in dissent, Chief Judge Prost argued that “The correct course of action would be to vacate the portions of the injunction that improperly reach Cooler Master.”

Following the original opinion, CMI filed for rehearing and that has been partially granted today with a new opinion from the original panel.  The new opinion here adopts Chief Judge Prost’s position and her partial dissent is deleted as is the panel’s non-vacatur.  The new opinion now partially vacates the injunction so that it no longer applies to the non-party (except for aiding and abetting).  The new paragraph:

Two final, related points. First, the need for further proceedings to determine the proper reach of the injunction in this case leads us to vacate the injunction, effective upon issuance of our mandate, insofar as the injunction reaches conduct by Cooler Master that does not abet new violations by CMI. The district court is to conduct those proceedings in as reasonably prompt a fashion as possible. Our partial vacatur of the injunction does not foreclose Asetek from pursuing reinstatement of the vacated portion of the injunction should there be unjustifiable delay by Cooler Master in completing the proceedings, or from pursuing any other remedies against Cooler Master, if otherwise authorized by law.

The en banc court simultaneously released its denial of rehearing after noting that the panel had revised its opinion.  CMI’s en banc petition began as follows:

The Panel Majority’s precedential opinion has promulgated a new rule that a pre-liability permanent injunction against a non-party is permissible pending a determination of liability under the “legally identified with” theory. There are three issues with this opinion. First, it violates the rule that everyone has a right to his day in court. Second, it violates the rule that actual success on the merits must precede entry of a permanent injunction. Third, its remand of further proceedings to determine the “legal identity” issue is an impermissible advisory opinion.

I believe that the revised decision here is legally correct, but it always gives me pause to watch companies and owners divide-up the structure of their firms without substantially dividing management and control — and then use that division to partially avoid legal liability.  The end result is that the potential corporate complexity can substantially raise the costs of enforcement without providing any social benefit.  In this case, Asetek writes that “the precise historical and corporate relationship between CMI and Cooler Master is murky; not even their counsel is sure of it.”  The parties always had the same attorneys, and CMI distributes all of Cooler Master’s products in the US, and assists with US marketing.



Mentor Graphics v. Synopsys: Covering All the Bases

Mentor Graphics v. Eve-USA (Synopsys) (Fed. Cir. 2017) [synopsysmentor]

The appeal here is somewhat complicated – as reflected by the Federal Circuit’s 42-page opinion.  The complications begin with the founding of EVE, and emulation software company founded by folks who invented emulation software at Mentor. Synopsys then acquired EVE.   EVE had previously licensed some of Mentor’s patents, but Mentor claims the license was terminated by the Synopsys acquisition.

Ending Assignor Estoppel: The jury found that Synopsys infringed Mentor’s U.S. Patent No. 6,240,376 and awarded $36 million in lost profits damages.  The district court had refused to allow Synopsys to challenge the patent’s validity based upon the doctrine of assignor estoppel.  The judge-made doctrine prohibits a patent’s seller/assignor (such as an inventor who assigned rights to his employer) from later challenging the validity of a patent in patent infringement litigation.   Here, Synopsys agreed that the doctrine applied since the inventors of the ‘376 patent had founded and continued to operate EVE that was the source of the infringement.   However, the adjudged infringer boldly asked the Federal Circuit to eliminate the doctrine (as the PTAB has done) since Supreme Court “demolished the doctrinal underpinnings of assignor estoppel in the decision that abolished the comparable licensee estoppel in Lear, Inc. v. Adkins, 395 U.S. 653 (1969).” On appeal, the Federal Circuit panel disagreed – as it must – following its own precedent such as Diamond Sci. Co. v. Ambico, Inc., 848 F.2d 1220, 1222–26 (Fed. Cir. 1988) and MAG Aerospace Indus., Inc. v. B/E Aerospace, Inc., 816 F.3d 1374, 1380–81 (Fed. Cir. 2016).  The setup here is proper for en banc or Supreme Court petition.  On Point is Mark A. Lemley, Rethinking Assignor Estoppel, 54 Hous. L. Rev. 513 (2016) (arguing that the doctrine “interferes with both the invalidation of bad patents and the goal of employee mobility”).

Indefinite: The district court held on summary judgment that Synopsis’ cross-asserted U.S. Patent No. 6,132,109 is indefinite. On appeal, the Federal Circuit reversed.  The asserted claims require a “circuit analysis visually near the
HDL source specification that generated the circuit.”  And, the district court found that the undefined term-of-degree “near” rendered the claim indefinite.

Patent law requires that the claims “inform, with reasonable certainty, those
skilled in the art about the scope of the invention.” Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014).  Terms of degree are certainly permissible, but the patent document must include “some standard” used to measure the term of degree.

Here, the court walked through terms of degree that have been accepted post Nautilus: “spaced relationship”,  “visually negligible”, and “look and feel” based upon the intrinsic evidence or established meaning in the art.

Here, the specification indicates that the nearness of the circuit analysis display is to allow “a designer to make more effective use of logic synthesis and reduce the complexity of the circuit debugging process.”  In addition, the specification provides several diagrams showing the analysis next to the appropriate line of code (below). These descriptions provided enough of a standard for the court to find a reasonable certainty as to the scope of the term and the claim as a whole. “[W]e hold a skilled artisan would understand “near” requires the HDL code and its corresponding circuit analysis to be displayed in a manner that physically associates the two.”  On remand, Synopsys will get a shot at proving infringement of this patent.


Eligibility: A separate Synopsys patent was found ineligible. U.S. Patent No. 7,069,526 (asserted claims 19, 24, 28, 30, and 33). The claims are directed to “A machine-readable medium containing instructions …”  The problem is that the patent expressly defines “machine-readable medium” to include “carrier waves” and therefore is invalid under In re Nuijten, 500 F.3d 1346 (Fed. Cir. 2007).  In Nuijten, the court held that transitory signals are not eligible for patenting because they do not fit any of the statutory classes of “process, machine, manufacture, or composition of matter.” The here court writes: “Because the challenged ’526 claims are expressly defined by the specification to cover carrier waves, they are similar to the ineligible Nuijten claims.”

Claim Preclusion: Finally, the Mentor has successfully appealed the district court claim preclusion holding as to Mentor’s U.S. Patent Nos. 6,009,531 and 5,649,176.  Back in 2006, Mentor had sued EVE for infringing the patents.  That litigation settled with Eve’s license and a dismissal with prejudice.

Here, the Federal Circuit held that claim preclusion cannot apply because the current litigation is based upon acts that occurred subsequent to the prior settlement.

Mentor’s infringement allegations are based on alleged acts of infringement that occurred after the Mentor/EVE license terminated and were not part of the previous lawsuit. Claim preclusion does not bar these allegations because Mentor could not have previously brought them.

What is a bit unclear here is how the license plays in.  The court noted that the current infringement claims are “based on post-license [termination] conduct, so the alleged infringement did not exist during the previous action.”  It is unclear how the court would deal with pre-termination conduct.

Note: The case also includes an important holdings on lost profits damages, willfulness, and written description that we’ll save for a later post.

Chan v. Yang: Can the Federal Circuit Continue to Affirm Without Opinion?

by Dennis Crouch

Another new petition for rehearing has been filed with the Federal Circuit asking the court to reconsider its Rule 36 Jurisprudence in light of the statutory requirements  that the court issue an opinion in cases appealed from the Patent & Trademark Office.

In Chan v. Yang, App. No. 16-1214, involves an appeal from an interference case and the merits issue involves the requirement that claims subject to interference must be patentable but for the interference.  After losing before the PTAB, the petitioner appealed and the Federal Circuit issued a R.36 “Affirmance without Opinion.”  Chan’s attorney Robert Bauer writes:

The Rule 36 Judgment of the panel gives the parties and the USPTO no guidance on the key issues that were left unresolved in the PTAB decision. In particular, there is no indication whether the decision is based upon Appellees’ claims having the “white raphide” limitation or not.  There is no indication whether the claims as considered by the panel are concluded to be directed to patentable subject matter under 35 U.S.C. 101 or not. …

The statute requires that the Federal Circuit “issue to the Director its mandate and opinion, which shall . . . govern further proceedings” in the case. 35 U.S.C. 144.  I previously argued that the Federal Circuit’s practice of Affirmances without Opinion violates this requirement for issuing an opinion.


= = = =

Meanwhile, the Federal Circuit appears to be taking some limited notice of the issue. In two pending petitions for en-banc consideration of the R.36 Issue, the court has requested responsive briefing:

  • Leak Surveys, Inc. v. FLIR Systems, Inc., Appeal No. 16-1299: responsive briefing requested by March 14, 2017
  • Cascades Projection LLC v. Epson America, Inc., Appeal No. 17-1517: responsive briefing requested by March 14, 2017

The request for responsive briefing is important since in most cases the court rejects en banc petitions without even requesting responsive briefing:

At least two pending Supreme Court petitions are also based upon R.36 judgments by the Federal Circuit:

  • Oil States Energy Services, v. Greene’s Energy Group and Michelle K. Lee
  • Enplas v. Seoul Semiconductor

In both cases, the Supreme Court could properly vacate and remand with a one-line statement requiring the court to comply with 35 U.S.C. 144.




Whether a Patent Right is a Public Right


by Dennis Crouch

Another interesting en banc petition by Robert Greenspoon and Phil Mann: Cascades Projection v. Espon and Sony, Appeal No. 17-1517 (Fed. Cir. 2017).  The petition asks one question: “Whether a patent right is a public right.” Of course, the Federal Circuit has already decided this in MCM – which is why the petitioner is bypassing the initial appeal and asking directly for an en banc hearing.

[S]ince this Court has not had a chance (as a full court) to consider the exceptionally important constitutional question, since intervening decisions after MCM have encroached upon the MCM constitutional holding, since patentees continue to bring the same constitutional challenge in hopes of overturning the MCM constitutional holding, and since overturning the MCM holding will potentially reduce this Court’s ballooning USPTO docket, Appellant seeks initial en banc review.

The “public rights” issue is complicated, but the basic outcome is simple – if patents rights are not public rights (but instead private rights) then an administrative agency cannot lawfully revoke a patent once issued (without the permission of the patentee).

The Supreme Court appeared to speak directly on this issue in McCormick Harvesting Mach. Co. v. Aultman-Miller Co., 169 U.S. 606 (1898):

The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent. Moore v. Robbins, 96 U. S. 530, 533; U. S. v. American Bell Tel. Co., 128 U. S. 315, 364, 9 Sup. Ct. 90; Lumber Co. v. Rust, 168 U. S. 589, 593, 18 Sup. Ct. 208.

Although the direct case is 100+ years ago, we’re still working with the same United States Constitution that protects private property rights against governmental intrusion that violate due process and equal protection principles.

In MCM, the Federal Circuit distinguished these old cases by noting that patent office cancellations were not authorized by Congress: “McCormick … certainly did not forbid Congress from granting the PTO the authority to correct or cancel an issued patent.” MCM (opinion by Judge Dyk, joined by Judges Prost and Hughes).  The petition offers several responses: (1) McCormick does not actualy provide the ‘statutory caveat’ but instead limits PTO authority “for any reason whatever.” (2) The reissue statute in force in McCormick did expressly authorize examiners to reject the issued claims – whether original or amended. Thus, the McCormick decision did limit the power of Congress to increase PTO power.

= = =

One of the petitioner’s justifications for en banc review here is that it might allow the court to limit its docket.  In the process, the petition cites my recent Wrongly Affirmed Without Opinion article for the proposition that the court’s opinion writing docket may soon be further ballooning. “If Professor Crouch is right, it could be serendipitous if the Court overrules MCM, thus reducing docket load through reduction of incentives of patent owners to appeal.”

= = =

= = =

The public/private divide is, in reality, a false dichotomy since the Court is comfortable with the notion of “quasi-private right” — which has the aspects of a private property right, but which can be subjected to administrative agency control.  A key recent opinion on point is B&B Hardware (2015) – albeit the dissent by Justice Thomas (with Scalia):

Trademark registration under the Lanham Act has the characteristics of a quasi-private right. Registration is a creature of the Lanham Act, which “confers important legal rights and benefits on trademark owners who register their marks.” Because registration is merely a statutory government entitlement, no one disputes that the TTAB may constitutionally adjudicate a registration claim.

By contrast, the right to adopt and exclusively use a trademark appears to be a private property right that “has been long recognized by the common law and the chancery courts of England and of this country.” In re Trade–Mark Cases, 100 U.S. 82, 92, 25 L.Ed. 550 (1879). As this Court explained when addressing Congress’ first trademark statute, enacted in 1870, the exclusive right to use a trademark “was not created by the act of Congress, and does not now depend upon it for its enforcement.” Ibid. “The whole system of trade-mark property and the civil remedies for its protection existed long anterior to that act, and have remained in full force since its passage.” Ibid. Thus, it appears that the trademark infringement suit at issue in this case might be of a type that must be decided by “Article III judges in Article III courts.” Stern, 564 U.S., at ––––, 131 S.Ct., at 2609.

B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1317, 191 L. Ed. 2d 222 (2015) (Thomas, J. Dissenting).

First Rehearing Request Challenging No-Opinion Judgments

by Dennis Crouch

LSI v. FLIR (Fed. Cir. 2017) (request for rehearing) [16-1299-leak-surveys-v-flir_combined-rehg]

In its newly filed petition for rehearing, Leak Surveys has asked the Federal Circuit to withdraw its Judgment Without Opinion. Leak’s Counsel (Donald Puckett) argues:

It is hard to imagine an appeal more unsuitable for affirmance without opinion under Fed. Cir. R. 36 than this one.

The petition makes two primary arguments:

  1. If the Federal Circuit’s judgment is based upon new or alternative grounds not stated by the PTAB, then it must write an opinion.  Although the reason for a judgment without opinion are not directly discernible, the petitioner here suggests that it was likely based upon theories first espoused by the court and respondent at oral arguments — sufficient to form a prima facie conclusion that the judgment relied upon new or alternate grounds.
  2. LSI urges the en banc Court to grant rehearing to decide whether this Court can ever affirm a PTAB IPR decision without opinion. See 35 U.S.C. § 141 (in USPTO appeal, Federal Circuit “shall issue to the Director its mandate and opinion . . .”) (emphasis added). See also Crouch, Wrongly Affirmed Without Opinion, Univ. of Missou. L. Stud. Research Paper No. 2017-02, Forthcoming 52 Wake Forest Law Review ___ (2017) (http://ssrn.com/abstract=2909007).

In offering the first weaker option, LSI gives the court an option in case it “may hesitate to open a floodgate of rehearing requests.”  Of course, there are only about a dozen R.36 decisions that are still within the court’s 30-day deadline for requesting rehearing.  (The Supreme Court has a 90-day deadline).  The stronger approach that I argue for: “LSI presents this argument here to preserve it for further appeal to the U.S.
Supreme Court if necessary.”  [Amicus support due within two weeks]

The underlying appeal center on the validity of Leak’s U.S. Patent No. 8,193,496 and 8,426,813 that cover gas-leak detection equipment and methods using a passive-IR camera and bandpass filter.  The primary issues were claim construction (“leak” and “normal operating conditions”) and motivation to combine in the ultimate obviousness conclusion.   The original brief began as follows:

The IPR proceedings below resulted in the creation of a dense factual record involving 24 declarations and 14 depositions. Almost all witnesses were scientists (many with Ph.D. degrees) having personal knowledge of the petroleum industry’s extensive efforts (and failures) to develop a commercially viable imaging system for detecting hydrocarbon gas leaks in the field. Most of these same witnesses also offered first-hand testimony of [the inventor] David Furry’s own efforts to solve the same technical problem. Several witnesses -top scientists from the largest petroleum companies – described the day in 2004 when Furry showed up at the industry’s “Scan Off” to demonstrate his “Hawk” camera against the industry’s then-best optical leak detection systems. These scientists, having dedicated years of work and countless resources to creating a commercially viable optical leak detection system, testified that they were completely surprised and astonished by the Hawk’s unexpected results. It was immediately apparent that Furry had solved an important technical problem that the petroleum industry had been unable to solve.




Guest Post: Challenging PTO Institution Policies (If Not Institution Decisions)

endrunThe following is a guest post by Oliver Richards (Fish & Richardson).  Mr. Richards is a NYU Law alum and a former clerk for Judge Dyk on the Federal Circuit. 

After several rounds at the Federal Circuit and a trip to the Supreme Court, the law surrounding what aspects of the PTAB’s decision to institute on a petition for inter partes review are reviewable remains unclear. In light of the Federal Circuit’s decision to again revisit this issue in the grant of a petition for rehearing en banc in Wi-Fi One, LLC v. Broadcom Corporation (No. 2015-1944, -1945, -1946), I wanted to share a few thoughts on what, exactly, should be reviewable under 35 USC 314(d).   I believe that the yes/no decision of the PTAB as applied to any particular petition should be unreviewable.  However, in my view, review of PTAB regulations should be available either through appeal from the PTAB, or (preferably) through an APA challenge in district court. [1]  The distinction between review of specific PTAB institution decisions and general review of PTAB regulations and policies, I believe, makes sense for at least three reasons:

First, this distinction comports with the language of the statute.  314(d) prohibits judicial review of “[t]he determination . . . whether to institute an inter partes review.”  The statute should be read to mean what it says.  A review of “the” decision to institute in any case is not allowed.  General review of any agency regulation is not review of “the determination . . . whether to institute” even if the result of that review overturns the decision in any particular case.

In McNary v. Hatian Refugee Ctr. Inc.498 US 479 (1991) the Supreme Court drew a similar distinction relating to reviewability of “special agricultural worker” (“SAW”) eligibility decisions of immigration officials under the provisions of the Immigration Reform and Control Act of 1986.  In McNary, the Supreme Court was asked whether 8 U.S.C. § 1160(e)—which prohibits “administrative or judicial review of a determination respecting an application for adjustment of status”—deprived a district court of jurisdiction over a suit challenging agency policies and procedures.

The Supreme Court allowed the challenge.  According to the Court, “[t]he critical words in § 210(e)(1) … describe the provision as referring only to review ‘of a determination respecting an application’ for SAW status. Significantly, the statutory reference to “a determination” describes a single act rather than a group of decisions or a practice or procedure employed in making decisions.”  McNary, 498 U.S. at 491–92.  Thus the language prohibiting review indeed prohibited “direct review of individual” determinations but did not prohibit “general collateral challenges to unconstitutional practices and policies used by the agency in processing applications.”    “[H]ad Congress intended the limited review provisions of § 210(e) of the INA to encompass challenges to INS procedures and practices, it could easily have used broader statutory language” such as by prohibiting “all causes arising under any of the provisions” of the immigration program as it had done in other places.  Id. at 494. [2]

In my view, the patent law’s statutory language – “The determination . . . whether to institute” similarly indicates that § 314(d) was intended to apply to only individual determinations, not to prohibit any and all review of PTO procedures and policies relating to institution.

Second, the distinction strikes a fair balance between making sure the PTAB is complying with its statutory mandate and maintaining the efficiency of the IPR system.  Perhaps wary of a flood of appeals clogging the courts and the corresponding slow down in IPR determinations, Congress choose efficiency in section 314(d) by prohibiting an appeal relating to every single IPR institution decision.  On the other hand, allowing parties to turn to courts to check potentially problematic regulations or practices by the PTAB is an important check on that body’s power.  Seee.g.Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016) (concluding that the PTAB’s definition of a “covered business method patent” exceeded the statute.”)[3]   Prohibiting challenges to each and every institution decision but allowing general challenges provides for efficient review of PTAB regulations, policies, and procedures without slowing down the whole IPR system.

Third, the distinction is consistent with most Federal Circuit decisions on the topic.  Although the distinction I suggest was not provided as the reasoning, the CAFC has notably found many PTAB regulations/policies relating to institution reviewable.  See, e.g.Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.4 – “Institution of trial.  The Board institutes the trial on behalf of the Director”); Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.108, titled “Institution of inter partes review”).  The cases where the Federal Circuit has found issues not to be reviewable are typically cast in case-specific ways.  Seee.g. Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) (reviewing “whether Apple’s petition was time barred”); Cuozzo, 793 F.3d at 1272 (“Cuozzo argues that the PTO improperly instituted IPR on claims 10 and 14 because the PTO relied on prior art that Garmin did not identify in its petition as grounds for IPR as to those two claims.”)

Any resolution of the reviewability issue must comply with the statute, must put teeth to Congress’s embrace of efficiency, and at the same time must make sure that the rights of patent holders are adequately protected.  The approach I have outlined above, in my view, adequately balances efficiency with appropriate supervision of the PTAB.   I’m curious to see what you all think, and I look forward to reading the comments.

Note: The views views expressed here are solely my own and do not necessarily reflect the views of my firm or any clients.


[1] The CAFC left open the question of whether the APA allowed for challenges to PTAB regulations in district court in Synopsys, Inc. v. Lee, 812 F.3d 1076 (Fed. Cir. 2016).   From a practical standpoint, an APA challenge in a district court would seem to be a better option–the parties will have an opportunity to develop a fuller record removed from the facts of any particular IPR, and a district court may well provide a better first look than than the agency that promulgated the challenged regulation.

[2] NcNary follows other Supreme Court decisions distinguishing between specific challenges to a particular determination and general challenges to regulations.  See Bowen v. Michigan Acad. of Family Physicians, 476 U.S. 667, 675 (1986).

[3] For individual determinations where the PTAB clearly exceeds its statutory authority, mandamus remains available.  See, e.g.In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1274 (Fed. Cir. 2015),  aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).


Does Refusal to Register a Mark Violate the First Amendment?

by Dennis Crouch

USPTO v. Tam (Supreme Court 2017)

The Supreme Court today held oral arguments in the trademark battle over whether the rock band can register its name THE SLANTS. The PTO argues “no” because the name is disparaging to Asians and Congress does not allow registration of marks “which may disparage … persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” 15 U.S.C. § 1052 (known as Section 2(a) of the Lanham Act). Tam argues that the ban on registering disparaging marks violates his free-speech rights protected under the First Amendment of the US Constitution.

Congress shall make no law … abridging the freedom of speech, or of the press.

In its decision, the en banc Federal Circuit ruled against the government – finding that the anti-disparagement law and its application was unconstitutional and therefore invalid. The case will have a direct impact on the native-american sports-logo cases (“Redskins”), and may usher in a new golden era of fringe consumer products with disparaging names. In its brief, the Government wrote that it should not be forced to register marks “containing crude references to women based on parts of their anatomy; the most repellent racial slurs and white-supremacist slogans; and demeaning illustrations of the prophet Mohammed and other religious figures.” Of course, what the PTO is doing here is discrimination based upon viewpoint. If TAM wins here, the larger question will be whether fraudulent marks can also be denied going forward.

In my view, we clearly have viewpoint discrimination.  However, we have skipped the more fundamental question of whether ‘registration’ should count as speech in the first place — and here to be clear the allegation is that TAM’s speech has been impinged.  Another way of looking at the issue is simply that trademark registration is a government program – and for non-speech-limiting government programs, the government has more leeway to discriminate based upon someone’s viewpoint (at least without violating the First Amendment).  My concern for the case is outside of TM law — I wonder the extent that further strengthening the First Amendment to reach beyond usual speech cases will further empower entities to more generally avoid substantial government regulation based upon so-called “speech” concerns.  [E.g., EPA is violating speech rights of pro-polluters by not letting them pollute while allowing non-polluters do whatever they want…Entirely viewpoint based discrimination.]

[Read the Oral Arguments Transcript: 15-1293_l6gn1]

A few excerpts (not in chrono-order)

JUSTICE BREYER: Look. We’re creating, through government, a form of a property right, a certain form. That’s a trademark. It’s as if through government we created a certain kind of physical property right that certain people could dedicate a small part of their houses or land to Peaceful Grove. And in Peaceful Grove, you write messages, but peaceful messages. And above all, you don’t write messages that will provoke others to violence or bad feelings. Okay? Anything wrong with that? I can’t think of anything wrong with that. There are thousands of places where they can express hostile feelings. It’s just in this tiny place, one-quarter of an acre, that you yourself have chosen to take advantage of that you can’t because it will destroy the purpose. It will destroy the purpose of Peaceful Grove. That’s why I asked my question.

. . . .

MR. CONNELL: Marks constitute both commercial speech and noncommercial speech, and the disparagement clause specifically targets the noncommercial speech and denies registration to marks that only express negative views.

JUSTICE SOTOMAYOR: This is a bit different than most [First Amendment] cases. No one is stopping your client from calling itself The Slants. No one is stopping them from advertising themselves that way, or signing contracts that way, or engaging in any activity, except that stopping someone else from using the same trademark. But even that they could do. Because you don’t need a registered trademark to sue under the Lanham Act’s entitlement for the confusion of the public in the use of any kind of registered or unregistered mark. If another band called themselves Slants, they would be subject to deceptive advertisements because they wouldn’t be this Slants. [Rather] your speech is not being burdened in any traditional way.

JUSTICE BREYER: [The provision] stops nobody from saying anything.

MR. CONNELL: In this case, the government has used the disparagement clause to selectively deny those legal benefits to a mark holder expressing negative views that the government favors, as opposed to mark holders who received those benefits because they express neutral or positive views that the government does favor. . . . It is a [speech] burden because our client is denied the benefits of legal protections that are necessary for him to compete in the marketplace with another band. And the only reason for the denial of those benefits is the burden on his noncommercial speech contained in the mark. . . . I think what the government is trying to do here is simply encourage commercial actors to conduct business in such a way as to not insult customers.

MR. STEWART: It places no restrictions on his ability to use the mark. It may limit the remedies that are available for infringement, but — but that’s entirely regulating the commercial aspects of the conduct.

. . . .

MR. STEWART (for the Government supporting the provision): The trademark registration program and trademarks generally have not historically served as vehicles for expression. That is, the Lanham Act defines trademark and service mark purely by reference to their source identification function. . . .

JUSTICE ALITO: Do you deny that trademarks are used for expressive purposes?

MR. STEWART: I don’t deny that trademarks are used for expressive purposes. As I was saying earlier, I think many commercial actors will pick a mark that will not only serve as a source identifier, but that will cast their products in an attractive light and/or that will communicate a message on some other topic. My only point is in deciding whether particular trademarks should be registered, Congress is entitled to focus exclusively on the source identification aspect. . . .

JUSTICE SOTOMAYOR: What purpose or objective of trademark protection does this particular disparagement provision help along or further?

MR. STEWART: I think Congress evidently concluded that disparaging trademarks would hinder commercial development in the following way: A trademark in and of itself is simply a source identifier … It is not expressive in its own right … and basically Congress says, as long as you are promoting your own product, saying nice things about people, we’ll put up with that level of distraction.

. . . .

JUSTICE SOTOMAYOR:  Your argument earlier was that if someone slanders or libels an individual by saying — Trump before he was a public figure — Trump is a thief and that becomes their trademark, that even if they go to court and prove that that’s a libel or a slander, that trademark would still exist and would be capable of use because otherwise canceling it would be an abridgment of the First Amendment?

MR. CONNELL: I believe that’s correct.

JUSTICE SOTOMAYOR: That makes no sense.




Wi-Fi One v. Broadcom: Mine-Runs and Shenanigans in Inter Partes Review

by Dennis Crouch

Wi-Fi One v. Broadcom (Fed. Cir. 2017)

First en banc order of the year: the Federal Circuit will review the following question:

Should this court overrule Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?

en banc order. Briefs of amicus curiae may be filed without consent.

One Year Filing Deadline: Section 315(b) creates a statute of limitations for inter partes review proceedings – indicating that the petition for IPR must be filed within one-year of “the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  Here, Wi-Fi argues that Broadcom was in privity with entities involved in parallel district court litigation involving challenged patents — creating a time bar under 315(b).

The PTAB rejected Wi-Fi’s argument and call for discovery on the issue — holding that the “privy” requirement could only be met if Broadcom had the right to control the District Court litigation.

No Appeal: On appeal, the Federal Circuit affirmed – holding Section 314(d) prohibits appellate review of the institution issue.  In particular Section 314(d) states that

The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

In Achates, the court ruled that the one-year-deadline determination is an institution decision – “even if such assessment is reconsidered during the merits phase of proceedins and restated as part of the Board’s final written decision.”

In the background stands the 2016 Supreme Court decision in Cuozzo.  In that case, the Supreme Court gave effect to the no-appeal provision of 314(d).  However, the Supreme Court noted that unusual questions – such as constitutional questions – might still be appealable.  The foundation for the en banc review decision will be its interpretation of the following Cuozzo excerpts:

We conclude that [314(d)], though it may not bar consideration of a constitutional question, for example, does bar judicial review of the kind of mine-run claim at issue here, involving the Patent Office’s decision to institute inter partes review. . . .

Nevertheless, in light of §314(d)’s own text and the presumption favoring review, we emphasize that our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review. See §314(d) (barring appeals of “determinations . . . to initiate an inter partes review under this section” (emphasis added)). This means that we need not, and do not, decide the precise effect of §314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.” . . .  Thus, contrary to the dissent’s suggestion, we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under §112” in inter partes review. Such “shenanigans” may be properly reviewable in the context of §319 and under the Administrative Procedure Act, which enables reviewing courts to “set aside agency action” that is “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.”

The question then for court is whether we have a shenanigan here.



Yes, All Elements Rule Still Applies to Infringement

Medgraph v. Medtronic (Fed. Cir. 2016)

Medgraph’s claims are directed to a set of methods “for improving and facilitating diagnosis and treatment of patients.” See U.S. Patent 5,974,124 and U.S. Patent 6,122,351.   The problem is that the claims require actions by both the computer system and also a patient/doctor.  This claim structure directly runs headlong into traditional requirement for direct infringement of a patent – that all steps of the claim be performed-by or attributable-to a single entity.

In its 2015 decision, the district court ruled that Medtronic could not be liable for infringement because there was no “showing that Medtronic itself directly infringed the method claims or that it acted as a ‘mastermind’ by controlling or directing anyone else’s direct infringement.” Citing Akamai Techs., Inc v. Limelight Networks, Inc., 786 F.3d 899 (Fed. Cir. 2015) (decision on remand from SCT).

Following the district court’s decision in this case, the Federal Circuit issued a per curiam en banc decision broadening the scope of potential attribution. Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015).  In this most recent en banc decision, the court held that the “single entity” theory of direct infringement can also be extended “when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.”

On appeal here, Medgraph argued for remand to allow the district court to consider infringement under this broader theory.  However, the Federal Circuit rejected that suggestion.  The court held instead that Medgraph’s case fails on any and all theories of direct infringement because Medgraph failed to produce evidence that the missing steps were actually performed by the patient and doctor. In addition, Medgraph failed to identify evidence fitting within the new broader attribution guidelines.

“The district court also correctly concluded that Medtronic was not liable under a theory of indirect infringement, because indirect infringement is predicated on direct infringement. That rule was also unaffected by Akamai V, so the outcome would, again, not change if we were to vacate and remand. ”

Dismissal Affirmed

= = = =

I was curious how the patentee here thought it might win without proving infringement of each element. In its reply brief, Medgraph explained that (1) Medtronic instructed users to practice the claim steps; and (2) Medtronic ‘admits’ that about 20% of patients used the system in an infringing manner.  This admission came from Medtronic’s appeal brief that stated “the record shows that approximately 80 percent of customers in fact use the system in this non-infringing way.”  This evidence coupled with its expert testimony are, according to Medgraph, enough to prove infringement. See Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (Fed. Cir. 2009) (circumstantial evidence sufficient); Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986) (“[c]ircumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence.”).

= = = =

Although the Federal Circuit’s most recent Akamai decision loosened the knot a bit on the strict single-entity requirement, it remains a tough requirement.  Here, for instance, it does not appear to be enough that an accused infringer instructed its customers on how to use its system in a way that infringes.  Rather, liability under Akamai will only be created if the alleged infringer requires that those steps be followed or receives some benefit upon their performance.

Patent Law vs Property Law in Impression Prods. v. Lexmark Int’l.

by Dennis Crouch

I finally predicted something! The Supreme Court has now granted writ of certiorari in the pending patent exhaustion case of Impression Products, Inc. v. Lexmark International, Inc., SCT Docket No. 15-1189.  The two questions presented involve domestic and international exhaustion respectively.

The “patent exhaustion doctrine”—also known as the “first sale doctrine”—holds that “the initial authorized sale of a patented item terminates all patent rights to that item.” Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008). This case presents two questions of great practical significance regarding the scope of this doctrine on which the en banc Federal Circuit divided below:

1. Whether a “conditional sale” that transfers title to the patented item while specifying post-sale restrictions on the article’s use or resale avoids application of the patent exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law’s infringement remedy.

2. Whether, in light of this Court’s holding in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1363 (2013), that the common law doctrine barring restraints on alienation that is the basis of exhaustion doctrine “makes no geographical distinctions,” a sale of a patented article—authorized by the U.S. patentee—that takes place outside of the United States exhausts the U.S. patent rights in that article.

Lexmark offered its rewriting of the questions as follows:

Section 271(a) of the Patent Act provides that “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” 35 U.S.C. § 271(a) (emphasis added). The petition asks this Court to review two questions related to this provision:

1. This Court and the court of appeals have held that the sale of a patented article does not automatically confer unlimited “authority” for others to make, sell, or use that article where the patent rights actually conveyed are more limited in scope. E.g., Gen. Talking Pictures Corp. v. W. Elec. Co., 304 U.S. 175 (1938); Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992). Did the court of appeals correctly reaffirm its precedent in holding that Lexmark’s sale of a patented toner cartridge, subject to a lawful and express limitation, did not automatically convey unlimited authority that had been clearly denied?

2. This Court and the court of appeals also have held, in light of Congress’s decision to geographically limit the scope of patent rights and infringement liability to the United States, that a lawful sale abroad does not automatically confer unlimited “authority” to sell or import a patented article in the United States. E.g., Boesch v. Graff, 133 U.S. 697 (1890); Jazz Photo Corp. v. ITC, 264 F.3d 1094 (Fed. Cir. 2001). Did the court of appeals correctly reaffirm its precedent in holding that Lexmark’s sale of a patented toner cartridge in a foreign country, pursuant to the laws of that country, did not automatically convey “authority” to sell and import that product in the United States?

Is it Obvious to Combine Five References?

by Dennis Crouch

On his (great) blog, Bill Vobach considers whether it is time to revisit In re Gorman, 933 F.2d 982 (Fed. Cir. 1991).   Gorman involved an obviousness rejection based upon a combination of thirteen references. The Federal Circuit rejected Gorman’s argument that the combination of a large number of references to support a rejection for obviousness “of itself weighs against a holding of obviousness.” See also, In re Troiel, 274 F.2d 94 (CCPA 1960) (rejecting appellant’s argument that combining a large number of references to show obviousness was “farfetched and illogical”).  The USPTO has regularized this holding within its Manual of Patent Examination Practice (MPEP) Section 707.07(f) (“reliance on a large number of references in a rejection does not, without more, weigh against the obviousness of the claimed invention”).  Of course, when Gorman was decided, the court also required some express motivation in order to combine references — that requirement was eliminated ten years ago by the Supreme Court in KSR v. Teleflex (2007).

I cannot recall any obviousness decision coming out of a district court that combines four or more references.  Neither Judges nor Juries will stand for that level of complexity.  The PTAB judges are so well trained in the complexity of technology and patent law that they are open to these poly-reference arguments in the AIA trial context.

Vobach, who reviews almost all of the Federal Circuit oral argument audio clips, reports that various judges have commented recently on the large number of references being relied upon in obviousness rejections.  Judge Moore most pointedly noting that “four or greater . . . that’s a lot of references!”

Two approaches for moving forward on the issue: (1) preserve the appeal and request en banc hearing; (2) argue that Gorman was reset by KSR.  An unlikely third approach might push Congress to move toward an European approach that begins the analysis with the closest single prior art reference and builds from there.