Top Ten Patent Cases (Supreme Court) *

Transcription

1 Top Ten Patent Cases (Supreme Court) * (1) Myriad: Argument April 15, 2013 (8) Akamai: The All Elements Rule (green appendix) (10) Ninestar: Certiorari Vote March 15, 2013 Byrne v. Wood Herron: GVR expected in light of Gunn v. Minton (decided February 20, 2013). Merits Appeals (Certiorari Granted) highlighted in turquoise. Rank Case Name Issue Status 1 Myriad. 101 Patent Eligibility Argument April 15 2 Bowman v. Monsanto. Seed Patent Exhaustion Argued February 19 3 FTC v. Watson ANDA Reverse Payments. Argument Mar Merck (K-Dur) ANDA Reverse Payments Possible GVR 5 Kirtsaeng v. Wiley International Exhaustion Argued October 29 6 Epic Systems v. McKesson Joint Induced Infringement Response due Mar. 6 7 Limelight v. Akamai Joint Induced Infringement Response due Mar. 4 8 Akamai v. Limelight Joint Direct Infringement Response due Mar. 6 9 U.S. v. Beer Judicial Pay Response due Mar Ninestar v. ITC Int l Patent Exhaustion Conference March 15 Allcare v. Highmark Cybor déjà vu Petition due March 4 Nokia [InterDigital]. ITC Domestic Manufacture. Petition due April 9 ` Byrne v. Wood et al. Federal Circuit Jurisdiction GVR Expected Merits Decisions during the October 2012 Term Case Issue Date (2013) Already v. Nike Justiciable Controversy January 9 Gunn v. Minton Federal Court Jurisdiction February 20 * About the List: Harold C. Wegner is solely responsible for this list. The author is a former Professor of Law at the George Washington University Law School and is currently a partner in the international law firm of Foley & Lardner LLP. Any opinions or characterizations expressed in this paper represent the personal viewpoint of the author and do not necessarily reflect the viewpoint of any colleague, organization or client thereof. This list updated February 21, 2013.

2 Supreme Court October 2012 Term Argument Calendar Full for the Current Term: All arguments for the current Term have now been scheduled. If certiorari is granted in any further cases, they will be argued in the October 2013 Term that runs through June Red Day Sessions (arguments and sometimes decisions). The argument calendar is full until the final six red days beginning April 15, Blue Day Sessions (no arguments; decisions only): In addition to announcing decisions from the bench at the Session beginning at 10:00 AM, an Orders List relating to the previous Conference is published at 9:30 AM that announces certiorari (and other) decisions. Several additional blue days will undoubtedly be added in June that will be announced shortly before such sessions. Conferences ( Green Days ): Certiorari votes announced that day (for grants, if early in the Term) or the next red or blue day. 2

3 (1) Myriad 101 Patent-Eligibility The Myriad case, Association for Molecular Pathology v. Myriad Genetics, Inc., Supreme Court No , challenges the split 2-1 Federal Circuit confirmation of patent-eligibility under 35 USC 101 of claims to isolated DNA. Status: Argument April 15, The Petition raised three Questions Presented. Certiorari was granted only as to the first Question Presented: Question Presented (with Cert. Granted): Many patients seek genetic testing to see if they have mutations in their genes that are associated with a significantly increased risk of breast or ovarian cancer. Respondent Myriad [ ] obtained patents on two human genes that correlate to this risk, known as BRCA1 and BRCA2. These patents claim every naturally-occurring version of those genes, including mutations, on the theory that Myriad invented something patent-eligible simply by removing ( isolating ) the genes from the body. Petitioners are primarily medical professionals who regularly use routine, conventional genetic testing methods to examine genes, but are prohibited from examining the human genes that Myriad claims to own. This case therefore presents the following questions: 1. Are human genes patentable? *** (2) Bowman v. Monsanto Patent Seed Exhaustion In Bowman v. Monsanto Co., Supreme Court No , proceedings below, Monsanto Co. v. Bowman, 657 F.3d 1341 (Fed. Cir. 2011)(Linn, J.), Petitioner challenges the denial of patent exhaustion as to harvested seeds produced from patented plant technology, an issue discussed in Wegner, Post-Quanta, Post-Sale Patentee Controls, IV-B-1, Restrictions on Reproduced Bio-Products: The Quanta Loophole, 7 J. Marshall Rev. Intell. Prop. L. 682, (2008), available at Status: Awaiting decision at some point before the end of June 2013; argued February 19,

4 Question Presented: Patent exhaustion delimits rights of patent holders by eliminating the right to control or prohibit use of the invention after an authorized sale. In this case, the Federal Circuit refused to find exhaustion where a farmer used seeds purchased in an authorized sale for their natural and foreseeable purpose - namely, for planting. The question presented is: Whether the Federal Circuit erred by (1) refusing to find patent exhaustion in patented seeds even after an authorized sale and by (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies? Discussion: Respondent s counsel Seth Waxman gave one of his better performances both in briefing and argument. Given the transcript of the argument, it is difficult to see the exhaustion issue applied to a farmer s making of progeny seed from purchased/patented Roundup Ready seed. (3) FTC v. Watson (AndroGel) ANDA Reverse Payments In FTC v. Watson Pharms., Inc., Supreme Court No , opinion below, 677 F.3d 1298 (11th Cir. 2012), the Court is reviewing the AndroGel ANDA reverse payment settlement case. Justice Alito is recused. Status: Argument March 25, Question Presented: Federal competition law generally prohibits an incumbent firm from agreeing to pay a potential competitor to stay out of the market. See Palmer v. BRG of Ga., Inc., 498 U.S. 46, (1990). This case concerns agreements between (1) the manufacturer of a brand-name drug on which the manufacturer assertedly holds a patent, and (2) potential generic competitors who, in response to patent-infringement litigation brought against them by the manufacturer, defended on the grounds that their products would not infringe the patent and that the patent was invalid. The patent litigation culminated in a settlement through which the seller of the brand-name drug agreed to pay its would-be generic competitors tens of millions of dollars annually, and those competitors agreed not to sell competing generic drugs for a number of years. Settlements containing that combination of terms are commonly known as reverse payment agreements. The question presented is as follows: 4

5 Whether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the court below held), or instead are presumptively anticompetitive and unlawful (as the Third Circuit has held). (4) Merck (K-Dur)-- ANDA Reverse Payments Merck & Co., Inc. v. Louisiana Wholesale Drug Co., Inc., Supreme Court No , and Upsher-Smith Laboratories Inc. v. Louisiana Wholesale Drug Co., Inc., Supreme Court No. No , each involve ANDA reverse payment settlement decisions in conflict with No. (3) FTC. v. Watson, which will be argued in March or April with a merits decision by the end of June Status: It is apparent that both Merck and Upsher-Smith are being held for certiorari review following a merits decision in FTC v. Watson. If the decision in that case raises a conflict with Merck and Upsher-Smith, a GVR in each case may be anticipated. Question Presented in Merck: Whether the federal antitrust laws permit a brand name manufacturer that holds the patent for a drug to enter into a settlement of patent litigation with a prospective generic manufacturer, where the settlement includes a payment from the brand manufacturer to the generic manufacturer but does not exclude competition beyond the scope of the patent. Question Presented in Upsher: Whether the Third Circuit erred by holding, contrary to the Second, Eleventh, and Federal Circuits, that an agreement settling patent litigation that does not restrict competition outside the scope of the exclusionary right granted by the patent itself may presumptively violate the antitrust laws. 5

6 (5) Kirtsaeng v. John Wiley: International Exhaustion Kirtsaeng v. John Wiley & Sons, Inc., Supreme Court No , opinion below, 654 F.3d 210 (2d Cir. 2011)(Cabranes, J.), has the same denial of international exhaustion as in Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008)(Smith, Jr., J.), where the Court accepted review but then left the issue in the air with a 4-4 tie vote affirmance, Costco Wholesale Corp. v. Omega, S.A., 131 S.Ct. 565 (2010)(per curiam without opinion). Status: Awaiting decision; argument was October 29, Question Presented: This case presents the issue that recently divided this Court, 4-4, in Costco Wholesale Corp. v. Omega, S.A., 131 S. Ct. 565 (2010). Under 602(a)(1) of the Copyright Act, it is impermissible to import a work without the authority of the owner of the copyright. But the first-sale doctrine, codified at 109(a), allows the owner of a copy lawfully made under this title to sell or otherwise dispose of the copy without the copyright owner's permission. The question presented is how these provisions apply to a copy that was made and legally acquired abroad and then imported into the United States. Can such a foreign-made product never be resold within the United States without the copyright owner's permission, as the Second Circuit held in this case? Can such a foreign-made product sometimes be resold within the United States without permission, but only after the owner approves an earlier sale in this country, as the Ninth Circuit held in Costco? Or can such a product always be resold without permission within the United States, so long as the copyright owner authorized the first sale abroad, as the Third Circuit has indicated? 6

7 (6) Epic Systems v. McKesson Joint Indirect Infringement (7) Limelight v. Akamai Joint Indirect Infringement (8) Akamai v. Limelight Joint Direct Infringement In Epic Systems Corp. v. McKesson Technologies, Inc., Supreme Court No , Limelight Networks, Inc. v. Akamai Techs., Inc., Supreme Court No , and Akamai Techs., Inc. v. Limelight Networks, Inc., Supreme Court No , opinion below in each case, Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012)(en banc)(per curiam), infringement of a combination claim was found despite the fact that no single party performed each and every element of the combination. Epic Systems and Limelight each challenge the holding below of inducement to infringe under 35 USC 271(b), while the Akamai appeal asks the court to rule that there is direct infringement in this conditional appeal in the event Akamai loses in the Limelight proceedings. Status: Awaiting Responses to the certiorari petitions which are due as follows: No. (6) Epic Systems: March 6, No. (7) Limelight: March 4, No. (8) Akamai: March 6, A certiorari vote is expected during the current Term. If certiorari is granted in any of these cases, the argument will take place during the October 2013 Term that runs through June Question Presented in No. (6) Epic Systems: Whether a defendant may be held liable for inducing infringement of a patent that no one is liable for infringing. Question Presented in No. (7) Limelight: [The patent claims] a method involving redirecting requests for Internet content and selecting optimal servers. The Federal Circuit acknowledged that neither [the accused infringer] nor customers using [the accused infringer's service directly infringe [the] patent under 35 U.S.C. 271(a) because no one performs all the steps of the patented method. The Federal Circuit nevertheless held that [the accused infringer] could be liable, under 35 U.S.C. 271(b), for inducing infringement if (1) it knew of [the] patent; (2) it performed 7

8 all but one of the steps of the method; (3) it induced its customers to perform the final step of the claimed method; and (4) the customers performed that step. The question presented is: Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. 271(b) even though no one has committed direct infringement under 271(a). Question Presented in No. (8) Akamai: Whether a party may be liable for infringement under either 35 U.S.C. 271(a) or 271(b) where two or more entities join together to perform all of the steps of a process claim? No. (6) Epic Systems Argument: This Court should grant review for the reasons that the five dissenting judges below articulated in the sharpest possible terms. A scant majority of that Court (Newman, J., dissenting), has significantly [b]roaden [ed] liability for patent infringement, thereby effectuating a sweeping change to the nation's patent policy, (Linn, J., dissenting). The majority concluded that a party may be held liable for inducing patent infringement when the conduct it induced would not itself be actionable as infringement. This approach is contrary to both the Patent Act and to the Supreme Court's longstanding precedent that if there is no direct infringement of a patent there can be no contributory infringement. (quoting Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961) ( Aro I ); citing, inter alia, Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 526 (1972)). Simply put, the Federal Circuit's new rule is not in accordance with statute, precedent, and sound policy. It raises new issues unrecognized by the majority, and contains vast potential for abuse. (Newman, J., dissenting). These are compelling reasons for this Court's review. No. (7) Limelight s Argument: The Federal Circuit's holding that [the accused infringer] may be liable, under 35 U.S.C. 271(b), for inducing infringement of [the] patent even though no party directly infringed the patent under 271(a) conflicts with this Court's holding, repeatedly reaffirmed, that if there is no direct infringement of a patent there can be no [indirect] infringement. Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961) ( Aro I ) (referring to principle as a fundamental precept of patent law); see Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2065 (2011); Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 526 (1972); Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 483 (1964); see also Dawson Chem. Co. v. Rohm & Haas Co., 8

9 448 U.S. 176 (1980); Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661, 677 (1944) (Frankfurter, J., dissenting). No. (8) Akamai s Argument Presented in the Conditional Appeal: Akamai boldly argues that the all elements rule does not apply in the case where a party performs fewer than all the elements of a combination claim. The earliest Supreme Court case cited is Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997). The green paper attached as an appendix (Akamai: Origins of the All Elements Rule) focuses upon the origins of the all elements rule in Barrett v. Hall, 2 F.Cas. 914 (No. 1047)(D. Mass. 1818)(Story, J.), 180 years before Warner-Jenkinson. A Deeply Fractured Federal Circuit: The senior member of the Court explains: This en banc court has split into two factions, neither of which resolves the issues of divided infringement. A scant majority of the court adopts a new theory of patent infringement, based on criminal law, whereby any entity that advises, encourages, or otherwise induces, or causes, urges, encourages, or aids the infringing conduct, is liable for the infringing conduct. The majority further holds that only the inducer is liable for divided infringement, and that the direct infringers are not liable although the patent rights are plainly being violated by the actors' joint conduct. These are dramatic changes in the law of infringement. On this new inducement-only rule, the inducing entity is liable on greatly enlarged grounds, such as merely advising or encouraging acts that may constitute direct infringement. This new rule is not in accordance with statute, precedent, and sound policy. It raises new issues unrecognized by the majority, and contains vast potential for abuse. Akamai, 692 F.3d at 1319 (Newman, J., dissenting). The second senior-most member of the four dissenting judges (who has himself now taken senior status) explains the former majority viewpoint: [T]his court assumes the mantle of policy maker. It has decided that the plain text of 271(a) and (b) fails to accord patentees certain extended rights that a majority of this court's judges would prefer that the statute covered. To correct this situation, the majority effectively rewrites these sections, telling us that the term infringement was not, as was previously thought, defined by Congress in 271(a), but instead can mean different things in different contexts. 9

10 The majority's approach is contrary to both the Patent Act and to the Supreme Court's longstanding precedent that if there is no direct infringement of a patent there can be no contributory infringement. Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961); Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 526 (1972) (quoting Mercoid Corp. v. Mid Continent Co. ( Mercoid I ), 320 U.S. 661, 677 (1944) (Frankfurter, J., dissenting on other grounds)); see also Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed.Cir.1993) ( Liability for either active inducement of infringement or for contributory infringement is dependent upon the existence of direct infringement. ); C.R. Bard v. Advanced Cardiovascular Sys., Inc., 911 F.2d 670, 673 (Fed.Cir.1990) (same). Akamai, 692 F.3d at 1337 (Linn, J., joined by Dyk, Prost, O Malley, JJ.). Two Critical Votes by the Two Newest Members of the Federal Circuit: The Federal Circuit is a court in transition. What was once was an apparent solid majority for the viewpoint of what became the dissent in the opinion below was swung to a 6-5 per curiam majority thanks to the votes of the two newest members of the Court, Wallach, Reyna, JJ. With the possible exception of the senior member of the Court, the penultimate member of the Court has the highest ratio of separate opinions concurring, dissenting (or concurring dubitante) versus majority opinions of any member of the Court. Both have taken a positive attitude to become deeply involved with the most important matters of the Court, a sharp departure from a generation ago when newer members of the Court were reluctant to vote for en banc consideration of cases; it was then very difficult to obtain review of clear conflicts within the Circuit. This was perhaps best manifested by the conflict between Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565 (Fed.Cir.1991), and Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834 (Fed.Cir.1992). The Court repeatedly refused to resolve this conflict through an en banc proceeding, e.g., SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006)(Order den. reh g en banc). The conflict was only finally resolved seventeen (17) years after Atlantic Thermoplastics in Abbott Laboratories v. Sandoz, Inc., 566 F.3d 1282 (Fed. Cir. 2009)(en banc)(rader, J.). 10

11 (9) United States v. Beer Judicial Pay In United States v. Beer, Supreme Court No , opinion below, Beer v. United States, 696 F.3d 1174 (Fed. Cir. 2012)(en banc)(rader, C.J.), the Department of Justice questions the en banc decision of the Federal Circuit that determined that members of the Federal Judiciary are entitled to cost of living pay adjustments. Status: Response to Petition was is due March 6, A certiorari vote is expected during the current Term. If certiorari is granted in any of these cases, the argument will take place during the October 2013 Term that runs through June Questions Presented: 1. Whether the Compensation Clause prohibited Congress from disallowing certain annual increases in judicial salary contemplated by the Ethics Reform Act of 1989, Pub. L. No , when the statutes disallowing those increases were enacted into law before the increases were scheduled to take effect. 2. Whether, under the Act of Nov. 28, 2001, Pub. L. No , 625, amending Pub. L , 140, Congress's failure in 2007 and 2010 to pass specific legislation authorizing judicial salary increases prevented increases for those years from taking effect. Discussion: While this case has absolutely nothing to do with intellectual property law, the case may be the highest profile Federal Circuit case at the Supreme Court in terms of the attention of the federal judiciary at all levels because it deals with Congressional denial of cost of living pay adjustments. 11

12 (10) Ninestar v. ITC -- International Exhaustion Ninestar Technology Co., Ltd. v. International Trade Com'n, Supreme Court No , opinion below, 667 F.3d 1373 (Fed. Cir. 2012) (Newman, J.), challenges the Federal Circuit s denial of international patent exhaustion. Status: A certiorari vote is scheduled for March 15, If certiorari is granted, the argument will take place during the October 2013 Term that runs through June Discussion: This case is considered in more detail in the Analysis section, Patent Exhaustion Issues of First Impression. Question Presented: The longstanding doctrine of patent exhaustion provides that the initial authorized sale of a patented item terminates all patent rights to that item. Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 625 (2008). In Holiday v. Mattheson, 24 F. 185, 185 (C.C.S.D.N.Y. 1885), the court held that foreign sales authorized by U.S. patentees exhaust U.S. patent rights. That decision was followed for more than a century. In Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094, 1105 (Fed. Cir. 2001), however, the Federal Circuit concluded that foreign sales do not exhaust U.S. patent rights. The question presented is: Whether the initial authorized sale outside the United States of a patented item terminates all patent rights to that item. Argument for Grant: For over a century, courts consistently held that authorized sales abroad exhaust U.S. patent rights. In Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094, 1105 (Fed. Cir. 2001), however, the Federal Circuit reversed course. That decision the operative portion of which was two sentences in length did not acknowledge the preexisting law. The court relied solely on Boesch v. Graff, 133 U.S. 697, (1890), but, as lower courts and commentators alike have noted, the Federal Circuit s reading of Boesch was wrong. 12

13 Any uncertainty about international patent exhaustion should have been put to rest by this Court s decision in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008). There, the Court indicated that products sold abroad exhaust U.S. patent rights. Yet the Federal Circuit has refused to reconsider Jazz Photo in light of Quanta, and it continues to apply Jazz Photo s rule, as it did in this case. This Court should grant review to settle the rule governing international patent exhaustion. Not only is Jazz Photo wrong, but it has substantial and baleful practical implications for global trade. The U.S. import market for patented goods sold abroad is enormous, and barring importation of these goods causes U.S. consumers to pay inflated prices. The rule of Jazz Photo also restricts growth of the domestic remanufacturing industry, which relies on imports of patented goods suitable for repair. Yet more troubling, the rule encourages U.S. patent holders to move production facilities overseas. And Jazz Photo has been shown to restrict innovation. A GVR, Return to the Federal Circuit: Given that both Kirtsaeng has an exhaustion issue, a strong likelihood exists that the Court will defer a vote on certiorari in Ninestar until after a decision in Kirtsaeng. To the extent that the Court concludes that exhaustion is present in Kirtsaeng, a substantial chance exists that the Court will grant, vacate and remand (GVR) in Ninestar in light of the merits decision in Kirtsaeng. Petitioner expressly asks that the case be held for such a GVR as an alternative to the outright grant of certiorari: Alternatively, the Court should hold this petition pending resolution of Kirtsaeng v. John Wiley & Sons, Inc., No [argued October 29, 2012], and Bowman v. Monsanto Co., No (cert. granted Oct. 5, 2012), two cases that present questions bearing some relationship to the issue here. 13

14 Allcare v. Highmark: Cybor Déjà vu Allcare Health Mgmt. Sys., Inc. v. Highmark Inc., is the anticipated certiorari petition from the denial of rehearing en banc in Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., F.3d (Fed. Cir. 2012), panel opinion, 687 F.3d 1300 (Fed. Cir. 2012), where the en banc petitioner unsuccessfully sought review of the de novo standard of review for a fact-based determination, here, an exceptional case determination under 35 USC 285. Status: The petition for certiorari is due March 4, A certiorari vote is expected during the current Term. If certiorari is granted, the argument will take place during the October 2013 Term that runs through June A Deeply Fractured En Banc Panel: Plural dissenting opinions were issued dissenting from denial of rehearing en banc, including a principal opinion by Moore, J., joined by Rader, C.J., O Malley, Reyna, Wallach, JJ., dissenting from the denial of the petition for rehearing en banc. This is only the latest episode in a thirty year struggle by the Court to deal with FRCP 52(a) deferential standard of review of trial court fact findings. Rule 52(a) has troubled the Federal Circuit since its inception. The issue was squarely raised by the Supreme Court in its intervention in Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809 (1986). Here, the controversy first bubbled up into widespread public attention in the context of the factual underpinnings for an obviousness determination under 35 USC 103. The current dispute is capsulized by the main dissent in Highmark by Judge Moore: Our court system has well-defined roles: the trial court makes factual findings and the appellate court reviews those findings with deference to the expertise of the trial court. An exceptional case determination under 35 U.S.C. 285 has traditionally been one of the questions of fact determined by the trial court that is review-able only for clear error. Contrary to our precedent, the divided Highmark panel decided that a district court s exceptional case finding based on its determination that the infringement claims asserted at trial were objectively baseless is entitled to no deference and should be reviewed de novo. Highmark,[687 F.3d at ]. 14

15 Because Highmark * * * invades the province of the fact finder, and establishes a review standard for exceptional case findings in patent cases that is squarely at odds with the highly deferential review adopted by every regional circuit and the Supreme Court in other areas of law, I dissent from the denial of rehearing en banc. * * * We need to avoid the temptation to label everything legal and usurp the province of the fact finder with our manufactured de novo review. We have done it with claim construction, see Cybor[Corp. v. FAS Techs., Inc., 138 F.3d 1448, (Fed. Cir. 1998) (en banc)], with willfulness, see Bard [Peripheral Vascular, Inc. v. W.L. Gore & Assocs., 682 F.3d 1003 (Fed. Cir.2012)], and now with the exceptional case, see Highmark. When we convert factual issues, or mixed questions of law and fact, into legal ones for our de novo review, we undermine the uniformity and predictability goals this court was designed to advance. CCPA Genesis of the Rule 52(a) Controversy: Throughout its thirty year history the Federal Circuit has had great difficulty coming to grips with FRCP 52(a) deferential review of factual determinations in patent matters. The dean of the Federal Circuit early on explained that the predecessor CCPA had a lax standard of review of Patent Office decisions: One of the things that changed in the transition from CCPA to CAFC is much greater emphasis in the new court on standard of review. Giles S. Rich, Thirty Years of this Judging Business, Giles S. Rich 139, 148 (1986). The Supreme Court Speaks in Dennison: The first open confrontation with the Supreme Court occurred four years after creation of the Federal Circuit in Dennison: The Federal Circuit [in its obviousness ruling] did not mention Rule 52(a), did not explicitly apply the clearly-erroneous standard to any of the District Court's findings on obviousness, and did not explain why, if it was of that view, Rule 52(a) had no applicability to this issue. We therefore lack an adequate explanation of the basis for the Court of Appeals' judgment: most importantly, we lack the benefit of the Federal Circuit's informed opinion on the complex issue of the degree to which the obviousness determination is one of fact. In the absence of an opinion clearly setting forth the views of the Court of Appeals on these matters, we are not prepared to give plenary consideration to petitioner's claim that the decision below cannot be squared with Rule 52(a). Instead, we grant 15

16 the petition for certiorari, vacate the judgment, and remand the case to the Court of Appeals for further consideration in light of Rule 52(a). Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809, 811 (1986). Judge Rich took to the pages of the AIPLA Quarterly Law Journal to respond to the Supreme Court: [The CCPA] did not act like the Circuit Courts of Appeal. We have been breaking that habit. Meanwhile, the criticism I hear of the [Federal Circuit] most often is that we have been doing de novo fact finding and delving into the record on our own when we should not. I am probably one of the offenders. But I have to say that I do not know how one can decide whether a finding of fact is clearly erroneous without delving into the record, and surely we have the right to make such a decision. I also must say that I have great difficulty in determining the distinction between an alleged fact being wrong and being clearly erroneous, and I seem to remember a learned colleague saying It doesn't matter; if you want to upset the fact finding, you just have to use the magic words. Rich, 14 AIPLA Q. J. at 149. Nokia ITC Domestic Manufacture In the Nokia case, opinion below, InterDigital Communications, LLC v. International Trade Com'n, F.3d (Fed. Cir. 2013)(on panel reh g), vacated panel opinion, 690 F.3d 1318 (2012), the expected certiorari petition will challenge ITC jurisdiction to consider patent infringement without domestic manufacture. Status: The Court denied rehearing en banc, paving the way for a Supreme Court petition by Nokia by April 9, If a certiorari vote taken during the current Term, should certiorari be granted, the argument will take place during the October 2013 Term that runs through June From the Majority Opinion below: [S]ection 337 makes relief available to a party that has a substantial investment in exploitation of a patent through either engineering, research and development, or licensing. It is not necessary that the party manufacture the product that is protected by the patent, and it is not necessary that any other domestic party manufacture the protected article. 16

17 As long as the patent covers the article that is the subject of the exclusion proceeding, and as long as the party seeking relief can show that it has a sufficiently substantial investment in the exploitation of the intellectual property to satisfy the domestic industry requirement of the statute, that party is entitled to seek relief under section 337. InterDigital, F.3d at. From the Dissenting Opinion: My colleagues depart from the statutory text and purpose, in holding that the statutory requirement of domestic industry does not require domestic manufacture. The statute says, twice, that there must be articles protected by the patent, 1337(a)(2), (a)(3), whether produced by the patentee, or under license from the patentee. The domestic industry requirement is not met by foreign manufactures. InterDigital, F.3d at (Newman, J., dissenting). Byrne v. Wood, Herron & Evans Federal Circuit Jurisdiction In Byrne v. Wood, Herron & Evans, LLP, Supreme Court No , proceeding below, 676 F.3d 1024 (Fed. Cir. 2012) (Order denying reh g en banc), where the Court maintained its broad jurisdiction over state claims implicating a patent matter. Status: The Court is expected to grant certiorari, vacate the decision below and remand to the Federal Circuit for consideration of the case in light of the February 20, 2013, decision in Gunn v. Minton, U.S. (2013). Discussion: Arguments directed to the Supreme Court are found in the dissent in a dissent: It is time we stop exercising jurisdiction over state law malpractice claims. I dissent from the court's refusal to consider this matter en banc so that the case law through which we have expanded the scope of our jurisdiction to these purely state law matters can be reconsidered and revamped. This court has justified expanding the reach of our jurisdiction to cover state law malpractice claims by reading Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988), to authorize our doing so. Specifically, our case law concludes that, whenever a patent law issue is raised in the context of a state law claim and must be resolved in the course of that otherwise state law inquiry, 17

18 federal jurisdiction will lie, as will exclusive appellate jurisdiction in this court. That reading of Christianson is wrong, however. Supreme Court precedent permits federal courts to exercise federal question jurisdiction over state law claims only in the rare case where a federal issue is actually disputed and substantial, and where doing so will not upset any congressionally approved balance of federal and state judicial responsibilities. Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005). [T]he mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction. Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 813 (1986). Rather, courts must undertake a four-step inquiry as to whether: (1) a federal issue is a necessary element of a state law claim; (2) a federal issue is actually disputed; (3) a federal issue is substantial; and (4) exercising federal jurisdiction will disturb the balance of federal and state judicial responsibihties. Grable, 545 U.S. at 314. In choosing to exercise jurisdiction over malpractice claims arising out of patent matters, we have ignored the latter two parts of the inquiry. Byrne, F.3d at (O Malley, J., joined by Wallach, J., dissenting from denial of the petition for reh g en banc). 18

19 AKAMAI: ORIGINS OF THE ALL ELEMENTS RULE * Harold C. Wegner ** At some point this Spring the Supreme Court is expected to vote whether to grant certiorari in the latest intra-circuit split of the Federal Circuit over the all elements rule which is frontally assaulted in the conditional appeal in Akamai Techs., Inc. v. Limelight Networks, Inc., Supreme Court No , opinion below, Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012)(en banc)(per curiam). Petitioner cites Supreme Court case law beginning with Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997). This paper focuses upon the origins of the all elements rule 180 years earlier to Barrett v. Hall, 2 F.Cas. 914 (No. 1047)(D. Mass. 1818)(Story, J.). The conditional Petition in Akamai is in parallel with two other Petitions coming from the same case involving the different question of induced infringement under 35 USC 271(b). *** * This note reflects the opinions of the author and does not necessarily reflect the views of any colleague, organization or client thereof. This version: February 6, ** Former Director of the Intellectual Property Law Program and Professor of Law, George Washington University Law School; partner, Foley & Lardner LLP. hwegner@foley.com. *** Limelight Networks, Inc. v. Akamai Techs., Inc., Supreme Court No , where the Akamai conditional petitioner is Respondent, and Epic Systems Corp. v. McKesson Technologies, Inc., Supreme Court No

20 Wegner, Akamai: Origins of the All Elements Rule Joseph Story: Genesis of the All Elements Rule Under the all elements rule there can be no infringement of a claim to a combination of elements unless an accused infringer practices all elements of the combination are practiced. Here, neither accused infringer in either case practices all elements of the invention, while a third party practices the missing element. Story s contribution to the creation of the all elements rule is found in Barrett v. Hall as well as later cases including Moody v. Fiske, 17 Fed. Cas. 655 (D. Mass. 1820)(Story, J.)); and Prouty v. Draper, 20 F.Cas. 11 (No. 11,446)(D. Mass. 1841)(Story, J.), aff d, 41 U.S. (16 Pet.) 336 (1842)(Taney, C.J.). Story in turn credits the basis for his thinking to the opinion of his fellow member of the Supreme Court, Bushrod Washington, riding circuit in Evans v. Eaton, 8 F.Cas. 846 (No. 4559)(D. Pa. 1816), aff d, 3 U.S. (16 Wheat.) 454, 476, 506 (1818). Barrett v. Hall, 2 F.Cas. at 924. Justice Story in Barrett v. Hall explained that a patent to a combination of machines is not infringed when a third party does not use the entire combination: [A] patent may be for a new combination of machines to produce certain effects; and this, whether the machines, constituting the combination, be new or old. But in such case, the patent being for the combination only, it is no infringement of the patent to use any of the machines separately, if the whole combination be not used; for in such a case the thing patented is not the separate machines, but the combination; and the statute gives no remedy, except for a violation of the thing patented. Barrett v. Hall, 2 F.Cas. at 924 (emphasis added) 2

21 Wegner, Akamai: Origins of the All Elements Rule Two years later in Moody v. Fiske Justice Story explained that: Where a patent is for a new combination of existing machinery, or machines, and does not specify or claim any improvements or invention, except the combination, unless that combination is substantially violated, the patentee is not entitled to any remedy, although parts of the machinery are used by another, because the patent, by its terms, stands upon the combination only. Moody v. Fiske, 17 Fed. Cas. at 657. Nearly twenty-five years after the earlier decision, Justice Story explained the doctrine in simpler terms, riding circuit in Prouty v. Draper: [The patent] is a patent for a combination and for a combination only. Unless it is proved, that the whole combination is substantially used in the [accused infringing devices], it is not an infringement of the plaintiffs' patent, although one or more of the parts may be used in combination by the defendants. The plaintiffs' patent is for an entire combination of all the three things, and not for a combination of any two of them. A patent for a combination of A, B and C, cannot be technically or legally deemed at once a combination of A, B and C, and of A and B alone. Prouty v. Draper, 20 F.Cas. at 12. Chief Justice Roger Taney did not Create the Doctrine Chief Justice Roger Taney has often been credited with creation of the all elements rule in Prouty v. Draper, but his opinion was nothing more than an affirmance of the opinion by Justice Story, riding circuit. This was acknowledged by the Supreme Court less ten years later in Stimpson v. Baltimore and Susquehanna Railroad Co., 51 U.S. (10 How.) 329 (1850)(Daniel, J.). In that case, the Court reached a conclusion keyed to the all elements rule, noting that [t]his conclusion is in strictest accordance with the ruling of the late Justice Story at circuit in the case of Prouty v. [Draper], afterwards confirmed by this court, as will be seen in [41 U.S. (16 Pet.) 336 (1842)]. Stimpson, 51 U.S. (10 How.) at

22 Wegner, Akamai: Origins of the All Elements Rule Rediscovering the Case Law of Joseph Story Most contemporary practitioners, scholars and jurists refer to the Taney opinion as the origin of the all elements rule. Indeed, the Federal Circuit has never cited any of the three Story opinions, yet has cited the opinion of Chief Justice Taney in several of its opinions. Pennwalt Corp. v. Durand Wayland, Inc., 833 F.2d 931, , 951 (Fed. Cir. 1987)(en banc)(bennett, J., joined by Cowen, E. Smith, P. Newman, JJ.); Pennwalt., 833 F.2d at (Newman, dissenting sub nom Commentary ); Hilton Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1564 (Fed. Cir. 1995)(en banc)(lourie, J., dissenting, joined by Rich, Plager, JJ.), subsequent proceedings, Warner Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997); Hilton Davis, 62 F.3d at 1571 n.*, 1572 n.25 (Nies, J., dissenting in part, joined by Archer, C.J.); see also In re Wright, 848 F.2d 1216, 1220 (Fed. Cir. 1988)(Newman, J.)(citing Prouty for other issues), overruled, In re Dillon, 919 F.2d 688 (Fed. Cir. 1990)(en banc). For the most part, neither academics nor practitioners have deviated from the Federal Circuit understanding of the all elements rule, while Professor Moy has correctly traced the origins of the doctrine to Justice Story. See R. Carl Moy, Moy's Walker on Patents, 13:47 n. 2 (2012)(quoting Moody v. Fiske). 4