Top Ten Patent Cases * June 13, 2014

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1 Top Ten Patent Cases * June 13, 2014 Whither Alice v. CLS Bank the Final Patent Merits Decision this Term: The Court will announce decisions this coming week (June 16 and 19) and at later sessions up through June 30) M = S. Ct. Merits Stage P = S. Ct. Petition Stage FC = Federal Cir. x x Conference Scheduled Case Name Issue Status 1 M Teva v. Sandoz Deference (Lighting Ballast) Respondents Br. Aug M Alice v. CLS Bank. 101 Patent-Eligibility. Awaiting decision. 3 FC BioSig v. Nautilus 112(b) Definiteness On Remand from S.Ct. 4 P Commil v. Cisco. 271(b) Scienter. CVSG Outstanding. 5 M NLRB v. Canning Vacancies Reform Act Awaiting decision 6 FC In re Packard Indefiniteness Awaiting Petition Reh g Rank 7 FC Suprema v. ITC Induced Infringement/ITC En banc Briefing 8 P Kimble v. Marvel. Post-Expiration Royalties CVSG Outstanding. 9 P Roslin Institute Dolly the Sheep 101 Petition due August 6 10 P Advanced Biological 101 Patent-Eligibility Response due July 2 FC Braintree v. Novel Meaning of a Pet. reh g en banc P Pronova 102(b) Public Use Responses due June 18 P Herb Reed ebay Injunctive Relief Conference June 26 P Consumer W dog v. WARF Post-Grant Standing Petition due Sept. 2 P WildTangent 101 Patent-Eligibility Certiorari vote on Hold P Caret ( Mass. v. Utah ) S. Ct. Original Jurisdiction Conference June 12 P Rudolph De Novo Review Conference June 26 P Kilopass v. Sidense Rule 52(a) Appel. Deference Petition due June 8 FC In re Broadcom Supreme Court GVR GVR December 9, 2014 P Cisco v. Commil Jury Trial. CVSG Outstanding. P Bancorp v. Sun Life 101 Patent-Eligibility Certiorari vote on Hold P Accenture Global Bilski II Certiorari vote on Hold About the List: See page 2. TopTen2014June13

2 OCTOBER 2013 TERM ending June 2014 Monday Non-Argument Sessions to Announce Opinions: Three regularly scheduled non-argument sessions remain on the Calendar for the October 2013 Term: June 16, 23 and 30, at which time the Court is expected to announce merits decisions. An additional non-argument session is expected for Thursday, June 19, and possibly further additional non-argument sessions may be are expected before the end of June to announce merits decisions. The decisions are announced in open Court at a session beginning at 10:00 AM, and electronically published by the Court at Monday Announcements of Certiorari Decisions: At 9:30 AM on each of the three Mondays, the Court electronically issues an Orders List that gives the result of certiorari votes from the Conference the previous week, June 12, 19 and 26. Each Orders List is electronically published at Final Decisions on All Cases by the End of June: All cases argued during the current Term should be decided not later than June 30, (In the extremely rare situation where no decision is reached by June, the case can be reset for argument in the next Term.) About the List Rankings: Cases where certiorari has been granted are ranked according to potential impact on patents. Rankings at the petition stage are based upon a blend focusing mainly on the likelihood of grant but also considering the impact of the case. Thus, for example, one of the broadest questions of great importance is raised in Sinclair-Allison but the chances for grant are de minimis, wherefore the case is listed last. Where certiorari has already been granted, then the main ranking criterion is importance of the outcome as to a potential change in the law. A serious attempt to rank cases applies principally to the Top Ten Cases. Cases below the Top Ten are not necessarily ranked according to this guideline. Authorship: Harold C. Wegner is solely responsible for this list. He is a former Professor of Law at the George Washington University Law School and 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. 2

3 OCTOBER 2014 Term ending June 2015 Argument Session Non-Argument Session Conference 3

4 Supreme Court Merits Decision Scoreboard DECIDED CASES October 2013 Term Case Principal Issue Status 1 Nautilus v. Biosig 112(b) Indefiniteness DECIDED June 2 2 Limelight v. Akamai 271(b) Induced Joint Infringmt. DECIDED June 2 3 Medtronic v. Boston MedImmune Burden of Proof DECIDED Jan Alice v. CLS Bank 101 Patent-Eligibility Argued Mar Highmark v. Allcare Rule 52(a) Appellate Deference DECIDED Apr Octane Fitness 285 Exceptional Case DECIDED Apr NLRB v. Canning Vacancies Reform Act Argued Jan Petrella v. MGM Laches DECIDED May 19 Nautilus v. Biosig 112(b) Indefiniteness In Nautilus, Inc. v. Biosig Instruments, Inc., U.S. (2014)(Ginsburg, J.), Biosig Instruments, Inc. v. Nautilus, Inc., 715 F.3d 891, 900 (Fed. Cir. 2013)(Wallach, J.), a unanimous Supreme Court reversed the Federal Circuit Datamize insolubly ambiguous test for claim definiteness under 35 USC 112(b): According to the Federal Circuit, a patent claim passes the 112, 2 threshold so long as the claim is amenable to construction, and the claim, as construed, is not insolubly ambiguous. 715 F. 3d 891, (2013). We conclude that the Federal Circuit s formulation, which tolerates some ambiguous claims but not others, does not satisfy the statute s definiteness requirement. In place of the insolubly ambiguous standard, we hold that a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention. (emphasis added to show the holding). Return to Exxon? There is nothing in the Court s opinion that would preclude the Federal Circuit from reinstituting the holding in Exxon which is quoted in footnote 9 for a different point: 4

5 Exxon Research & Engineering Co. v. United States, 265 F. 3d 1371, 1375 (CA Fed. 2001) ( If a claim is insolubly ambiguous, and no narrowing construction can properly be adopted, we have held the claim indefinite. ). (emphasis added to show the holding of Exxon). Limelight v. Akamai Joint Indirect Infringement In Limelight Networks, Inc. v. Akamai Techs., Inc., U.S. (2014)(Alito, J.), opinion below, Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012)(en banc)(per curiam), a unanimous Supreme Court reversed the divided Federal Circuit to reach a conclusion that there can be no active inducement to infringe under 35 USC 271(b) absent an independent predicate act of direct infringement under 35 USC 271(a). The All Elements Rule Underscored: Limelight reiterates the principles of the all elements rule for patent infringement, as noted in the yellow highlightmarked copy of the attached opinion of the Court. Medtronic v. Boston Scientific: MedImmune Challenge, Burden of Proof In Medtronic Inc. v. Boston Scientific Corp., U.S. (2014)(Breyer, J.), opinion below, 695 F.3d 1266 (Fed. Cir. 2012)(Linn, J.), a unanimous 9-0 Supreme Court reversed the Federal Circuit in the context of a licensee patent validity challenge under MedImmune, Inc. v. Genentech, Inc., 549 U. S. 118, 128 (2007), to hold that, when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee. An Anti-Patentee Philosophy at the Supreme Court: Beyond a microscopic legal analysis of the precedents, the Court concludes with a patent policy statement emphasizing the importance of the rights of industry versus the patentee: The public interest, of course, favors the maintenance of a well-functioning patent system. But the public also has a paramount interest in seeing that patent monopolies... are kept within their legitimate scope. Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U. S. 806, 816 (1945). A patentee should not be... allowed to exact royalties for the use of an idea... 5

6 that is beyond the scope of the patent monopoly granted. Blonder-Tongue Laboratories, Inc. v. University of Ill. Foundation, 402 U. S. 313, (1971). And [l]icensees may often be the only individuals with enough economic incentive to litigate questions of a patent s scope. Lear, Inc. v. Adkins, 395 U. S. 653, 670 (1969). The general public interest considerations are, at most, in balance. They do not favor a change in the ordinary rule imposing the burden of proving infringement upon the patentee. Federal Circuit opinion on remand: The Federal Circuit issued its opinion on remand on March 11, 2014, Medtronic Inc. v. Boston Scientific Corp., Fed. App x (Fed. Cir. 2014)(Linn, J.). Highmark Appellate Deference In Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,., U.S. (2014)(Sotomayor, J.), proceedings below, 701 F.3d 1351 (Fed. Cir. 2012)(Order den. pet. for reh g en banc), panel opinion, 687 F.3d 1300 (Fed. Cir. 2012), the Court following the more important and concurrently decided Octane Fitness held that an appellate court should apply an abuse-of-discretion standard in reviewing all aspects of a district court s 285 determination. Although questions of law may in some cases be relevant to the 285 inquiry, that inquiry generally is, at heart, rooted in factual determinations, Cooter [& Gell v. Hartmarx Corp., 496 U.S. 384, 401 (1990)]. Octane Fitness Exceptional Case In Octane Fitness, LLC v. Icon Health and Fitness, Inc., U.S. (2014)(Sotomayor, J.), opinion below, Icon Health & Fitness, Inc. v. Octane Fitness, LLC, 496 Fed. Appx. 57 (Fed. Cir. 2013)(Lourie, J.), the Court held that an exceptional case is simply one that stands out from others with respect to the substantive strength of a party s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is exceptional in the caseby-case exercise of their discretion, considering the totality of the circumstances. (footnote deleted). 6

7 The Concurrence of Chief Judge Rader in Kilopass: The Court in Octane Fitness comments about the Kilopass case (separately discussed later in this paper): In Kilopass Technology, Inc. v. Sidense Corp., 738 F. 3d 1302 (Fed. Cir. 2013) decided after our grant of certiorari but before we heard oral argument in this case the Federal Circuit appeared to cut back on the subjective bad faith inquiry, holding that the language in ilor was dictum and that actual knowledge of baselessness is not required. 738 F. 3d, at Rather, the court held, a defendant need only prove reckless conduct to satisfy the subjective component of the 285analysis, ibid., and courts may dra[w] an inference of bad faith from circumstantial evidence thereof when a patentee pursues claims thatare devoid of merit, id., at Most importantly, the Federal Circuit stated that [o]bjective baselessness alone can create a sufficient inference of bad faith to establish exceptionality under 285, unless the circumstances as a whole show a lack of recklessness on the patentee s part. Id., at Chief Judge Rader wrote a concurring opinion that sharply criticized Brooks Furniture, 738 F. 3d, at ; the court, he said, should have remained true to its original reading of 285, id., at Octane Fitness, U.S. at n.4. Petrella Laches In Petrella v. Metro-Goldwyn-Mayer Inc., U.S. (May 19, 2014), opinion below, 695 F.3d 946 (9th Cir. 2012), the Court held that laches does not apply to acts of copyright infringement within the three year statute of limitations. Each act of infringement is separately evaluated so that infringing activity that goes back many years may still result in liability for acts within the statutory three year period. Strange Bedfellows, a Unique 6-3 Voting Split: The Court broke the traditional pattern of the traditional conservative and liberal wings of the court. The majority opinion was authored by Ginsburg, J., joined by Scalia, Thomas, Alito, Sotomayor, Kagan, JJ. The three vote dissenting opinion was authored by Breyer, J., joined by Roberts, C.J., Kennedy, J.). 7

8 The Holding in Petrella: The Copyright Act provides that [n]o civil action shall be maintained under the [Act] unless it is commenced within three years after the claim accrued. 17 U. S. C. 507(b). This case presents the question whether the equitable defense of laches (unreasonable, prejudicial delay in commencing suit) may bar relief on a copyright infringement claim brought within 507(b) s threeyear limitations period. Section 507(b) bars relief of any kind for conduct occurring prior to the three-year limitations period. To the extent that an infringement suit seeks relief solely for conduct occurring within the limitations period, however, courts are not at liberty to jettison Congress judgment on the timeliness of suit. Laches, we hold, cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window. As to equitable relief, in extraordinary circumstances, laches may bar at the very threshold the particular relief requested by the plaintiff. And a plaintiff s delay can always be brought to bear at the remedial stage, in determining appropriate injunctive relief, and in assessing the profits of the infringer... attributable to the infringement. 504(b). Petrella, U.S. at (holding emphasized by this writer; footnote omitted). Dissent Reliance on Federal Circuit, Patent Case Law: The dissent cites case law from several courts, including the Federal Circuit, for the proposition that [l]ower courts have come to holdings [invoking laches] in a wide array of circumstances often approving not only of the availability of the laches defense, but of its application to the case at hand. Petrella, U.S. at (Breyer, J., dissenting, joined by Roberts, C.J., Kennedy, J.)(citing, inter alia, A. C. Aukerman Co. v. R. L. Chaides Constr. Co., 960 F.2d 1020, , (Fed. Cir. 1992) (en banc) (laches available in patent suit claiming damages, and remanding for whether the defense was successful); Cornetta v. United States, 851 F.2d 1372, (Fed. Cir.1988) (en banc) (same, in suit seeking backpay) ). 8

9 We have not had occasion to review [Aukerman ] : Responsive to the dissent s citation of Federal Circuit patent case law, the majority first quotes 35 USC 286 that no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint and then 35 USC 282(b) that [n]oninfringement, absence of liability for infringement or unenforceability may be raised in any action involving the validity or infringement of a patent. Petrella, U.S. at n. 15. The majority expressly keeps open the issue of whether Auckerman remains good law: Based in part on [35 USC] 282 and commentary thereon, legislative history, and historical practice, the Federal Circuit has held that laches can bar damages incurred prior to the commencement of suit, but not injunctive relief. A. C. Aukerman Co. v. R. L. Chaides Constr. Co., 960 F.2d 1020, , (Fed. Cir. 1992)(en banc). We have not had occasion to review the Federal Circuit s position. Id. * * * * * * * * * * * * * * * * * 9

10 TOP TEN PENDING PATENT CASES Supreme Court Cases Yellow Highlighted. Circuit Court Cases Pink Highlighted. (1) Teva v. Sandoz Deference (Lighting Ballast) In Teva Pharms. USA, Inc. v. Sandoz, Inc., Supreme Court No , opinion below, 723 F.3d 1363 (Fed. Cir. 2013)(Moore, J.), petitioner challenges the Federal Circuit standard of appellate deference under Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), as most recently reaffirmed by the appellate tribunal in Lighting Ballast Control LLC v. Philips Electronics North America Corp., F.3d (Fed. Cir. 2014)(en banc). The Teva case represents a continuation of the issue of FRCP 52(a) deference in a case argued earlier this year and now awaiting decision, Top Ten No. (5) Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,, Supreme Court Status: (a) Petitioner s merits opening brief is due June 13, 2014 (once extended); (b) Respondent s merits brief is due August 11, 2014; and (c) argument is expected to be scheduled for Fall 2014, with a merits decision by the end of the Term that runs through June Question Presented: Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case), or only for clear error, as Rule 52(a) requires. The writer acknowledges involvement with a party to the proceedings below; he thus offers no comment on what the outcome of this case should be and merely provides the following historical context of Rule 52(a): 10

11 Historical Background, Rule 52(a) in Dennison: Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809 (1986), is the first Supreme Court review of a patent issue of the Federal Circuit, and the only merits review of a patent decision of that Court before 1990: 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 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, 475 U.S. at 811. Responsive to Dennison the dean of the Federal Circuit took to the pages of the AIPLA Quarterly Journal: [T]he 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. Giles S. Rich, Thirty Years of this Judging Business, 14 AIPLA Q. J. 139, 149 (1986). Lighting Ballast, Piggbacking off of Teva v. Sandoz: Lighting Ballast Control LLC v. Universal Lighting Technologies, Inc. Supreme Court No. 13A1119, is the styling of an expected petition from review of the en banc decision of the Federal Circuit Lighting Ballast Control LLC v. Philips Electronics North America Corp.,, 744 F.3d 1272 (Fed. Cir. 2014)(en banc), that under a theory of stare decisis reaffirms the continued validity of appellate de novo claim construction under Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc). Status: On May 9, 2014, Lighting Ballast petitioned the Court to extend the deadline for filing a certiorari petition from May 22, 2014, to June 20,

12 Gevo, Inc. v. Butamax, Piggbacking off of Teva v. Sandoz: Gevo, Inc. v. Butamax Advanced Biofuels LLC, Supreme Court No , opinion below, Butamax Advanced Biofuels LLC v. Gevo, Inc., F.3d (Fed. Cir. 2014)(Linn, J.), is a first certiorari petition piggybacking off of Teva v. Sandoz, where the Question Presented states: Rule 52(a) of the Federal Rules of Civil Procedure provides that in matters tried to a district court, the court's [f]indings of fact... must not be set aside unless clearly erroneous. The question presented is as follows: Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case), or only for clear error, as Rule 52(a) requires. Federal Circuit, Living in a Cybor Vacuum: Cybor and Lighting Ballast continue to be cited as binding precedent without mention of the grant of certiorari in Teva v. Sandoz: See Intouch Techs. v. Vgo Communs., F.3d, (Fed. Cir. 2014) (subsequent to Teva grant of cert.) ( Claim construction is a question of law reviewed de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272, (Fed. Cir. 2014) (en banc); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en banc). ); In re Packard, F.3d, (Fed. Cir. 2014)(Plager, J., concurring) (subsequent to Teva grant of cert.) ( Since claim construction is a matter of law with no formal deference given to the trial judge. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc); see also Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014), under this interpretive option the right construction will be known definitively only when the Court of Appeals judges (or the Supreme Court) choose it. ); GE Lighting Solutions, LLC v. AgiLight, Inc., F.3d, (Fed. Cir. 2014) (subsequent to Teva grant of cert.) ( We review claim construction de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272, (Fed. Cir. 2014) (en banc). ); University of Pittsburgh of the Commonwealth System of Higher Education v. Varian Medical Systems, Inc., F.3d, (Fed. Cir. 2014) (subsequent to Teva grant of cert.) ( Claim 12

13 construction is a legal issue that this court reviews without deference on appeal. See Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272, (confirming standard of de novo review of claim construction as set out in Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998)) (en banc). ); United Video Props., Inc. v. Amazon.com, Inc., F.3d, (Fed. Cir. 2014) (subsequent to Teva grant of cert.) ( Claim construction is an issue of law reviewed de novo. Lighting Ballast Control LLC v. Philips Elecs. N.A. Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en banc) ); Howlink Global LLC v. Network Communs. Int'l Corp., Fed. App x, (Fed. Cir. 2014) (subsequent to Teva grant of cert.) ( This court reviews a district court's claim construction de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en banc). ). See also Shire Dev., LLC v. Watson Pharms., Inc. F.3d, (Fed. Cir. 2014) (decision prior to grant of cert. in Teva) ( Claim construction is an issue of law reviewed de novo. Lighting Ballast Control LLC v. Philips Elecs. N.A. Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en banc). ); Novatek, Inc. v. Sollami Co., Fed. App x, (Fed. Cir. 2014) (decision prior to grant of cert. in Teva) ( This court reviews a district court's claim construction de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc). ); E2Interactive, Inc. v. Blackhawk Network, Inc., Fed.App x, (Fed. Cir. 2014) (decision prior to grant of cert. in Teva) ( Claim construction is an issue of law that we review de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc). ) (2) Alice v. CLS Bank: 101 Patent-Eligibility In Alice Corp. Pty. Ltd v. CLS Bank Intern., Supreme Court Docket No , opinion below, CLS Bank Intern. v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013)(en banc)(per curiam), replacing the vacated panel opinion, 685 F.3d 1341 (Fed. Cir. 2011)(Linn, J.), Petitioner challenges denial of patent-eligibility under 35 USC 101. Status: Awaiting decision (argued March 31, 2014). 13

14 Question Presented: Whether claims to computer-implemented inventions including claims to systems and machines, processes, and items of manufacture are directed to patent-eligible subject matter within the meaning of 35 U.S.C. 101 as interpreted by this Court.? Discussion: Generally, a petition will seek to show a conflict with the Supreme Court or other Circuit Courts of Appeal. Here, instead, the central theme of the petition is that the Federal Circuit is hopelessly, internally conflicted and is unable to provide guidance on software patent eligibility. The petition makes repeated references to the plurality opinion below (Lourie, J.) as presenting an impossible regime for the innovative community to follow: The Federal Circuit has left no doubt that it is irreconcilably fractured. The uncertainty that now plagues and will, absent [Supreme Court] intervention, continue to plague the patent system will cause severe harm and waste for innovators and litigants, as well as lower courts and the Patent and Trademark Office. Moreover, neither the judgment nor the analysis offered in the plurality opinion can be reconciled with this Court s precedents. What makes the current state of legal disarray completely intolerable is that patented inventions are the engine of much of the nation s and the world s economic growth, which will be needlessly stifled unless the standards for patentability are much clearer than they are today. The Court should grant certiorari in order to bring much-needed clarity to the application of section 101 to computer-implemented inventions. (3) Biosig v. Nautilus 112(b) Indefiniteness In Biosig Instruments, Inc. v. Nautilus, Inc., on remand from the Supreme Court, Nautilus, Inc. v. Biosig Instruments, Inc., U.S. (2014)(Ginsburg, J.), prior opinion, Biosig Instruments, Inc. v. Nautilus, Inc., 715 F.3d 891, 900 (Fed. Cir. 2013)(Wallach, J.), the Federal Circuit must redefine a test for indefiniteness under 35 USC 112(b) to implement the holding of the Supreme Court: Status: On remand from the Supreme Court as of June 2, Discussion: The Supreme Court stated According to the Federal Circuit, a 14

15 patent claim passes the 112, 2 threshold so long as the claim is amenable to construction, and the claim, as construed, is not insolubly ambiguous. 715 F. 3d 891, (2013). We conclude that the Federal Circuit s formulation, which tolerates some ambiguous claims but not others, does not satisfy the statute s definiteness requirement. In place of the insolubly ambiguous standard, we hold that a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention. (emphasis added to show the holding). (4) Commil v. Cisco (b) Scienter In Commil USA, LLC v. Cisco Sys., Inc. Supreme Court No , Petitioner challenges the new Federal Circuit standard of scienter for active inducement under 35 USC 271(b). Status: A CVSG Order was issued May 27, 2014, asking for the views of the United States whether certiorari should be granted. A cross-petition has also been filed, infra, as Cisco v. Commil Jury Trial. First Question Presented: Whether the Federal Circuit erred in holding that a defendant s belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. 271(b). A Deeply Fractured Federal Circuit: The proceedings below start with a divided panel opinion, Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361(Fed. Cir. 2013)(Prost, J)(Newman, J., dissenting), with further en banc proceedings denying rehearing, 737 F.3d 699, 700 (Fed. Cir. 2013)((Reyna, J., joined by Rader, C.J., Newman, Lourie, Wallach, JJ., dissenting from den. rh g en banc); id., 737 F.3d at (Newman, J., joined by Rader, C.J., Reyna, Wallach, JJ, dissenting from den reh g en banc). 15

16 (5) NLRB v. Canning Vacancies Reform Act In NLRB v. Canning, Supreme Court No , the Court must decide the limits of Recess Appointments to bypass Senate confirmation of government leaders. The Court may shed light on the consequences of such a bypass that may have relevance to the current Administration plan for short term leadership of the U.S. Patent and Trademark Office in apparent violation of the Vacancies Reform Act. Status: Awaiting decision (argument January 13, 2014). Questions Presented: The Recess Appointments Clause of the Constitution provides that [t]he President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session. Art. II, 2, Cl. 3. The questions presented are as follows: 1. Whether the President's recess-appointment power may be exercised during a recess that occurs within a session of the Senate, or is instead limited to recesses that occur between enumerated sessions of the Senate. 2. Whether the President's recess-appointment power may be exercised to fill vacancies that exist during a recess, or is instead limited to vacancies that first arose during that recess. A third question is raised by the Supreme Court sua sponte in its Order granting certiorari: In addition to the questions presented by the petition, the parties are directed to brief and argue the following question: Whether the President's recess-appointment power may be exercised when the Senate is convening every three days in pro forma sessions. NLRB v. Canning, 133 S. Ct. 2861, (2013). Vacancies Reform Act Safety Valve: In an Amicus Brief filed by the self-styled Political Scientists and Historians, this group of amici point out that individuals may be appointed with the consent of Congress to serve temporarily in a position if the need is urgent. Federal Vacancies Reform Act, 5 USC 3345 (2012). Someone from within the department can occupy a vacancy for a short time until an actual appointment is made. In this way, Congress allows for the government to continue operating even in emergency or unforeseeable situations 16

17 and Presidents can keep offices filled whatever the Senate's reasons are for not confirming nominees. Immediately thereafter, this group of amici note that President Obama has already filled 560 vacancies using the Act. See U.S. Gov't Accountability Office, Federal Vacancies Submissions[.] Id. n. 14 (citations omitted) Implications for the Patent Office: The Administration has bypassed the Senate confirmation process for the more than 400 days since Under Secretary Kappos announced his impending resignation. The Administration has followed a unique strategy of appointment of a Deputy Under Secretary and simultaneous resultant appointment of an Acting Under Secretary that raise questions of violation of the Vacancies Reform Act. To the extent that the Supreme Court issues guidance as to the consequences of violation of Senate confirmation to appoint an Acting Under Secretary, this may shed light on the consequences of the unique Administration bypass of the Senate confirmation process in the case of the Patent Office. (6) In re Packard 112(b) Definiteness In In re Packard, F.3d (Fed. Cir. 2014)(per curiam), the panel created a new examination regime for indefiniteness under 35 USC 112(b). Status: Awaiting Petition for rehearing. (The panel opinion was issued May 6.) (7) Suprema v. ITC: Induced Infringement/ITC The Federal Circuit has granted two petitions for en banc review raising a total of five different questions for en banc review in Suprema, Inc. v. ITC, Fed. App x (Fed. Cir. 2014)(unpublished Order), vacating panel opinion, 742 F.3d 1350 (Fed. Cir. 2013)(O Malley, J.). In a nutshell, does the importation of a noninfringing component of a patented combination provide basis for an ITC exclusion order where there is infringement by customers in the United States who practice the patented combination? Status: En banc briefing. (The Order granting rehearing en banc was issued May 13, 2014.) Panel Majority Denies Relief with only Post-Border Crossing Infringement: The 17

18 panel majority, following the literal wording of the law, found no ITC liability for the post-border crossing infringement. The third member of the panel disagreed, presenting unique and bold theories that because the ITC is a trade law, the literal wording of the statute should be disregarded: My problem with the majority's opinion is that it ignores that Section 337 is a trade statute designed to provide relief from specific acts of unfair trade, including acts that lead to the importation of articles that will result in harm to a domestic industry by virtue of infringement of a valid and enforceable patent. To negate both a statutory trade remedy and its intended relief, the majority overlooks the Congressional purpose of Section 337, the long established agency practice by the Commission of conducting unfair trade investigations based on induced patent infringement, and related precedent by this Court confirming this practice. In the end, the majority has created a fissure in the dam of the U.S. border through which circumvention of Section 337 will ensue, thereby harming holders of U.S. patents. Suprema, Inc. v. ITC, 742 F.3d at 1372 (Reyna, J., dissenting-in-part) Plain Wording of the Statute vs. the Trade Law Intent of the Statute: The dissenting member s problem with the majority's opinion is that it ignores that Section 337 is a trade statute designed to provide relief from specific acts of unfair trade. Suprema, Inc. v. ITC, 742 F.3d at 1372 (Reyna, J., dissenting-inpart)(more fully quoted above). But, ased upon the wording of the statute, the panel majority in Suprema hold[s] that an exclusion order based on a violation of 1337(a)(1)(B)(i) may not be predicated on a theory of induced infringement where no direct infringement occurs until post-importation. Suprema, 742 F.3d at The holding is keyed to the wording of the statute that a patent-based exclusion order must be based upon importation * * * of articles that infringe a valid and enforceable United States patent[.] 1337(a)(1)(B)(i)( [T]he following are unlawful [methods of competition]. * * * The importation into the United States* * * of articles that infringe a valid and enforceable United States patent* * *. ) Thus, the articles must be an infringement of the patent. 18

19 The third member of the panel jumps over the literal wording of the statute to look to the point that the ITC statute is a trade law : The jurist explains that [his] problem with the majority's opinion is that it ignores that Section 337 is a trade statute designed to provide relief from specific acts of unfair trade, including acts that lead to the importation of articles that will result in harm to a domestic industry by virtue of infringement of a valid and enforceable patent. To negate both a statutory trade remedy and its intended relief, the majority overlooks the Congressional purpose of Section 337, the long established agency practice by the Commission of conducting unfair trade investigations based on induced patent infringement, and related precedent by this Court confirming this practice. In the end, the majority has created a fissure in the dam of the U.S. border through which circumvention of Section 337 will ensue, thereby harming holders of U.S. patents. Suprema, Inc. v. ITC, 742 F.3d at 1372 (Reyna, J., dissenting-in-part)(emphasis added). The crux of this case, of course, is whether or not the definition of the specific acts of unfair trade should be interpreted in a manner that is broad enough to go outside the wording of the statutory definition of 1337(a)(1)(B)(i). [T]he remedy lies with the law making authority, and not with the courts : As explained by then-justice Rehnquist: "Laws enacted with good intention, when put to the test, frequently, and to the surprise of the law maker himself, turn out to be mischievous, absurd or otherwise objectionable. But in such case the remedy lies with the law making authority, and not with the courts." Griffin v. Oceanic Contractors, 458 U.S. 564, 575 (1982)(Rehnquist, J.)(quoting Crooks v. Harrelson, 282 U.S. 55, 60 (1930)). "Policy considerations cannot override our interpretation of the text and structure of [a statute], except to the extent that they may help to show that adherence to the text and structure would lead to a result so bizarre that Congress could not have intended it." Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1192 (Fed. Cir. 2004)(quoting Central Bank, N.A. v. First Interstate Bank, N.A., 511 U.S. 164, 188 (1994)). 19

20 A Limelight Domino : The decision fo the Supreme Court in Limelight that will take place in the coming weeks will have a domino impact on the Federal Circuit. Perhaps the first domino to fall will be Suprema: To the extent that the Supreme Court affirms the divided Federal Circuit in Limelight (that will be decided even before the briefing period has expired in Suprema) there is a stronger chance that the panel majority will be overturned. But, to the extent that the Supreme Court reverses in Limelight this may provide a strong indicator that the panel majority, here, should be sustained. The Five Questions Rasied in Two Petitions for Rehearing En Banc: Petitions of both the ITC and one of the parties were granted which cumulatively raise five questions: (i) The Commission s Petition asks four Questions: 1. Did the panel contradict Supreme Court precedent in [Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005),] and precedents of this Court [*] when it held that infringement under 35 U.S.C. 271(b) is untied to an article? 2. Did the panel contradict Supreme Court precedent in Grokster and this Court s precedent in Standard Oil [Co. v. Nippon Shokubai Kagaku Kogyo Co., 754 F.2d 345 (Fed. Cir. 1985),] when it held that there can be no liability for induced infringement under 35 U.S.C. 271(b) at the time a product is imported because direct infringement does not occur until a later time? 3. When the panel determined the phrase articles that... infringe in 19 U.S.C. 1337(a)(1)(B)(i) does not extend to articles that infringe under 35 U.S.C. 271(b), did the panel err by contradicting decades of precedent [*] and by failing to give required deference to the [ITC] in its interpretation of its own statute? 4. Did the panel misinterpret the Commission s order as a ban [on the] importation of articles which may or may not later give rise to direct infringement when the order was issued to remedy inducement of infringement and when the order permits U.S. Customs and Border Protection to allow importation upon certification that the articles are not covered by the order? [*] Beyond Grokster and Standard Oil, the ITC cites Crystal Semiconductor Corp. v. TriTech Microelectronics Int l, Inc., 246 F.3d 1336 (Fed. Cir. 2001); Young Eng rs, Inc. v. ITC, 721 F.2d 1305 (Fed. Cir. 1983); Vizio, Inc. v. ITC, 605 F.3d 1330 (Fed. Cir. 2010); and Enercon GmbH v. Int l Trade Comm n, 151 F.3d 1376 (Fed. Cir. 1998). 20

21 (ii) The Cross Match Petition asks [w]hether the [ITC] has authority to find a Section 337 violation where it finds that an importer actively induced infringement of a patented invention using its imported articles but the direct infringement occurred post-importation. Cross Match cites Young Engineers and Vizio (also relied upon by the ITC) and Disabled Am. Veterans v. Sec y of Veterans Affairs, 419 F.3d 1317 (Fed. Cir. 2005). Professor Dennis Crouch provides a complete set of the petition documents as well as his own commentary. See Dennis Crouch, En Banc Federal Circuit to Review ITC s Power over Induced Infringement, PATENTLY O (May 15, 2014), available at (8) Kimble v. Marvel Post-Expiration Royalties In Kimble v. Marvel Enterprises, Inc., Supreme Court No , opinion below, 727 F.3d 856 (9th Cir (Callahan, J.), petitioner challenges the rule of Brulotte v. Thys that a patentee s use of a royalty agreement that projects payments beyond the expiration date of the patent is unlawful per se. Status: CVSG Order (June 2, 2014) outstanding. Question Presented: Petitioners are individuals who assigned a patent and conveyed other intellectual property rights to Respondent. The [Ninth Circuit] reluctantly held that Respondent, a large business concern, was absolved of its remaining financial obligations to Petitioners because of a technical detail that both parties regarded as insignificant at the time of the agreement. App. 2-3; 23. Specifically, because royalty payments under the parties contract extended undiminished beyond the expiration date of the assigned patent, Respondent s obligation to pay was excused under Brulotte v. Thys Co., 379 U.S. 29, 32 (1964), which had held that a patentee s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se. A product of a bygone era, Brulotte is the most widely criticized of this Court s intellectual property and competition law decisions. Three panels of the courts of appeals (including the panel below), the Justice Department, the Federal Trade Commission, and virtually every treatise and article in the field have called on this Court to reconsider Brulotte, and to replace its rigid per se prohibition on postexpiration patent royalties with a contextualized rule of reason analysis. The question presented is: 21

22 Whether this Court should overrule Brulotte v. Thys Co., 379 U.S. 29 (1964). (9) Roslin Institute Dolly the Sheep Patent-Eligibility 101 Roslin Institute (Edinburgh) v. Lee is the expected certiorari petition from In re Roslin Institute (Edinburgh), F.3d (Fed. Cir. 2014)(Dyk, J.), that affirmed the Board s denial of patent-eligibility to cloned animals sheep and several other barnyard mammals. Status: The petition for certiorari is due August 8, (10) Advanced Biological 101 Patent-Eligibility In Advanced Biological Labs., SA v. SmartGene, Inc., Supreme Court no , opinion below, SmartGene, Inc. v. Advanced Biological Labs., SA, Fed. App x (Fed. Cir. 2014)(Taranto, J.), petitioner challenges the denial of 101 patenteligibility for a computerized method for evaluating treatment options. Status: Response to the petition is due July 2, Question Presented: Whether claims to a computerized expert system and method for evaluating treatment options for complex medical conditions which necessarily requires the use of computer, are patent eligible since they do not preempt all practical applications of an abstract idea of guiding the selection of a therapeutic treatment regimen for a patient with a known disease or medical condition. Claim 1 Ruled Lacking Patent-Eligibility: 1. A method for guiding the selection of a therapeutic treatment regimen for a patient with a known disease or medical condition, said method comprising: (a) providing patient information to a computing device comprising: a first knowledge base comprising a plurality of different therapeutic treatment regimens for said disease or medical condition; a second knowledge base comprising a plurality of expert rules for evaluating and selecting a therapeutic treatment regimen for said disease or medical condition; 22

23 a third knowledge base comprising advisory information useful for the treatment of a patient with different constituents of said different therapeutic treatment regimens; and (b) generating in said computing device a ranked listing of available therapeutic treatment regimens for said patient; and (c) generating in said computing device advisory information for one or more therapeutic treatment regimens in said ranked listing based on said patient information and said expert rules. From the Federal Circuit Opinion: The district court correctly held that the claim 1 method falls outside the eligibility standards of section 101 as that provision has been construed. This conclusion follows from CyberSource Corp. v. Retail Decisions, Inc., where, based on earlier precedents, this court held that section 101 did not embrace a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads. 654 F.3d 1366, 1373 (Fed. Cir. 2011); see also In re Grams, 888 F.2d 835, (Fed. Cir. 1989); In re Meyer, 688 F.2d 789, (C.C.P.A. 1982). As CyberSource explains, those precedents rest on Supreme Court decisions indicating that section 101 covers neither mental processes associated with or as part of a category of abstract ideas nor processes that merely invoke a computer and its basic functionality for implementing such mental processes, without specifying even arguably new physical components or specifying processes defined other than by the mentally performable steps. See Gottschalk v. Benson, 409 U.S. 63, (1972); Parker v. Flook, 437 U.S. 584, 589 (1978). Braintree v. Novel: Meaning of a In Braintree Labs., Inc. v. Novel Labs., Inc., F.3d (Fed. Cir. 2014) (Prost, J.), a petition for rehearing en banc has been filed where the principal opinion reached the surprising conclusion that a excludes the singular. Status: Awaiting decision on rehearing en banc. Discussion: In dissent, one member of the panel explained that: 23

24 The plain and ordinary meaning of a patient is one or more patients. * * * A patient, according to the majority, requires multiple patients, a patient population, or patient class. But there is no plain meaning of a that excludes the singular. Braintree, F.3d at (Moore, J., dissenting)(original emphasis) The third member of the panel had a lengthy opinion on a variety of issues,, F.3d at (Dyk, J., concurring in part, dissenting in part, and concurring in the result) Pronova 102(b) Public Use In Pronova BioPharma Norge AS v. Teva Pharms. USA, Inc., Supreme Court No , opinion below, 549 Fed. App x. 934 (Fed. Cir. 2012)(O Malley, J.), petitioner questions the definition of public use as a patent-defeating bar under 35 USC 102(b). Status: Responses to the petition are due June 18, Question Presented: The Patent Act provides that a person shall be entitled to a patent unless the invention was in public use in the United States more than one year before the filing of a U.S. patent application. 35 U.S.C. 102(b) (2006). In Egbert v. Lippmann, this Court held that to constitute an invalidating public use, an invention must be used without restriction for the purpose and in the manner designed by the inventor. The Federal Circuit applied Egbert in Motionless Keyboard Co. v. Microsoft Corp., holding that the public-use bar of section 102(b) requires a use of the invention for its intended purpose. In this case, the Federal Circuit interpreted public use as public access, holding that any disclosure that makes an invention publicly accessible triggers the public-use statutory bar to a U.S. patent. The court thus concluded that because Pronova provided samples of a chemical composition to a U.S. medical researcher, the patent in suit was invalid on public-use grounds irrespective of any actual use of the invention for its claimed and intended purpose as a pharmaceutical. The question presented is whether the statutory bar for public use of an invention under section 102(b) (2006) (pre-aia) (current version at 35 U.S.C. 102(a)(1) (2012)) broadly bars a patent when an innovator company allows any 24

25 public access to its invention even if the invention is not actually used in public for its intended purpose. Herb Reed ebay Injunctive Relief In Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc., Supreme Court No , opinion below, 736 F.3d 1239 (9th Cir. 2013)(McKeown, J.), Petitioner challenges applicability of ebay-based injunctions in the context of trademark infringement. Status: Conference June 26, Question Presented: In ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388, (2006), this Court reversed the general rule in patent disputes that a permanent injunction will issue once infringement and validity have been adjudged. The meaning of ebay in patent injunction cases is clear. All of the requirements for an injunction must be established, including irreparable harm, without reliance on categorical pronouncements. Circuit courts are split and lower courts are in disarray, however, about whether and how to apply ebay in trademark infringement cases, and the state of the law is such that a trademark plaintiff's ability to obtain an injunction currently turns on the happenstance of the Circuit in which the case is pending. There are significant differences between patent and trademark cases. In patent cases, irreparability of harm does not necessarily flow from the evidence showing infringement. But in a trademark case, the plaintiff must show, inter alia, customer confusion impairing control over the mark or goodwill. As a result, the same evidence that establishes infringement will often show irreparable harm. The Ninth Circuit below, however, and some other lower courts, have interpreted ebay and Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, (2008) to require a trademark infringement plaintiff to come forward with something more, although the required added showing is vague. The question presented is whether the Ninth Circuit erred in concluding ebay means that a district court may not base a finding of irreparable injury on the same 25

26 evidence used to show likely infringement, such as customer confusion and impairment of control or goodwill. Consumer Watchdog v. WARF Post-Grant Standing In Consumer Watchdog v. Wisconsin Alumni Research Foundation, proceedings below, F.3d (Fed. Cir. 2014)(Rader, J.), the patent challenger may file a petition that challenges the appellate court s dismissal of its patentability challenge on the basis of lack of standing. Status: The petition is due September 2, 2014 from the decision of the Federal Circuit dated June 2, Discussion: The PTO in the decision below had denied the public interest patent challenger s attack in an inter partes reexamination. Although the patent challenger had a procedural right to appeal to the Federal Circuit, the Court dismissed the appeal on the basis of lack of standing: [W]here Congress has accorded a procedural right to a litigant, such as the right to appeal an administrative decision, certain requirements of standing namely immediacy and redressability, as well as prudential aspects that are not part of Article III may be relaxed. See Massachusetts v. E.P.A., 549 U.S. 497, (2007). However, the requirement of injury in fact is a hard floor of Article III jurisdiction that cannot be removed by statute. Summers [v. Earth Island Inst., 555 U.S. 488, 497 (2009)]. That injury must be more than a general grievance, Hollingsworth [v. Perry, 133 S. Ct. 2652, 2661 (2013)], or abstract harm, City of Los Angeles v. Lyons, 461 U.S. 95, 101 (1983). Implications for the America Invents Act Post-Grant Proceedings: The Federal Circuit decision has manifest implications for the Inter Partes Review and Post Grant Review proceedings of the America Invents Act where a patent challenger who loses before the Patent Trial and Appeal Board has a similar procedural right to appeal. Implications for AIA Post Grant Proceedings: Post grant proceedings under the Leahy Smith America Invents Act Inter Partes Review and Post Grant Review permit public interest groups to challenge patents. If the public interest group loses 26