Top Ten Patent Cases * May 20, Supreme Court Petrella decision. analysis at pp. 5-6.

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1 Top Ten Patent Cases * May 20, 2014 Supreme Court Petrella decision. analysis at pp M = S. Ct. Merits Stage P = S. Ct. Petition Stage FC = Federal Cir. x x Conference Scheduled Case Name Issue Status 1 M Nautilus v. Biosig 112(b) Indefiniteness Awaiting decision 2 M Limelight v. Akamai Joint Induced Infringement Awaiting decision 3 M Teva v. Sandoz Deference (Lighting Ballast) Opening Brief June 13 4 M Alice v. CLS Bank. 101 Patent-Eligibility Awaiting decision 5 M NLRB v. Canning Vacancies Reform Act Awaiting decision 6 FC In re Packard Indefiniteness Awaiting Petition Reh g Rank 7 P Maersk Drilling 271(a) Extraterritoriality CVSG Order outstanding 8 FC Suprema v. ITC Induced Infringement/ITC En banc Briefing 9 P Cisco v. TecSec Relitigation of Issues Conference May P Kimble v. Marvel Post-Expiration Royalties Conference May 29 Roslin Institute Dolly the Sheep 101 Petition due August 6 FC Consumer W dog v. WARF Post-Grant Standing Awaiting decision 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 Response due May 22 P NSK v. ITC Appellate Review Conference May 29 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 Akamai v. Limelight Joint Induced Infringement Certiorari vote on Hold P Commil v. Cisco 271(b) Scienter Conference May 22 P Cisco v. Commil Jury Trial Conference May 22 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 the Endnote. TopTen2014May20

2 Supreme Court Term ending June 2014 Non-Argument Session Conference Merits Arguments: No further merits arguments are scheduled. The next merits arguments will take place in October Certiorari decisions are announced as part of an Orders List issued at 9:30 AM on the first regularly scheduled session (blue) following a Conference (green). The Orders Lists are published at Merits decisions are issued on blue session days and late in the Term on other dates announced several days in advance by the Court. The decisions are announced in open Court at a session beginning at 10:00 AM, and electronically published by the Court at 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.) Supreme Court Merits Decision Scoreboard DECIDED CASES October 2013 Term Case Principal Issue Status 1 Nautilus v. Biosig 112(b) Indefiniteness Argued Apr Limelight v. Akamai 271(b) Induced Joint Infringmt. Argued April 30 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 Discussion of each decided case follows on the next pages: 2

3 DECIDED CASES THIS TERM 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... 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.). 3

4 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). 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 4

5 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.). 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). 5

6 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) ). 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. * * * * * * * * * * * * * * * * * * 6

7 TOP TEN PENDING PATENT CASES Supreme Court Cases Yellow Highlighted. Circuit Court Cases Pink Highlighted. (1) Nautilus v. Biosig 112(b) Indefiniteness In Nautilus, Inc. v. Biosig Instruments, Inc., Supreme Court No , opinion below, Biosig Instruments, Inc. v. Nautilus, Inc., 715 F.3d 891, 900 (Fed. Cir. 2013)(Wallach, J.), petitioner reawakens the ghost of United Carbon Co. v. Binney & Smith Co., 317 U.S. 228 (1942), the last major Supreme Court case where claims were invalidated for indefiniteness under what today is 35 USC 112(b). Status: Awaiting decision (argument was held April 28, 2014). First Question Presented: Does the Federal Circuit s acceptance of ambiguous patent claims with multiple reasonable interpretations so long as the ambiguity is not insoluble by a court defeat the statutory requirement of particular and distinct patent claiming? The Datamize Line of Case Law: The appellate court below reprised a familiar line of recent case law from the Federal Circuit on indefiniteness: A claim is indefinite only when it is not amenable to construction or insolubly ambiguous. Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005) (internal quotations and citations omitted). In and of itself, a reduction of the meaning of a claim term into words is not dispositive of whether the term is definite. And if reasonable efforts at claim construction result in a definition that does not provide sufficient particularity and clarity to inform skilled artisans of the bounds of the claim, the claim is insolubly ambiguous and invalid for indefiniteness. Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1371 (Fed. Cir. 2008) ( Star Scientific I ) (citations omitted). Thus, a construed claim can be indefinite if the construction remains insolubly ambiguous Star Scientific[, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364, 1373 (Fed. Cir. 2011)]; see also Exxon Research & Eng'g Co. v. United States, 265 F.3d 1371, (Fed. Cir. 2001) (accepting the district court's claim construction and 7

8 separately undertaking an analysis of the claims at issue to determine indefiniteness); Union Pac. Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684, , 692 (Fed. Cir. 2001) (same); Minn. Min. and Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1567 (Fed. Cir. 1992) (same). Biosig v. Nautilus, 715 F.3d at 898. Seventy-Plus Years Since United Carbon: In 1942 more than seventy years ago the Court in United Carbon the Court invalidated claims under what today is 35 USC 112(b) where such claims create a zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement of claims, [a policy which] would discourage invention. United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942). United Carbon, Awakening the Sleeping Giant: The United Carbon case has never been cited by the Supreme Court for the issue of indefiniteness in the entire history of the 1952 Patent Act. Cf. Markman v. Westview Instruments, 517 U.S. 370, 387 n.13 (1996)(citing United Carbon in support of the role of jury and judge). Prior to the 1952 Patent Act United Carbon was cited only twice. See Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 149 (1950)(citing United Carbon for the proposition that the [inventive feature] is not mentioned in the claims, except, perhaps, by a construction too strained to be consistent with the clarity required of claims which define the boundaries of a patent monopoly. ); Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1, 12 (1946)(citing United Carbon, 317 U.S. at 236, for the proposition that unless frightened from the course of experimentation by broad functional claims like these, inventive genius may evolve many more devices to accomplish the same purpose. ). Persistence Pays Off; Previous Attempts to Rouse the Ghost of United Carbon: Would the Court have sufficient interest to gain four votes for certiorari in an area of law that has been dormant at the Court for more than seventy years? Previous attempts to raise the ghost of United Carbon have failed. Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364 (Fed. Cir. 2011), cert. dismissed under Rule 46.1, R.J. Reynolds Tobacco Co. v. Star Scientific, Inc., 133 S. Ct. 97 (2012); Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364 (Fed. Cir. 2011), 8

9 cert. dismissed under Rule 46.1, R.J. Reynolds Tobacco Co. v. Star Scientific, Inc., 133 S. Ct. 97 (2012); Wellman, Inc. v. Eastman Chem. Co., 642 F.3d 1355 (Fed. Cir. 2011); cert. den., Eastman Chem. Co. v. Wellman, Inc., 132 S. Ct (2012); Enzo Biochem, Inc. v. Applera Corp., 605 F.3d 1347, (Fed. Cir. 2010)(Plager, J., dissenting from den. of panel reh g ), cert. den., Applera Corp. v. Enzo Biochem, Inc., 131 S. Ct (2011). (2) Limelight v. Akamai Joint Indirect Infringement In Limelight Networks, Inc. v. Akamai Techs., Inc., Supreme Court No , opinion below, Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012)(en banc)(per curiam), active inducement infringement of a combination claim was found under 35 USC 271(b) despite the fact that no single party performed each and every element of the combination so that there was no direct infringer under 35 USC 271(a). Status: Awaiting decision (argued April 30, 2014 ). Question Presented in 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 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). (3) 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., 9

10 138 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): 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). 10

11 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, Gevo, Inc. v. Butamax, Piggbacking off of Teva v. Sandoz: Gevo, Inc. v. Butamax Advanced Biofuels LLC, Supreme Court No , 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. 11

12 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 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. 12

13 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). ) (4) 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). 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 13

14 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. (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: 14

15 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 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. 15

16 (7) 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, 2014.) (7) Maersk Drilling 271(a) Extraterritoriality In Maersk Drilling USA, Inc. v. Transocean Offshore Deepwater Drilling, Inc., Supreme Court No , opinion below, Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., 699 F.3d 1340 (Fed. Cir. 2012)(Moore, J.), Petitioner challenges the extraterritorial expansion of United States patent law by expansion of the scope of offshore activity that can result in direct infringement liability under 35 USC 271(a). Status: On October 7, 2013, the Court issued an invitation to the Solicitor General to file a CVSG brief to educate the Court whether the Government recommends grant of review. There is no time limit for a CVSG filing. Question Presented: Whether offering, negotiating, and entering into a contract in Scandinavia to provide services using a potentially patented device constitutes an offer to sell or sale of an actually patented device within the United States, under 35 U.S.C. 271(a). Discussion: As explained in amicus brief, the Federal Circuit considerably expanded the extraterritorial reach of th[e 271(a) offer offer to sell] provision: there can be infringement if negotiations take place anywhere in the world, so long as the potential sale may be in the United States, even if that sale is never consummated. As a result, there can now be liability in circumstances where no activity has ever taken place within the United States. Such an approach is squarely contrary to the Supreme Court s articulation of a presumption against the extraterritorial application of U.S. law. Brief of Intellectual Property Law Professors (original emphasis). 16

17 The Court at some point will grant certiorari to deal with issues of extraterritorial expansion of 271(a). The question, now, is whether this case is an appropriate vehicle to do so. (8) 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? The outcome of this case could well be influenced by whatever decision is reached in the coming weeks in Limelight. 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 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) 17

18 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. 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). 18

19 [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)). 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. 19

20 271(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). (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 (9) Cisco v. TecSec Issue Relitigation In Cisco Systems, Inc., v. TecSec, Inc., Supreme Court No , opinion below, TecSec, Inc. v. IBM Corp., 731 F.3d 1336 (Fed. Cir. 2013)(Linn, J.), petitioner raises issues as to when an issue may be relitigated. Status: Conference May 29, Questions Presented: 1. Whether alternative holdings, each independently sufficient to sustain a judgment, all have preclusive effect in subsequent proceedings, as the Second, Third, Ninth, Eleventh, and D.C. Circuits hold, or whether none of them do, as the Fourth, Seventh, Tenth, and Federal Circuits hold. 20

21 2. Whether the mandate rule bars a party from relitigating an issue in the same case that was within the scope of a decision that was unequivocally affirmed. Discussion: The fractured Federal Circuit decision included an interesting and unique point of view by the third member of the panel who said that [t]his case raises an important issue concerning the court's practice of issuing judgments pursuant to Federal Circuit Rule 36 [ ]. TecSec, 731 F.3d at 1439 (Reyna, J., dissenting). Second bite at the Apple : In the request for certiorari, petition did not even see fit to raise the issue of Rule 36. The relevance of Rule 36 is explained in the dissent below: The majority concludes that the district court misconstrued various claim terms from three TecSec, Inc. patents. It reaches this conclusion notwithstanding that the same claim terms, same constructions, same arguments, and same summary judgment order were previously before this court and reviewed on January 9, See TecSec, Inc. v. Int'l Bus. Mach. Corp. ( TecSec I ), 466 Fed. App'x 882 (Fed. Cir. 2012). In TecSec I, this court summarily affirmed the district court's grant of summary judgment of noninfringement pursuant to Rule 36. Id. After TecSec lost its case against IBM, and without offering any additional evidence against the other defendants now before us, TecSec stipulated to noninfringement and has once again appealed the same district court's claim constructions to this court. I respectfully dissent because I believe that entertaining this appeal gives a second bite at the apple and undermines the utility of Rule 36. TecSec, 731 F.3d at (Reyna, J., dissenting). (10) 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: Conference May 29, If certiorari is granted, the case would be argued in the October 2014 Term that runs through June

22 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: Whether this Court should overrule Brulotte v. Thys Co., 379 U.S. 29 (1964). Discussion: If this case originated from the Federal Circuit as part of a split opinion, this would be a slam dunk case for grant of certiorari. It is difficult to argue with Petitioner that Brulotte v. Thys is out of step with the current state of the law, a point persuasively argued in an amicus brief by Professor Mark Janis on behalf of a group of leading academics including Professor Rochelle Cooper Dreyfuss. Absent widespread publicity about this case, it is difficult to see grant of certiorari. 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,

23 Consumer Watchdog v. WARF Post-Grant Standing In Consumer Watchdog v. Wisconsin Alumni Research Foundation, Fed. Cir. App. No , the Board in an inter partes reexamination had confirmed the patentability of WARF s disputed claims; a key issue raised by the Court on appeal is whether the patent challenger lacks appellate standing under Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). After a merits argument an Order issued: The PTO and the United States are requested to file brief(s) concerning whether Consumer Watchdog has standing to pursue this appeal. [The parties] each may file a responsive brief[.] Order dated December 4, Status: Awaiting decision; second argument March 13, 2014 ( limited to standing)(rader, C.J., Prost, Hughes, JJ.). The parties are invited to participate in oral argument in January [2014]. Order dated December 4, 2013; emphasis added. As of February 7, 2014, no argument had been posted on the Federal Circuit website. Discussion: Patent challenger Consumer Watchdog has a procedural right to appeal to the Federal Circuit an inter partes reexamination defeat at the PTAB, but, given that Consumer Watchdog has no direct stake in the outcome such as by way of use of the invention, the issue is whether Consumer Watchdog has standing to take an appeal to the Federal Circuit. 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 at the PTAB there is a statutory procedural right to appeal to the Federal Circuit just as there is for inter partes review that is the subject of the Consumer Watchdog case. WildTangent 101 Patent-Eligibility In WildTangent, Inc.. v. Ultramercial, LLC, Supreme Court No , opinion below sub nom Ultramercial, LLC v. WildTangent, Inc., 722 F.3d 1335 (Fed. Cir. 2013)(Rader, C.J.), previous proceedings, WildTangent, Inc. v. Ultramercial, LLC, 132 S.Ct (2012)(GVR vacating panel opinion, Ultramercial, LLC v. 23

24 WildTangent, Inc., 657 F.3d 1323 (Fed. Cir. 2011)(Rader, C.J.)), the petition revisits software patent-eligibility under 35 USC 101. Status: Certiorari vote on hold. (WildTangent was considered at the Conference on January 24, 2014, but no decision whether to grant certiorari has been announced. A vote whether to grant certiorari is apparently on hold pending a merits decision in Alice v. CLS Bank, which will be argued March 31, 2014, and decided in either late May or in June. If certiorari is granted, the case would be argued in the October 2014 Term that runs through June 2015.) Question Presented: When is a patent s reference to a computer, or computerimplemented service like the Internet, sufficient to make an unpatentable abstract concept patent eligible under 35 U.S.C. 101? The Majority Opinion: In a nutshell, the majority ruled that because eligibility requires assessing judicially recognized exceptions against a broad and deliberately expanded statutory grant, one of the principles that must guide our inquiry is these exceptions should apply narrowly. Indeed, the Supreme Court has cautioned that, to avoid improper restraints on statutory language, acknowledged exceptions thereto must be rare. Ultramercial,722 F.3d at The court added that, [a]s a practical matter, because judicially acknowledged exceptions could eviscerate the statute, application of this presumption and its attendant evidentiary burden is consistent with the Supreme Court's admonition to cabin exceptions to 101. Id. The Author of the Overruled Prometheus Opinion: The third member argued that the majority had an obligation to concisely faithfully follow the rationale of the Supreme Court Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct (2012). Ultramercial,722 F.3d at 1354 (Lourie, J.)( I concur in the result reached by the majority, but I write separately because I believe that we should concisely and faithfully follow the Supreme Court's most recent guidance regarding patent eligibility in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct (2012). It is our obligation to attempt to follow the Supreme Court's guidance in Mayo rather than to set forth our own independent views, however valid we may consider them to be. ) 24