DOLLY THE SHEEP, AN ISSUE UNNECESSARY FOR THE DECISION * an addendum to FEDERAL CIRCUIT RETURN TO ITS STATUTORY MANDATE. Harold C.

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1 DOLLY THE SHEEP, AN ISSUE UNNECESSARY FOR THE DECISION * an addendum to FEDERAL CIRCUIT RETURN TO ITS STATUTORY MANDATE Harold C. Wegner ** [W]hen we decide an important en banc case with a close vote, with no majority opinion, that is not a failure; it is hard-working judges doing their best to do the job they were appointed to do. * * * Hon. Alan D. Lourie *** I. INTRODUCTION 2 II. DOLLY THE SHEEP LACKED PATENTABLE NOVELTY 3 III. SEEKING UNNECESSRY NOTOREITY AND PUBLICITY 5 IV. PERPETUATION OF INCORRECT CASE LAW CONSTRUCTION 5 V. CHOOSING THE MORE DIFFICULT PATHWAY, WHY? 7 VI. DOLLY THE SHEEP, NOT AN ISOLATED CASE 8 APP.: FEDERAL CIRCUIT RETURN TO ITS STATUTORY MANDATE * The original paper, Federal Circuit Return to its Statutory Mandate (July 10, 2014), is attached as the red bordered appendix. Both the original and this paper present the views of the author and do not necessarily reflect the views of any colleague, organization or client thereof. July 10, ** Partner, Foley & Lardner LLP. *** Hon. Alan D. Lourie, State of the Court, Address to the Federal Circuit Bar Association Bench and Bar Conference, The Grove Park Inn, Asheville, N.C. June 19, 2014 (emphasis added).

2 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision I. INTRODUCTION One point that was outside the scope of the primary paper is the fact that there is a penchant at the Court to seek out controversial issues. The most extreme example of this practice at the Federal Circuit is the Dolly the Sheep Case, more formally In re Roslin Institute (Edinburgh), F.3d (Fed. Cir. 2014)(Dyk, J.). It is one thing for judges to be hard-working [ ] doing their best to do the job they were appointed to do. A jurist who chooses to take a detour from an easy way to reach the correct holding but with added uncertainties and controversies may well be a hard-working judge[ ] but may not be doing [his] best to do the [appointed] job. The Federal Circuit jurist is appointed to decide cases but also to maintain a body of uniform and stable patent law. In the Dolly the Sheep case claims were refused by the Patent Office to living sheep (and other barnyard animals) that were exactly the same with no distinguishing characteristics from normal sheep. Thus, a claim to the sheep, per se, was clearly anticipated under 35 USC 102, which should have been the end of the story. But, the Patent Office also denied the claims as lacking patent-eligibility under 35 USC 101. It would have been a simple, one page opinion for the Court to have affirmed the anticipation rejection under 35 USC 102 and refrained from dealing with the controversial issue of patent-eligibility of mammals under 35 USC

3 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision The Dolly the Sheep case shows that the Court had a very easy way to affirm denial of product claims to the patent applicant based upon garden variety anticipation that is free from any doubt; yet, the Court chose to go into the realm of patent-eligibility under 35 USC 101 which is sure to keep the spotlight of attention on this Court including attention from the Supreme Court. Even worse, however, an unnecessary and incorrect characterization of the case law is perpetuated. The current court could take a page from the 1970 s when the CCPA refrained from unnecessarily raising red flags and better stayed under the Supreme Court radar screen. II. DOLLY THE SHEEP LACKED PATENTABLE NOVELTY The key claim in question is to a live sheep (or other barnyard animal), provided it has been cloned. The claim is not to a cloning method, but to the live animal, per se. There is no limitation to the main claim other than that the sheep has been cloned: A live-born clone of a pre-existing, non-embryonic, donor mammal wherein the mammal is selected from cattle sheep, pigs, and goats. The Patent Office quite properly denied patentability on the basis of anticipation as the claim covered any barnyard animal from the named Markush group without any distinguishing characteristic. 3

4 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision The author of the opinion in the Dolly the Sheep case was quite well aware of the fact that the claims to Dolly the Sheep and other barnyard animals were anticipated by the prior art under 35 USC 102 and that it was of no moment to patentability how the animals were created: In determining validity of a product-by-process claim, the focus is on the product and not the process of making it. Greenliant Sys., Inc. v. Xicor LLC, 692 F.3d 1261, 1268 (Fed. Cir. 2012)(Dyk, J.)(citation omitted). (The law of product-by-product-by-process patentability is explained in In re Thorpe, 777 F.2d 695, (Fed. Cir. 1985)(Newman, J.)) Even if the claims defined an animal with bare novelty, the cloned animal would be expected to share common properties and thus, the invention as a whole would be obvious under 35 USC 103: The burden in such a case of prima facie obviousness is in any event upon the patent applicant under the Papesch line of case law: [I]f an examiner considers that he has found prior art close enough to the claimed invention to give one skilled in the relevant chemical art the motivation to make close relatives of the prior art compound(s), then there arises what has been called a presumption of obviousness or a prima facie case of obviousness. In re Henze, 181 F.2d 196 (CCPA 1950); In re Hass, 141 F.2d 122, 127, 130 (CCPA 1944). The burden then shifts to the applicant, who then can present arguments and/or data to show that what appears to be obvious, is not in fact that, when the invention is looked at as a whole. In re Papesch, 315 F.2d 381 (CCPA 1963). In re Dillon, 919 F.2d 688, 696 (Fed. Cir. 1990)(en banc)(lourie, J.) 4

5 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision III. SEEKING UNNECESSRY NOTOREITY AND PUBLICITY The Dolly the Sheep case is hardly unique in terms of exploring areas of the law totally unnecessary to reach the correct holding. Here, it should have been a simple matter to produce a one or two paragraph opinion affirming the Patent Office denial of the Roslin Institute claims based upon anticipation under 35 USC 102. But, the panel refrained from touching anticipation as basis for affirmance but instead created it own analysis on the patenting of animals under patenteligibility under 35 USC 101. To be sure, in recent cases the Supreme Court has said that patent-eligibility under 35 USC 101 should be considered even before patentability. Yet, to simply follow guidance in the face of facts that deserve summary treatment and reach the same outcome minimizes the role of the Federal Circuit in its task of creating a uniform body of patent law. IV. PERPETUATION OF INCORRECT CASE LAW CONSTRUCTION The Court also took the opportunity to provide a scholarly analysis of Supreme Court case law. Without citation to any authority and thus presumably the panel s own scholarship, the panel stated that: 5

6 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision [T]he Court s opinion[ ] in Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948), made clear that naturally occurring organisms are not patentable. In Funk Bros., the Supreme Court considered a patent that claimed a mixture of naturally occurring strains of bacteria that helped leguminous plants extract nitrogen from the air and fix it in soil. 333 U.S. at The Court concluded that this mixture of bacteria strains was not patent eligible because the patentee did not alter the bacteria in any way. Id. at 132 ( [T]here is no invention here unless the discovery that certain strains of the several species of these bacteria are noninhibitive and may thus be safely mixed is invention. But we cannot so hold without allowing a patent to issue on one of the ancient secrets of nature now disclosed. ). Critically, in Funk Bros., the Court explained: [w]e do not have presented the question whether the methods of selecting and testing the non-inhibitive strains are patentable. We have here only product claims. [The patentee] does not create a state of inhibition or of non-inhibition in the bacteria. Their qualities are the work of nature. Those qualities are of course not patentable. For patents cannot issue for the discovery of the phenomena of nature. The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. Id. at 130 (citation omitted). Thus, while the method of selecting the strains of bacteria might have been patent eligible, the natural organism itself the mixture of bacteria was unpatentable because its qualities are the work of nature unaltered by the hand of man. Id. Unfortunately, the scholarship does not comport with the reality of the case law. Funk v. Kalo is explained by Professor Sean Tu. See Shine Tu, Funk Brothers an Exercise in Obviousness, 80 UMKC L. Rev. 637, (2012) 6

7 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision If the Supreme Court is to be criticized for faulty analysis of its own case law, blame must be shared by others who provide the same faulty analysis. 1 V. CHOOSING THE MORE DIFFICULT PATHWAY, WHY? Issuing an opinion on the patent-eligibility of a mammal is highly controversial, no matter what the outcome. Why, precisely, did the Court find it necessary to reach this issue in the face of a black and white case of unpatentability for anticipation? There were opportunities in the early 1970 s when the predecessor CCPA had the opportunity to reach the issue but wisely refrained from doing so. Instead of dealing with patent-eligibility of mammals or even chickens the Court gingerly dealt with microorganisms. American courts of that era were reluctant to deal with patent-eligibility of anything in the animal kingdom above a microorganism. 2 The issue of patenting a barnyard animal as in the Dolly the Sheep case was raised forty years ago in In re Merat, 519 F.2d 1390 (CCPA 1975)(Rich, J.), where instead of sheep claim 2 was a product by process claim to a heavy meat chicken. Written in independent form, claim 2 reads: 1 To be sure, the panel cites to Chakrabarty and characterization of Funk v Kalo in that case. But, the statements in Chakrabarty represent dictum unnecessary to the holding of patenteligibility in that case. 2 In contrast, the German Supreme Court, the Bundesgerichtshof, had no trouble addressing the patent-eligibility of red doves and baker s yeast. Rote Taube ( Red Dove )(BGH 1969), 1 IIC 136 (1970); Bäckerhefe ( Baker s Yeast ), 6 IIC 382 (1975); see also Wegner, Patenting Nature s Secrets Microorganisms, 7 IIC 235 (1976); Wegner, Patent Protection for Novel Microorganisms Useful for the Preparation of Known Products, 5 Int'l Rev. Indus. Prop. & Copyright L. 285 (1974) 7

8 Wegner, Dolly the Sheep, an Issue Unnecessary for the Decision [The product obtained by the controlled] process for production of normal chickens from dwarf hens and normal cocks which includes passing through a dwarf breed and a heavy breed into which an nr sex-linked recessive dwarfism gene has been introduced, comprising crossing females of a cooking breed of poultry having good growth and fattening characteristics with cocks of small size which carry the nr gene, causing the animals obtained by this first crossing to reproduce with one another retaining all the subjects of small size which carry the nr gene so as to constitute a basic breed, and coupling the dwarf hens of this breed with any desired breed of normal heavy meat cocks, thereby obtaining, as an industrial product, a chick to be raised as a cooking chicken of normal heavy meat size. The Court in Merat wisely took the cautious approach of denying claim 2 on a basis other than lack of Section 101 patent-eligibility. See In re Bergy, 563 F.2d 1031, 1035 (CCPA 1977)(Rich, J.)(discussing Merat), vacated and superseded by new decision, 596 F.2d 952 (CCPA 1979)(Rich, J.), aff d sub nom Diamond v. Chakrabarty, 447 U.S. 303 (1980). VI. DOLLY THE SHEEP, NOT AN ISOLATED CASE The Dolly the Sheep case is not an isolated example of the Federal Circuit forging ahead with the creation of case law where none was needed at the time. Creating unnecessary controversy through opinions reaching out into areas unnecessary for the holding that result in fractured panels represent a root cause for the greater attention focused on the Federal Circuit today, and for the increased watchfulness of the Supreme Court. Judicial restraint has gone out the window at least in some of the Chambers high above Madison Place. 8

9 FEDERAL CIRCUIT RETURN TO ITS STATUTORY MANDATE * Harold C. Wegner ** I. OVERVIEW 2 II. THE MANDATE, A STABLE AND UNIFORM PATENT LAW 4 A. The Federal Courts Improvement Act 4 B. The Markey Court, Focus on the Mandate 6 C. Lessons from the Great Chief Justice 7 D. A Careful and Selective Grant of En Banc Review 9 III. EN BANC- AND DISSENT-WORTHY SITUATIONS 9 A. Careful Use of Full Blown En Banc Review 9 B. The Kingsdown Mechanism for Course Correction Brooks Furniture, the Rogue Panel Opinion Prometheus Characterization of Experimental Use 12 C. Good Dissents Lead to Necessary Judicial Reforms 14 IV. EN BANC MISSION FAILURE, A FRACTURED COURT 15 A. CLS Bank, an Opinion without a Majority 16 B. Akamai v. Limelight, a New Theory on Appeal 17 C. Highmark v. Allcare 18 D. Lighting Ballast 18 V. UNPRECEDENTED PATENT LAW PANEL SPLITS 19 VI. WHAT THE MAJORITY CAN AND CANNOT ACCOMPLISH 24 * This paper represents the personal views of the writer and does not necessarily reflect the views of any colleague, organization or client thereof. This version: July 10, **Partner, Foley & Lardner LLC.

10 I. OVERVIEW Wegner, Federal Circuit Return to its Statutory Mandate The Federal Circuit will provide nationwide uniformity in patent law, will make the rules applied in patent litigation more predictable. House Report leading up to the Federal Courts Improvement Act of 1982 As the Hon. Sharon R. Prost commences her term as Chief Judge of the Court of Appeals for the Federal Circuit in a term running into May 2021, the new Prost Court faces unprecedented challenges, battered by open en banc dissension that has spilled onto the pages of the Federal Reporter Third Series. Instead of a stable body of patent law, the public is faced with an uncertain patent jurisprudence that has attracted the attention of the Supreme Court. The new Prost Court is challenged to return the appellate body to its unique patent law mission of the Federal Courts Improvement Act of 1982: The Court was fashioned to provide stability and uniformity in the patent law. The inaugural Federal Circuit of the 1980 s was hugely successful in its statutory mission. The Markey Court never lost sight of the mandate to provide a stabile and uniform patent law. It had the highest level of cohesiveness imaginable, to the point that the Supreme Court throughout the 1980 s abstained from a decision on any Federal Circuit patent case ( beyond summary disposition). The Federal Court achieved its goal to a great extent by leaving its internal disputes locked inside the Courthouse on Madison Place, outside the public view. The Markey Court learned the lessons of the early nineteenth century of the Great Chief Justice: The Federal Circuit should issue pronouncements through a unitary voice. Separate opinions were issued only minimally. En banc opinions in patent cases were relatively rare and few had three or more dissenting voices. 2

11 The Court today has lost sight of its primary statutory task of creating a uniform body of law. The most obvious failure in the past year has been the unnecessary grant of en banc review in cases not ripe for such consideration or the failure to dismiss en banc status when there was a clear deadlock or both. At first blush, one may think that the Court should abandon its grant of en banc review. That would be a mistake. But, the Court should be far more selective both in terms of when it grants such review and the manner in which it treats en banc review, tailored to case by case situations. Complementary to the deep divisions at the en banc level, there has been an unprecedented level of panel dissension. To be sure, informed debate where change is a necessity provides sound basis for dissents which are capable of creating judicial reform. The new Prost Court will be successful in restoring the position of the Court and the establishment and creation of a stabile body of patent law only with the cooperation of a majority of the Court. Not even Chief Judge Markey (nor any of his successors) was able to completely curtail unnecessary dissent: Indeed, the common jurist on the Federal Circuit of Markey and even today is the one person who has undoubtedly set the record for the greatest number of panel dissents in patent law in the history of the Evarts Act. While harmony at the panel level is problematic, the first major reform must come in the area of en banc review where a majority of the Court has the power to block such review. 3

12 II. THE MANDATE, A STABLE AND UNIFORM PATENT LAW The inaugural Federal Circuit under Chief Judge Howard Thomas Markey understood that beyond reaching correct holdings in patent cases for the individual litigants the primary goal of the Federal Circuit was the maintenance of a stable and uniform body of patent law. A. The Federal Courts Improvement Act Achieving a stable and uniform patent law has been a primary goal of the Federal Courts Improvement Act of As stated in the House Report leading up to the Federal Courts Improvement Act that created the Federal Circuit: "The establishment of a single court to hear patent appeals was repeatedly singled out as one of the most far-reaching reforms that could be made to strengthen the United States patent system in such a way as to foster technological growth and industrial innovation. The new [ ] Federal Circuit will provide nationwide uniformity in patent law, will make the rules applied in patent litigation more predictable and will eliminate the expensive, time-consuming and unseemly forum-shopping that characterizes litigation in the field." Aerojet-General Corp. v. Machine Tool Works, Oerlikon-Buehrle, Ltd., 895 F.2d 736, 744 n.7 (Fed. Cir. 1990)(en banc)(markey, C.J.)(quoting House Report), overruled in part, Holmes Group, Inc. v. Vornado Air Circulation Sys., 535 U.S. 826 (2002). 4

13 The Chief Judge of the Federal Circuit throughout the 1980 s, the late Howard Thomas Markey, explained that the Federal Circuit was created and chartered with the hope and intent that stability and uniformity would be achieved in all fields of law within its substantive jurisdiction[.] South Corp. v. United States, 690 F.2d 1368, 1371 (Fed. Cir. 1982)(en banc)(markey, C.J.)(emphasis added). As underscored by Justice O Connor, Congress conferred exclusive jurisdiction of all patent appeals on the Court of Appeals for the Federal Circuit, in order to provide nationwide uniformity in patent law. " Bonito Boats v. Thunder Craft Boats, 489 U.S. 141, 162 (1989)(O Connor, J.)(quoting H. R. Rep. No , p. 20 (1981)). Justice Ginsburg noted that Congress sought to eliminate [appellate] forum shopping and to advance uniformity in the interpretation and application of federal patent law. Holmes Group, Inc. v. Vornado Air Circulation Sys., 535 U.S. 826, 840 (2002)(Ginsburg, J., joined by O Connor, J., concurring in the judgment)(citing Rochelle Cooper Dreyfuss, The Federal Circuit: A Case Study in Specialized Courts, 64 N. Y. U. L. Rev. 1, (1989)). 5

14 B. The Markey Court, Focus on the Mandate Throughout the existence of the Federal Circuit of the 1980 s the late Howard Thomas Markey was Chief Judge. Markey understood and took very seriously the mission of his new Court. Throughout his tenure as Chief Judge he remained true to the mission. Near the end of his time as Chief Judge he reiterated that: The broad theme of the [Federal Courts Improvement Act] -- increasing nationwide uniformity in certain fields of national law -- is epitomized here in the field of patent law. The availability of a clear, stable, uniform basis for evaluating matters of patent validity/invalidity and infringement/noninfringement renders more predictable the outcome of contemplated litigation, facilitates effective business planning, and adds confidence to investment in innovative new products and technology. Aerojet-General, 895 F.2d at 744 (footnote omitted). The Markey Court was wildly successful in creating a uniform body of decisional law. There were few en banc patent opinions during this period. There were even more rarely en banc opinions with multiple dissenting votes. Even amongst panels there was rare dissent in patent cases. The Federal Circuit with its creation of a unified body of patent law was truly the Supreme Court of Patent Law : Never once in the 1980 s of the Federal Circuit was there a full merits decision of any patent case by the Supreme Court going beyond summary disposition. Cf. Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809 (1986)(GVR on deferential standard of review); Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988)(transfer of appeal to the Seventh Circuit).) The first merits review was Eli Lilly and Co. v. Medtronic, Inc., 496 U.S. 661 (1990). 6

15 C. Lessons from the Great Chief Justice The Chief Judge took the mission of his Court seriously. He understood that it was important that whenever possible the Court should speak with one voice. Judge Markey was a student of history who followed the example of the Great Chief Justice, John Marshall, who transformed the once relatively unimportant Supreme Court into a true coequal branch of government. (The relative lack of importance of the Supreme Court of the late eighteenth century was manifested by the action of the Chief Justice of the United States, John Jay, who resigned his commission in order to run for Governor of New York.) A principal tool employed by Marshall was to work with his colleagues to provide unanimous opinions of the Supreme Court. Speaking with one voice was a key integer in the successful transition of the Supreme Court into a coequal branch of the Federal Government. Thus, [a]fter a brief fling with seriatim opinions at the dawn of the republic, the U.S. Supreme Court abandoned that practice under the firm hand of Chief Justice John Marshall. * * * [T]he great Chief Justice squelched dissent to the best of his ability during his tenure. Hon. Diane P. Wood, When to Hold, When to Fold, and when to Reshuffle: The Art of Decisionmaking on a Multi-Member Court, 100 Cal. L. Rev. 1445, 1450 (2012)(footnotes omitted). Judge Wood explained the views of the current Chief Justice in his quest to minimize dissent: Chief Justice[ ] John G. Roberts, Jr., * * * regards dissent as a symptom of dysfunction and that he has made it a personal priority to discourage his colleagues from issuing separate opinions. Wood, supra, 100 Cal. L. Rev. at 1450 (2012)(footnotes omitted). Thus, 7

16 When Chief Justice John Roberts took over the helm of the Court in September of 2005, he declared that one of his main goals was to bring a more collegial atmosphere to the body. Specifically, he expressed an interest in adding both credibility and stability to the law by urging his new colleagues to find agreement in their opinions wherever possible. Recalling the John Marshall Court era of the early 19th century--when nearly every case handed down was unanimous--roberts complained that the divided opinions of the modern era have been eroding, to some extent, the capital that Marshall built up... and that the Court is ripe for a... refocus on functioning as an institution, because, if it doesn't, it's going to lose its credibility and legitimacy as an institution. Roberts told one interviewer that unanimous or nearly unanimous decisions are preferred precisely because they are hard to overturn, while closely divided 5-4 decisions make it harder for the public to respect the Court as an impartial institution that transcends partisan politics. David A. Yalof, Joseph Mello & Patrick Schmidt, Collegiality Among U.S. Supreme Court Justices? An Early Assessment of the Roberts Court, 95 Judicature 12, 13 (July-August 2011) While there are obvious costs with plural opinions in terms of judicial efficiency and other factors, of great importance to an appellate body seeking to provide clear and firm guidance on a unique area of patent law, the larger problem is that [s]eparate opinions can muddy the waters in a way that underscores the lack of a clear rule in an area. * * * The lack of clarity naturally has the unfortunate effect of fomenting further litigation. Wood, supra, 100 Cal. L. Rev. at Faithful to the Marshall model, during the Markey Era there were extremely few en banc decisions in patent law and, where the Court did speak in an en banc opinion, there were few dissenting voices. 8

17 D. A Careful and Selective Grant of En Banc Review In the Markey Era, en banc review was infrequently used for patent cases where the outcome was uncertain. Thus, just as the Supreme Court has discretion whether to grant certiorari and can wait for an appropriate vehicle to have the Court review a particular legal issue, so, too, does the Federal Circuit have the ability to postpone en banc review until a majority of the court votes for such review. III. EN BANC- AND DISSENT-WORTHY SITUATIONS The Federal Circuit has gotten itself squarely in the spotlight of Supreme Court attention through its fractured en banc patent jurisprudence. That does not mean that the Federal Circuit should refrain from en banc consideration of appropriate cases and, to be sure, nothing should stop any member of the Court from issuing a separate concurring or dissenting opinion where circumstances warrant. A. Careful Use of Full Blown En Banc Review In the early years of the Federal Circuit en banc review was conducted without fanfare and publicity. Today, en banc situations are routinely announced through a published Order of the Court that defines an Issue (or Issues) and asks for arguments from the parties and amici as well as a full blown en banc argument by the parties but generally without amici participation. All too often the argument turns into an amicus circus with a fully packed Courtroom 201 and questions from the en banc panel which are more in the nature of arguments between members of that panel. Frequently, the client of the 9

18 party that has briefed the case and is questioned has no interest in the Issue presented: Counsel is representing the client s interests and should not be asked for answers that are insofar as the client is concerned theoretical at best with nothing to do as to its own business interests. A frequent flood of amici briefing is often unnecessary and largely populated by counsel seeking to see their names published in the Federal Reporter Third Series. In many cases, if not most, the issues are already well understood by the Court and really do not need en banc briefing. (The outcome should not be like Family Feud to see what is the most popular answer from the amici briefing.) B. The Kingsdown Mechanism for Course Correction Surely, while there are indeed situations where an issue should be identified for briefing and such briefing and argument may be necessary, one size does not fit all. For more than twenty-five years the Federal Circuit has had the Kingsdown mechanism for the Court to bypass altogether en banc briefing and argument: The Court may simply circulate what has started out as a panel opinion to gain the endorsement for a critical portion for the en banc imprimatur of the Court. * * Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 n.16(1988)( Because precedent may not be changed by a panel, South Corp. v. United States, 690 F.2d 1368, 1370 n.2 (Fed. Cir. 1982) (in banc), this section has been considered and decided by an in banc court formed of Markey, Chief Judge, Rich, Smith, Nies, Newman, Bissell, Archer, Mayer, and Michel, Circuit Judges. ); see also Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359 n.1(fed. Cir. 1999) (en banc in part)( Because a panel of this court lacks the authority to overrule one of the court's precedents, we are acting en banc with respect to the resolution of the choice of law issue. Accordingly, Chief Judge Mayer, Circuit Judge Rich, Senior Circuit Judge Smith, and Circuit Judges Newman, Michel, Plager, Lourie, Clevenger, Rader, Schall, Bryson, and Gajarsa 10

19 There are two good examples where there should be or should have been a clear consensus that has created a confused situation of major disruption to the administration of patent justice, where use of the Kingsdown mechanism would be or would have been appropriate: 1. Brooks Furniture, the Rogue Panel Opinion In Brooks Furniture Mfg., Inc. v. Dutailier Int l, Inc., 393 F.3d 1378 (2005)(Newman, J.), a panel deviated from precedent to create a rigid test for attorney fees under 35 USC 285 which festered for nearly a full decade until the case was overruled by the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, (2014)(Sotomayor, J.). That Brooks Furniture took an aberrant path should have been fully appreciated by the Federal Circuit yet, overnight, it became the binding precedent of that Court. It should have been a simple matter for the Court to have corrected Brooks Furniture through the Kingsdown mechanism. Yet, it took a full blown Supreme Court review to take the action the Federal Circuit could have followed under Kingsdown. Perhaps the mildest criticism of Brooks Furniture is the statement by Justice Sotomayor: join in Part II-A of this opinion, which resolves the choice of law issue. ); DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1304 (Fed. Cir. 2006) (en banc in part)( Opinion for the court [for III-B] filed by Circuit Judge Rader, with Newman, Lourie, Schall, Bryson, Gajarsa, Linn, Dyk, Prost, Moore, Circuit Judges, join. Concurring opinion filed by Michel, Chief Judge, and Mayer, Circuit Judge. ). 11

20 The Federal Circuit s formulation is overly rigid. Under the standard crafted in Brooks Furniture, a case is exceptional only if a district court either finds litigation-related misconduct of an independently sanctionable magnitude or determines that the litigation was both brought in subjective bad faith and objectively baseless. 393 F.3d, at This formulation superimposes an inflexible framework onto statutory text that is inherently flexible. Octane Fitness, 134 S. Ct. at Prometheus Characterization of Experimental Use A central theme in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct (2012), is that patents inhibit future research; this theme is uncritically carried forward in the plurality opinion of the en banc decision in CLS Bank Int'l v. Alice Corp. Pty, 717 F.3d 1269 (Fed. Cir. 2013)(en banc)(lourie, J., joined by Dyk, Prost, Reyna, Wallach, JJ., concurring), aff d U.S. (2014). As explained by Circuit Judge Lourie: Preemption features prominently in the Supreme Court's recent 101 decisions, see Mayo [Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289, 1301 (2012)]("The Court has repeatedly emphasized a concern that patent law not inhibit further discovery by improperly tying up the future use of laws of nature."); Bilski [v. Kappos, 130 S.Ct. 3218, 3231 (2010)] * * * Guarding against the wholesale preemption of fundamental principles should be our primary aim in applying the common law exceptions to 101. To be clear, the proper focus is not preemption per se, for some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors, for a limited time, from practicing the claimed invention. See 35 U.S.C Rather, the animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; 12

21 a patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add "significantly more" to the basic principle, with the result that the claim covers significantly less. See Mayo 132 S. Ct. at Thus, broad claims do not necessarily raise 101 preemption concerns, and seemingly narrower claims are not necessarily exempt. * * * CLS Bank Int'l v. Alice Corp. Pty, 717 F.3d 1269, (Fed. Cir. 2013)(en banc)(lourie, J., joined by Dyk, Prost, Reyna, Wallach, JJ., concurring)(emphasis added). Thus, it is the Lourie view that some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors * * * from practicing the claimed invention. This statement quoted more fully above from Judge Lourie is flat out in contradiction to the law prior to the Federal Circuit. See Harold C. Wegner, Post- Merck Experimental Use and the Safe Harbor, 15 Fed. Cir. B.J. 1 (2005). To be sure, there are aberrant statements of the law that have been cited with approval by at least one member of the Court. See Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860, 863 n.2 (Fed. Cir. 2003)(Rader, J.)( Judge Newman's dissent [fails to] note that the judge-made [experimental use] doctrine is rooted in the notions of de minimis infringement better addressed by limited damages. Embrex v. Service Eng'g Corp., 216 F.3d 1343 (Fed. Cir. 2000) (Rader, J., concurring); see also Deuterium Corp. v. United States, 19 Cl.Ct. 624, 631 (Cl. Ct. 1990)[(Rader, J.)] ( This court questions whether any infringing use can be de minimis. Damages for an extremely small infringing use may be de minimis, but infringement is not a question of degree. ). Unless and until the Supreme Court is disabused of the notion that patents preempt future research to create new technologies, the viewpoint of Justice Breyer has some validity. 13

22 C. Good Dissents Lead to Necessary Judicial Reforms To be sure, there must always be the right to dissent when a jurist has something new or important to say that is sufficiently valuable to demand in the first instance the attention of the Federal Circuit and then, if necessary, the Supreme Court. This exception to the general rule is best manifested by the work of the only District Court judge ever to be elevated to the Federal Circuit. Based upon her experience that dates back to patent trial work even preceding her seventeen years on the bench of the Northern District of Ohio, this jurist has used her pen to make remarkable contributions to the law: Circuit Judge O Malley has had an immediate impact on the Court. Much as in the tradition of the late Helen Wilson Nies she has boldly stated positions of disagreement on critical issues that have led to Supreme Court actions: Her first major contribution to the dialog was her insistence that the Federal Circuit was wrong in Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504 F.3d 1262 (Fed. Cir. 2007), and Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P., 504 F.3d 1281 (Fed. Cir. 2007), where the Federal Circuit held that the federal courts have exclusive jurisdiction over state malpractice actions where a patent is the res of the action. Her pointed criticism of this practice in cases such as Byrne v. Wood, Herron & Evans, LLP, 676 F.3d 1024, (Fed. Cir. 2012)(O Malley, J., joined by Wallach, J., dissenting from den. of reh g en banc), undoubtedly played a role in Supreme Court review of this issue and its unanimous decision overruling Federal Circuit practice in Gunn v. Minton, 133 S.Ct (2013)(Roberts, C.J.). 14

23 Her second notable achievement has been success in gaining grant of en banc review in Lighting Ballast Control LLC v. Philips Elecs. North Am. Corp., 744 F.3d 1272 (Fed. Cir. 2013)(en banc), which then triggered grant of certiorari on the same issue in Teva Pharms. USA, Inc. v. Sandoz, Inc., Supreme Court No , as discussed infra at pp IV. EN BANC MISSION FAILURE, A FRACTURED COURT Close votes by our en banc court are not aberrational and irresponsible. * * * [W]hen we decide an important en banc case with a close vote, with no majority opinion, that is not a failure; it is hard-working judges doing their best to do the job they were appointed to do. * * * Hon. Alan D. Lourie * The jurist is, of course, correct that he and his colleagues are judges with the responsibility of deciding specific cases as they arise[.] But, the only obligation that the Court has to the litigants is to seek to achieve the correct holding to govern the conduct of the parties, and nothing more. Do I infringe the patent, yes or no? The obligation of the Court to the profession and the patent and business communities at large is to meet the statutory mandate, to create a uniform and stable body of patent law. Here, the results speak for themselves. * Hon. Alan D. Lourie, State of the Court, Address to the Federal Circuit Bar Association Bench and Bar Conference, The Grove Park Inn, Asheville, N.C. June 19,

24 The current Federal Circuit is en banc -happy and has brought issues to public attention that needed further percolation. While it is true that the Federal Circuit is required to reach a decision in every procedurally-perfected appeal it is a matter of the Court s discretion whether to grant en banc review in any particular case. It is also a matter of discretion when the Court, finding itself without a clear path to resolve an issue accepted for en banc review, has the ability to determine whether to decide the particular issue or even to maintain en banc review o the case. The fruits of the en banc Court are splashed all over the recent volumes of the Federal Reporter Third Series: A. CLS Bank, an Opinion without a Majority In CLS Bank Int'l v. Alice Corp. Pty, 717 F.3d 1269 (Fed. Cir. 2013)(en banc)(per curiam), the Court was badly fractured on an issue of patent-eligibility under 35 USC 101. Among the opinions were one by Rader, C.J., dissenting-inpart, joined by Linn, Moore, O Malley, JJ.; Moore, J., joined by Rader, C.J., dissenting-in-part; Newman, J., dissenting-in-part; Linn, O Malley, JJ., dissenting). Given that there was such widespread and open disagreement and the absence of a majority, the question must be asked: Even if there had been thought to be a reason for granting en banc review in the first place, precisely why did the Court maintain the en banc case and let the case go to a fractured decision without a majority? 16

25 Given such disagreement, the case was certain to attact attention at the Supreme Court. Indeed, certiorari was granted and eventually the Supreme Court issued a decision further nailing down an anti-patentee view of patent-eligibility under 35 USC 101 in Alice Corp. Pty. Ltd v. CLS Bank Intern., U.S. (2014). B. Akamai v. Limelight, a New Theory on Appeal Undoubtedly the most outrageous en banc action in recent memory is Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301(Fed. Cir. 2012)(en banc)(per curiam), where the Court could not agree whether the en banc petitioner s theory of direct infringement under 35 USC 271(a) was correct: Instead, sua sponte, the divided court reached a conclusion of active inducement under 35 USC 271(b). The Court was badly split with five dissents, (Newman, J., dissenting; Linn, J., joined by Dyk, Prost, O Malley, JJ., dissenting). Why, precisely, did the en banc Court choose to take the drastic action of a sua sponte new ground to find infringement when it could have simply revoted whether to maintain en banc review and dismissed the en banc petition? Needless to say, the Supreme Court granted certiorari and eventually reversed the en banc Court in Limelight Networks, Inc. v. Akamai Techs., Inc., U.S. (2014). 17

26 C. Highmark v. Allcare Highmark, Inc. v. Allcare Health Mgmt. Sys., 701 F.3d 1351(Fed. Cir. 2012)(en banc)(den. pet. reh g en banc)(per curiam), was yet again another red flag inviting grant of certiorari. There is never a requirement to issue a dissenting opinion on a denial for rehearing en banc, yet this option to display the laundry of the court in public is the right of any Federal Judge. Whether to exercise that right is up to the individual jurist. Here, there were plural opinions, Moore, J., joined by Rader, C.J., O Malley, Reyna, Wallach, JJ., dissenting from the denial of the petition for rehearing en banc; Reyna, J., joined by Moore, O Malley, Wallach, JJ., and joined in part by Rader, C.J., dissenting from the denial of the petition for rehearing en banc. The end result was grant of certiorari and a reversal by the Supreme Court, Highmark, Inc. v. Allcare Health Mgmt. Sys.,, 134 S. Ct (2014)(Sotomayor, J.). Additionally, the Court also granted review in what became Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, (2014)(Sotomayor, J.). 4. Lighting Ballast Lighting Ballast Control LLC v. Philips Elecs. North Am. Corp., 744 F.3d 1272 (Fed. Cir. 2013)(en banc)(newman, J.), is an exception to the general rule against dissenting en banc opinions. To be sure, Court was badly split (6-4). 18

27 Here, however, the issue was appellate de novo review of claim construction, an issue that had festered for more than fifteen years and where the issues were well known and written about for more than a decade. Here, the cogent dissent by Circuit Judge O Malley, joined by Rader, C.J., Reyna, Wallach, JJ., was a clear invitation to Supreme Court review. The dissent was so successful that even before the period for filing a petition in Lighting Ballast had expired the Court granted certiorari in a different case where the petitioner put all its certiorari eggs in the Lighting Ballast basket. Certiorari was granted in Teva Pharms. USA, Inc. v. Sandoz, Inc., Supreme Court No , and will be argued and decided in the October 2014 Term running into June V. UNPRECEDENTED PATENT LAW PANEL SPLITS The penchant to air out internal disputes on the pages of the Federal Reporter Third Series is also dramatically seen by contrasting the rate of panel dissents in patent cases from today as opposed to the Markey Court more than a generation ago: 19

28 Federal Circuit Three Judge Panel Patent Dissents * Five or More Dissents Per Year Shown in Red The Markey Court Recent Federal Circuit Circuit Judge Dissents per year Circuit Judge Dissents per year Markey, C.J. 0.3 Rader, C.J. 5 Friedman, J. 0 Newman, J. 9 Rich, J. 0.3 Lourie, J. 2 Davis, J. 0 Dyk, J. 5 Smith, J. 0.7 Prost, J. 2 Nies, J. 0.7 Moore, J. 3 Baldwin, J. 0 O Malley, J. 6 Newman, J. 1.7 Reyna, J. 7 Bissell, J. 0 Wallach, J. 3 Archer, J. 0 Taranto, J. 2 Mayer, J. 0 Chen, J. *** 0 Michel, J. ** 0 ** Hughes, J. *** 0 * Only patent decisions of three judge panels were counted for this survey; a dissent-in-part was counted as a dissent. A three year period was chosen for the Markey Court because of the few numbers of dissents. The Recent Federal Circuit, here, surveyed May 1 to May 1 of the two years. Senior members of the Court are not included in this analysis because they generally sit 25 % to 50 % of the time vis a vis their active judge counterparts. It is therefore difficult to compare their rates of dissent with active members of the Court. Thus, none of the Senior Judges from the 1980 s period in question are included; nor are the current Circuit Judges in this category, Mayer, Plager, Clevenger, III, Schall, Bryson, Linn, JJ. **Judge Michel only commenced service on March 4, 1988, i.e., he only served for 25 % of the period in this survey. *** This jurist did not begin to sit until after the beginning of the sample period. Chen, J., received his commission August 2, 2013; Hughes, J., received his commission September 24, The proliferation of separate opinions at the Federal Circuit is out of control. It is not unique to have the principal author of an opinion simultaneously issue a second opinion as in Flo Healthcare Solutions, LLC v. Kappos, 697 F.3d 1367 (Fed. Cir. 2012)(Plager, J.); the three member panel opinion was accompanied by two opinions each expressing separate views (Plager, Newman, JJ). The 20

29 practice of the author of the opinion for the Court issuing a concurring opinion (styled as Additional Views ) dates back to its first year of existence when the author of the opinion for the Court needed a vehicle for a second opinion and (presumably) did not feel that she could issue a concurring opinion. * See also Nystrom v. Trex Co., 580 F.3d 1281 (Fed. Cir. 2010)(Rader, J.); 580 F.3d at 1286 (Rader, J., additional views)( While I endorse the reasoning and results of the panel, I write separately to address the doctrine of claim vitiation. ); Classen Immunotherapies, Inc. v. Biogen Idec, 659 F.3d 1057 (Fed. Cir. 2011)(Newman, J.), with Additional views filed by Rader, C.J.., joined by Newman, J.; Moore, J., dissenting); and Ohio Willow Wood Co. v. Thermo-Ply, Inc., 629 F.3d 1374 (Fed. Cir. 2011)(Rader, C.J.)(Newman, J., additional views; Moore, J., dissenting) Four opinions were issued by a three member panel in Zoltek Corp. v. United States, 442 F.3d 1345 (Fed. Cir. 2006)(per curiam)(gajarsa, J., concurring with opinion; Dyk, J., concurring with opinion; Plager, J., dissenting with opinion). Zoltek is not at all unique as seen from Frolow v. Wilson Sporting Goods Co., 710 F.3d 1303 (Fed. Cir. 2013)(Moore, J.), where a second judge issued a concurrence, 710 F.3d at 1315 (Newman, J., concurring), which was answered by the third member of the panel, 710 F.3d at 1315 (Clevenger, J., additional views), which in turn was responded to by the author of the opinion for the court, 710 F.3d at 1315 (Moore, J., additional views)( writ[ing] in response to Judge Clevenger s additional views ). * See SSIH Equipment S.A. v. United States International Trade Comm n, 718 F.2d 365 (Fed. Cir. 1983)(Nies, J.), where the author of the opinion of the Court issued a second opinion. SSIH Equipment, 718 F.2d at 379 (Additional views of Circuit Judge NIES). 21

30 Jurists have even departed from the merits to issue separate opinions to reflect on the decision-making process: One jurist took the time [i]n the twentyfifth year of [his] judicial service [when he was] wont to reflect on [his] early judicial experience in search of the confidence in the correctness of [his] judicial views. CLS Bank Int'l v. Alice Corp. Pty, 717 F.3d 1269, 1333 (Fed. Cir. 2013)(en banc)(rader, C.J., Additional Reflections of Chief Judge Rader). One member of a unanimous three member panel cast doubt on the outcome in My-Lan where he acknowledged that that the panel [took] a guess in reaching its decision: The majority embarks on a winding course as it explores case law, and evidentiary rules. At the start of its journey, the majority recognizes [that] the Ninth Circuit has not spoken squarely on this issue. Still, the majority discerns a trend in the law and on that basis takes a guess that the Ninth Circuit, if its hand were at the helm, would [reach our decision]. Wi-LAN, Inc. v. LG Elecs., Inc., 684 F.3d 1364, 1374 (Fed. Cir. 2012) (Reyna, J., dubitante)(emphasis added; internal citation and footnote omitted); 21 X2Y Attenuators, LLC v. U.S. Int l Trade Comm n, F.3d, (Fed. Cir. 2013)(Reyna, J., concurring)( I join the court s opinion in its entirety. I write separately to address an error in the claim construction approach [below]. The error, while significant, did not affect the result affirmed by this court. ). Three member panel decisions with three separate opinions is not that uncommon, including one which ultimately was reviewed by the Supreme Court. Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 601 F.3d 1359 (Fed. Cir. 2010)(Rader, J.)(Clevenger, J., concurring; Dyk, J., concurring), rev d and remanded, Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 132 S. Ct (2012). See also Braintree Labs., Inc. v. Novel Labs., Inc., 749 F.3d 1349 (Fed. Cir. 2014)(Prost, J.)(Dyk, J., concurring in part, dissenting in part; Moore, J., 22

31 dissenting); Commil USA, LLC v. Cisco Sys., 720 F.3d 1361 (Fed. Cir. 2013)(Prost, J.)(Newman, J., concurring-in-part, dissenting-in-part; O Malley, J., concurring-inpart, dissenting-in-part); In re Rosuvastatin Calcium Patent Litig. v. Aurobindo Pharma Ltd., 703 F.3d 511 (Fed. Cir. 2012)(Newman, J.)(Plager, J., concurring; Mayer, J., dissenting). One might guess that new but patent-experienced members of the Court would have more dissents than new members without a patent background. This has not proven to be the case. Through July 1, 2014, the Hon. Jimmie V. Reyna had a total of fifteen dissenting opinions in three judge panel patent cases, a rate of nearly five per year, whereas Circuit Judge Linn (with thirty-five years experience in patents) averaged one dissent every two years for such cases during his first four years on the Court a disparity at a ratio of nearly ten to one. 23

32 VI. WHAT THE MAJORITY CAN AND CANNOT ACCOMPLISH It is unrealistic to think that the Chief Judge or any group of the Court can really achieve total success in reining in plural opinions at the panel level. This would be more difficult than herding cats. While it may be difficult or impossible to restrain all members of the Court from the habit of writing separate opinions, there is one major change that the majority of the Court can impose on everyone: A majority of the Court still controls whether a case will be taken en banc. With either the current eleven active judges (or a full twelve member complement of twelve), only six active members of the Court can block en banc review. The Markey Court truly was a Supreme Court of Patent Law which spoke with a unified voice that was respected by the Supreme Court that did not disturb its patent jurisprudence. The first step toward restoration of confidence in Federal Circuit jurisprudence is a more cautious approach to en banc decision-making. 24