February 24, 2022
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Patent Law at the Supreme Court February 2022 - Patently-O

by Dennis Crouch

The Supreme Court has not yet granted writ of certiorari in any patent cases this term. And, absent an unusual shadow-docket patent case, it is now too late for any case to be granted and heard this term. Rather, any new grant this term will very likely be pushed back to the October 2022 Term for hearing and decision.

Still, there are a number of important patent cases pending before the court. Lets talk them through.

Although no petitions have been granted, the Supreme Court has requested amicus briefs from the Federal Government in four particular cases. The request, known as a CVSG, typically requires four of the nine Justices — the same number needed to grant certiorari. Because of that heavy threshold, a CVSG is typically seen as an important signal that the court is likely to grant certiorari. But, the real boost only happens if the government brief supports certiorari.

Here are the four CVSG cases, I describe them in more detail below.

  • Eligibility under Section 101: American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, et al., No. 20-891 (CVSG requested May 3, 2021);
  • Res Judicata and the Patent-Specific Kessler Doctrine: PersonalWeb Technologies, LLC v. Patreon, Inc., et al., No. 20-1394 (CVSG requested October 4, 2021);
  • Undermining Jury Decisions: Olaf Sööt Design, LLC v. Daktronics, Inc., et al., No. 21-438 (CVSG requested October 4, 2021); and
  • Appellate Standing for IPR Challenger: Apple Inc. v. Qualcomm Incorporated, No. 21-746 (CVSG requested February 22, 2022).

Standing: The most recent CVSG is in Apple v. Qualcomm, a case focusing on appellate standing following an IPR final written decision favoring the patentee. The statute indicates that any party to an IPR final-written-decision has a right to appeal. 35 U.S.C. § 319. However, a statutory right is insufficient for Constitutional standing. Rather, an appellant must show concrete injury caused by the PTAB decision and redressability of that injury. Qualcomm had previously sued Apple for patent infringement, and Apple responded with a set of inter partes review petitions. The parties settled the litigation before the IPRs were complete, but agreed that the IPRs could continue. The settlement also included a license to thousands of Qualcomm patents. Here’s the problem — in its appeal, Apple was not able to show Apple’s rights or duties under the license would change if the patents were cancelled. And, although the license is set to expire before the patents, the court found that potential future infringement to be too speculative. The petition asks the following question: Whether a licensee has Article III standing to challenge the validity of a patent covered by a license agreement that covers multiple patents. This question ties the case directly to MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) where the Supreme Court found standing for a licensee to challenge a patent — and rejecting the Federal Circuit’s reasonable-apprehension-of-suit requirement. Apple’s petition attracted four amicus briefs, including a bipartisan brief from Senator Patrick Leahy (D) and Congressman Darrell Issa (R).

Intel v. VLSI Tech, also focuses on IPR standing, albeit in somewhat different posture. Intel’s IPR petition was denied under the NHK-Fintiv Rule that permits the PTAB to deny institution of otherwise sufficient IPRs based upon the existence of ongoing parallel litigation involving the same patent and parties. The statute includes a statement that the USPTO’s discretionary denial of institution is “final and nonappealable,” but Intel argues that appeal is still proper here because the denial was “arbitrary and capricious”, “violates the AIA and undermines the role of IPR in Congress’s effort to improve the integrity of the patent system.”

Eligibility: American Axle v. Neapco has been awaiting views of the SG since May of 2021. The asserted patent covers a new method of manufacturing an automobile drive-shaft with reduced vibration. The basic idea: insert a “tuned” liner into a hollow shaft. The liner is special–it is made of a “reactive absorber” and its mass and stiffness have been “tuned” all for the purpose of attenuating both “shell mode vibrations” and “bending mode vibrations” of the shaft. The petition asks two questions: (1) What does it mean to be “directed to” an ineligible concept? (Alice Step 1). and (2) Is eligibility a pure questions of law (based upon the claims); or does it also involve a “question of fact for the jury based upon the state of the art at the time of the patent?” A number of folks filed amicus briefs in the case. The most interesting was submitted by Profs. Menell and Lefstin. Still, we are awaiting the views of the Solicitor General in American Axle.

Three other eligibility cases are pending:

  • PersonalWeb Technologies LLC, v. Google LLC;
  • Universal Secure Registry LLC v. Apple Inc.; and
  • Gabara v. Facebook, Inc.

These cases have all tied their mounts to the lead horse of American Axle and so may rise or more likely fall together. The court recently denied certiorari in Yu v. Apple. The invention in Yu was a multi-lens camera deemed abstract by the Federal Circuit.

The Kessler Doctrine: If you want to really dig into this case, please read my article on the topic that I wrote for an Akron Law review IP symposium issue. Dennis Crouch & Homayoon Rafatijo, Resorbing Patent Law’s Kessler Cat into the General Law of Preclusion, 54 Akron Law Ref. ___ (2022)(forthcoming).

The basics you know about res judicata (claim preclusion) and collateral estoppel (issue preclusion), but in patent law we have a third and apparent co-equal form of judge-made preclusion known as the Kessler Doctrine. Although the doctrine derives its name from a 1907 Supreme Court decision, the doctrine in the form know it today was created by the Federal Circuit in its 2014 Brain Life decision and then expanded later in SpeedTrack (Fed. Cir. 2015) and again in PersonalWeb Techs. (Fed. Cir. 2020). In its petition, PersonalWeb argues that Kessler should not be seen as a freestanding doctrine and should not apply in situations involving voluntary dismissal.

I expect that the SG’s office will agree with our argument that the Kessler should be seen as falling fully within the bounds of issue and claim preclusion and that the Federal Circuit improperly expanded its reach.

The fourth and final case with a pending CVSG is Olaf Sööt Design, LLC v. Daktronics, Inc. The petition offers a classic argument that the Federal Circuit’s sua sponte claim construction on appeal undermined the jury verdict in a way that conflicts with Soot’s Seventh Amendment rights. Although patent infringement is a question of fact that goes to the jury, in many cases the courts effectively decide the infringement questions as part of the claim construction. Here, the Federal Circuit did that, but in a further offensive way — sua sponte; after the jury had already decided the case; and in a manner that “essentially recasts” the factual infringement question as a claim construction issue.

For litigators familiar with the case law, the focus here is the Federal Circuit’s 2008 decision in O2 Micro and its subsequent expansion. The petition explains: “This line of authority … extends well beyond this Court’s Markman ruling and now fundamentally disrupts the orderly resolution of patent disputes at the trial level.”

A somewhat similar pending petition is Daikin Industries v. Chemours Co. Rather a jury trial, Daikin involved an IPR decision by the PTAB. The question in the petition is whether the Federal Circuit is permitted to “reverse an administrative agency’s decision on a factual ground not addressed by the agency.” And, rather than basing its argument on the 7th Amendment, Daikin’s petition is grounded in the Administrative Procedure Act and “the principles of separation of powers embedded within that Act.”

Full Scope Enablement: Amgen v. Sanofi has the potential of being a huge case in terms of how it impacts the future of biotech innovation. The patent here claims a genus of monoclonal antibodies that the Federal Circuit lacked sufficient enabling disclosure. The petition asks two particular questions: 1. Is enablement a question of fact for the jury or a question of law as the FedCir held; 2. Does the statutory “make and use” requirement require enablement to the “full scope of the claimed embodiments”?

Prior Art for IPRs: An interesting statutory interpretation petition is pending in Baxter v. BD. Congress was careful to limit the scope of IPR proceedings. The IPR petition may request claims “only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. 314(b). In the case, expert testimony was used to fill a gap in the prior art, and the question is whether the use of expert testimony in this manner violates the statutory provision.

PTAB Practice: The Supreme Court recently denied a number of NHK-Fintiv discretionary dismissal cases. One more is still pending – Intel Corporation v. VLSI Technology LLC. The Solicitor’s office filed a strong responsive brief which makes me think that we’ll see a denial here.

A lot of litigation power is being spent on whether or not the plaintiff’s choice of judge (Judge Albright) will stick. The statute for proper venue in patent narrowly proscribes appropriate venues and the Federal Circuit has further limited venue with its aggressive granting of mandamus actions on convenience grounds.

Ikorongo Texas LLC, v. Samsung Electronics Co., Ltd., the patentee (Ikorongo) attempted to alter the terms of the debate by geographically dividing its patent — with a particular company (Ikorongo Texas) rights to the patent only with respect to the counties encompassed by Judge Albright’s court in the Western District of Texas. When the defendants attempted to transfer venue to N.D.Cal., the patentee explained that district would not be proper under the venue statute 1400(b). On mandamus, however, the Federal Circuit cut through the corporate form — finding that this division of rights “recent, ephemeral, and artificial” and thus could not be used to keep the case in Texas. The petition directly challenges this aspect of the Federal Circuit decision and also asks the Supreme Court to rethink its public-and-private factors used for convenient forum — they are extremely outdated.

Last case still pending: Heat On-The-Fly, LLC. v. Energy Heating, LLC. In the case, the patentee lost due to inequitable conduct. Basically, the patentee failed to disclose pre-filing sales of the invention. The court also found the case exceptional and awarded attorney fees to the defendant. In addition to the fact of inequitable conduct, the court also noted that the patentee pursued aggressive litigation despite knowing that the patent was unenforceable. The trial court award was affirmed on appeal. Now, the patentee petitioned for certiorari with an argument that any analysis of attorney fees “must consider litigation misconduct, or lack thereof, in determining whether a case is exceptional under 35 U.S.C. § 285?” I don’t see this going anywhere.



source: https://patentlyo.com/patent/2022/02/patent-supreme-february.html

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