Posts in Courts

In what can really only be characterized as a stunning development, earlier today Judge Randall Rader of the United States Court of Appeals for the Federal Circuit announced that he is retiring effective June 30, 2014. This announcement comes only weeks after he stepped down as Chief Judge.

The Supreme Court reversed a decision from the Ninth Circuit that held that within the realm of labeling for food and beverages, a Lanham Act claim asserting that the label is deceptive and misleading is precluded by the Federal Food, Drug, and Cosmetic Act (FDCA). This case arose relating to the belief of POM that claims made by the Coca-Cola Company were misleading with respect to a juice blend sold by Coca-Cola’s Minute Maid division. The juice sold by Coca-Cola prominently displays the words “pomegranate blueberry,” but in truth the product contains only .3% pomegranate juice and only .2% blueberry juice.

In a decision barely reaching 11 pages, a unanimous Supreme Court in Limelight Networks, Inc. v. Akamai Technologies reversed and remanded the Federal Circuit’s per curiam majority ruling in Akamai Technologies and McKesson Technologies. That the Supreme Court overturned the Federal Circuit’s per curiam majority ruling is not a surprise. But what is truly shocking are the factually inaccurate statements, as well as the problematical reasoning that appears in Justice Alito’s opinion for this unanimous Supreme Court. With all due respect, Alito’s opinion is an abysmal ”comedy of errors.”

Akamai argued Limelight ”provides instructions and offers technical assistance” to its customers regarding how to tag. The Federal Circuit dodged the question about whether there was direct infringement under 35 U.S.C. 271(a), but instead found that there was induced infringement under 35 U.S.C. 271(b). The problem with this ruling was that it was a legal impossibility. Well settled law had long stood for the proposition that there can be no induced infringement if there is not indirect infringement. Thus, this bizarre ruling by the Federal Circuit had those in the patent community scratching their head. It was easy to predict a Supreme Court reversal.

The district court determined that the term was indefinite, the Federal Circuit reversed. According to the Federal Circuit, a claim is indefinite “only when it is not amenable to construction or insolubly ambiguous.” Under that standard, the majority determined, the ’753 patent survived and was not indefinite. The Supreme Court characterized this test as the Federal Circuit tolerating “some ambiguous claims but not others.”

Given the anti-patent climate that has been created by major Silicon Valley technology companies, the Obama Administration and certain Members of Congress, the news that Judge Rader will step down as Chief Judge comes at a difficult time… While I do hope the Federal Circuit can find common ground, there is no doubt that making sense of Supreme Court precedent on patent law issues is virtually impossible. The remedy for this is not to dismantle the Federal Circuit. The remedy would be for the Supreme Court to get a clue, or to take patent cases only to the extent that there is an irreconcilable split within the Federal Circuit. That would be far more consistent with the intent of the Federal Circuit when it was created.

Written by Don Dunner: ”Fifty-four years ago, a lawyer in the prime of his career was appointed by President Eisenhower to serve as a judge on the Court of Customs and Patent Appeals (CCPA). Within weeks if not days of that appointment, then Chief Judge of the CCPA, Noble Johnson, chose as his sixth and last law clerk a second year law student. Giles Sutherland Rich was the new judge; I was the new law clerk. Little did I realize at the time that the new judge on the block was about to embark on a judicial odyssey that would extend just short of the 21st century and that would propel him into the rarified atmosphere occupied only by true giants of the profession.”

Chief Judge Randall R. Rader today announced that he will step down as Chief Judge of the United States Court of Appeals for the Federal Circuit on May 30, 2014. This surprise announcement by Judge Rader, who turned 65 on April 29, 2014, means that Judge Sharon Prost will become the next Chief Judge of the Federal Circuit… This alone will draw a sharp contrast between Judge Prost and Judge Rader given that Judge Rader has for years been a strong, vocal supporter of strong patent rights. Thus, it would be easy to envision a future where the industry needs to be ready for a different philosophical message coming from the CAFC.

By claiming mutual and unilateral mistake, DuPont had placed the truthfulness of its subjective belief concerning its stacking rights at issue… The problem for DuPont was that the internal e-mails showed that in-house attorneys advised DuPont executives that the company did not have the right to commercialize the stacked product “[b]ecause of the field of use limitation” contained within the Licensing agreement. Upon learning that DuPont had been advised that they had no right to stack, Monsanto moved for sanctions, asking the district court to rule that DuPont had misrepresented its subjective belief concerning stacking rights and had perpetrated a fraud on the court.

Earlier today the United States Court of Appeals for the Federal Circuit ruled that Dolly the cloned sheep, and any other genetic clones, are patent ineligible in the United States because the “claimed clones are exact genetic copies of patent ineligible subject matter.” — The holy grail of personalized medicine, at least with respect to organ transplantation, is to create an organ that is identical to what occurs in nature. Now we know that if that is accomplished the resulting organ will not be patentable. That being the case, why is anyone going to spend the billions, or possibly trillions, of dollars it will require to make this branch or personalized medicine a reality? Without possibility of exclusive rights research will dry up.

I think that the Supreme Court decision will be enough to prevent the so-called “patent reform” from gaining any traction in the Senate. The cynical view is that there is so much lobbying money flowing why would Congress want to turn that spigot off when it could easily flow into the next Congressional term? Further, there has been a growing and steady effort by those opposed to the pending patent legislation. Opponents were already making their case heard as the Senate continued to time after time postpone dissemination of the Manager’s Amendment, signaling the consensus that some Senators desperately wanted to reach was illusive, if not impossible. Now with the Supreme Court decisions in these two cases those on the Hill who were already skeptical have more than enough ammunition to slam on the brakes, at least for now, to see what the ultimate ramifications of the decisions will be on the reality of patent litigation.

35 U.S.C. § 285, which is an extremely short statute, authorizes a district court to award attorney’s fees in patent litigation to the prevailing party. In its totality, § 285 states: “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” With such a simple statute you might wonder how or why it was necessary for the Supreme Court to step in and provide clarity. Because in 2005 the Federal Circuit departed from three decades of case law and made it difficult, if not impossible, for prevailing parties to demonstrate entitlement to attorneys fees.

Many, many, many patents have issued to cover the physical elements and intuitive steps to make this familiar sequence possible and increasingly reliable and refined. Mechanical elements, i.e., rotating shafts with a gears on each end, have been replaced by a toothed wheel and magnetic sensor and a wire, but the information about where the engine is in its cycle of rotation is the same… To illustrate to the lay person that just because software is the ”tool” being used to “do” things, we are still ”doing” the same things in the same ways for the same reasons. To wit: That, in the modern era, the execution of the ”useful arts” is done using software does not change what is done or the fact that it is a ”useful art”; and, the patentability thereof should be unaffected simply because we ”do” it differently now as compared with how we ”did” it then.

Professor Paul Janicke of the University of Houston Law School conducted a study of all damage verdicts in patent infringement cases between 2005 and 2007. He found no pattern of “runaway jury awards.” In fact, many of the biggest damage awards of that time, including the $1.5 billion award Lucent won from Microsoft, were set aside or greatly reduced by the judges. Even Apple’s $1 billion 2012 patent verdict against Samsung was recently slashed 43 percent. Why, then, are claims of a “broken” patent system rife with “excessive damage” awards so widely believed?