Peter Harter

The Wall Street Journal explains ithat the Silicon Valley culture has long regarded copying as a good thing and necessary for rapid growth, first to market, first mover advantage, network effects, world domination, liquidity for early investors and Founders, etc. What complete and total garbage. When you live in a culture that tolerates and even promotes copying that is, in fact, what you get. When everyone copies everyone that means no one is innovating. Many studies and articles in recent years have highlighted how we have a net loss of startups over the past 30 years and that companies are no longer innovating.

Phyllis Schlafly was a true friend of and advocate for the American inventor. Mrs. Schlafly’s life-long admiration of inventors was deeply felt and well-founded. Her biographer reports Mrs. Schlafly regarded an inventor to be “the most glorious product of the free-enterprise system.” She had firsthand exposure to an inventor: her father, Bruce Stewart.

IntegraSpec was denied the opportunity to make its case here because of collateral estoppel based on the reasoning that they already had a full and fair opportunity to litigate the dispute. What exactly does “full and fair” mean? Figuring out what the means in the context of Rule 36 disposals is complicated. We do know, however, what “full and fair” cannot mean. The term “full and fair” cannot mean “equal.” While the Federal Circuit continues to want to say that cases decided using the Rule 36 summary mechanism are “no less carefully decided,” the fact is that litigants in Rule 36 cases receive less consideration by the Court; this truth is factually indisputable. It takes a certain amount of time to decide the answers to the questions presented, but it also takes a certain amount of time to explain those answers in a written decision. To think the act of writing the decision is purely ministerial and makes no difference strikes me as pure nonsense.

If you are having trouble figuring out how Zond could have had 371 claims, lost all of them, but only 1,220 claims were instituted out of 1,377 claims challenged, you understand the problem. These are not misprints or mistakes. Zond had 371 unique patent claims, but because of the IPR gang tackling phenomena those 371 claims were challenged a total of 1,377 times, but instituted only 1,220 times. Thus, the number of institutions is more than three times the number of unique claims Zond owned. In other words, the institution rate shouldn’t have been 88.6%, it should have been closer to 329%!

What happens if a patent owner who suffered that Rule 36 summary loss to Google at the Federal Circuit were to decide to sue another party – perhaps Apple – on the same claims that were invalidated in the above mentioned hypothetical Google proceeding? No doubt Apple’s attorneys would be rightfully indignant, and if the proceeding were in federal district court you could guarantee there would be sanctions, likely against both the patent owner and the attorneys representing the patent owner. Why? Because those claims have been lost (i.e., invalidated) in a prior proceeding, and it does not matter that Apple was not privy to that prior proceeding. The underlying property right has been lost, and whether the Federal Circuit wants to admit it or not that is binding precedent.

Based on how often the Supreme Court reverses the Federal Circuit, what percentage of the Court’s Rule 36 decisions are wrong? Perhaps 90% of them? Then again it is impossible to really know given how Rule 36 is an impenetrable black box that realistically prevents appeals, insulating the Federal Circuit from any scrutiny from above… The notion that the facts of the case are what they are and will result in the same results in any district court goes right out the window if you look at what passes for “patent justice” in America. Therefore, the shocking lack of consistency court-to-court and judge-to-judge would certainly argue in favor of more, and better, guidance from the Federal Circuit. But use of Rule 36 and the all too familiar one-word judgment that simply says – “Affirmed” – prevents any guidance, let alone meaningful guidance.

Erich Spangenberg commented on our most recent Rule 36 article, “Does the Federal Circuit’s use of Rule 36 call into question integrity of the judicial process?” He raised a significant and potent question: Logically, when the Federal Circuit uses Rule 36 to affirm without a written opinion should fees and costs be awarded?… The Federal Circuit is using Rule 36 so often that it has to raise questions even in the mind of the most vocal supporter of the Court. It is entirely predictable that such secrecy would lead people to ask questions, including the dramatic – why is it not appropriate to award at least costs if the appeal is so easy and nothing could be gained from writing an opinion?

The Federal Circuit is using Rule 36 as a docket management tool, which allows the real problems facing the patent system to fester like an open wound. Between the law being hopelessly uncertain, patent examiners that refuse to issue patents, and a PTAB that denies parties even the most basic due process, it is misguided for the Federal Circuit to think they can fulfill their Constitutional and statutory duties with an ever increasing number of one-word decisions that seem to be issued in direct violation of Rule 36 itself.