Posts Tagged: "SCOTUS"

The United States Supreme Court accepted certiorari in two patent cases, which will require the court to determine whether district court judges should have discretion to award victorious patentees with enhanced damages under 35 U.S.C. § 284. While predicting the outcome of a Supreme Court decision is always speculative, this case should be one of the easiest outcomes to predict ever. Unless the Supreme Court fundamentally alters its statutory interpretation from the Octane Fitness case, arbitrarily creating a distinction without a difference, the Supreme Court will grant district courts the same broad discretion on enhanced damages that they have been given with respect to awarding attorneys fees.

In general, the courts distinguish between functions and algorithms, and they require patent applicants to disclose algorithms to cure perceived deficiencies in functions. The problem with this line of reasoning is that both algorithms and functions under 35 U.S.C. § 112(f) are composed of the same things: steps. So the result of the algorithm requirement is to simply make patent applicants “fix” one step by specifying more steps. Accordingly, if the algorithm requirement is taken to its logical conclusion, then each step would be fixed with more steps, and each of those steps would be fixed with even more steps, like Russian dolls. Instead, the courts do not take the algorithm to its logical conclusion and, instead, only require a single layer: the original step and the further steps (i.e., algorithm) for it. This is arbitrary, confusing for patent applicants and examiners, and a poorly calibrated solution to concerns about software patents.

Everybody has to be careful because you’re right if we undermine our patent system that is the only thing that allows America to remain strong competitively because China they just have labor rates that are a fraction of ours. We couldn’t possibly make products as cheaply as China. We need to make sure that Congress isn’t hearing so much about how bad the patent system is that they without intention undermine it in significant part and then hurt our competitive advantage against China. I mean that’s all possible. I agree. I share that concern. Are we going too far?

I think there was certainly a level of abuse prior to patent trolls from larger companies that weren’t scrupulous trying to sue smaller companies and using the high cost of patent litigation to get things they weren’t entitled to. The only difference was these smaller companies that were being abused didn’t have any lobbying efforts before Congress. So when the whole patent troll issue came to a fever pitch the biggest companies in America were being held hostage to it. Apple, Microsoft, Facebook, LinkedIn, all of the most notorious companies that are just great technologies were being sued by smaller entities. And how do these smaller entities get economic leverage over these big companies? They did it because they could file 40 lawsuits at a time so the incremental cost beyond case number one didn’t cost anything. And they would just hold out for these nuisance value settlements and that’s why even the largest companies in America were being held hostage. How Octane changed that is now that you have a realistic chance of getting attorneys’ fees, now you have that chance now the bigger companies can stand up to a troll.

The U.S. Supreme Court’s recent decision in Kimble v. Marvel Entertainment, LLC (2015) rejuvenates a 50-year-old rule that limits collecting patent royalties after a patent expires. On June 22, 2015, the Court upheld its per se Brulotte rule that bars a patent licensor’s collection of royalties for the use of a claimed invention beyond the expiration date of the underlying patent. The Court directly addressed criticisms of this rule, which originated in its Brulotte v. Thys Co. (1964) decision, and foreclosed any speculation about the continued viability of Brulotte’s bright-line rule in current practice.

During the last hearing of the House Judiciary Committee there was an attempt to insert language via amendment that would make it impossible for Kyle Bass and others to challenge pharmaceutical patents via post grant challenge at the Patent Office. Judiciary Chair Congressman Bob Goodlatte (R-VA) vociferously objected saying that if the amendment to prevent post grant challenges to pharmaceutical patents passed it would create a so-called scoring problem with the Congressional Budget Office (CBO). What an admission by Goodlatte! No legislative help is coming for pharma’s post grant challenge problem because the federal government likes the idea of some patents on important drugs being invalidated, which will save Medicare money.

Patent prosecution describes the interaction between applicants and their representatives, and a patent office with regard to a patent, or an application for a patent. (source: Wikipedia). It is a well-known term of art commonly used in the IP community. On the other hand, patent persecution describes the activities among various actors currently dismantling the US patent system, block by block. It is a recent phenomenon and seems to know no boundaries. (source: read the news!).

It is undeniable that the major destructive force in the patent system today is the United States Supreme Court. Indeed, over the last several years, the Supreme Court has become extremely active in the area of patent law. They have made decisions on a number of cases that have significantly altered the patent landscape and negatively affecting patent value. Without any legitimate statutory precedent or authority the Supreme Court is wrecking the U.S. economy just as sure as snow is white and water is wet. As a lawyer it is hard to watch the Supreme Court. I increasingly wonder how anyone could teach either patent law or constitutional law without simply acknowledging to the students that there is no rhyme or reason in the decisions of our High Court.

Simply stated, any patent decision from the Supreme Court that cites stare decisis lacks all intellectual credibility given how arbitrarily and capriciously they have ignored their patent own precedent and the patent statutes over the past decade. Obviously, this Supreme Court doesn’t understand the true definition of stare decisis. Given how frequently the Court disturbs well-established principles and precedent in the patent space the use of stare decisis in this case is nothing more than a complete and total cop-out. It also insults the intelligence of anyone who has even casually observed the Supreme Court on patent matters over the past decade.

Simply stated, Lemley is wrong and his suggestion that eBay v. MercExhange is at all positive, let alone the best development, strikes me as utterly ridiculous. The true mischief of the eBay decision isn’t that patent owners can’t obtain a permanent injunction, but rather that the Supreme Court has taken the threat of a permanent injunction off the table. This means that infringers have no incentive to deal. If infringers had to fear the possibility of a permanent injunction they would be forced to enter into meaningful arms length negotiations with patent owners. Instead, now infringers can merely say “sue me,” which is exactly what they do.

The idea that the Supreme Court is at all capable of understanding — let alone deciding — issues of a technical nature is ridiculous. Yet their individual and collective lack of knowledge hasn’t prevented them from reaching misguided decisions in a variety of cases. Like an Emperor without any clothes the Supreme Court seems blissfully ignorant of their own ignorance. Indeed, you would have to go out of your way to find nine less qualified people to decide issues of a technological nature.

In both theories of indirect patent infringement (i.e., inducement of patent infringement and contributory infringement), the patent owner must show that the defendant knew its activities were infringing. If the defendant can prove that it did not have such belief then it is a valid defense to indirect infringement. In Commil, the defendant went a step further and contended that it was not liable for inducement of infringement, arguing that it is axiomatic that one cannot infringe an invalid patent and it had a good faith belief that the patent at issue was invalid. The defendant mixed infringement and invalidity together. In the opinion, the Supreme Court placed a wall between the theories of infringement and invalidity and held that the mental state of the defendant as to the patent’s invalidity has no bearing on whether it thought its acts were infringing.

The issue considered by the Supreme Court was whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. In a 6-2 decision written by Justice Kennedy, the Supreme Court ruled that belief of invalidity is not a defense to a claim of induced infringement. While it seems that the Supreme Court issued a reasonable decision in this case it is deeply troubling how little the Supreme Court actually knows about patent law. In addition to repeatedly discussing the validity of the Commil patent, rather than the validity of the patent claims, the Supreme Court also seemed to suggest that Cisco could have relied on a procedural challenge to the Commil patent that simply wasn’t available as an option at any relevant time during the proceedings.

Changing the rules of the game is fundamentally unfair, which would be obvious to everyone if we were talking about football, soccer or playing a board game. Somehow common sense is abandoned when dealing with patents. Changing patent laws in midstream seems particularly un-American, both because it disturbs vested property rights and because it is quintessentially anti-inventor. If we want to maximize a property rights regime it must be certain, stable and predictable. Patents are no exception.

There was a split in the circuit courts as to what effect a TTAB decision will have, and this depends heavily upon where the litigation is happening. The weight of a TTAB decision will vary depending on the jurisdiction, ranging from none at all to complete preclusion. Here, the issue was whether one mark was confusingly similar to another, which the Supreme Court determined was exactly the same as what was being litigated.