U.S. Supreme Court and Patents
David Healey
Fish & Richardson
April 25, 2011
Copyright 2011
But first a word on behalf of our GC
This talk and these slides are for discussion purposes only.
The content of the slides and talk are meant to promote
discussion, thought, and are not intended to be opinions or
statements of the law on any set of facts.
The presentation does not reflect the opinions of Fish &
Richardson in any specific case.
For copies under these conditions, email healey@fr.com
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US Sct And Patents: The Top
US SCT
Court of Policy
US SCT
Rule-Making
Federal Circuit
Court of Error
District court
PTO
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ITC
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Sct is Court of Policy
Sct takes cases to set policy, not to correct errors.
Sct only takes cases according to its own discretion:
– Process to request review is called petition for writ of certiorari:
– Approx. 10,000 petitions for writ of certiorari filed each year.
– Less than 100 writs are granted: Case set for full briefing,
argument and an opinion on the merits per term.
– The 100 cases cover all fields of Federal Law: Criminal,
procedure, administrative law, elections law, disputes between
states, as well as appeals from State “high courts” on Federal
Issues (typically criminal cases, e.g., death penalty).
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Sct is Court of Policy
Sct might know a case is wrong but not act because it
must allocate its work to the most pressing policy issues:
Examples of where Sct would not act:
– Where facts are unique and not likely to re-occur.
– Where question might benefit from further development
in courts of appeals.
– Legislative solution is required not judicial solution.
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Sct’s Impact on Patent Cases
Review of Federal Circuit opinions on patent law.
Review of all Federal Courts of Appeals decisions on
procedure (e.g., pleading).
Review of antitrust cases through FTC and courts, that
impact on patent cases (e.g, standards, reverse settlement
payments, tying, patent pools).
Constitutional issues that impact judicial system from any
source (e.g. standing, personal jurisdiction).
Rule-making process for Rules of Civil Procedure.
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Sct & Policy of U.S. Government
Sct asks Solicitor General for the Government’s view when
administration of U.S. regulations or agencies is at stake:
– For example, in i4i v. Microsoft, the Sct. invited the Solicitor
General to give government’s view on the case by filing a brief on
the merits and giving oral argument.
– Solicitor General is part of the President’s administration.
– Often the Solicitor General’s view is given great weight in cases
involving federal government agencies and regulations.
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Sct Meets the Federal Circuit
For first quarter century of Federal Circuit, 1982-2005, Sct
left patent law to Federal Circuit (7 cases in 23 years).
NTP v. RIM injunction against “blackberry” system in 2005
was “wake up call” to the importance of public policy and
patents: Why?
– August 28, 2005 Hurricane Katrina destroyed most of New Orleans,
the “blackberry RIM” system was sole reliable communication: NTP
injunction was threat to public safety.
– eBay filed petition for review in November 2005, it was granted, and
in Spring 2006, Sct decided eBay v. MercExchange to deal with
public policy of injunctions.
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Blackberry Was Critical In Katrina
On Larry King show, on national T.V., New Orleans Mayor
Ray Nagin, said that in the days following Hurricane
Katrina, the only way he could communicate with city
officials and employees was by his blackberry.
– This was in early September 2005.
– November 5, 2005, Sct grants certiorari to review eBay’s complaint
that injunctions should not be given out in patent cases unless
traditional equitable principles are met.
– Ironically, in January 2006, Sct denied RIM’s petition for writ of
certiorari on narrower questions that would have avoided an
injunction in its case.
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Recent Sct Cases for Patent Litigators
eBay v. MercExchange: Injunctions not mandatory.
Twombly and Iqbal: New pleading standards
Medimmune v Genentech, DJ actions, standing
Bilski v. Kappos: Scope of U.S. patents
Holmes v. Vornado: Limitation on jurisdiction of Federal
Circuit.
KSR v Teleflex: Obviousness standard.
Quanta v LG: Patent Exhaustion.
Illinois Tool Works, Inc. v. Independent Ink: Tying-Antitrust
Microsoft v AT&T: Limit on foreign reach of US laws
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Pending Decisions and Petitions
Argued, briefed and opinion pending this term:
– i4i v Microsoft
– SEB/ Therasense
– Stanford v Roche
Petitions for Certiorari filed requesting review:
– Mediostream v Microsoft
– In re Princo
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The Most Important Sct Decision
In the last five years the most important Sct decision in patent
law is eBay v. MercExchange L.L.C., 547 U.S. 388 (2006):
This case was politically charged due to Hurricane Katrina.
This case changed all patent law since the 1952 Patent Act, by
holding that a patent owner who won its case still had to meet
the traditional test under principles of equity for an injunction.
This case eliminated the mandatory injunction in patent cases:
This case made injunctions the exception not the rule.
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Most Important Sct Decisions
Holmes Group, Inc. v. Vornado Air Circulation Sys., 535
U.S. 826 (2002):
– Held that the jurisdiction of the Federal Circuit Court of
Appeals was limited to cases where the original complaint was
brought based on the patent jurisdiction statute.
– And that the Federal Circuit could not take jurisdiction over a case
simply because it had a patent issue in the lawsuit.
– This decision allows litigants to frame their original filings in
antitrust and other lawsuits to avoid the Federal Circuit on appeal.
• This is important because the Federal Circuit is very pro-patent.
• E.g., in Reverse payment settlements, Federal Circuit rule permits them while
other courts of appeals condemn or limit them.
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Most Important Sct Decisions
Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009); Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)
These decisions changed the pleading standards under
Federal Rule of Civil Procedure 8 on pleading:
– In patent cases, for 271(b) Inducement and 271(c) contributory
infringement, the complaint must set forth facts that are plausible
that if true would state a cause of action. “Bare bones” pleading is
no longer allowed.
– For 271(a) direct infringement, these opinions do not apply because
Federal Rule of Civil Procedure 84 and Form 18, specifically set
minimum standard for pleading direct infringement in a patent case.
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Most Important Sct Decisions
Medimmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007)
Changed standard for filing a declaratory judgment action.
Changed rule that licensee had to give up license to
challenge validity (licensee estoppel).
Held that any act that was taken to exploit a patent could be
the basis of a “DJ” action (law previously required an
express threat of suit).
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Most Important Sct Decisions
Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010)
Held Section 101 of Title 35 allowed for broad range of
inventions that could be patented.
Upheld business method and software patents as patentable
“processes”.
Rejected Federal Circuit’s “machine or transformation” test.
Only three exceptions to patentable subject matter:
– laws of nature
– physical phenomena, and
– abstract ideas.
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Most Important Sct Decisions
KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398 (2007)
"A person of ordinary skill is also a person of ordinary
creativity, not an automaton.”
– Eliminated requirement of suggestion of a teaching that references
be combined to make the claimed invention
– Obviousness under Section 103 could be based only on a single,
incomplete reference where a person of ordinary skill in the art
would have thought to fill in or adapt missing parts.
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Most Important Sct Decisions
Quanta v. LG, 553 U.S. 617 (2008)
When are the rights of a patent owner exhausted by its sale
of a product where use of the patented invention is the
expected use of the product?
– Method claims are exhausted when the expected and intended use of
a product sold by the patent owner or its licensee is to employ the
patented method.
– This restated long-standing Sct law that patent rights are exhausted
by sale of a patented product. (U.S. v. Univis Lens)
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Most Important Sct Decisions
Illinois Tool Works, Inc. v. Independent Ink, 547 U.S. 28
(2006)
Antitrust case on “tying” involving patents.
Antitrust laws protect markets not competitors or products.
Generally, must show a contract or conspiracy is an
“unreasonable restraint” on trade in a “relevant market”.
Sct made clear a patent does not ordinarily define the
market.
Tying requires proof of harm to competition in a relevant
market.
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Most Important Sct Decisions
Microsoft v AT&T, 550 U.S. 437 (2007)
– Shipment of a “Golden Disk” with software outside of
the U.S. to be combined with hardware and other
software to make something that would infringe a U.S.
patent if made or sold in the U.S. is not covered by reach
of U.S. patent law.
– Even though 271(f) does not permit circumvention of
U.S. patent by assembling components of an infringing
device outside of the U.S., 271(f) does not reach this
conduct because the software is not a component.
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Pending Cases in Sct
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Opinion on Merits Pending in the Sct
SEB/Therasense, Argued February 23, 2011:
– DSU Medical held in 2006 that inducement required knowledge of
the patent and a deliberate effort/intention to cause another to
actually infringe the claims of the patent.
– SEB/Therasense later held in 2010 that inducement could occur
where there was “deliberate ignorance to a known risk”, not just
proof of knowledge.
– “Deliberate ignorance” is generally a criminal law doctrine used in
prosecution for smuggling and possession of contraband: “Someone
paid me $1,000 to carry this suitcase on to the plane, I don’t know
what is in it – he did not tell me and I did not ask.”
– No involvement by Solicitor General.
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Opinion on Merits Pending in the Sct
Stanford v. Roche, Argued February 28, 2011
– Ownership of inventions, standing and the Bayh-Dole
Act.
– Whether a federal contractor university's statutory right
under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in
inventions arising from federally funded research can be
terminated unilaterally by an individual inventor through
a separate agreement purporting to assign the inventor's
rights to a third party.
– Solicitor General was asked to file a brief and argue.
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Opinion on Merits Pending in the Sct
i4i v. Microsoft, Argued April 18, 2011
– Should clear and convincing test for invalidity in patent litigation be
reduced to “preponderance of the evidence”?
• Final administrative agency action is generally only subject to limited
review, much like clear and convincing standard.
• Solicitor General asked the Sct to uphold clear and convincing standard
in all cases.
• Microsoft focused on reducing the standard where the USPTO did not
consider the materials on which invalidity is based: e.g., on-sale bar.
• Practical impact on a jury trial will be small – real impact is on JMOL
and appeal from trials.
• Questionable if any impact on MSJ since standard is “as a matter of
law”/”no factual dispute”?
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Pending Cert Petitions in Sct
Mediostream v Microsoft: Petition for writ of certiorari on
standard of review of a district court’s decision on transfer of
a lawsuit under Section 1404(a) of Title 28.
– Mediostream was an EDTEX case under Fifth Circuit 1404(a) law.
– Mediostream has petitioned for Sct review of a Federal Circuit
mandamus, arguing that there is a split among the circuit court of
appeals on how and whether district court decisions on discretionary
transfers can be reviewed.
– Asks the Sct to adopt the same rule for all circuits: One where
district court decisions not subject to review on facts and only
limited review on law as applied to the facts.
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Pending Cert Petitions in Sct
In re Princo: petition for writ of certiorari from divided en
banc Federal Circuit decision on scope of patent misuse.
Majority held that patent misuse defense only applied to a
patent the accused infringer did not want to license and did
not infringe (“tied” patent). Since defendant was sued only
on the infringed patent, no misuse defense.
Dissent wrote that this decision let patent pools and patent
licensors violate antitrust law, but still enforce patents. This
is especially important in ITC cases where there are no
counterclaims, only defenses.
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End of Presentation
This presentation is for discussion purposes only and not a
statement of the law or an opinion on any case or set of facts,
and is not legal advice.
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