Federal Circuit Year in Review 2013/2014 Intellectual Property and Appellate Practice Groups
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Federal Circuit Year in Review 2013/2014 Intellectual Property and Appellate Practice Groups www.gibsondunn.com TABLE OF CONTENTS Page INTRODUCTION ..................................................................................................................... 1 STATISTICAL ANALYSIS ..................................................................................................... 5 INDEX BY ISSUE .................................................................................................................... 24 CASE SUMMARIES ................................................................................................................ 33 ALPHABETICAL INDEX OF ALL CASES ............................................................................ 177 i INTRODUCTION The Federal Circuit’s 2013-2014 term saw a number of important developments in patent law.1 The Court issued published opinions in a total of 128 precedential patent cases, including one en banc decision. Several decisions presented challenges to fundamental issues of patent law and are now the subject of potential Supreme Court review. Among the most significant decisions issued by the Federal Circuit this term were: • This year, the Federal Circuit issued two more decisions on the standard of review for claim construction rulings, following last year’s decision in Teva v. Sandoz, which is currently before the Supreme Court. In each of these cases, the question was whether the rulings of the District Court in support of its claim construction should be reviewed de novo as the Federal Circuit established in Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), or for “clear error” as set forth in Fed. R. Civ. P. 52(a): o Teva Pharms. USA, Inc. v. Sandoz, Inc., 723 F.3d 1363 (Fed. Cir. 2013). Petition for certiorari granted; oral argument held October 15, 2014 (Supreme Court No. 13-854). o Butamax Advanced Biofuels LLC v. Gevo, Inc., 746 F. 3d 1302 (Fed. Cir. 2014). Petition for certiorari pending (Supreme Court No. 13-1286). o Lighting Ballast Control LLC v. Philips Electronics North America Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc). Petition for certiorari pending (Supreme Court No. 13-536). • Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361(Fed. Cir. 2013) (Prost, J.) (Newman, J., dissenting), with further en banc proceedings denying rehearing, 737 F.3d 699, 700 (Fed. Cir. 2013) (Reyna, J., joined by Rader, C.J., Newman, Lourie and Wallach, JJ., dissenting from denial of reh’g en banc). The Federal Circuit held that a defendant’s good faith belief that a patent is invalid may be a defense to induced infringement under 35 U.S.C. § 271(b). A petition for certiorari is pending as of this writing, and the Solicitor General has recommended that the petition be granted (Supreme Court No. 13-896). • Bristol-Myers Squibb Co. v. Teva Pharm., 752 F.3d 967 (Fed. Cir. 2014) (J. Chen), with further en banc proceedings denying rehearing, ___F.3d ___, 2014 WL 5352893 (Fed. Cir. 2014) (per curiam) (Newman, J. and Taranto J., joined by Reyna and Lourie, JJ. dissenting from denial of reh’g en banc). The court held a composition of matter patent invalid as obvious; the panel decision raised issues regarding the use and application of post-filing evidence of unexpected results. 1 Term defined as August 2013 to July 2014. 1 • All Section 101 Patent Ineligibility Cases Affirmed. In each Section 101 case resolved this term, the Federal Circuit affirmed the district court and held that there was no patentable subject matter. Accenture Global Servs., GMBH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013); In re Roslin Institute (Edinburgh), 750 F.3d 1333 (Fed. Cir. 2014); Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014). Not surprisingly, issues of claim construction, infringement, obviousness, and Section 112 dominated the Court’s substantive patent law docket in 2013-2014, and the Court also addressed a significant number of district court and ITC-related procedural issues. Patent holders and their opponents fared somewhat differently depending on the substantive issue, but overall the opponents had more outright successes (47% compared to 38%), which is a reversal of the overall win/loss percentage from last year, when patentees were more successful overall. In 2013-2014, patent holders prevailed more often than their opponents on issues of obviousness (54% compared to 42%), anticipation (46% compared to 38%), injunctive relief (60% compared to 30%), and Section 112 (45% compared to 40%).2 Opponents of patent holders prevailed outright more often on issues of claim construction (43% compared to 37%), damages (50% compared to 38%), and Section 101 (75% compared to 0%); in a reversal from last year’s trend, opponents also prevailed substantially more often on infringement issues (59% compared to 26%). The relative success of patent holders on issues of validity may very well be attributed to the burden of proof and the presumption of validity, but it is interesting to note that the margin in favor of the patentee is not great and is indeed less than the burden of proof might suggest. As was the case last year, the affirmance rates for frequently recurring issues are not necessarily correlated with the relative rigor of the presumptively applicable standards of appellate review. For example, rulings relating to injunctive relief were reversed as often as they were affirmed (40% each), even though such rulings are generally reviewed under the deferential abuse-of-discretion standard. Of course, there are circumstances in which the grant or denial of injunctive relief may be predicated on a pure legal ruling that is not entitled to deferential review, which may help explain the high reversal rate. Subject matter ineligibility rulings applying Section 101 were affirmed 100% of the time when the issue was resolved on the merits,3 even though such rulings typically involve pure questions of law reviewed de novo. In other areas, however, the standard of review seems to produce the expected results: anticipation rulings were reversed in full only 15% of the time and in part another 8% of the time, not surprisingly in light of the typically fact-intensive nature of such determinations. Claim construction rulings, on the other hand, were reversed in whole or in part 48% of the time, in keeping with the de novo standard of appellate review reaffirmed by the en banc Court in Lighting Ballast (and currently under review by the Supreme Court in Teva v. Sandoz, supra). The results in obviousness cases, which were divided almost equally between affirmances and 2 The remaining cases produced mixed or inconclusive results on these issues. 3 The Federal Circuit vacated one case for the lower tribunal to decide in light of new precedent, which is the reason for the 75% statistic in the table below. 2 reversals (54% to 46%), also seem consistent with the mixed nature of the obviousness issue (an ultimate question of law based on subsidiary facts). These statistics may suggest that appellants seeking to challenge unfavorable district court rulings in patent cases should not be unduly daunted by the technically more rigorous standards of appellate review that apply to certain types of issues on appeal, such as factual disputes or rulings committed to the discretion of the district court. Overall, however, it remains true in the Federal Circuit that appellees fare better than appellants, although appellants’ odds improved somewhat this year. The Court affirmed 51% of the patent issues decided in precedential opinions in 2013-2014, while reversing in 33%, with another 9% producing partial wins for both sides; the comparable statistics for 2012-2013 were 55% affirmed, 28% reversed, and 11% split.4 Thus, while appellants still face somewhat unattractive odds on average, the overall prospects for obtaining at least some relief (42%) are probably better than in many of the regional circuits. This may be a reflection of both the complexity of patent cases generally (and thus the greater potential for reversible error) and the specialized expertise of the Federal Circuit. The Federal Circuit continues to decide cases in a reasonably prompt manner. Even though the Court’s published patent decisions are likely to involve some of the most complex issues faced by the Court (or indeed by any court of appeals), the average time from oral argument to decision was less than four months (120 days, to be precise), and the average time from the decision below until issuance of the Federal Circuit’s opinion was roughly 17 months. The average time from docketing to decision is 415 days (almost 14 months) for precedential cases, compared to a median of less than 11 months from docketing to disposition for all Federal Circuit appeals.5 The longer time period for precedential patent decisions is obviously reflective of the greater complexity and more substantial investment of judicial resources entailed in resolving patent appeals that merit published opinions. 4 The remaining percentage (where neither party won) is disclosed in the statistics section below. 5 See http://www.cafc.uscourts.gov/the-court/statistics.html, Median Disposition Time for Cases Terminated After Hearing or Submission, Detailed Table of Data (2013). 3 ACKNOWLEDGEMENT We would like to thank all of the Gibson Dunn associates and staff who contributed significant time and energy to this undertaking and without whom this publication would not have been possible.