No-Opinion Federal Circuit Orders Face Long Shot at High Court

The Federal Circuit’s mechanism for disposing of cases without an opinion continues to stir controversy with no resolution in sight, despite multiple bids for the US Supreme Court to police the practice.

“Rule 36" judgments allow the US Court of Appeals for the Federal Circuit to summarily affirm a lower court or administrative decision without explaining its reasoning. In the intellectual property realm, critics have argued they violate Patent Act requirements and can stymie the types of arguments that arise in patent litigation.

“There’s a perception on the defense side of the bar that this creates an opening for plaintiffs to relitigate issues multiple times, where under ordinary circumstances they wouldn’t be permitted to do so,” said Stefan Szpajda, a partner with patent firm Folio Law Group PLLC. “If the opinion contains some reasoning, you can tell what was necessary to the result.”

But attorneys and academics also acknowledge that the rule helps promote judicial economy at the Federal Circuit, which saw its caseload multiply in the wake of the 2012 America Invents Act’s creation of the Patent Trial and Appeal Board. That tribunal’s decisions in patent validity challenges can be appealed to the Federal Circuit.

“Taking a big swing at Rule 36 is probably never going to be successful because there are big policy considerations” keeping it in place, Szpajda said.

Patent Act Argument

Tech firm Virentem Ventures LLC and pro se petitioner Franz Wakefield in February both asked the justices to review separate cases that received Rule 36 orders. Virentem’s petition was denied March 27 without reasoning, as is customary. Wakefield’s is pending, but with dim chances of success.

Virentem argued the practice violates a Patent Act clause that says the Federal Circuit “shall issue to the Director [of the Patent Office] its mandate and opinion.”

The company had sued YouTube LLC and Google LLC in federal district court, alleging infringement of seven audio-processing patents. The Patent Trial and Appeal Board invalidated all of the patents, and the Federal Circuit summarily upheld the decisions.

Virentem called the process a poor substitute for the opinion mandated by the statute.

“The lack of an opinion here, and in hundreds of other cases ... conceals a disparate application of claim construction law at the Federal Circuit,” Virentem said in its petition. “The disparity runs afoul of the very reason for the creation of that Court: to promote uniformity in the application of patent laws.”

Patent Invalidation

In the other petition, Wakefield asked the high court to consider questions including “whether The Federal Circuit can affirm, by Rule 36, invalidation of a software patent” when the patent’s prosecution history “discloses clear and convincing evidence to the contrary.”

Wakefield’s company, CoolTVNetwork.com, accused tech companies—including BlackBoard Inc., Meta Platforms Inc., and Snap Inc.—of infringing a patent for embedding clickable hyperlinks in videos.

Then-Delaware federal Judge Leonard P. Stark knocked out the patent early in the cases, finding its language was vague. The Federal Circuit then affirmed those rulings via Rule 36. The high court has yet to decide the certiorari petition, but attorneys noted the Supreme Court typically doesn’t hear pro se cases.

Both petitions raise an interesting question on their face, even if the court doesn’t answer it, said Temple University law professor Paul Gugliuzza.

“A Rule 36 order that just says, ‘It is ordered that this case is affirmed’ is arguably not an opinion,” he said. Especially read by Supreme Court justices with a textualist bent, “that’s maybe a winning argument.”

Gugliuzza noted the court can—and usually does—sidestep the whole issue by simply declining to review the petitions invoking Rule 36, as it previously did in 2015, 2018, and 2020.

Judicial Economy

The Supreme Court could be wary of limiting the use of Rule 36 for several reasons.

For one, summary affirmances have become a survival mechanism for the Federal Circuit after the creation of the PTAB funneled new patent validity decisions to the appeals court.

“That was the development that really pushed Rule 36 into the spotlight,” Gugliuzza said.

The court increasingly turned to no-opinion rulings to compensate for a higher volume of cases. According to 2017 data, the Federal Circuit made a Rule 36 ruling in about a third of the appeals of district court decisions that it handles, and in half of the cases involving appeals from the US Patent and Trademark Office.

Under such a high case volume, the practice can help Federal Circuit judges feel confident in the opinions they do issue, said Rachel Zimmerman Scobie, a partner at tech-focused law firm Merchant & Gould PC.

“To expect that to come together so quickly, I think, would be unworkable,” Scobie said of opinions on often-complex patent matters. “They’re ensuring that the opinions that they do put out are of a very high quality because they’re able to give themselves sufficient time to devote to crafting those opinions.”

A change to the Federal Rules of Appellate Procedure about 17 years ago also favors no-opinion rulings, Scobie said. After 2006, appellate courts no longer could forbid the citation of nonprecedential decisions, encouraging panels to spend extra time on both published and unpublished opinions.

“It makes that option of an unpublished opinion that maybe the judges don’t spend as much time” on less likely, Scobie said.

Transparency Concerns

Still, IP stakeholders see a downside to using Rule 36 because it denies them a look into what arguments the court relied on when disposing of their case.

This can hamper related cases in patent matters that are often narrowed through issue preclusion, which prevents an unsuccessful argument from being raised in a different venue.

Several factors may culminate in the decision at the district court level, but under a summary affirmance that doesn’t address the factors separately, “you have no ability to apply issue preclusion to the party that lost on appeal,” Folio Law Group’s Szpajda said.

The outcome is unsatisfying for plaintiffs because it can appear the court chose to “rubber stamp” a lower court while paying little attention to the arguments, he said. The all-or-nothing approach also makes some defendants feel that they’re left open to attack from the same patent plaintiffs because specific issues weren’t decided with certainty, he said.

Temple Law’s Gugliuzza said the use of Rule 36 can also cloud the Federal Circuit’s patterns overall. For example, it’s clear that precedential opinions are far more likely to reverse the lower court than the Federal Circuit’s overall body of decisions.

But when looking at the volume of no-opinion affirmances, it’s plain the court often leaves intact lower court and tribunal decisions as well, he said.

“The better critique of Rule 36 is that the court’s use of it can sometimes obscure what it’s actually doing and how it’s actually deciding cases,” Gugliuzza said.