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Top Patent Court Urged to Tackle More Full Bench Do-Overs

March 3, 2020, 11:01 AM

The Federal Circuit is facing new calls to hear cases as a full court to clarify the law on hot patent issues.

The U.S. Supreme Court and Congress have signaled that they aren’t going to resolve issues that have led to conflicting rulings from the U.S. Court of Appeals for the Federal Circuit, including what is patent-eligible and how courts should interpret patent terms. Appeals court rulings that differ depending on the particular three-judge panel spell uncertainty for patent practitioners, litigants, and industry players, court watchers say.

The court was created in 1982 as the sole patent appeals court precisely to provide certainty, former chief judge Paul Michel said.

“If the Federal Circuit defaults on its responsibility to provide predictability and clarity, it’s really serious because nobody else can provide it,” Michel said.

The court usually only takes one or two patent cases en banc each year, and took none last year.

But not everyone agrees that more full court reviews will lead to clearer law. Calling for more full court hearings assumes the judges will be able to reach some kind of compromise, Alex Moss, staff attorney at the Electronic Frontier Foundation in San Francisco and former Federal Circuit clerk, said. Highly fractured opinions may not be worth the huge drain on judicial resources that more en banc hearings would require, she said.

“The Supreme Court has said in patent law we don’t always want bright line rules—sometimes it’s more important to take more time and get it right,” Moss, who clerked for Judge Timothy B. Dyk, said.

Reasoned Reluctance

Practitioners point to conflicting Federal Circuit decisions in many important areas of patent law in the last decade, including patent eligibility, claims construction, the doctrine of equivalents, and time-bars for bringing patent office challenges.

The court has issued conflicting opinions about what counts as a “law of nature” ineligible for patenting. In cases such as Ariosa Diagnostics v. Sequenom and Cleveland Clinic Foundation v. True Health Diagnostics, panels held that diagnostic methods are ineligible. But panels have upheld patents on treatment methods in cases such as Vanda Pharmaceuticals v. West-Ward Pharmaceuticals and Natural Alternatives v. Creative Compounds. A Supreme Court ruling on natural laws doesn’t require that distinction, Judge Pauline Newman wrote in a dissent last year.

The Federal Circuit has also developed two sets of principles for claims construction, Michel says. One line of cases accords a “heavy presumption” that a term carries its ordinary meaning as understood by someone skilled in the art; the other takes a more “holistic” approach that allows the patent specification to limit a term’s scope, Michel said.

“For clients, it is difficult not knowing with more certainty how their patent disputes will be adjudicated, what the key issues will end up being, or even how long it’s going to take to come to some decision point in a case that will be conclusive,” Charanjit Brahma, a partner at Troutman Sanders LLP in San Francisco, said.

Attorneys need more guidance they can use to advise their clients confidently, he said.

The Federal Circuit’s exclusive patent jurisdiction means there are never splits with the regional courts of appeal, which can get the attention of the Supreme Court.

The court has been reluctant to go en banc even when one panel differs with another on an issue, said Ryan Vacca, who teaches intellectual property at the University of New Hampshire School of Law. Vacca has pushed for the Federal Circuit to sit en banc more frequently.

The court has gotten tired of the Supreme Court undoing its precedents in patent law, Vacca said. And the court’s caseload has greatly increased since the America Invents Act of 2011 created new administrative patent reviews that are appealable to the Federal Circuit, he said.

The influx of complicated patent cases has raised the average time from docketing to disposition from under 10 months in 2010 to 15 months in 2019, according to court data. An en banc rehearing can mean 40 to 50 additional briefs for the judges and their clerks to review.

There are also collegiality concerns. Some judges think full court reviews create friction and strain interpersonal relationships, Michel said.

Even if a full court decision isn’t entirely successful at clarifying the law, the process can be an important signal to the Supreme Court, Vacca said. It is more likely to review a case that 12 smart people can’t agree on, he said.

Getting to Yes

A majority of the 12 active judges on the court must vote in favor for a case to be heard en banc. If the original three-judge panel was unanimous, those judges are unlikely to vote for a do-over. That leaves nine judges from whom to get seven votes for a full court hearing.

Michel said some judges may vote against en banc review in deference to their colleagues on the panel. Getting to seven votes can be “almost impossible,” he said.

The court accepts amicus briefs to help it decide whether an issue warrants a full court review.

Michel has filed two briefs supporting review recently: one in a case about evidentiary standards, and another in an eligibility case.

“I have no economic or other interest in the outcome,” Michel said. “I really don’t care what the court does as long as it goes en banc to address the problems.”

Getting any full circuit court to hear a case is about as difficult as getting Supreme Court review; often less than one percent get heard, Vacca said.

Still, everyone seems to ask for it.

If clients aren’t satisfied with a panel decision, they may want to throw the Hail Mary and seek en banc in hopes of getting another shot, Laura Lydigsen of Brinks Gilson & Lione in Chicago, another former Federal Circuit clerk, said.

Even the delay an en banc petition creates can be a victory for companies if they can get an injunction or damage ruling put off by a few months, Lydigsen, who clerked for Federal Circuit Judge Alvin A. Schall, said.

Reality Check

But more full court rehearings may not be a cure-all, Moss said.

“Unfortunately, there are more recently examples of highly fractured en banc decisions than clarifying ones in controversial patent cases raising issues that most need clarity,” she said.

Moss cited the 2013 en banc decision in CLS Bank International v. Alice Corp. Pty. Ltd., where the court issued six opinions disagreeing about whether the computer system claims at issue were patent-eligible.

En banc rehearing takes the judges and their clerks away from other cases, and may just crystallize the judges’ disagreement, she said.

Moss also pushed back against the idea that patent law should be rigid.

“Part of the idea of the common law is you don’t necessarily get stability by writing out the law,” she said. “You get stability by building up this record of cases.”

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editors responsible for this story: Roger Yu at ryu@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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