Now that the new year has started, we're seeing an uptick in precedential opinions. This week we decided to turn back to patent appeals, taking a look at IPRs and Article III—always a fun topic. Below we provide our usual weekly statistics and our case of the week—our highly subjective selection based on whatever case piqued our interest.
Precedential opinions: 4
Non-precedential opinions: 16
Rule 36: 6
Longest pending case from argument: James-Cornelius v. HHS, No. 20-1969 (127 days)
Shortest pending case from argument (non-Rule 36): SIMO Holdings Inc. v. Hong Kong uCloudlink Network, No. 19-2411 (60 days)
Case of the week: ABS Global, Inc. v. Cytonome/ST, LLC, No. 19-2051
Panel: Chief Judge Prost and Judges Moore and Stoll, with Judge Stoll writing the opinion and Chief Judge Prost dissenting in part
You should read this case if: you want to read another decision on Article III standing and mootness in IPR appeals
What happens to an IPR appeal when the patent owner loses on infringement in the district court and says it won't appeal? The Federal Circuit answered that question in ABS. And for those who don't want to read further, here's the answer: the appeal, at least in this case, became moot. But there's an interesting back-and-forth about vacatur at the end, so keep reading.
IP litigators know this story well. Patent owner sues accused infringer. Accused infringer then challenges some of patent owner's asserted patent claims in an IPR. The PTAB invalidates some claims, but it also finds that accused infringer failed to prove other claims were not unpatentable. So accused infringer decides to appeal.
Of course, here's where the story takes a turn and gets a little interesting. While the IPR was humming along, the district court granted summary judgment that the patent owner failed to prove infringement on the claims at issue in the IPR. And when the patent owner filed its response brief in the IPR appeal, it included an affidavit from its counsel stating that the patent owner "has elected not to pursue an appeal of the district court's finding of non-infringement ... and hereby disclaims such an appeal." Having made that declaration, the patent owner argued that the formerly accused infringer lacked Article III standing to appeal the IPR final decision. In turn, the accused infringer argued that the issue wasn't one of standing, but instead went to mootness. As to mootness, the accused infringer contended that its IPR appeal wasn't moot.
So what did the Federal Circuit do? It agreed with the accused infringer that this issue was one of mootness, not standing. But that's pretty much where the Court's agreement with the accused infringer ended. The Federal Circuit looked to the Supreme Court's burden-shifting framework in Already v. Nike, 556 U.S. 85 (2013). First, the Federal Circuit held that the party asserting mootness (here, the patent owner) due to voluntary cessation bears the formidable burden of showing that it will not assert the patent claims against the accused infringer. The Court held that the patent owner met that burden, because its disavowal barred future infringement actions based on the same patent claims against the same or essentially the same accused infringer's products. Second, the Court held that the burden shifted to the other party (the accused infringer) to demonstrate any evidence of an injury sufficient to support an ongoing case or controversy. The accused infringer failed to meet that burden. If anything, its statements all indicated that it didn't believe it would infringe the patent in the future and that it would have strong preclusion arguments if the patent owner reasserted the claims again. (Although one would imagine that the accused infringer had little incentive to argue that its products in development were likely to infringe, given that it had won non-infringement in the district court action.)
The Court also rejected the accused infringer's argument that there was a patent law exception to mootness under Fort James v. Solo Cup, 412 F.3d 1340 (Fed. Cir. 2005). The accused infringer argued that a patent owner who strategically waits until after the resolution of its claim for patent infringement to offer a covenant not to sue (and not to appeal) does not moot a challenge to the patent's validity. While the several-page discussion is interesting and definitely worth a read, for our purposes it's probably enough to say that the Court rejected any patent-specific exception to mootness.
Finally, the Court refused to vacate the challenged portions of the PTAB's decision. The Court faulted the accused infringer for not raising vacatur until oral argument. On this last point, Chief Judge Prost dissented. She noted that "[t]ime and time again the Supreme Court has explained that vacatur is in order when the prevailing party below unilaterally moots an appeal." Citing the Supreme Court's Munsingwear line of cases, she explained it "is only fair" to vacate. She noted that this "appeal was not mooted by mere happenstance but by the unilateral act of an adversary to cement its victories below." The mere dismissal deprives the accused infringer of appellate review through no fault of its own, while vacatur clears the path for future relitigation of the appealed determinations. And Chief Judge Prost excused the delay in the accused infringer's request for vacatur. She noted that the majority's forfeiture ruling "ignores that [the patent owner's] theory was a moving target throughout this appeal. [The patent owner's] response brief argued that [the accused infringer] lacked 'standing,' which does not trigger the Munsingwear analysis." And while the majority faulted the accused infringer for not requesting vacatur in its reply, the patent owner "had not yet even argued the case was moot."
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved