As the calendar flips to 2022, intellectual property litigators are wondering what the new year has in store.

We predict substantive and procedural uncertainty in two key areas. Substantively, there will be continued demands for clarity on Section 101 law, but no real clarity. Procedurally, recent U.S. Court of Appeals for the Federal Circuit mandamus decisions will cause patentees to reconsider their venue selections.

The only certainty this year is that hybrid work will continue, as litigants grow even more accustomed to remote work and new variants temper our return to physical offices.

No Real Clarity on Section 101

Walk into a room of sophisticated patent litigators, and talk will invariably turn to one thing: What is happening with patent eligibility law?

Some will advocate for higher standards for invalidating a patent under Section 101 of the Patent Act. Others will bemoan the U.S. Patent and Trademark Office's laxity in allowing patents on what one could do with pen and paper. But all will emphasize the need for greater clarity from both the Federal Circuit and the U.S. Supreme Court on these issues.

This, of course, raises the questions: Do we really need greater clarity, and will we get it next year? A review of Federal Circuit decisions over the past 12 months suggests that the answer to both questions is "no." The Federal Circuit is humming along with its application of Section 101 law, and the right fact pattern and the right Supreme Court case are necessary to change things considerably.

The Federal Circuit's Section 101 jurisprudence since last December has been a model of consistency. Of the 31 decisions, excluding Rule 36 affirmances, that the appellate court issued during that time frame, 29 held patents to be unpatentable, and two held them to be patentable. Those cases involved just one dissent, by U.S. Circuit Judge Pauline Newman, and one concurrence, by U.S. Circuit Judge Jimmie Reyna, meaning that the Federal Circuit agreed on patentability outcomes over 90% of the time.

There also were five reversals, meaning that the Federal Circuit agreed with the district courts or Patent Trial and Appeal Board judges over 80% of the time. If one includes Rule 36 affirmances, these rates would only be higher. In fact, the Federal Circuit's decisions were so mundane that it designated 21, or 68%, of them nonprecedential, higher than prior statistics might suggest.1

The types of cases appealed also reflected consistency, at least in the types of patents being challenged. All the patents reviewed in those 31 opinions involved computers in some way. This included the claims of two life sciences-related patent applications that the Federal Circuit deemed unpatentable.2

And despite early fears that the 2018 Federal Circuit decision Berkheimer v. HP Inc.3 sounded the death knell for early motions to dismiss due to lurking factual issues, 19 of the 20 decisions addressing district court rulings came from motions to dismiss under Federal Rules of Civil Procedure 12(b)(6) and 12(c).

The Supreme Court might, of course, mix things up by granting certiorari in American Axle & Manufacturing Inc. v. Neapco Holdings LLC, after the Solicitor General's Office finally submits its views.4 But that case involved a mechanical patent - a "method for manufacturing driveline propeller shafts" - that is quite a bit different from the type of patents that typically wend their way to the Federal Circuit.5

After the Supreme Court's trifecta of Bilski v. Kappos in 2010, Mayo Collaborative Services v. Prometheus Laboratories Inc. in 2012, and Alice Corp. v. CLS Bank International in 2014,6 one can only speculate on what additional clarity the high court might provide on Section 101.

Western District of Texas, Waco Division, Transfers

The Waco Division of the U.S. District Court for the Western District of Texas's reluctance to transfer cases made the venue a hot spot for patent cases. But that may change in light of the Federal Circuit's recent mandamus orders.7

The U.S. Court of Appeals for the Fifth Circuit provides an eight-factor framework to analyze motions to transfer for convenience under Title 28 of the U.S. Code, Section 1404.8 The Federal Circuit confirmed in In re: Quest Diagnostics Inc. that while none of the factors are of dispositive weight, the cost of attendance for willing witnesses is the most important factor in the transfer analysis.9

The Waco Division reiterated that it will grant transfer motions only if the movant meets its burden of showing that the transferee venue is clearly more convenient. In its analysis, the court previously emphasized Waco's speediness to trial after filing when considering the administrative difficulties flowing from the court congestion factor and placed less weight on party witnesses when considering the cost of attendance for willing witnesses factor.

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Footnotes

1. See, e.g., D. Bagatell, "Federal Circuit's 2017 Patent Decisions: A Statistical Analysis," Law360 (Jan. 5, 2018) (noting that 166 of 282 issued decisions in 2017 were non-precedential).

2. See In re Bd. of Trs. of Leland Stanford Junior Univ., 991 F.3d 1245, 1247 (Fed. Cir. 2021) (claim to "a. computerized method for inferring haplotype phase in a collection of unrelated individuals" held unpatentable); In re Bd. of Trs. of Leland Stanford Junior Univ., 989 F.3d 1367, 1247 (Fed. Cir. 2021) (claim to "a. method for resolving haplotype phase, comprising . . . storing the haplotype phase . . . using a computer system" held unpatentable).

3. 881 F.3d 1360, 1370 (Fed. Cir. 2018) ("Whether claims 4-7 perform well-understood, routine, and conventional activities to a skilled artisan is a genuine issue of material fact making summary judgment inappropriate with respect to these claims. . . . O.n this record, summary judgment was improper, given the fact questions created by the specification's disclosure.").

4. Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 967 F.3d 1285, 1289 (Fed. Cir. 2019).

5. Id.

6. Bilski v. Kappos, 561 U.S. 593 (2010); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012); Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208 (2014).

7. See, e.g., In re Samsung Elecs. Co., No. 2021-139, No-21-140; In re Uber Techs., Inc., No. 2021-150; In re Hulu, LLC, No. 2021-142; In re Dish Network L.L.C., No. 2021-182; In re Juniper, No. 2021-160; In re Quest Diagnostic, No. 2021-193; In re Altassian Corp. PLC, No. 2021-177.

8. See In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008); the factors are: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive; (5) the administrative difficulties flowing from court congestion; (6) the local interest in having localized interests decided at home; (7) the familiarity of the forum with the law that will govern the case; and (8) the avoidance of unnecessary problems of conflict of laws or in. the application of foreign law.

9. In re Quest Diagnostics Inc., No. 2021-193.

Originally published by Law360

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.

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