Supreme Court Analytics on the Past Term
Professor Edward Lee, IIT Chicago-Kent College of Law
Professor David Schwartz, IIT Chicago-Kent College of Law
Small sample! 6 patent cases from Fed. Cir., 5 reversed and 1 affirmed; 2 reversals in © cases; 1 reversal/1 affirmance in Lanham Act cases. Overall 73% reversal of all cases incl. non-IP. Fed. Cir. may be special case b/c circuit splits aren’t an issue so they may be more likely to take cases they’re going to reverse. Alice was affirmed, but it was of a 6-6 ruling that upheld the district court. And when Lanham Act case was affirmed, the Court rejected the test used by the circuit court.
All 6 patent cases and both Lanham Act cases were unanimous; both © cases were 6-3. Overall, Court was 66% unanimous including non-IP. Voting alignments: Ginsburg-Sotomayor-Kagan were 100% in majority and together; other axes were Roberts-Kennedy-Breyer and Scalia-Thomas-Alito. SG participation: SG on winning side 7 times, not in Pom Wonderful. Except in Alice, respondent received more questions in oral argument (or the same number); losing side always got more questions.
Rise in IP cases over last few years. Bounces around over last 50 years, but in last decade there’s a relatively large increase from 2-3 year to high water mark of 10 and 6-7 a few years in a row. Growth especially in patent cases.
Schwartz: Patent law is more in the news, possibly. Justices think the Fed. Cir. is getting it wrong. Patent bar is more active in persuading Court that patents matter—cf. Kappos’s statement about the importance of IP to the economy.
Preview of the Upcoming Term: Cert. petitions granted & to watch, Supreme Court IP practice
Hana Financial, Inc. v. Hana Bank (Whether the court or the jury determines if use of an older mark may be tacked to a newer one.)
B&B Hardware, Inc. v. Hargis Industries, Inc. (Whether the Trademark Trial and Appeal Board's finding of a likelihood of confusion precludes respondent from relitigating that issue in infringement litigation, and, if not, what deference should the trial court give to the TTAB finding.)
Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. (Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires—and as the panel explicitly did in this case—or only for clear error, as Federal Rule of Civil Procedure 52(a) requires.)
Moderator: Professor Christopher Schmidt, Director, Institute on the Supreme Court of the United States (ISCOTUS), IIT Chicago-Kent College of Law
Panelists: Thomas Saunders, Counsel to POM Wonderful, Partner, WilmerHale LLP: Hana, TM tacking. Priority of use is very important. Shouldn’t sacrifice rights from small adjustments to TM over time. Very strict doctrine—some changes lead to lost ability to tack rights to prior mark. Two marks should be “legal equivalents” for tacking purposes. Question: who makes the determination, the judge or the jury? 9th Cir. says circuits take different approaches to whether confusion is an issue of law or fact; we think the same sort of issues come into play w/tacking so we say it’s an issue of fact. Watch for: (1) Unlike IP cases without a split, this has a classic split and is harder to predict. (2) Because of the likely confusion overlap, there’s a question of whether the back door issue of this case is how likely confusion should be treated. The way the case is being argued tends to delink those standards. Emphasis on the particular aspects of tacking that might distinguish it. (RT: But the Court in IP cases often goes beyond what the parties argued, as occurred in Wal-Mart, for example.)
B&B v. Hargis: TTAB deference. Prevailing party in TTAB says you’ve had your chance to litigate so we win likely confusion if you don’t stop use. 8th Circuit says no. One argument: if you give deference to another circuit whose confusion test differs somewhat, why wouldn’t you defer to the TTAB even if its confusion test differs somewhat as well? So again, SCt may take up the broader issue of what the likely confusion standard is—whether all the circuits’ tests are essentially directed to the same thing even if they differ in wording.
Professor Peter Menell, University of California Berkeley School of Law: Teva v. Sandoz: very important case about case management. Markman déjà vu. Fed. Cir. held to the idea that it was a question of law, though SCt called it “mongrel,” and treated it as subject to de novo review. This has been very controversial in the Fed. Cir. Dct judges claim vehemently that this usurps their power/ability to put together a record and learn the science and tech. Resulted in very high reversal rate, at least initially; come down quite a bit, but not because the Fed. Cir. is now finding the dct gets the right answer but is rather losing interest. Fed. Cir. is reviewing cases with mixed questions w/o much of a record, because dcts fear writing anything down. A black box. SCt will answer whether this is a Q of law. Do dcts have a special role in finding factual Qs? Dcts often don’t have special insight into what PHOSITA was like at the time of prosecution.
Strongest argument for affirmance: a lot of big tech companies don’t trust district judges and want second bite at apple. He thinks that there should be a reversal but there’s a political element. Comes down to whether SCt thinks EDTex or Fed. Cir. is the more renegade jurisdiction. He thinks: ultimate question is mixed question, and Fed. Cir. can always review that—if dct diverges from prosecution history, for example. But subsidiary questions like what a skilled worker would know are issues of fact. Issues are often not technical in a scientific sense but in a patent drafting sense, and the Fed. Cir. and SCt haven’t confronted that. If reversed, dramatic effects on claim construction procedure: leeway to do evidentiary hearings and build a record.
Domenic Perella, Counsel to Highmark Inc.; Partner, Hogan Lovells LLP: Layman’s perspective on Teva. Meaning of a document = generally a question of law. If that’s not actually what goes on for people on the ground construing a patent, that’s important to educate the Court on, and he thought the topside briefs did a good job—what happened below was not legal interpretation but gathering of facts.
Mark Perry, Counsel to CLS Bank International, Partner, Gibson Dunn LLP: SCt has shown interest in nuts and bolts of federal procedure/practice, and all these cases are about proper allocation of authority of stakeholders in IP: jury/court, agency/court, dct/appellate court. Past Term: statute of limitations, discovery, tolling—Court has a renewed interest in these issues.
Jameson Jones, Counsel to Static Control Components, Partner, Bartlit Beck LLP: Ultimately Teva may not give a lot of guidance; it could say that the facts are very narrow—could be limited to “is molecular weight calculable in a number of different ways?” How broadly you go with inferences from facts as legal ultimately will determine importance of case.
Menell: a lot of Markman cases are about ordinary terms interpreted in the context of the claim; scientists may read differently than we do, whereas they often agree on the meaning of exotic terms. It may be true that statutory/contract interpretations rarely involve that kind of dispute over meaning of terms, but patents do.
Constantine Trela, Jr., Counsel to Alice Corp.; Partner, Sidley Austin LLP: Meaning of a term to a practitioner at the time is a legal issue b/c it’s the ultimate issue in the case. If so, Fed. Cir.’s legal sails may not be much trimmed.
Menell: Ultimate Q is how you take what people think and nest it w/in the patent claim and specification. That’s where you get the room for Fed. Cir. to intervene. Battle of experts is something dcts deal with all the time.
Q: why so many IP cases?
Menell: Court engaging in gap-filling exercises. If you look at reform proposals from 10 years ago, the AIA only dealt with ½ the issues; the others were dealt with by the SCt or the Fed. Cir. SCt had ignored patents but has now engaged; feel a responsibility to this area of the law. The beatings will continue until people behave/until the sense that the patent system is out of control dissipates. Patent office has really cut back in the last year; there’s still enough mischief out there to see more patent cases. Harder to see systematic source of cases for © and TM.
Perella: surges occur in many kinds of SCt cases—criminal, etc. Then the ripples dissipate. Similar here.
Perry: disagrees. We’re watching a transformation of the economy into information-based, tech-based and the stakes are so high that an area of the law that used to be the province of subject matter experts in small regional firms is completely different now. Multibillion-dollar cases being litigated w/huge downstream consequences. Congress has written into law a guarantee of litigation almost impossible to settle as part of Hatch-Waxman, so now it’s part of the business model. Cellphones: at each other hammer and tongs. So much economic incentive to sue.
Saunders: you get lots of reversals of the Fed. Cir. but with a vague standard, which puts authority back into the hands of the Fed. Cir. which has to interpret the standard in the average case.