April 2, 2007

The Supreme Court’s Renewed Interest in IP

Ken Bass

Who is this guy?

• Clerk for Justice Hugo Black (1969 Term)• Private Practice focusing on appellate cases

since 1970• Joined SKGF in 2000 • Adjunct Professor of Appellate Practice at

Georgetown• Past President American Academy of Appellate

Lawyers• Involved in Supreme Court Patent cases• Co-counsel in KSR v. Teleflex

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Looking Back at History

• The Supreme Court’s View of IP law in the early 1970’s– A technical, fairly arcane field– A subject of “lesser importance”– Judicial self-awareness of limitations

• The lack of regional consistency• The “National Court of Appeal”

movement

The Birth of the Federal Circuit

• The 1975 Conference on Appellate Justice

• The “National Court of Appeals”proposal meets resistance

• The focus shifts to a “specialized”nationwide court for patent cases

• The birth of the CAFC in 1982

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The Supreme Court’s Initial Reaction

• Wait and See

• IP issues remained of secondary

public importance

• The Court’s membership had not

changed all that much

• The “Percolation” Policy

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The Picture Begins to Change

• Markman v. Westlaw Instruments– April,1996

– 517 U.S. 370

– CAFC decision• Judges, not juries, decide issues of claim

construction

– Supreme Court decision• Agreed!

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An “Outlier” Contributes to Change

• Nelson v. Adams USA– April, 2000– 529 U.S. 460 – CAFC decision

• Attorney’s fees awarded against individual who in fact controlled the defendant corporation and was added as a party after trial

– Supreme Court decision (unanimous)• Improper to sanction someone not a party

at the trial and thus no sanctions can be imposed

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The Pace of Change Quickens

• Festo v. Shoketsu– May, 2002

– 535 U.S. 722

– The CAFC decision• Any amendment forecloses DOE

– The Supreme Court decision (unanimous)

• Flexibility restored

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The Pace of Change Quickens (cont.)

• Holmes v. Vornado– June, 2002– 535 U.S. 826 – The CAFC decision

• Per Curiam – the CAFC has appellate jurisdiction over patent counterclaims based on long-standing CAFC precedent

– The Supreme Court decision (unanimous)

• No you don’t!

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The Growing “Tension”

• eBay v. MercExchange– May, 2006– 126 S. Ct. 1837– The CAFC decision

• Final injunctions are almost automatic once there is a finding of infringement and validity

– The Supreme Court decision• No presumption of issuance, the same

rules apply as in all civil litigation• Two different thumbs on the scale

– Justice Kennedy– The Chief Justice

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The Growing Tension (cont.)

• MedImmune v. Genentech– January, 2007– 127 S. Ct. 764– The CAFC decision

• No Article III standing if a licensee in good standing contests patent validity

– The Supreme Court decision• There is an Article III case and

controversy (8-1 decision)

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• KSR v. Teleflex– ???? 2007– The CAFC decision

• Applied the well-established TSM test for determining obviousness as a first hurdle

– The arguments at the Supreme Court• Wide hostility to an absolute, first hurdle

approach

– What’s likely to emerge?

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What Does it All Mean?

• The Supreme Court has become engaged – once again – in IP issues

• The Supreme Court is not “happy” with the CAFC’s handling of patent issues

• The Supreme Court dislikes “bright-line”rules

• The Supreme Court avoids giving clear guidance on how patent cases should be decided

• The Supreme Court recognizes the central importance of IP in today’s “flat world” economy