Tuesday, 10 May 2016

Patent rulings in the United States: don't forget the Federal Circuit

Last month, on the IAM Blog, Joff Wild posted a short note under the title "Three recent Federal Circuit decisions that will have an impact on US patent monetisation strategies" (here).  The cases -- chosen by the Chicago-based Global IP Law Group -- are individually not particularly exciting; nor are they, taken by themselves or in conjunction with each other -- likely to have a major impact on US patent monetisation strategies.  However, the point they make is an important one.  While US Supreme Court rulings deservedly receive a vast amount of close analysis and attention, they are by no means the only legal indicia that are capable of affecting patent monetisation practice.

Two points should be borne in mind when looking at the impact of US appellate rulings on what businesses plan to do with their patents.

For one thing, there are more Federal Circuit decisions on patents than there are Supreme Court rulings, and they reflect the thinking of judges that are closer to the pulse of intellectual property law and practice than the Supreme Court, which of necessity must be a generalist tribunal.

Secondly, Supreme Court decisions are very much public property in the sense that everyone is looking at them from way before the hearings, provoking a degree of analysis and discussion that either reaches a degree of consensus as to what the law means or which gives a strong indication in advance as to which alternative strategies any patent-intensive business (or its competitors) should be considering in the event of one of two or more predicted outcomes.

Federal Circuit decisions, in contrast, attract less attention and speculation, particularly from businesses and analysts based outside the US. This fact invites the suggestion that those who study them more closely are potentially in a position to benefit from an appreciation of their significance that does not instantly become common knowledge in the same way that Supreme Court rulings do.

For the record, the three cases picked out for consideration (and explained in greater detail on the IAM post) are as follows:
* Lexmark International Inc v Impression Products Inc (2016 WL 559042 (Fed Cir Feb 12, 2016) (En Banc)), which held that a US patent owner can restrict downstream trade in used and resale goods by lawfully and clearly communicating single-use/no-resale restrictions at the time of sale, while the sale or authorisation of sale of a product abroad did not exhaust the US patent rights in the product.

* Nuance Communications Inc v ABBYY USA Software House Inc (2016 WL 692497 (Fed Cir Feb 22, 2016)), holding that a US district court may properly enter final judgment as to patents that were part of the original complaint, but which were removed after a voluntary narrowing of the case where patentee did not expressly reserve its rights with respect to those patents.

* Blue Calypso v Groupon Inc (2016 WL 791107 (Fed Cir March 1, 2016)), which established that the Federal Circuit may review the Patent Trial and Appeal Board’s decision that a patent is an unpatentable covered business method (CBM).
Taken individually, it is difficult to see how any of these rulings will directly affect patent value. However, it is clear that each has the capability to influence two important drivers of patent exploitation strategy: how one formulates one's licensing and sale contracts and how one approaches patent litigation.  The IAM post is therefore a welcome reminder that businesses operate in an ever-changing legal environment and that, both cumulatively and individually, the evolving body of Federal Circuit case law is no less worthy of study than the seismic shifts at Supreme Court level.


  1. Court in the Act10 May 2016 at 09:26

    The linked IAM piece looks somewhat contrived, more like a disguised attempt at self-promotion. Still, your point is a fair one. But why just look at the Fed Circ? There are many Cts worldwide that make decisions with a big potential impact on monetization. Bundesgerichtshof, for example.

  2. Keeping an open mind10 May 2016 at 11:48

    I doubt US Federal Circuit rulings have any direct relevance to patent monetization in general terms, though they are bound to have an impact on an accused patent - especially if they make it worthless. Also, the adverse impact on a patent in a court decision may promote the market value of a competitor's patent that wasn;t involved in the same proceedings

  3. I read your tweet about how this post was read principally by US readers (presumably you know this from the Blogger visiting-time data) rather than European businesses, as well as @TangibleIP's suggestion that you write a comparable piece on EPO Oppositions, to compare and contrast the analytics.

    I'm not sure that a crude comparison would actually prove anything. The fact of the matter is that US readers are more interested in patent monetisation as a topic in its own right rather than as something that just has to be done when the occasion demands, and they are probably responding to the word 'monetisation' rather than wanting to know more about their own case law.