6 ms·

The Supreme Court is struggling to rein in America's rogue patent court

60 points by dctoedt 12y ago

SeanDav 12y ago
The USA seems to have the most incredibly lousy "justice" system. Laws are made by lobbyists and enforcement of those laws, sometimes involving judgments of billions of dollars seem to rest on some good ol' boys in some dingy Texas courtroom. Surely it can't be as bad as it seems to this outsider - can anyone point to a good guide on how this all works?
- dctoedt 12y ago
  > Laws are made by lobbyists and enforcement of those laws, sometimes involving judgments of billions of dollars seem to rest on some good ol' boys in some dingy Texas courtroom. It's not nearly as bad as you make it sound, but there's certainly a kernel of truth to it -- not just in patent law, but in law generally. For example, look at Tesla Motors having to contend with state laws protecting car dealers, and Uber and Lyft with taxicab laws, and AirBnB with hotel laws, and craft brewers with alcohol-distribution laws. All those laws have at least some "rational basis," but it's no secret who pushed to get them enacted and who pushes to keep them in force. In law school, I had a hard time getting my mind around that brute fact: Power matters, even in the legal system; no matter where you go, people push to get the government to (i) help them do what they like and (ii) stop others from doing what they (the pushers) don't like. I tell my students not to be disillusioned or discouraged about that, but to accept it for what it is; plan around it; and get on with their business. [EDIT: I agree with the sibling commenters who say that in this regard the U.S. is way better than a lot of places.]
- jnbiche 12y ago
  By far the worst part of our legal system is the massive of proliferation of laws over the past few decades that govern every single aspect of our lives -- by far more laws that any one person can understand and remember. The result is that some of the most honest, ethical members of our society are being charged with felony offenses for "crimes" that 10 years ago might have resulted in an oral reprimand from a boss at work.
- rayiner 12y ago
  The U.S. has a tradition of litigation, which forces all these issues into the public. Do you think there's less influence-peddling in say France or Italy? In places where the decision-makers can't get sued over every little action, you don't even need to have a lobbyist make a law. Take something like bribing officials in developing countries to get contracts. European companies are far more likely to engage in such behavior than American ones. What do you think that says about their behavior at home?
  - WildUtah 12y ago
    "Take something like bribing officials in developing countries to get contracts. European companies are far more likely to engage in such behavior than American ones." It's legal for European companies to bribe foreign governments to get contracts. The Europeans don't consider their laws to apply outside their borders, so their companies can comply with local law. The USA has the Foreign Corrupt Practices Act that punishes US citizens or companies with criminal penalties on return to the USA for ordinary business practices in foreign lands. An ambition to clean up foreign corruption keeps US companies out of some countries.
    - rayiner 12y ago
      The fact that it's legal doesn't mean it's not morally objectionable. You can argue that not the choice not to make it illegal is a jurisdictional one, but that doesn't change the fact that European companies engage in the practice when they could choose not to. I think that says a lot about European attitudes towards corruption versus American ones.
    - mordero 12y ago
      The U.K. also has the UK Bribery Act which is appears to be more expansive than the Foreign Corrupt Practices Act (the U.S. counter-part). Like the FCPA, it applies to acts globally for companies with part of their business within the U.K..
- bane 12y ago
  It's a very messy system, no doubt. It sometimes works, sometimes doesn't. But it's remarkably public, and there's usually a clear challenge path. I'll put it this way, if I was suspected of a crime, I'd rather be tried in the U.S. system than just about anywhere else.
  - angersock 12y ago
    I'd rather not--consider how few cases make it to trial. There is a massive amount of douchebaggery that goes on to keep you from ending up in court, and at that point, they'll nail you to the wall for being uppity. At least, that seems to be the consensus these days.
    - deleted 12y ago
      [deleted]
    - bane 12y ago
      Plea bargaining is more like a gambling buy out. Plea "guilty" and we'll guarantee you a lighter sentence, plea "not guilty" and be prepared for a long and expensive trial, but you might get out of it. Actually, the trial judges in the U.S. have a pretty good reputation as far as fairness and incorruptibility (sure it happens, but it's not really common). It's better than say Italy, which is considered pretty suspect or Japan, where you know the conviction rate is like 90%.
- GregBuchholz 12y ago
  Here's one historical explanation of common law that might provide some insight: http://faculty.msb.edu/hasnasj/GTWebSite/nyufinal.pdf http://faculty.msb.edu/hasnasj/GTWebSite/nyufinal.pdf ...and not directly applicable for this discussion, I also like "The Myth of the Rule of Law": http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm
crazy1van 12y ago
The Supreme Court's job is less about correcting bad laws than striking down unconstitutional laws. Many terrible laws can be totally constitutional. The best way to fix a bad law is to replace it with a better law.
- binarybits 12y ago
  I'd say that the Supreme Court isn't so much correcting bad laws as correcting bad Federal Circuit interpretations of the law.
- ubernostrum 12y ago
  The Supreme Court's job is less about correcting bad laws than striking down unconstitutional laws. The judicial power in the United States extends to far more than "is this constitutional or not". It includes how to interpret and apply laws other than the Constitution, and the Supreme Court is the final stop for that process. Much of the debate about the Federal Circuit is that its interpretation and application of patent law departs radically from the Supreme Court's interpretation and application.
  - crazy1van 12y ago
    Oh I agree. But the best solution would be just to write better laws in the first place -- laws that can't be interpreted to produce the mess of a patent system that we have right now.
rayiner 12y ago
Many folks in the tech community lament, on one hand, that the U.S. legal system lacks people, particularly judges, with technical backgrounds, yet at the same time are intensely unhappy with the decisions of the Federal Circuit, which has a substantial number of judges with degrees in science and engineering. The only way I can reconcile these sentiments in my head is that when people say "judges don't understand technology" what they mean is "judges don't see technology the way I see technology."
- unreal37 12y ago
  I like the conclusion of the article, which is that concentrating all patent cases into a single court has given that one court too much power. That particular court seems heavily pro-business right now. The legal system works better when appeals court judges across the country make decisions, and the supreme court manages the splits. Not sure if it's true, but it sounds like it would avoid the concentration of decisions in one bad court. We see that in "West Texas" patent lawsuits as well. One rogue court can affect the nation.
  - dctoedt 12y ago
    > I like the conclusion of the article, which is that concentrating all patent cases into a single court has given that one court too much power. That particular court seems heavily pro-business right now. The legal system works better when appeals court judges across the country make decisions, and the supreme court manages the splits. The author of the original article probably doesn't remember the days before the Federal Circuit was created. Except for the then-rare cases when the Supreme Court intervened, judicial interpretations and applications of patent law could vary widely among the different courts. The validity of a patent often depended heavily on where the lawsuit was filed. Some courts were known as graveyards for otherwise-good patents. The federal district court in Minnesota was one such place, along with its appellate court the Eighth Circuit. That often led to patent owners and accused infringers racing to get their lawsuits filed first: A patent owner would try to sue the accused infringer first in a patent-friendly court, while the accused infringer would try to sue the patent owner first in, say Minnesota, asking for a "declaratory judgment" of invalidity and non-infringement. Under the procedural rules, usually whoever won the race to the courthouse got to keep their lawsuit alive, while the second-place filer would have their lawsuit dismissed. That in turn led to great uncertainty in the scope, validity, and value of a patent. Clients hate uncertainty. That's what led to the creation of the Federal Circuit: To try to bring more uniformity to the judicial interpretations and applications of patent law.
mjcohen 12y ago
The current Supreme Court is pretty rogue itself.
WildUtah 12y ago
OP Cites Judge Prost's dissent in Alice, "The majority has failed to follow the Supreme Court’s instructions—not just in its holding, but more importantly in its approach." But that was about the awful judgement of the three-judge panel. The ruling was reexamined by the whole CAFC and a 5-5 hung court could not decide weather to keep the ruling intact. Until the Supreme Court rules, that 5-5 non-decision is the final word. Any rational decision by the Supreme Court -- concluding that Alice's patent is invalid -- will not be considered a reversal. Also, it is considered unlikely the decision will reach the question of software patent eligibility. It will probably turn on abstract idea or business method eligibility. The patent monopolizes any use of computers in handling escrow accounts.
lostinpoetics 12y ago
while this isn't 100% inaccurate, one major headache are vague rulings from SCOTUS. the "reasonable certainty" test is a good example as well as their "abstract means abstract" pseudo-standards. while SCOTUS paints with a broad brush (rightfully so), many of their decisions are borderline meaningless other than to say to the CAFC "no you're wrong," which results in multiple rounds of these type of decisions (often on the same issues, or variations of them). that being said, the closeness of the CAFC to the bar is quite troubling and the e-mails that Rader sent to attorneys who argued in front of him were pretty embarrassing for all involved.
throwawaykf05 12y ago
Hah, I knew who the author was going to be before I even clicked the article. (Hi, binarybits!) Allow me to rebut some points: 1. If anything is to be blamed for the "explosion of patent litigation in recent years" (for certain values of "recent"), it's the following: a) the recent AIA "joinder" rules regarding how many defendants you can sue together, forcing trolls to file multiple suits where they would have filed one giant suit; and b) Genentech v Medimmune [1], which made it possible for potential licensees to file a pre-emptive "Declaratory Judgement" lawsuit if someone even approached them to discuss a license, which forced licensors to take sue-first-ask-questions-later attitude to avoid ending up in a defensive position. 2. As this patentlyo post [2] points out, the CAFC is not a single-minded group of judges. Most of the decisions that were reverted by the Supreme Court had CAFC judges with dissenting opinions. (As many as 5, as in the Limelight case.) And if you need data as opposed to examples, well, there's a study [3] finding that this court had the "second highest percentage of dissents amongst the circuits studied". Further, since Bilski, the SC has agreed with the CAFC 7 out of 13 times [2], which is not too bad. But there's more: the TFA uses this link [4] to show that the Supreme Court reversed the CAFC 10 times. Somehow TFA does not mention that there were a total of 40 cases since the CAFC was formed, which indicates that the Supreme Court affirmed the Federal Circuit decision 75% of the time! 3. The Supreme Court is not infallible, especially when it comes to patents, because I'm guessing it is a relatively esoteric part of law. This patentlyo post [5] points out one potential error in the Limelight case. The Prometheus decision was another example where they actually conflated patent eligibility with patentability [6, 7, 8]. This is such a basic mistake that even a non-lawyers like us can understand it. 4. Recent empirical evidence indicates that the Federal Circuit is no more "patent friendly" than district courts [9]. In fact, if you look at the chart 2, the rate of invalidating patents has been increasing steadily since 2000. (To be fair, they theorize it's because of Supreme Court pressure.) But if you look at chart 4, the CAFC has consistently been affirming the district courts findings of invalidity the vast majority of the time. So no only does the Supreme Court agree with the CAFC more often than not, so do the district courts. 1. http://en.wikipedia.org/wiki/MedImmune,_Inc._v._Genentech,_Inc http://en.wikipedia.org/wiki/MedImmune,_Inc._v._Genentech,_I.... 2. http://patentlyo.com/patent/2014/06/federal-circuit-really.html http://patentlyo.com/patent/2014/06/federal-circuit-really.h... 3. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1598419 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1598419 4. http://writtendescription.blogspot.com/p/patents-scotus.html http://writtendescription.blogspot.com/p/patents-scotus.html 5. http://patentlyo.com/patent/2014/06/judicial-hypothetical-limelight.html http://patentlyo.com/patent/2014/06/judicial-hypothetical-li... 6. http://inventivestep.net/2012/03/20/supreme-court-continues-to-confuse-patentable-subject-matter-with-patentability/ http://inventivestep.net/2012/03/20/supreme-court-continues-... 7. http://www.boulwarevaloir.com/article-Mayo-Promethus-pub.pdf http://www.boulwarevaloir.com/article-Mayo-Promethus-pub.pdf 8. http://www.ipwatchdog.com/2014/03/31/missed-opportunities-for-alice-software-at-the-supreme-court/id=48845/ http://www.ipwatchdog.com/2014/03/31/missed-opportunities-fo... 9. http://www.morganlewis.com/pubs/Smyth_USPatentInvalidity_Sept12.pdf http://www.morganlewis.com/pubs/Smyth_USPatentInvalidity_Sep...

60 points by dctoedt 12y ago

The USA seems to have the most incredibly lousy "justice" system. Laws are made by lobbyists and enforcement of those laws, sometimes involving judgments of billions of dollars seem to rest on some good ol' boys in some dingy Texas courtroom. Surely it can't be as bad as it seems to this outsider - can anyone point to a good guide on how this all works?

dctoedt 12y ago
> Laws are made by lobbyists and enforcement of those laws, sometimes involving judgments of billions of dollars seem to rest on some good ol' boys in some dingy Texas courtroom. It's not nearly as bad as you make it sound, but there's certainly a kernel of truth to it -- not just in patent law, but in law generally. For example, look at Tesla Motors having to contend with state laws protecting car dealers, and Uber and Lyft with taxicab laws, and AirBnB with hotel laws, and craft brewers with alcohol-distribution laws. All those laws have at least some "rational basis," but it's no secret who pushed to get them enacted and who pushes to keep them in force. In law school, I had a hard time getting my mind around that brute fact: Power matters, even in the legal system; no matter where you go, people push to get the government to (i) help them do what they like and (ii) stop others from doing what they (the pushers) don't like. I tell my students not to be disillusioned or discouraged about that, but to accept it for what it is; plan around it; and get on with their business. [EDIT: I agree with the sibling commenters who say that in this regard the U.S. is way better than a lot of places.]
jnbiche 12y ago
By far the worst part of our legal system is the massive of proliferation of laws over the past few decades that govern every single aspect of our lives -- by far more laws that any one person can understand and remember. The result is that some of the most honest, ethical members of our society are being charged with felony offenses for "crimes" that 10 years ago might have resulted in an oral reprimand from a boss at work.
rayiner 12y ago
The U.S. has a tradition of litigation, which forces all these issues into the public. Do you think there's less influence-peddling in say France or Italy? In places where the decision-makers can't get sued over every little action, you don't even need to have a lobbyist make a law. Take something like bribing officials in developing countries to get contracts. European companies are far more likely to engage in such behavior than American ones. What do you think that says about their behavior at home?
- WildUtah 12y ago
  "Take something like bribing officials in developing countries to get contracts. European companies are far more likely to engage in such behavior than American ones." It's legal for European companies to bribe foreign governments to get contracts. The Europeans don't consider their laws to apply outside their borders, so their companies can comply with local law. The USA has the Foreign Corrupt Practices Act that punishes US citizens or companies with criminal penalties on return to the USA for ordinary business practices in foreign lands. An ambition to clean up foreign corruption keeps US companies out of some countries.
  - rayiner 12y ago
    The fact that it's legal doesn't mean it's not morally objectionable. You can argue that not the choice not to make it illegal is a jurisdictional one, but that doesn't change the fact that European companies engage in the practice when they could choose not to. I think that says a lot about European attitudes towards corruption versus American ones.
  - mordero 12y ago
    The U.K. also has the UK Bribery Act which is appears to be more expansive than the Foreign Corrupt Practices Act (the U.S. counter-part). Like the FCPA, it applies to acts globally for companies with part of their business within the U.K..
bane 12y ago
It's a very messy system, no doubt. It sometimes works, sometimes doesn't. But it's remarkably public, and there's usually a clear challenge path. I'll put it this way, if I was suspected of a crime, I'd rather be tried in the U.S. system than just about anywhere else.
- angersock 12y ago
  I'd rather not--consider how few cases make it to trial. There is a massive amount of douchebaggery that goes on to keep you from ending up in court, and at that point, they'll nail you to the wall for being uppity. At least, that seems to be the consensus these days.
  - deleted 12y ago
    [deleted]
  - bane 12y ago
    Plea bargaining is more like a gambling buy out. Plea "guilty" and we'll guarantee you a lighter sentence, plea "not guilty" and be prepared for a long and expensive trial, but you might get out of it. Actually, the trial judges in the U.S. have a pretty good reputation as far as fairness and incorruptibility (sure it happens, but it's not really common). It's better than say Italy, which is considered pretty suspect or Japan, where you know the conviction rate is like 90%.
GregBuchholz 12y ago
Here's one historical explanation of common law that might provide some insight: http://faculty.msb.edu/hasnasj/GTWebSite/nyufinal.pdf http://faculty.msb.edu/hasnasj/GTWebSite/nyufinal.pdf ...and not directly applicable for this discussion, I also like "The Myth of the Rule of Law": http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm

crazy1van 12y ago

The Supreme Court's job is less about correcting bad laws than striking down unconstitutional laws. Many terrible laws can be totally constitutional. The best way to fix a bad law is to replace it with a better law.

binarybits 12y ago
I'd say that the Supreme Court isn't so much correcting bad laws as correcting bad Federal Circuit interpretations of the law.
ubernostrum 12y ago
The Supreme Court's job is less about correcting bad laws than striking down unconstitutional laws. The judicial power in the United States extends to far more than "is this constitutional or not". It includes how to interpret and apply laws other than the Constitution, and the Supreme Court is the final stop for that process. Much of the debate about the Federal Circuit is that its interpretation and application of patent law departs radically from the Supreme Court's interpretation and application.
- crazy1van 12y ago
  Oh I agree. But the best solution would be just to write better laws in the first place -- laws that can't be interpreted to produce the mess of a patent system that we have right now.

rayiner 12y ago

Many folks in the tech community lament, on one hand, that the U.S. legal system lacks people, particularly judges, with technical backgrounds, yet at the same time are intensely unhappy with the decisions of the Federal Circuit, which has a substantial number of judges with degrees in science and engineering. The only way I can reconcile these sentiments in my head is that when people say "judges don't understand technology" what they mean is "judges don't see technology the way I see technology."

unreal37 12y ago
I like the conclusion of the article, which is that concentrating all patent cases into a single court has given that one court too much power. That particular court seems heavily pro-business right now. The legal system works better when appeals court judges across the country make decisions, and the supreme court manages the splits. Not sure if it's true, but it sounds like it would avoid the concentration of decisions in one bad court. We see that in "West Texas" patent lawsuits as well. One rogue court can affect the nation.
- dctoedt 12y ago
  > I like the conclusion of the article, which is that concentrating all patent cases into a single court has given that one court too much power. That particular court seems heavily pro-business right now. The legal system works better when appeals court judges across the country make decisions, and the supreme court manages the splits. The author of the original article probably doesn't remember the days before the Federal Circuit was created. Except for the then-rare cases when the Supreme Court intervened, judicial interpretations and applications of patent law could vary widely among the different courts. The validity of a patent often depended heavily on where the lawsuit was filed. Some courts were known as graveyards for otherwise-good patents. The federal district court in Minnesota was one such place, along with its appellate court the Eighth Circuit. That often led to patent owners and accused infringers racing to get their lawsuits filed first: A patent owner would try to sue the accused infringer first in a patent-friendly court, while the accused infringer would try to sue the patent owner first in, say Minnesota, asking for a "declaratory judgment" of invalidity and non-infringement. Under the procedural rules, usually whoever won the race to the courthouse got to keep their lawsuit alive, while the second-place filer would have their lawsuit dismissed. That in turn led to great uncertainty in the scope, validity, and value of a patent. Clients hate uncertainty. That's what led to the creation of the Federal Circuit: To try to bring more uniformity to the judicial interpretations and applications of patent law.

mjcohen 12y ago

The current Supreme Court is pretty rogue itself.

WildUtah 12y ago

OP Cites Judge Prost's dissent in Alice, "The majority has failed to follow the Supreme Court’s instructions—not just in its holding, but more importantly in its approach." But that was about the awful judgement of the three-judge panel. The ruling was reexamined by the whole CAFC and a 5-5 hung court could not decide weather to keep the ruling intact. Until the Supreme Court rules, that 5-5 non-decision is the final word. Any rational decision by the Supreme Court -- concluding that Alice's patent is invalid -- will not be considered a reversal. Also, it is considered unlikely the decision will reach the question of software patent eligibility. It will probably turn on abstract idea or business method eligibility. The patent monopolizes any use of computers in handling escrow accounts.

lostinpoetics 12y ago

while this isn't 100% inaccurate, one major headache are vague rulings from SCOTUS. the "reasonable certainty" test is a good example as well as their "abstract means abstract" pseudo-standards. while SCOTUS paints with a broad brush (rightfully so), many of their decisions are borderline meaningless other than to say to the CAFC "no you're wrong," which results in multiple rounds of these type of decisions (often on the same issues, or variations of them). that being said, the closeness of the CAFC to the bar is quite troubling and the e-mails that Rader sent to attorneys who argued in front of him were pretty embarrassing for all involved.

throwawaykf05 12y ago

Hah, I knew who the author was going to be before I even clicked the article. (Hi, binarybits!) Allow me to rebut some points: 1. If anything is to be blamed for the "explosion of patent litigation in recent years" (for certain values of "recent"), it's the following: a) the recent AIA "joinder" rules regarding how many defendants you can sue together, forcing trolls to file multiple suits where they would have filed one giant suit; and b) Genentech v Medimmune [1], which made it possible for potential licensees to file a pre-emptive "Declaratory Judgement" lawsuit if someone even approached them to discuss a license, which forced licensors to take sue-first-ask-questions-later attitude to avoid ending up in a defensive position. 2. As this patentlyo post [2] points out, the CAFC is not a single-minded group of judges. Most of the decisions that were reverted by the Supreme Court had CAFC judges with dissenting opinions. (As many as 5, as in the Limelight case.) And if you need data as opposed to examples, well, there's a study [3] finding that this court had the "second highest percentage of dissents amongst the circuits studied". Further, since Bilski, the SC has agreed with the CAFC 7 out of 13 times [2], which is not too bad. But there's more: the TFA uses this link [4] to show that the Supreme Court reversed the CAFC 10 times. Somehow TFA does not mention that there were a total of 40 cases since the CAFC was formed, which indicates that the Supreme Court affirmed the Federal Circuit decision 75% of the time! 3. The Supreme Court is not infallible, especially when it comes to patents, because I'm guessing it is a relatively esoteric part of law. This patentlyo post [5] points out one potential error in the Limelight case. The Prometheus decision was another example where they actually conflated patent eligibility with patentability [6, 7, 8]. This is such a basic mistake that even a non-lawyers like us can understand it. 4. Recent empirical evidence indicates that the Federal Circuit is no more "patent friendly" than district courts [9]. In fact, if you look at the chart 2, the rate of invalidating patents has been increasing steadily since 2000. (To be fair, they theorize it's because of Supreme Court pressure.) But if you look at chart 4, the CAFC has consistently been affirming the district courts findings of invalidity the vast majority of the time. So no only does the Supreme Court agree with the CAFC more often than not, so do the district courts. 1. http://en.wikipedia.org/wiki/MedImmune,_Inc._v._Genentech,_Inc http://en.wikipedia.org/wiki/MedImmune,_Inc._v._Genentech,_I.... 2. http://patentlyo.com/patent/2014/06/federal-circuit-really.html http://patentlyo.com/patent/2014/06/federal-circuit-really.h... 3. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1598419 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1598419 4. http://writtendescription.blogspot.com/p/patents-scotus.html http://writtendescription.blogspot.com/p/patents-scotus.html 5. http://patentlyo.com/patent/2014/06/judicial-hypothetical-limelight.html http://patentlyo.com/patent/2014/06/judicial-hypothetical-li... 6. http://inventivestep.net/2012/03/20/supreme-court-continues-to-confuse-patentable-subject-matter-with-patentability/ http://inventivestep.net/2012/03/20/supreme-court-continues-... 7. http://www.boulwarevaloir.com/article-Mayo-Promethus-pub.pdf http://www.boulwarevaloir.com/article-Mayo-Promethus-pub.pdf 8. http://www.ipwatchdog.com/2014/03/31/missed-opportunities-for-alice-software-at-the-supreme-court/id=48845/ http://www.ipwatchdog.com/2014/03/31/missed-opportunities-fo... 9. http://www.morganlewis.com/pubs/Smyth_USPatentInvalidity_Sept12.pdf http://www.morganlewis.com/pubs/Smyth_USPatentInvalidity_Sep...