My January 2016 talk about 112 and 102b (BioSig v. Nautilus and Medicines v. Hospira)

On January 14, 2016 I had the good fortune to be invited to speak at the Bloomberg BNA Conference "Patent Litigation in the New Era," organized by my former student Brian Pandya and his partner Jim Wallace. I was asked to speak on two topics: (1) indefiniteness under 35 USC 112 after the Supreme Court's 2014 decision in BioSig v. Nautilus and (2) the 35 USC 102b issue in The Medicines Company v. Hospira.

The slides from my talk are now available at tinyurl.com/rjm-102b - shorthand for http://myunpublishedworks.com/DOCS/112and102b-Jan2016-Nautilus-and-Medicines-v-Hospira.pptx .

The 102(b) appeal in Medicines v. Hospira will soon be heard en banc by the Federal Circuit. Cross-appeals from the Delaware District Court's bench trial opinion were decided by a panel of the Federal Circuit in July, 2015. The panel determined, among other things, that Patent Owner (PO) Medicines had violated the on-buy bar, as I chose to call it in my talk. PO petitioned for rehearing en banc and its petition was granted on November 12, 2015. Accused Infringer (AI) Hospira was ordered to file the first brief because it was appellant on the 102b issue. After a joint request for extension, the deadline for that brief was January 11, 2016, three days before my talk. Medicines brief is due February 24. I believe that amicus briefs in support of neither party or Hospira were due January 18 and amicus briefs in support of Medicines are due March 2. Under the Order granting the petition for rehearing, amicus briefs "may be filed without consent of the parties and leave of court."

rev 1 20160425

Three (3) Ways the patent system promotes progress. Not 1. Not 2.

The patent system promotes progress in three ways.  At least three.  But certainly not one. And not two. They are: the carrot, the stick, and the "it's not all about you" factor: enriching the public domain.

Let me count the ways.

The first way patents promote progress is the one that comes to mind from the phrase "incentivizing the innovators" (see [n1] below).  The carrot of possible patent protection motivates people to come up with ideas, sometimes all on their own, sometimes because their knowledge and training convinces people with money to hire them to come up with ideas.  Then people (the same or different) spend some money on developing, commercializing, and marketing those ideas.  Obtaining a patent lets the people who own the patent exclude competition, albeit for a relatively short time (see [n2] below).  Those people may make more money and then they may decide to spend it on additional research and development.  Innovation happens.  Society benefits.

But that is not the end of the story about how the patent system promotes progress. We have to count past one to two and three.

Numbers two and three on the list of benefits are less obvious.  They also tend to be ignored by journalists, academics, judges, justices, and others who do not know all that much about the patent system.  In fact, this post was prompted by a talk I heard last May about patents as incentives to innovation. The talk was half over before the speaker mentioned the third benefit and ne never mentioned the second at all.

The second way patents promote progress is with a stick.  Other people's patents can stop you from doing what you want because of the threat of suit, or the owner's refusal to license you at a rate you can afford, or your refusal to deal with the owner because it is a fierce competitor or, what gets too much attention these days, a troll. But the stick of patent protection is more in the nature of a prod. You are always at liberty to come up with a better idea: in patent lingo, to "design around" the patent.  Patents, during their limited life, don't bar everything in the field, they only bar what is claimed. Alas, in at least the years since the 1982 creation of the Federal Circuit (the appeals court for patent cases), the Supreme Court has never used the phrase design around to describe one of the ways that patents "promote Progress in Useful Arts," the justification for patents given in the Constitution (Art. I, sec. 8, cl. 8). Why not? Everyone says "saying it does not make it so" (attribution unknown) but this is a case where

NOT saying it does not make it NOT so.

"Designing around" may lead to another patent because of that carrot, and then there will be another stick (prod) as well as benefit number three.

The third way patents promote progress is that they enrich the public domain, the public store of knowledge about how to do things.  In order to obtain a patent, the inventor must describe the invention so that other people can (in patent lingo:  are enabled to) make and use it.  "Enablement" has long been referred to as the quid pro quo for the patent "monopoly."  Anyone can read a patent and learn from it. That was true even before the internet. That rich store of free, accessible and relatively easy-to-search information is a huge benefit that we, the people, receive because we have a patent system. Yet the term public domain has been used only rarely by the Supreme Court in the last forty years in decisions about patent law, and then only to focus is on how a wrongly issued (invalid, overly broad, etc.) patent steals from the public domain. The only exception to that anti-patent bias is found in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 US 141, 151 (1989). Bonito Boats addressed a challenge not to a patent but to a state statute against copying boat hulls, and the opinion contains several references to the theft view of patents before acknowledging that:

"[T]he ultimate goal of the patent system is to bring new designs and technologies into the public domain through disclosure."

Yes.

I think the patent system -- and the statutes, the case law, the proposals for reform -- would be improved if people understood that it has more progress-promoting capability than just offering the promise of a time-limited monopoly.

NOTES

(n1)  Jim Alexander, a student in my IP Survey course in 2007, was the first person I heard use this phrase.  I believe it originated with Prof. Katherine E. White. See her 2006 law review article: Preserving the Patent Process to Incentivize Innovation in Global Economy, 2006 Syracuse Sci. & Tech. L. Rep. (2006).

(n2) It is true that patents give patent owners' some rights but there are limits.
           A.    A patent gives the owner the right to exclude but only for a limited time.  Patents have expiration dates.  Before the expiration date, the owner must pay maintenance fees.  Once the patent expires, or once the fee hasn't been paid, the patent owner has no right to exclude. The patent has risen into (see [n3] below) the public domain.
           B.  A patent is a right to exclude not a right to do. That's because there may exist a patent #1, which gives owner #1 a right to exclude what patent owner #2 does, even though owner #2 has a patent. During the time that patent #1 is in effect, owner #2 has no absolute right to practice nis own patent but ne can: (1) wait until patent #1 rises into the public domain; (2) design around patent #1 (and maybe obtain patent #3), or (3) hope that owner #1 won't do anything. If that hope is dashed, owner #2 can choose to (a) change its business; (b) fight; or (c) take a license. Depending on how much #1 and #2 hate each other (and how good patent #3, if there is one, is as an alternative), owner #1 and owner #2 may decide to cross-license or merge. More innovation may emerge from that transaction and often does.

(n3)  At a conference on digitization at the University of Michigan in 2006, President Mary Sue Coleman gave excellent opening remarks about copyright and education and libraries.  I felt obliged to comment, however, when she said something about works "falling into" the public domain.  I pointed out that we ought to say that they RISE into the public domain.  When a piece of intellectual property passes from private hands to the public domain, the change should be likened to going to Heaven, not the other place, or to standing up and being counted, not to collapsing and being buried.  (I was unable to attend the afternoon session at that conference, but I was told that some speakers had changed their slides where they mentioned the public domain, crossing out the word "falling" and putting in the word "rising.")  Yes.

Drafted, but not posted, in May of 2013.
Minor revisions and posting: April 2, 2014; rev 20140523

Advice to a Young Would-Be Patent Law Scholar - 01

A while ago a law student asked me to look over a draft law review article ne had written.  Nis draft was about 50 pages.  My comments were about 25 pages.  I liked ner very much or I wouldn't have bothered.  Ne was intelligent and eager to do things to the best of nis substantial ability.

More recently, ne asked me to look at another paper.  I wasn't able to spend another forty-odd hours writing comments, so I just sent ner these reminders:

1. Remember what a paragraph is, and remember to police yourself on your paragraphing, from the first draft on, in EVERY revision!

2. Remember to use words accurately.  (I write UWA in the margins of many a student exam, and think it regularly as I read novels and news articles.)  If you can't think of the right word, NEVER EVER write down something you know is not quite right.  Instead, ALWAYS write _____. That will remind you to find the right word before you are done.

3. Remember never to write anything you're not 100% sure of.  If you have any doubt, check it out! If you can't manage to wrestle the thing to the ground, either omit it, change what you say about it, or come up with a hedge.

4. Have an outline VISIBLE at the top of your paper, from the very first draft.  Read it every time you do a revision, and revise it every time you change a heading in your paper. (A good paper, by the way, should have at least one heading every two pages in standard format.  This makes it skimmable for the reader, and reminds the writer what nis purpose is.)   Keep the outline as
current as your thinking.

5. TALK FIRST, write second.  If you can't talk what you want to say, you will write it poorly.  You will not have thought it through.  If you can't think without writing (I sometimes have this problem), write until you think you know what you want to say. Do this in SMALL sections, not the whole paper.  Then TALK IT.  Then throw out what you wrote before you talked it out, and write what you talked.  (Stay tuned for more about the TALK METHOD in a future posting.)

6. The theory behind instructions 1 through 5 is that an article on patent law should be written with the same scrupulous honesty and thoroughness as a brief for a patent savvy judge in a lawsuit where opposing counsel has outstanding depth and breadth of experience in patent
law.  That is, imagine that your article will be read by a  lawyer who will find your every error and weakness,  one who has done prosecution, counseling, pre-trial, trial, and appellate work, and has an encyclopedic memory of  40 years of experience, as well as everything ne learned from nis mentors, and who, you can be sure, will use your errors and omissions to win nis case.

Too many people write articles as if the truth is not important.  As if a clear organization to the writing is something nobody would miss.   As if thinking thoroughly is not a requirement.   These authors think that it is enough to set forth an interesting new idea, no matter whether half-baked or based on misunderstanding.  They assume that nobody will jump down their throats if they make a mistake.  (And they know that there is little danger that student law review editors will know enough to recognize mistakes.)  These authors may have accurately gauged their readership.  Few people read law review articles word for word; most, whether other scholars, litigators or judges, word search for something specific and read no further.  But for hiring and promotion, someone may read from page one to the end and might just notice the poor quality work.

Unfortunately, too, many academic authors have not themselves had much training by top litigators or legal writers who demand the highest standards.  When a young scholar gives them a draft, they may try to catch the basic idea, but not otherwise give ner instructive comments. Often, their own law practice has been limited to a couple of years in a large firm. Working on research  memos and document production is not the best training for becoming an excellent writer.  Even a judicial clerkship may not be the best preparation, especially if the former clerk does not view scholarship as requiring the same high standards as judicial writing.  Law professors may also lack the time, if not the inclination, to train  young scholars to write right.  It is a time-consuming undertaking.

If, however, you learn to hold yourself to a high standard, you will soar to the top.  Your readers, whether practitioners or academics, will notice the difference between you and the rest of the pack.

Microsoft v i4i - Tables of Contents of ALL the Briefs

To get a quick handle on ALL the briefs in 10-290, Microsoft v. i4i, since the grant of certiorari, from Microsoft's Opening Merits Briefs to Microsoft's Reply Brief, and all the amicus briefs in between, please see my pdf compendium of all the coversheets and tables of contents of all the briefs. I put in bookmarks for each brief's coversheet, but if you don't want to open the whole pdf and just want to see a list of all the briefs, click here for a table of contents to the tables of contents.

For an alphabetical list of all the entities represented in briefs in support of Microsoft, see my 2/11/11 post.

The briefs in support of neither party came from

1. AIPLA
2. The DC Bar Association
3. IBM
4. Federation Internationale,  and
5. the owner of this very blog, Roberta J. Morris, Esq., Ph.D. (pdf, or TOC only.)

For a list (by brief) of all the entities represented in briefs in support of i4i, see i4i's court papers site.

Note: This post is an update of my 2/10/11 post, which only included Microsoft's opening briefs and the briefs in support of 

APPLICATION FOR PTO DIRECTOR

Soon the Obama administration will pick the next director of the United States Patent and Trademark Office. If I were in charge, I would want anyone who wished to be considered for this important position to fill out an application something like this.

Claim Construction and the Burden of Proof

In today's decision in Kinetic Concepts, Inc. v. Blue Sky Medical Group, Inc., (February 2, 2009, No. 2007-1340), Judges Prost and Bryson split with Dyk on the issue of construing the word "wound" in KCI's patents, a term whose meaning was disputed in connection with Blue Sky's obviousness arguments.

Neither the majority nor the dissent alluded to the burden of proof (BOP) on the issue which gave rise to the claim construction. Since I am currently working on an article about claim construction, and how the burden of proof is an excellent and underused tool for resolving close questions as to the meaning of claim language, I responded to a report on Kinetic Concepts by Hal Wegner in his excellent newsletter as follows:

Dear Hal,

You write:

> Indeed, it is difficult without an intensive study
> of the record to determine whether the majority
> or the dissent has properly construed the claims
> under Federal Circuit precedent: Indeed, it is
> possible that both constructions are acceptable.

I'm 100% with you: I have long (LONG! since Cybor in 1996 or before!) believed that criticizing the Federal Circuit for reversals and splits on claim construction failed to take into account that, if the parties appeal a case to the Federal Circuit, the chances are VERY high that the question has no clear answer. If someone had a strong winning argument, the case would settle. Patent litigation is very expensive, in time and money and energy, and prolonging it only keeps real parties from their real business. Reasonably prudent people know that. (Patent holding companies change the equation, but that's a subject for another day.)

But then you conclude:

> Kinetic Concepts thus once again points to the
> continued imperative of statutory claim
> construction reform.

And that's where you lose me. What nobody (and absolutely not the court) seems to realize is that BURDENS OF PROOF (BOPs) help decide these questions. Of course, to take into consideration the BOP, the court has to understand enough OUTSIDE the patent and its file history and cited prior art to know whether the reason that the parties dispute the meaning of words in a claim is for INFRINGEMENT or VALIDITY. But armed with that understanding, the law is in fact clear on how to handle 50-50 cases. If infringement is the ultimate issue for which claim construction is being argued, then the accused infringer should win: the patent owner has the burden of proof on infringement. If validity is the ultimate issue, then the patent owner should win.

In _Kinetic Concepts_ my fast reading tells me that the disputed construction of the word "wound" related to obviousness. ["Defendants argue that the district court erred by vacating its construction of "wound" when the term's meaning was *critical to the obviousness inquiry*" (page *9, emphasis mine).] That means the patent owner should win. Since it had won below, the federal circuit majority (Prost and Bryson) was correct and the dissent (Dyk) was wrong.

***

If the trial and appellate courts would remember to consider the burden of proof (and higher quantum of proof on validity) on the issue for which claim construction is required, they could deal with 50-50 cases more easily, and I submit, more fairly and predictably. Maybe statutory changes would not be
needed.

Thanks as always for your newsletter.
RJM

A quick review of articles, court decisions and the web suggests that neither lawyers nor judges have taken advantage of the assistance that BURDENS OF PROOF provide in resolving close questions of claim constructions. Factoring in the burden of proof helps resolve motions for summary judgment (cf. Celotex Corp. v. Cattrett, 477 US 317, 322 (1986)) and preliminary injunctions, so why not claim construction?

I am working on a much longer footnoted piece on this subject, but meanwhile, when the intrinsic evidence (the patent and its file history and the cited prior art) and the extrinsic evidence -- uncited art, dictionaries, etc. -- do not make one side's interpretation of words in the claim of a patent any more plausible than the other side's interpretation, the burden of proof on the issue to which the claim construction relates provides a reasonable method of decision.

My Amicus Brief in Bilski

Here is a link to the pdf version of my amicus brief in In re Bilski.

The Missing V-Word in KSR v. Teleflex : VACATED

Everyone is writing about the Supreme Court's decision in KSR v. Teleflex. I have already written a little about it, in anticipation of the decision (IPToday, April 2007, pp. 29-31), and I am not going to jump in again to decide whether the sky has fallen now, or not. (My first entry into blogdom wondered about the falling sky after MedImmune, so perhaps that will be a theme of myunpublishedworks, the blog.)

No, what I want to mention is that what the Federal Circuit did in Teleflex was to VACATE the summary judgment of obviousness, and remand for FINDINGS. It absolutely did NOT reverse. It absolutely did NOT find the patent in suit to be nonobvious.

Who is misleading us?

Among others, the Supreme Court itself. The word "vacat!" is absent entirely from the opinion. In fact, the appeals court decision is affirmatively characterized as a REVERSAL, rather than a VACATING. (See REFERENCES below for supporting quotations.)

I am pretty sure I learned in law school that VACATING was not the same as REVERSING, and I am pretty sure that when I have practiced law, everyone acted like those two words were different, at least for the parties to the suit. But maybe everyone on the Court is so far removed from either law school or practice that they see things differently?

Who is helping keep us misled?

The BNA PTCJ, among others. Its HIGHLIGHTS summary of the cases says: "Reversing and remanding a ruling of patent invalidity, the high court ...." (emphasis mine) No, there was no ruling from the Federal Circuit "of patent invalidity." There was not even a ruling of patent pro-validity. The only thing available for reversal by the Supreme Court was a vacating of a district court's ruling of invalidity. It's complicated, but not impossible.

Another surprising perpetrator is Hal Wegner, whose excellent newsleter had this parenthetical remark,

"(It would have been truly astounding for the Court to have affirmed a holding of 103 nonobviousness on the merits, something the Court the Court has never done in the entire history of this section of the statute.)"

I wrote him about how truly astounding it would be for the Court to affirm something not before it. He thanked me, and then issued a correction about other things in that news item, but not the implication that the Federal Circuit had made a HOLDING OF NONOBVIOUSNESS. I remain astonished.

I have not checked the blogosphere enough yet, but I can confirm that, since the Supreme Court decision was announced, the words VACATED or VACATING and KSR have not yet appeared in the excellent blog of Dennis Crouch's www.patentlyo.com Or at least I could not find those words using wordsearch and google.

I start to wonder whether my copy of the Federal Circuit's decision is different from everyone else's.

Those INFAMOUS "gas pedal" patents: another shooting star in the (falling) sky?

Many (including Wegner) are pushing hard on all those "gas pedal" patents out there. But how many belong to KSR itself? (Answer: 15, on a search today of uspto.gov, looking for 'pedal' and assignee=ksr.) KSR's big victory in the Supreme Court makes its investment in those patents, if not also the research and development that led to them, look like a poor use of corporate time and money.

Will a whole new class of class action suits come out of KSR: stockholders claiming that their money is being misspent on acquiring big patent portfolios -- so often on minor improvements in crowded arts (where the arts may be crowded because of that very company's own efforts)? All that money on patent attorney fees and fees to the PTO, all that researchers' time wasted meeting with patent counsel, etc., etc., spent getting patents that are of no value does not sound like intelligent management. (The defense bar, with the patent bar to serve as experts, may be thrilled.)

Perhaps, though, the foreign counterpart patents are worth something in other countries, ones with a more pro-patent climate? And perhaps the US patents could be worth something again when the pendulum swings back, if the patents have not yet expired, and if their maintenance fees have been paid?

But maybe I exaggerate.

REFERENCES

Cases:

KSR Int'l Co. v. Teleflex Inc., 2007 U.S. LEXIS 4745 (U.S. 2007): The Supreme Court thinks that it was reviewing a reversal of invalidity:

At slip op. 29: "...The District Court granted summary judgment for KSR. [new paragarph] With principal reliance on the TSM test, the Court of Appeals *reversed.*" (emphasis mine -RJM)

Teleflex, Inc. v. KSR Int'l Co., 119 Fed. Appx. 282 (Fed. Cir. 2005) , http://www.fedcir.gov/opinions/04-1152.pdf. Proof that the appeals court VACATED, rather than reversed:

At 283: "[W]e _vacate_ the grant of summary judgment and remand the case to the district court for further proceedings." (underlining by Federal Circuit)

At 286: "We agree with Teleflex that the district court did not apply the correct teaching-suggestion-motivation test. We also agree that, under that test, genuine issues of material fact exist, so as to render summary judgment of obviousness improper. For these reasons, we vacate the decision of the district court and remand for further proceedings consistent with this opinion." (underlining of the word "vacate" in the last sentence appears only the LEXIS version of the decision, but on on the Federal Circuit's pdf.)

At 290: "(3) We consequently _vacate_ the decision of the district court and remand the case for further proceedings on the issue of obviousness, and, if necessary, proceedings on the issues of infringement and damages." (underlining by Federal Circuit)

*

Other References

Roberta J. Morris, "Thoughts on Patent-Bashing, Obviously," _Intellectual Property Today_, April 2007, at 29-31. Discussion of KSR is on 30-31.

Forum Shopping and MedImmune, SanDisk, and patent DJs

Where is the F word in MedImmune and SanDisk?

I mean forum as in forum shopping and choice of forum. The word FORUM does not appear in MedImmune and it does not appear in SanDisk. Why? Would the judiciary deny that expanded declaratory judgment (DJ) jurisdiction may be an incentive to forum shop and forum race?

The Supreme Court's decision, and the Federal Circuit's view of immediately-famous footnote 11, may effectively transfer from patent owners (POs) to accused infringers (AIs) the right to choose the forum and the right to choose the time when patent infringement suits begin.

If the facts of MedImmune or SanDisk had been a final exam question (before the Supreme Court had ruled), any student who failed to mention forum shopping would have gotten an F from me. Now that the Supreme Court has ruled, I think the Justices get an F. All of them: even dissenting Justice Thomas. He omitted the F word, too.

Respondent/PO Genentech did mention forum shopping once, in n32 of its brief (not exactly up front and center), but the MedImmune amici were remarkably timid about it. If you wordsearch among the briefs, you get only one hit about forum shopping. It is from University of Akron IP professors Jay Dratler, Jr., A. Samuel Oddi, and Jeffrey M. Samuels. They side with MedImmune, which may explain why they mention forum shopping and then explain that Article III is not about fairness but about separation of powers. I don't think the two are mutually exclusive. I rather thought the Constitution was based on principles of fairness and rightness throughout. Isn't the idea behind "case or controversy" that people should be able to seek redress when they need it, and that other people should not be unnecessarily hounded by people seeking redress who do not need it? Then, too, declaratory judgment actions sound in equity, to use an antique turn of phrase. Equity is definitely about fairness.

MedImmune represents a triumph of the patent bashers and the defense bar mentality to a degree that even patent defendants may come to dislike (the clients, not the lawyers: we lawyers will be enjoying full employment). Most patent defendants have a portfolio of patents of their own. (A quick search today shows that MedImmune is assignee on more than 60 patents, SanDisk on more than 600.) Now their licensees and maybe potential licensees and possibly even people who look at one of their patents and think it's interesting, will all have MedImmunity to start a lawsuit whenever they want, wherever they want.

(Am I overstating? Probably. But imagine you are thinking about making a new product and you find a prior art patent that might cover what you want to do. You study up and find a plausible invalidity argument. The US system does not have an opposition proceeding, and you think reexamination is too pro-patentee or time consuming or otherwise undesirable, so you ask the patent owner for a license. If you are offered anything less than a sweetheart deal, you sign up and then file a MedImmune suit. Farfetched? Or is it happening as I write? And are patent owners now sweetening the sweetheart deals even more, trying to make an upfront payment of what economists call rent, the rent that MedImmune has bestowed on licensees?)

THE BLOGOSPHERE DOES NOT LIKE THE F WORD, EITHER

The blogosphere seems not to have mentioned forum shopping and MedImmune in the same breath yet, either. Please correct me if I'm wrong. The hits I get by searching the web for the two words - forum MedImmune - do not lead to anything relevant of recent date. Old posts have the two words somewhere, but not tied together.

I did find a good paper from Skadden that was written before the Supreme Court had ruled. It mentions that a PO who is the second to sue may be able to get dismissal or transfer of an AI's first-filed DJ. But after MedImmune, what equities favor the second-to-file PO?

OTHER MISSING CONCEPTS: THE SANCTITY OF CONTRACTS, BARRIERS TO ENTRY, and RECIPROCITY OF SUIT

These recent decisions attack the sanctity of contracts, in particular patent licenses, but don't admit it. Upholding contracts was important in Lear v. Adkins, but had to make way for "the important public interest in permitting full and free competition in the use of ideas which are in reality a part of the public domain." In MedImmune, the public interest was not invoked at all.

Lear was also concerned with that perhaps-old-fashioned antitrust concept, the "barrier to entry." (395 U.S. 653, 669 n.16). Patent licensees have the benefit of the patent as a barrier to entry, even while they attack the patent in court. Perhaps potential new entrants, knowing of the suit, find the patent to be no barrier at all? But maybe they just see it as a sinking barrier, not yet sunk and possibly buoyant. In that case, the theory goes, the patent helps the licensee-plaintiff's competitive position while the suit is wending its way to a conclusion. We can never run the experiment both ways to learn about what would happen with and without the lawsuit, but I wonder if some economist or law-economist has compiled any historical data on licensed patents, comparing the level of new entry into a market where patents are later invalidated with the level where the patents are not challenged, or are upheld or subject to settlement. There probably is no such study, because if there were, some brief would have mentioned it and there would have been a footnote about it somewhere.

RECIPROCITY

In post-MedImmune licensing negotiations, a licensee has more liberty to start a suit than the licensor-PO, who must await a colorable breach. Licenses of the future may RECITE that initiating a DJ is a breach, but at that point the horse is stolen: the forum and the timing have been chosen by the AI.

The Supreme Court did not answer the question whether Genentech, having received the royalty payment from MedImmune, albeit under protest, could sue. What it said was:

"Assuming (without deciding) that respondents here could not claim an anticipatory breach and repudiate the license, the continuation of royalty payments makes what would otherwise be an imminent threat at least remote, if not nonexistent. As long as those payments are made, there is no risk that respondents will seek to enjoin petitioner's sales. Petitioner's own acts, in other words, eliminate the imminent threat of harm. The question before us is whether this causes the dispute no longer to be a case or controversy within the meaning of Article III."

(127 S.Ct. at 772, internal footnote n8 omitted, emphasis mine). It then proceeded to answer that question "NO."

If Genentech did sue, then MedImmune could have the suit dismissed on the basis that it was licensed and had done nothing to breach. Is there anything to stop it from the next day starting a suit in a forum of its choice? What could Genentech do then: could it get the suit back to the forum it had preferred earlier?

The fact that all district court appeals are heard by the Federal Circuit (except for Vornado actions) does not eliminate forum shopping. District courts differ in their patent intelligence, the general crowdedness of their dockets, the sympathies of their jurors, etc. etc. and in fact MOST patent lawsuits never reach the Federal Circuit. The District Court is the main event in patent cases, as Judge Rader said it should be in Cybor, but that is a subject for another blog.

MedImmune, by keeping the license alive, deprived Genentech of a basis for suit, yet it has - per the Supreme Court - a right itself to choose the time and place of suit. Maybe that resolution is a great boon to society, but it would be nice to have been told why.

THE SKY IS FALLING

Every big patent decision is met by members of the bar saying that this will end life as we know it. Usually, however, life goes on pretty much as before. Is this the exception?

If ever a decision was designed to encourage litigation and to discourage the peaceful, intelligent and lower-cost method of contracting to resolve disputes, it strikes me that MedImmune is it.

The only good news for patent owners is that now they get to be defendants, a more favored class in patent cases these days.

References

Cybor: Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1474 (Fed. Cir. 1998) (Rader, J., concurring in the judgment)

Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002)

Lear: Lear, Inc. v. Adkins, 395 U.S. 653 (U.S. 1969)

MedImmune: MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (U.S. 2007).

MedImmune Briefs:
- Genentech: Brief for Respondent Genentech, Inc., (No. 05-608), July 26, 2006, 2006 U.S. S. Ct. Briefs LEXIS 1676, 2006 WL 2190748, at page *44.
- University of Akron Professors' Brief to the Supreme Court: Brief of Three Intellectual Property Professors as Amici Curiae in Support of the Petitioner (No. 05-608) , 2006 U.S. S. Ct. Briefs LEXIS 419, 2006 WL 1355595, at *13.

SanDisk: SanDisk Corp. v. STMicroelectronics, Inc. (Fed. Cir., March 26, 2007)

Skadden paper: http://www.skadden.com/content/Publications/Publications1219_0.pdf
(see page 5, point 5)