United States: Patent Law And The Supreme Court: Patent Certiorari Petitions Granted

Questions Presented:

The "patent exhaustion doctrine"—also known as the "first sale doctrine"—holds that "the initial authorized sale of a patented item terminates all patent rights to that item." Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008). This case presents two questions of great practical significance regarding the scope of this doctrine on which the en banc Federal Circuit divided below:

1. Whether a "conditional sale" that transfers title to the patented item while specifying post-sale restrictions on the article's use or resale avoids application of the patent exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law's infringement remedy.
2. Whether, in light of this Court's holding in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1363 (2013), that the common law doctrine barring restraints on alienation that is the basis of exhaustion doctrine "makes no geographical distinctions," a sale of a patented article—authorized by the US patentee—that takes place outside of the United States exhausts the US patent rights in that article.

Cert. petition filed 3/21/16, conference 6/16/16, CVSG 6/20/16, brief amicus curiae of United States filed 10/12/16, conference 11/22/16, conference 12/2/16, cert. petition granted 12/2/16.

CAFC Opinion, CAFC Argument

Questions Presented:

This Petition presents two questions raised in two previous petitions for writs of certiorari. With respect to the first question presented here, this Court has granted certiorari in Cuozzo Speed Technologies, LLC v. Lee, No. 15-466 (S. Ct. Jan. 15, 2016), and the second question presented here is currently pending in another petition before this Court, Achates Reference Publ'g, Inc. v. Apple Inc. and Lee, No. 15-842 (S. Ct. Dec. 29, 2015).

In 2011, Congress enacted the Leahy-Smith America Invents Act (AIA), Pub. L. No. 112-29, 125 Stat. 284, creating post-grant adjudicatory proceedings for challenging patentability of patents. Among other types of proceedings, the AIA created inter partes review (IPR) proceedings, which are heard by the newly-established Patent Trial and Appeal Board (Board) in the United States Patent and Trademark Office (PTO). Since the inception of IPR proceedings, the number of challengers has increased at an unexpected and unparalleled rate, with roughly 4,000 petitions being filed to date. The Board has instituted review in over two-thirds of its IPR institution decisions, and roughly 87% of cases proceeding to final written decisions have resulted in the cancellation of some or all claims under review. Based on these success rates, the proceedings have quickly become the venue of choice for entities wishing to challenge patent validity.

In Cuozzo, Achates, and this case, the Federal Circuit held that it lacks jurisdiction to review claims that the Board exceeded its statutory authority in instituting their respective IPRs. In each case, the Federal Circuit denied review without due consideration of the strong presumption of judicial review of agency action. In Cuozzo, the Federal Circuit denied review of the institution decision itself, and this Court has granted certiorari to determine whether a Board institution decision made in excess of its statutory authority is judicially reviewable. In Achates, the Federal Circuit denied judicial review of a decision made in excess of its statutory authority both at the institution phase and in the Board's final written decision, for which the AIA affords judicial review under 35 U.S.C. § 319 and § 141(c). This case has analogous issues to those in Cuozzo and Achates, as the board exceeded its statutory authority at both institution and in its final written decision. Judicial review is available under § 319 and § 141(c) to determine whether the Board exceeded its statutory authority by instituting IPR and issuing its final written decision, notwithstanding that the patent challenger was served with a complaint alleging infringement of the patent more than one year before filing its petition for IPR in direct violation of 35 U.S.C. § 315(b).

The questions presented are as follows:

1. Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board's decision whether to institute an IPR proceeding is judicially unreviewable.
2. Whether the court of appeals erred in holding that, even if the Board expressly decided in its final written decision that it had statutory authority to institute the proceeding, the Board's decision is judicially unreviewable.

Cert. petition filed 2/10/16, waiver of respondents Ingenio, Inc. and Yellowpages, LLC filed 4/11/16, conference 6/23/16, GVR 6/27/16.

CAFC Opinion, No CAFC Argument

Questions Presented:

35 U.S.C. § 271(f)(1) provides that it is an act of patent infringement to "suppl[y] . . . in or from the United States all or a substantial portion of the components of a patented invention, . . . in such manner as to actively induce the combination of such components outside the United States." Despite this Court's clear dictate that section 271(f) should be construed narrowly, Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007), the Federal Circuit held that Life Technologies is liable for patent infringement for worldwide sales of a multi-component kit made abroad because just a single, commodity component of the kit was shipped from its U.S. facility to its own foreign facility. The questions presented are:

1. Whether the Federal Circuit erred in holding that a single entity can "actively induce" itself to infringe a patent under 35 U.S.C. § 271(f)(1).
2. Whether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales

Cert. petition filed 6/26/15, conference 9/28/15, CVSG 10/5/15, SG brief filed 5/11/16, conference 6/16/16, conference 6/23/16, granted limited to question 2 6/27/16, set for argument 12/6/16, argued 12/6/16 (transcript here).

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