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Rader Regrets CLS Bank Impasse, Comments on Latest Patent Reform Bill

Tuesday, October 29, 2013

By Tony Dutra  

Oct. 28 --Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit told a large audience of intellectual property stakeholders that the court's inability to issue jurisprudence in its en banc review of the CLS Bank v. Alice case was “the greatest failure in my judicial career.”

However, Rader, in an Oct. 25 interview with Executive Director Q. Todd Dickinson of the American Intellectual Property Law Association at AIPLA's annual meeting in Washington, D.C., said that the “opportunity is still open” to reach a majority in other cases before the court on patent eligibility, especially considering that three recently added judges--Richard G. Taranto, Raymond T. Chen and Todd M. Hughes--did not participate in the CLS Bank decision.

The court's per curiam opinion in the case is one paragraph. Six opinions covering 135 pages were filed, with five judges filing a concurrence, four judges joining three opinions that dissented in part or entirely, and Judge Pauline Newman dissenting separately. Rader also filed “additional reflections.” CLS Bank Int'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 2013 BL 124940, 106 U.S.P.Q.2d 1696 (Fed. Cir. 2013) .

A petition for writ of certiorari has been filed and friends of the court supporting review have commented . A response is due Nov. 6.

Nevetheless, Rader said, “I think we will move with diligence to correct the situation.”

Patent Litigation Reform

The chief judge also suggested that the Federal Circuit may have more to say on an issue on which the Supreme Court has granted cert--the standards for which a district court can determine an exceptional patent case under 35 U.S.C. §285 for the purpose of awarding attorneys' fees to the prevailing party. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., No. 12-1163, and Octane Fitness, LLC v. Icon Health & Fitness, Inc., No. 12-1184 (U.S., review granted Oct. 1, 2013) .

“We may end up ahead of them,” Rader said, pointing to several cases pending. “I think our court will be clarifying [the standards].”

Dickinson's interview covered a wide variety of topics otherwise, but he often returned to what was the hottest topic at the AIPLA meeting this year--Rep. Robert W. Goodlatte (R-Va.)'s introduction of the Innovation Act (H.R. 3309), primarily aimed at curbing patent infringement litigation abuses, on Oct. 23 . In fact, a “loser pays” provision is included in the bill and the appeals court--as it did before passage of the America Invents Act--could get ahead of Congress on the issue as well.

Rader was particularly critical, though, of H.R. 3309's attempts to control district courts' discovery procedures and rules in Section 6 on “Procedures and Practices to Implement and Recommendations to the Judicial Conference.”

“I don't think there's any way to set a rule for something so case-specific as discovery,” he said.

Rader has been a champion, in his support of the patent judge pilot program and through the Federal Circuit Advisory Council , of promoting suggestions to make patent infringement litigation less expensive.

To put responsibility for making up those rules in Congress, though, he said, “strikes at the heart of judicial independence.”

Something Wrong With Picture

Goodlatte's bill creates more opportunities--expanding on the options available under the AIA--for challenges to issued patents at the Patent and Trademark Office, and that also caught Rader's attention.

First, he noted that there are “things to sort out” in terms of vague or disputed language in the AIA, and the Federal Circuit will be handling a lot of appeals from the Patent Trial and Appeal Board in the next couple of years. But he was more concerned with a “tension throughout the system.”

On one side of the PTO, he said, “You have 7,000 people giving birth to [intellectual] property rights,” while in the PTAB, there will soon be as many as 300 administrative patent judges “acting as death squads, killing property rights.”

Finally, Dickinson asked whether Rader had any comment on the recent suggestion by Seventh Circuit Chief Judge Diane P. Wood that the time is ripe to allow patent infringement cases to be appealed to regional circuit courts as well as the Federal Circuit.

“We tried that for about 100 years and it didn't work,” Rader said, promising that he will respond to Wood in the near future.

 

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com

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