A House Divided Against Itself: The Federal Circuit’s En Banc that Wasn’t, Marine Polymer Tech v Hemcon
March 17, 2012
On March 15, 2012, the En Banc Federal Circuit issued Marine Polymers Technologies, Inc. v. Hemcon, Inc., Slip Op. 2010-1548. The opinion decided nothing: The district court’s claim construction, infringement, and damages rulings were affirmed by an equally divided court. In other words, since no majority was formed on any question on appeal, the result below in the district court was left “as is”, affirmed. (The panel decision was vacated by the procedure of the case being taken En Banc). The issue that prompted the En Banc, whether changes in claim scope in a re-examination proceeding where the words of the claims do not change, but claim scope does due to interaction with the examiner (e.g., disclaimer of scope or re-definition of a term), gives rise to intervening rights, was addressed by dozens of pages of dicta from both sides of the Court, but nothing was decided. (Not all judges on the Court participated in the case.). An equally divided court did manage to tilt in favor of Judge Lourie’s “alternative holding” that intervening rights only arises under the statute where the claim language changes (Judge Linn joined Judge Lourie’s opinion on the point): But this is dicta since the equally divided court affirmed the district court judgment, which did not address the intervening rights issue. Yet oddly, this is labelled a “precedential” opinion on the Federal Circuit’s website. Of what???
“A House Divided Against Itself Cannot Stand”, Abraham Lincoln, June 16, 1858. (See also, Gospel of Mark 3:25, “And if a house be divided against itself, that house cannot stand.”). The Federal Circuit is clearly a house divided against itself. Prior posts have pointed out the conflicting approaches to claim construction that were illustrated six months ago in the dissents from denial of En Banc review in Retractable Technologies, Inc., and later posts on other issues (e.g., standard for preliminary injunction).
Here, right down the line, claim construction, infringement and damages, the Federal Circuit could not muster a majority to issue a ruling on any key aspect of the district court’s order, leaving its judgment “as is”. The district court’s judgment was left intact by this split, but the split shows patent law is in tatters: How can we have a “first world”, reliable, patent system, when the judges charged with bringing uniformity to that system are so deeply divided, they cannot form a majority on any issue in an En Banc opinion. Volumes of amici briefs, doubtless enormous legal expenses, and yet the Court cannot get a majority to agree on any aspect of the district court’s ruling. Indeed, as explained below, the Court cannot even reach a consensus on dicta on intervening rights.
If ever these was a single clear sign that our U.S. patent system is broken, it is this En Banc exercise that resulted in no result.
What is a U.S. patent worth? Maybe it is litigation cost/defense cost only since no one can define the claim scope (coverage), preliminary injunctions are rare, permanent injunctions are limited to narrow circumstances, and damages law remains opaque. Maybe the seat of patent jurisprudence should be Las Vegas?
Okay, enough of my pontificating: We do not have the uniformity of decision to have a reliable patent system, this drives up enforcement costs, and minimizes patent value. So now, the 50 pages of dicta in Marine Polymers Tech., Inc.
A brief analysis: The judges of the Court equally divided on the question of the proper claim construction of the key limitation “biocompatible”: From reading both opinions this was apparently driven by disagreement over the role of the specification, the doctrine of claim differentiation, and limitation of the invention to the single disclosed embodiment. The claim construction by the district court was affirmed by an equally divided En Banc court (that is, by default since neither side could muster a majority). The infringement ruling was likewise affirmed due to an equally divided En Banc court. So too was the damages ruling: From Judge Lourie’s opinion, we know that reasonable royalty, entire market value rule, and the evidence needed to sustain a damage award were issues, but again none were decided. The equally divided court left the district court’s damages decision untouched, affirmed.
The remarkable aspect of this opinion (opinions) is the discussion of intervening rights: It is all dicta. Since the district court’s opinion was affirmed by an equally divided court, intervening rights became a non-issue. The panel decision was vacated by the En Banc, the panel’s split decision was not subject to review, it was left a nullity. Moreover, since the intervening rights issue was based on events occurring after the district court’s judgment, it was not part of the district court case or judgment below.
The “non-issue ” on intervening rights was whether under Section 307 of Title 35 on re-examination (which refers to Section 252, on re-issue), intervening rights only arise when the claim language actually changes; or if intervening rights can arise if claim scope is changed during a post-grant proceeding (e.g., by disclaimer or re-defining a term in a claim), but the literal wording of the claim does not change. Judge Lourie wrote for half of the En Banc court (plus one, Judge Linn who switched sides on this issue), that only a change in language in the claim itself creates intervening rights under the statutes. Judge Dyk, writing for the other part of the En Banc court, invoked the Supreme Court’s advice that when a court is equally divided, no opinion should issue at all (since the only impact is to leave the decision below undisturbed for failure to obtain a majority to reverse it): Since the district court opinion and judgment was affirmed by an equally divided court, no opinion should have issued. Judge Dyk then went on to argue the Supreme Court’s prior writings on intervening rights were based on changes in legal scope not just words. That’s a lot of money for a lot of dicta. And is 50 pages of dicta worth Supreme Court review?
The expense, breadth, and burden of patenting and patent enforcement, are questionable in this state of affairs. Moreover, the mandate in the United States Constitution on patents is left unfulfilled in a system where there are no rules. I am not sure if I should beware of the “Ides of March” or just go drink green beer for St. Patrick’s day…