In the past few years, how many patent cases has your company faced? Across the United States, that number has both risen and fallen within this time frame. According to an informative article in Today’s General Counsel, there are several developments to watch for this year, some of which may help continue the early resolution of cases and dis-incentivize nuisance litigation while others may incentivize it.
The first development is the application of the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank International, which has been beneficial for defendants. Because it covers what subject matters are patentable under Section 101, cases have been dismissed simply based on their pleadings. As of December 2015, Federal Circuit courts have found appeals and motions to be invalid about 90 percent while district courts’ percentage is closer to 70 percent. But the future is uncertain, according to the authors, attorneys Andrew N. Thomases and James L. Davis, Jr. at Ropes & Gray, LLP. As courts further define the limits of the Supreme Court’s decision, decisions may go the opposite way and favor patent holders.
The second development is a heightened pleading requirement. The recent amendments to the Federal Rules of Civil Procedure may have raised the pleading requirement for patent complaints to the same standards as for other types of cases. No longer can a litigant identify only a patent and an accused product, further facts must be included, which may possibly dissuade some nuisance lawsuits. But the impact and uniformity remain to be seen. This is the year, as the authors say, that the tone for how the amended rules should be interpreted will be set.
The third development is the return of the Patent Office. Since 2012, many defendants have used challenging the patentability of asserted claims in the post-issuance proceeding before the Patent Office’s Patent Trail and Appeal Board to be a common approach within a defensive strategy. With its cost-effectiveness compared to district court proceedings and the high success rate, this approach will likely remain popular this year.
The fourth development is the clarification of the ITC’s reach. This year, the Federal Circuit will decide whether to review en banc a split panel decision in the case of ClearCorrect vs. Invisalign. The panel originally determined that the ITC can’t have jurisdiction over electronic transmissions of digital data. If the scope is expanded, it could affect the number and types of cases the ITC hears. No matter the impending decision, the ITC will continue to be a reliable patent dispute venue.
The fifth and final development is the Supreme Court’s scrutiny of enhanced damages. In a number of patent cases, defendants have been successful. In Stryker Corp. et al. v. Zimmer, Inc., et al. and Halo Electronics, Inc. v. Pulse Electronics, Inc., et al., the Supreme Court will review the standard for will infringement and whether enhanced damages are warranted or not.
As these developments in patent litigation unfold this year, we will revisit them in forthcoming posts. It will be interesting to see what 2016 has in store for patent litigation.