Cert Alert and Other News from the Supreme Court

by McDermott Will & Emery

1—The U.S. Supreme Court granted a petition for writ of certiorari in a case challenging patent eligibility (under § 101) of method claims directed to a software embodiment and a corresponding system.  Alice Corp. Pty. Ltd. v. CLS Bank Int'l (Case No. 13-298, review granted, Dec. 6, 2013).  The question presented by the patent owner in the case is:

“Whether claims to computer-implemented inventions—including claims to systems and machines, processes, and items of manufacture—are directed to patent-eligible subject matter within the meaning of 35 U.S.C. §101 as interpreted by this Court?”

In the underlying case, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, created an intra-circuit conflict when it failed to reach agreement on patent eligibility of computer-related claims (IP Update, Vol. 15, No. 7).  The en banc court was split 7-3 against patent eligibility of the method claims and 5-5 as to the system claims. However, since the district court had ruled that the system claims were not patent eligible, that judgment stood—and hence all of the claims were found to be  not patent-eligible. Eight members of the en banc court said that method and system or media claims should rise or fall together, but not for the same reasons.

In a closely related (as far as the legal issues are concerned) case, the Supreme Court also requested a response from the patent owner to a cert petition (by filed by the alleged infringer) in another § 101 case, WildTangent, Inc. v. Ultramercial, LLC.  (See IP Update, Vol. 16, No. 7.)  In that case, WildTangent posed the question, “When is a patent’s reference to a computer, or computer-implemented service like the Internet, sufficient to make an unpatentable abstract concept patent eligible under 35 U.S.C. §101?”

In the underlying case, where only method claims were at issue, the Federal Circuit ruled that Ultramercial’s patent, directed to a method for allowing Internet users to view copyrighted material free of charge in exchange for watching certain advertisements, was patent-eligible.

2—In one fell swoop, the U.S. Supreme Court granted a cert petition, vacated a decision by the U.S. Court of Appeals for the Federal Circuit and remanded the case back to the Federal Circuit to reconsider the effect of a forum-selection clause in a license and specifically the effect of such a license provision on venue transfer motions in patent infringement cases.  Broadcom Corp. v. U.S. District Court for the Eastern District of Texas (Case No. 12-1475, Cert granted, Fed. Cir. decision vacated, remanded, Dec. 9, 2013).  In its cert petition, Broadcom challenged the U.S. District Court for the Eastern District of Texas’s refusal of a venue transfer request and the Federal Circuit’s unpublished mandamus denial, where the Federal Circuit said it was “bound by Fifth Circuit law as it presently exists.”  The Federal Circuit, relying on the U.S. Court of Appeals for the Fifth Circuit’s Atlantic Marine case, explained that “in the context of a [28 U.S.C.] §1404(a) motion, the district court may place the burden on the movant to demonstrate that the contractually-chosen forum is clearly more convenient than the plaintiff's chosen forum.”  In dicta that may have invited Broadcom cert petition, the Federal Circuit also noted that a forum selection clause could be considered under 28 U.S.C. §1404(a), which applies when venue is proper but inconvenient, or 28 U.S.C. §1406(a), which applies when venue is improper, and observed that the majority of appellate courts—but not the 5th Circuit—would have applied § 1406(a).

In Atlantic Marine (Case No. 12-929 , Dec. 3, 2013), the Supreme Court concluded  that the 5th Circuit “improperly placed the burden on Atlantic Marine to prove that transfer to the parties’ contractually preselected forum was appropriate instead of requiring J-Crew, the party acting in violation of the forum-selection clause, to show that public-interest factors overwhelmingly disfavored a transfer”  and that “[A]lthough a forum-selection clause does not render venue in a court “wrong” or “improper” under §1406(a) or Rule 12(b)(3), the clause may be enforced through a motion to transfer under §1404(a), which permits transfer to any other district where venue is proper or to any district to which the parties have agreed by contract or stipulation.

3—In the case of Limelight Networks v. Akamai Technologies, the Solicitor General has now recommended that the Supreme Court review the question of how infringement can be found when more than one party performs steps of a patented method.  (Case No. 12-786.)  Limelight, in its cert petition (filed on Jan. 2), presented the question:

Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. §271(b) even though no one has committed direct infringement under §271(a). In his brief, the solicitor general said, “[T]his Court’s review of that question is warranted to avert a significant expansion of the scope of inducement liability (and a corresponding increase in burdensome litigation) that is not justified under a proper understanding of § 271.”

In the underlying case, the Federal Circuit, in a 6-5 en banc decision, overturned precedent in holding that a patent owner claiming induced infringement under §271(b) no longer had to show that a single induced entity is liable for direct infringement under 35 U.S.C. §271(a). (See IP Update, Vol. 15, No. 7.)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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