Take Two at the Supreme Court

After several decades when patents were handed out like candy, leading to a litigious free-for-all, the courts and Congress over the past few years have begun tightening the reins. This is important if we want intellectual property to promote real technological innovation, rather than frivolous legal entrepreneurship.

Among the signs of progress, the Supreme Court in December ruled 8-0 for Samsung, reversing a $399 million award to Apple. In my view, the court made the right call that the 19th century law governing design patents, which concern the ornamental appearance of products, was being misapplied in a modern smartphone world.

On the heels of its victory, Samsung is now asking the Supreme Court to look at another patent squabble with Apple. This case concerns substantive questions of patent validity and infringement and also an unusual procedural question – both of which could have important implications for IP law.

In this case, the jury initially sided with Apple in its charge that Samsung infringed three patents, which we’ll call:

  (1) a 1996 “quick links” patent with “analyzer server” (’647);

  (2) a “slide to unlock” patent (’721); and

  (3) an “autocorrect” patent (’172)

Upon appeal, however, the federal circuit ruled 3-0 for Samsung – finding that patent (1) was not in fact infringed and that patents (2) and (3) are invalid because they are obvious. The unanimous determination was in line with the new legal (and common sense) consensus that too many obvious patents had been issued and that courts should more closely scrutinize claims of infringement.

Apple then requested en banc review by the entire court, but the parties did not hear from the court for six months. Until, suddenly, an en banc order was issued overturning the 3-0 ruling, without any hearing, briefs, or notice. Normally, a court will first announce it has taken a case en banc (or not), and later issue an opinion. In patent cases especially, there is usually further briefing and often a hearing. Court watchers were thus surprised by the unusual procedure (or lack thereof). All three judges from the 3-0 decision dissented with gusto, questioning the en banc review’s substance and procedural irregularities.

Samsung is thus seeking a return to the Supreme Court, petitioning for cert on March 10. Getting the high court to hear your case is always hard. They only take a small minority of those who ask. And the court just decided a case with the same two litigants in December. On the other hand, the court has been keen to reform what it sees as out-of-control patent law over the past few years. Its 8-0 decision in December reveals a likeness of mind to further the “patent reformation,” as I’ve called it. The high court may want to clarify some of the fundamental questions in this utility patent case (which concerns functionality), just like it did for design patents (concerning appearance) in the last case. It may also want to resolve the federal circuit’s highly unusual en banc behavior, lest that court make it a habit. The strength of the three dissents by the original 3-0 panel also makes it somewhat more likely they’ll take Samsung’s case.

If the Supremes do take the case, it could be a big one. Samsung’s petition highlights four questions, all of which are important in patent litigation.

First, the question of validity, or whether the patent should have been issued in the first place. In this case, whether the patented items were too obvious to be given IP protection.

Second, the question of remedy. How appropriate is injunctive relief when monetary damages are available to make the parties whole? That is, when should courts order firms to stop selling products altogether?

Third, the breadth of infringement. In this case, whether all the elements of the “quick links” patent – number (1) in the list above – were actually infringed, and how that bears on the case.

And fourth, the procedural question. Does the federal circuit, which hears most patent appeals, plan to regularly issue en banc decisions that overturn unanimous orders without notice or additional briefings or hearings? If so, is the Supreme Court comfortable with that – in this instance, or in the future?

If the high court takes the case – and especially if it addresses several of these questions – it could be one of the biggest patent cases in a long while.

Thus, if the high court really wants to extend its recent efforts to improve patent law, this might be the case to do it.

Bret Swanson is a Visiting Fellow at AEI’s Center for Internet, Communications, and Technology Policy and president of Entropy Economics LLC, a strategic research firm specializing in technology, innovation, and the global economy.

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