DOJ Statement of Interest in FTC v. Qualcomm

Here's a copy, along with the supporting affidavits from the Department of Defense and the Department of Energy.  Coverage also on Bloomberg and Law360.  These materials lay it on a bit thick, in my opinion:  "A hobbled Qualcomm, without the ability to make significant investments in R&D, presents a serious threat to DoD's extensive networks, advanced telecommunications systems, and ultimately its ability to control the battlespace"; "Any measure that inappropriately reduces Qualcomm's revenue substantially, and hence its ability to invest in R&D and standard setting activities, could harm national security"; "The Department [of Energy] believes that any remedy that cause undue financial strain on Qualcomm may result in undermining Qualcomm's position int he growing 5G market (among other telecommunications markets) and ceding to foreign entities, in particular China, a dominant position in the development and expansion of 5G technology." 

Breaking News # 2: Justice Stevens Dies

As readers may already have seen, former U.S. Supreme Court Justice John Paul Stevens has died at the age of 99.  (He had just recently come out with a new book, The Making of a Justice:  Reflections on My First 94 Years.)  Over the course of his long career on the bench, he authored many important opinions, including some on IP and antitrust.  Sometimes I agreed with him, sometimes I didn't, but I think he will long be remembered as a voice of reason.  

On a personal note, I had the honor of meeting Justice Stevens once, back in 1987, when he interviewed me for a clerkship.  I didn't get the job--I'm sure there were other candidates much more qualified than I was--but it was a thrill for me nonetheless.  The thing I will remember most is when he showed my a baseball he kept on his desk, autographed by his (and my) favorite team, the Chicago Cubs.  

Rest in peace, Justice Stevens. 

 

Breaking News # 1: DOJ Files Statement of Interest, Again, in FTC v. Qualcomm

I just saw this on Twitter, reported by Bloomberg's Victoria Graham.  The Antitrust Division wants the Ninth Circuit to stay the injunction.  (As Yogi Berra would say, it's déjà vu all over again.)  The Division also is representing that the Department of Defense "firmly believes that any measure that inappropriately limits Qualcomm's technological leadership, ability to invest in research and development (R&D), and market competitiveness, even in the short-term, could harm national security."  I'm having a hard time wrapping my head around the idea that national security requires that we throw antitrust law under the bus, but we'll see. 

Federal Circuit Issues Slightly Revised Opinion in SRI v. Cisco

I blogged about the original panel opinion in March (here), stating:

On willfulness, the court concludes that the evidence did not permit the inference that Cisco willfully infringed during the entire time period that finding covered, and remands for further proceedings . . . .

Surprisingly, perhaps, since fees often are not awarded to the plaintiff unless the infringement was willful, the court affirms the exceptionality finding, though it remands for a recalculation . . . .

On Friday, the court issued a revised opinion modifying the portion of the opinion addressing attorneys' fees.  Here is the relevant portion of the original opinion: 

. . . To meet the abuse-of-discretion standard, the appellant must show that the district court made “a clear error of judgment in weighing relevant factors or in basing its decision on an error of law or on clearly erroneous factual findings.” Bayer, 851 F.3d at 1306 (quoting Mentor Graphics, 150 F.3d at 1377); see also Highmark, 572 U.S. at 563 n.2.

We see no such error in the district court’s determination that this was an exceptional case. The district court found:

There can be no doubt from even a cursory review of the record that Cisco pursued litigation about as aggressively as the court has seen in its judicial experience. While defending a client aggressively is understandable, if not laudable, in the case at bar, Cisco crossed the line in several regards.  Post-Trial Motions Op., 254 F. Supp. 3d at 722.

The district court further explained that “Cisco’s litigation strategies in the case at bar created a substantial amount of work for both SRI and the court, much of which work was needlessly repetitive or irrelevant or frivolous.” Id. at 723 (footnotes omitted). Indeed, the district court inventoried Cisco’s aggressive tactics, including maintaining nineteen invalidity theories until the eve of trial but only presenting two at trial and pursuing defenses at trial that were contrary to the court’s rulings or Cisco’s internal documents. Id. at 722. The district court concluded that all of this, in addition to the fact that the jury found that Cisco’s infringement was willful, led it to exercise its discretion pursuant to § 285 to award SRI its attorneys’ fees and costs. Id. at 723. We conclude that the district court did not abuse its discretion in so finding (pp. 22-23).

Here is the modified opinion, with the new matter in boldface:

. . . To meet the abuse-of-discretion standard, the appellant must show that the district court made “a clear error of judgment in weighing relevant factors or in basing its decision on an error of law or on clearly erroneous factual findings.” Bayer, 851 F.3d at 1306 (quoting Mentor Graphics, 150 F.3d at 1377); see also Highmark, 572 U.S. at 563 n.2.

We see no such error in the district court’s determination that this was an exceptional case. The district court found:

There can be no doubt from even a cursory review of the record that Cisco pursued litigation about as aggressively as the court has seen in its judicial experience. While defending a client aggressively is understandable, if not laudable, in the case at bar, Cisco crossed the line in several regards.
Post-Trial Motions Op., 254 F. Supp. 3d at 722.

The district court further explained that “Cisco’s litigation strategies in the case at bar created a substantial amount of work for both SRI and the court, much of which work was needlessly repetitive or irrelevant or frivolous.” Id. at 723 (footnotes omitted). Indeed, the district court inventoried Cisco’s aggressive tactics, including maintaining nineteen invalidity theories until the eve of trial but only presenting two at trial and pursuing defenses at trial that were contrary to the court’s rulings or Cisco’s internal documents. Id. at 722. Nevertheless, the district court relied in part on the fact that the jury found that Cisco’s infringement was willful in its determination to exercise its discretion pursuant to § 285 to award SRI its attorneys’ fees and costs. Id. at 723. Accordingly, we vacate the district court’s award of attorneys’ fees and remand for further consideration along with willfulness (pp. 22-23, emphasis added).

So, unless I'm missing something, that's it.  I'm having a bit of a hard time wrapping my head around the simultaneous affirmation that there was "no . . . error in the . . . determination that this was an exceptional case," and the decision to remand to determine if the decision to award fees was based on an incorrect determination of willfulness; but I think the court is saying that the exceptionality finding can stand, but that the possible lack of willfulness should factor in to the determination whether to award fees.

Ninth Circuit Expedites Appeal in FTC v. Qualcomm

A copy of the order granting an expedited appeal is available here.  Qualcomm's opening brief is due on August 9, the FTC's on October 4, and Qualcomm's reply brief on October 25.  Story on Law360 (behind a paywall) here.

STRONGER Patents Act Would Revive Presumption of Injunctive Relief

Senator Coons and Representative Stivers have reintroduced their Support Technology & Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act.  Here is the text of the bill.  (Bloomberg Law and IP Watchdog also have posts, with useful links.)  The bill, like the previous version, would partly overrule eBay by creating a presumption in favor of injunctive relief (more precisely, upon finding the patent valid and infringed, the court would presume irreparable injury and inadequacy of remedies at law).  I wrote about last year's version of the bill here.

As I've said in the past, neither eBay itself nor the courts' application of it is perfect; but the eBay standard is an improvement over the near-automatic granting of injunctions that we had in place before.  I worry that the bill's presumption of injunctive relief, unless further clarified, could be interpreted in a manner that would make it unduly difficult to avoid granting injunctions in cases where there is a substantial risk of holdup.  (Is it a rebuttable presumption?  By what standard--preponderance or clear-and-convincing evidence?  What evidence would be sufficient to rebut?)  Further, the evidence so far does not indicate that eBay has had a negative effect on U.S. innovation--indeed, the contrary appears to be true.  And prevailing patent owners still get injunctions in the majority of cases in which they seek them (contrary to the statement on IP Watchdog about "permanent injunctions being overwhelmingly denied since eBay").  But why let facts get in the way of ideology?

For my most recent article on the economics of injunctions in patent law, see here.

Patent Remedies and Complex Products: Open Access Link

Recently I mentioned the publication of Patent Remedies and Complex Products:  Toward a Global Consensus (Brad Biddle, Jorge L. Contreras, Brian J. Love & Norman V. Siebrasse eds., Cambridge Univ. Press 2019).  I coauthored several of the chapters, and I am delighted to see the work in print.  You can obtain a hard copy from CUP, Amazon, or other sellers, but as I mentioned before the book is also available on an open-access basis.  The open-access link on CUP's webpage doesn't appear to be working as of right this moment (July 9, 2019, 12:40 p.m. Central Time), but Brian Love has provided this direct link.  So, I hope readers will take a look, and as I said before, reviews are welcome.