Patent Cases Continue to Fall in 2017 Q1

Ryan Davis has a good article out on the filing stats from Q1 of 2017 by Lex Machina, and it’s more of the same – patent case filings continue to drop both nationwide and in EDTX, with filings in EDTX continuing to drop slightly more.  2017 Q1 was actually the lowest quarter in terms of filings since 2011 (meaning since enactment of the AIA), which is saying something since there wasn’t a preceding quarter event that caused filings to spike (FRCP rule changes in December 2015, patent legislation news – that sort of thing).

In fact, the Q4 spike as a result of the FRCP rule amendments was the last significant bump in filings, resulting in what LM “legal data scientist” (damn, I wish I’d thought of that title) Brian Howard calls the “new normal.”

As we saw last year, filings in the EDTX are dropping slightly more than the national average, with the district’s share of patent cases dropping from 36% to 33%.  Perhaps not coincidentally, Delaware’s share is up from 10.1% in 2016 to 13.8% so far this year.

Capitol Days in Austin

Took a break for a few days this week to go to Austin to work on state legislative issues with some old friends and colleagues, including representatives of the Texas chapters of the American Board of Trial Advocates.  

I unexpectedly got an opportunity to testify on a bill dealing with motions to dismiss at a hearing before the House Judiciary and Civil Jurisprudence on behalf of Tex-ABOTA, and since it was patterned on FRCP 12(b)(6) motions I really enjoyed it.  Fortunately my law school mock trial partner Lin McCraw, who’s serving as president of the Texas Trial Lawyers Association this year testified after me and got everything straight for the members of the committee.

That was the first time I’ve testified before a legislative committee in Austin in exactly 30 years (yes, I am now that old).  I won’t say it was worth the four hour wait, but it could have been worse – the hearing actually went on another three hours after I left.

Visited with several legislators, including my new state senator, former Judge Steger law clerk Bryan Hughes, and my law partner Larry Phillips, who has the pleasure this session of serving as chair of the House Insurance committee (still unclear who he pissed off), and spent a lot of time in conference rooms watching floor debates and committee hearings. Brought back some good memories of my days in Austin during graduate school, especially during a session.  I was watching the House yesterday morning when Chairman King welcomed a group of student to “your Capitol” and that reminded me what a great experience it is as a Texan to see the big beautiful Texas Capitol.

But as I told people on the way out yesterday, being around the Lege in action is sort of like Disneyworld.  It’s a lot of fun for about three days, but then everything starts looking like Mickey Mouse and you’re really ready to go home.  It was very good to head out yesterday afternoon for the Easter break, and I am pretty sure everyone else around the pink dome felt the same way.

How Do You Know When The Case Is Over?

Ever had that situation where you think you have a settlement, but the other side doesn’t, or vice versa?  I mean in the absence of horned and breastplated opera singers, of course. That was the situation presented in this case, where the parties in a patent infringement case appeared to have settled their dispute, but the final settlement agreement fell through when Defendants learned that the Patent Trial and Appeal Board (PTAB) had instituted inter partes review (IPR) of one of the asserted patents. The Court found that

EDTX Grant Rate on 101 Motions Up to 75%; Del/ND Cal. 101 Grant Rate Drops to 23%

Fenwick & West’s BilskiBlog had a good summary of the state of 101 caselaw as of the end of Q1 2017 yesterday.  Most notable to me was their observation of the pronounced change in grant rates for 101 motions in patent-heavy district in the last six months.

They compared grant rates from mid-2014 through the third quarter of 2016, and then over the past six months, uncovering two significant trends.  First, the three top districts in terms of rulings that are not the EDTX had grant rates from 65-74%, but those rates dropped dramatically to 18-40% in the last six months.  Excluding CD Cal and only looking at the double digit districts, the rate is 18-25%.

In contrast to its 31.9% grant rate from 2014-2016, however, the EDTX grant rate for 101 motions the last six months has increased to 75%, with 12 of 16 motions being granted.  That is over three times the grant rate in D Del and ND Cal, which are currently at 23%.

The reason for the spike appears to be a batch of grants in March 2017, but the post recognizes that the overall national trend is a downward one nonetheless.

TexasBarCLE Advanced Patent Litigation Course – Horseshoe Bay – July 20-21, 2017

If your plans for this summer will permit a trip to the Texas Hill Country, I’d recommend you consider the TexasBarCLE Advanced Patent Litigation course at Horseshoe Bay on July 20-21, cosponsored by the Intellectual Property Law section of the State Bar of Texas, and as of today the Eastern District of Texas blog as well.  The newly renovated Horseshoe Bay Resort is situated on Lake LBJ, and features award winning golf courses, dining, shopping, a kids club, and sunset cruises.

I am very happy to have been selected to speak on the subject of Post-trial Motions in Patent Cases (you know how much I like postverdict motion practice – and we both wish I was kidding about that).  You can get more information here, but let me summarize some of the topics and speakers.

Topics include:

– Federal Circuit and PTAB Update
– The Scope of Venue in View of TC Heartland
– Pre-suit Investigations
– IPR, PGR, and CBM Use in Parallel with Litigation
– International Enforcement
– Discovery Strategies
– The On-Sale Bar After Helsinn and Medicines Co.
– Intersection of Anti-Trust and Patent Law
– Fraudulent Demand Letters
– Trial Strategies and Litigation Tactics
– Strategic Use of Patent Opinions
– Patent Agent Privilege in View of In re Andrew Silver
– Impact of Lexmark v. Impression Products
– How to Get Injunctive Relief
– Patent Challenges Under Section 101
– Overhaul of the Discovery Rules – Where Are We Now?
– Judicial Panel – Taking the Lead: Trial Strategies For Aspiring Lead Lawyers
– Damages and Technical Experts
– Impact of Apple v. Samsung on Design Patent Enforcement
– Post-Trial Motion Practice (me – this is me.  Contain your enthusiasm)
– Attorneys’ Fees
Panelists are not yet confirmed, but it looks like we’ll have four EDTX judges in attendance.
It’s a great location, and looks to be a great set of topics – hope to see you there.

Show cause order re: attorney’s “systematic carelessness”

Yesterday I posted on a recent decision by Judge Gilstrap finding “exceptional case” status.  In that opinion, the Court addressed the effect of mistakes by lawyers, parties or principals.  Earlier this morning, Judge Gilstrap issued a “show cause” order as a result of what he said is “most charitably” described as an attorney’s “systematic carelessness” requiring the attorney to appear to show cause why his conduct does not violate Rule 11(b), and why appropriate sanctions under that rule should not be imposed. As set forth below, the party is a familiar one, although in a different context.

Subscriber questions/information

I wanted to say thank you to my subscribers over the first three months of operation on the new platform.  I have had a great time providing a deeper dive into EDTX content this spring, and hope you have enjoyed it as well.

I wanted to post on a few repeat issues for subscribers.

  1. Logins – If you log in incorrectly more than three times the site will lock you out.  But there’s no need to email me to ask me to reset it.  It emails me automatically when this happens and I have no life so I’ll reset your counter as soon as I see it and ask if you need your password. (Those of you that are mistyping your password because your are trying to type at 4 am – I know who you are, and you need to turn out the light and get some sleep).
  2. Invoices/Receipts – many subscribers are signing up with their personal cards and then getting their firms to reimburse them.  If you need an invoice/receipt, just ping me and we’ll get you one.
  3. Firm subscriptions – we have that set up now based on size, so if you want to get subscriptions for your firm or practice area, just choose the appropriate tab when signing up, and contact me if you have questions.  We have tried to automate the process, but there may be kinks.
  4. Private client services – if you’re interesting in a private analysis of a case or motion for yourself or a client or investor interested in what may happen in a pending case, contact me offline and we can see if it’s something I can help you with (in some cases so much is filed under seal that even an educated guess isn’t possible).
  5. Problems logging in – I know a few of you have had problems getting through to articles.  If this is you, let me know what the problem is and I’ll get it fixed.
  6. Cases – I review a lot of cases from a variety of sources each day and select which to post on, but I always appreciate someone giving he a heads up about a particularly interesting one.  If there’s one you think should be included, just let me know.
  7. Additional options/features – I’ve tried to include the features (copies of cases/sort by topics) that people have been asking for.  If there’s an additional feature you’re interested in, let me know about it.  No one is agitating for the return of Patent Litigation Haiku just yet, but you never know …

EDTX Creates Nonparty Liability in Exceptional Cases; CAFC Not So Much

I was working on an update on the Iris Connex case (you remember – noninfringement dismissal after expedited claim construction, $507,000 in sanctions against plaintiff and nonparty) when I saw Dennis Crouch’s summary this morning of the Federal Circuit’s decision in Asetek Danmark v. CMI USA (“Cooler Master”) (Fed. Cir. 2017) focused on the issue on enjoining a nonparty.

In light of that case, I realized that the time might be right for a detailed post on the issue of the new EDTX-created mechanism for nonparty liability, which I’ll refer to as a the “Iris Connex” test.

The significance of this new test appears to be starting to seep in – I just read an analysis of it in an article by some TBL partners that correctly noted it as evidence that “courts on the front lines of patent litigation, and particularly in the Eastern District of Texas, are more adept at addressing potential systemic abuses than reform-minded politicians.” 23 No. 25 Westlaw Journal Intellectual Property 1.  The specific proposals they were addressing were those in recent patent reform bills that sought to increase transparency in NPE cases to address exactly the abuses that the Court found in this case, but which ran into trouble trying to craft specific measures that didn’t cause other problems.  When faced with a “shell corporation” scheme to elude liability under Section 285, the article wrote that “the Eastern District of Texas created a solution – and set an example for other courts and patent litigants to follow.”  The article opines, and I think correctly so, that this may be another example of the courts developing an effective solution to a problems using existing tools before Congress legislates one.

But first, we need some background facts on the Iris Connex case.  After all, it is the one Judge Gilstrap described as “the clearest example of an exceptional case to yet come before the undersigned. Simply put, if this case is not an exceptional case, then there are none.”

The next 4,296 words are my attempt to summarize the case, its resolution, and its significance.  Pour yourself a cup of coffee, pull up a seat, and let’s get exceptional.