Welcome to the latest edition of Skilled in the Art. I'm Law.com IP reporter Scott Graham. I'm reporting this week from the Berkeley-Stanford Advanced Patent Law Institute in Silicon Valley. We'll hear from from former PTO Director Michelle Lee, four patent-savvy judges and a host of IP experts. I also have an update on what was once seen as a cutting-edge IP/antitrust case. As always you can share your thoughts and feedback with me at [email protected] and find me on Twitter at @scottkgraham.

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Ask Not for Whom the Director Stacks

Michelle Lee wants it known that she is not a PTAB panel stacker. During a Q&A on Thursday at the Advanced Patent Law Institute in Silicon Valley, the former USPTO director said she played no role personally in adding extra judges to Patent Trial and Appeal Board panels. Panel stacking was a major bone of contention during Supreme Court arguments last month in the Oil States case.

“I was never in a position to, nor did I ever, stack any panel,” she flatly declared to White & Case partner Bijal Vakil.

Oil States Energy Services and its supporters had seized on a concession made during a 2015 Federal Circuit argument by Scott Weidenfeller – then PTO senior counsel, now vice chief judge of the PTAB. He told the court that the PTO director has “the ultimate authority to expand panels” and that “the director is trying to ensure that her policy position is being enforced.”

The PTO argued to the Supreme Court, and Lee reiterated Thursday, that judges are added only in rare instances. The goal is to secure uniformity on the front-end decisions to institute IPR proceedings – not to achieve specific outcomes on the merits. Under PTAB operating procedures, Lee said, those decisions are made by the PTAB's chief judge – “not the director.”

She did allow that “there are probably better ways” to achieve uniformity, such as designating preferred decisions precedential. (That requires a majority vote of all PTAB judges, plus the chief judge and director's sign-off.)

Lee emphasized during her talk that the PTAB is still in its formative years and, assuming the Supreme Court doesn't kill IPRs, more refinements lie ahead. Changes might be required on the board's standards for claim construction or claim amendments to bring the two into alignment, she suggested.

On another topic, Lee acknowledged the challenge of interpreting the Supreme Court's Section 101 jurisprudence. She said “everybody is doing the best they can” to apply it at the agency. She is skeptical that Congress will come to the rescue soon. “Those are tough calls,” she said. “Once you raise one issue, then everybody wants to add their issues as well.”

Many Ways to Skin a Claim

Put four experienced patent judges on a CLE panel and you'll usually get four distinct ways of managing cases. Thursday's panel featuring U.S. District Judges James Donato of San Francisco, Andrew Guilford of Santa Ana, Mark Hornak of Pittsburgh and Susan Wigenton of Newark was no exception.

The debate started with Guilford's contention that limiting the number of claim terms a judge will construe might be constitutionally infirm. Federal Circuit judges “have told me I'm wrong and I can limit the number of terms, but I prefer to construe all of them while encouraging you not to present so many,” he said.

Hornak, on the other hand, said requests to construe numerous terms leads to his favorite question at oral argument: “Why does it matter?”

“If the answer is 'Well judge, it really doesn't matter, we just think it's the preferred construction,'” he's not likely to play ball.

Donato said that he too will limit claim terms. “Most times parties can agree” on a short list, he said. But he prefers not to ask why constructions will make a difference, because he prefers to decide claim construction without being influenced by summary judgment outcomes.

The judges also had a peppy debate over the fairness of granting Section 101 motions on the pleadings. But Wigenton said she that in her bio-pharma heavy docket, she doesn't have to make that call very often. “We don't even get the motion in those cases,” she said.

Sidley Austin partner Vern Winters moderated the discussion.

Noted From the Conference

“We're going out of business.” Those are magic words for buyers of patents on the secondary market, according to Ron Laurie of Inflexion Point Strategies. Any other reason operating companies give for selling their patents – whether it's financial distress or cash flow needs – will often be perceived as “not quality patents.”

“If you thought they were going away, you're not getting that for Christmas.” That was Kent Richardson's take on the non-practicing entity industry. The Richardson Oliver Law Group partner, who advises companies on buying and selling patents, says there's still plenty of venture investment flowing into high-end NPEs.

The patent world is swimming in acronyms. You've got the USPTO, of course, and the PTAB, NPEs and PAEs. Fenwick & West partner Michael Sacksteder is proposing a new one: REPB. That would be a Regular and Established Place of Business, a phrase used in the patent venue statuteand put back into prominence by the Supreme Court's TC Heartland decision last May. REPB sounds good to me. I'm already tired of typing the full phrase every time a court decides whether home offices, retail outlets or bank branches qualify.

Score one for the Northern District of California's new patent rules. Earlier this year, the court somewhat unexpectedly updated its local rules to require earlier disclosure of damages estimates and theories. This requires some back and forth about the smallest salable unit of the technology and the portion covered by the patent. Cisco IP litigation chief Leah Waterland has already had a good experience – the disclosures recently led to an unexpected early resolution, she said. “Counsel was able to go back to his client and say there's no pot of gold here,” she said.

RPX Out of Cascades Antitrust Litigation

It roared into the Northern District of California five years ago
with a big head of steam: Cascades Computer Innovations, a non-practicing entity backed by the two original “patent trolls,” was using the antitrust laws to take dead aim at defensive patent aggregator RPX Corp.'s business model.

Last week, after a star-crossed history including the untimely passing of its legal champion, the case ended quietly with a four-page, unpublished Ninth Circuit decision.

Cascades CEO Anthony Brown and outside counsel Raymond Niro Sr. had accused RPX of anti-competitive behavior by trying to license its patents at a group discount on behalf of Samsung Electronics, HTC Corp., LG Electronics and others. “It would be an antitrust violation if the heads of these companies sat down together in a room and agreed not to deal with [Cascades],” Brown said at the time. “Is it any different that they achieved the same result through RPX?”

Cascades negotiated settlements with several of the companies, but Samsung persuaded an Illinois jury that it did not infringe the patent. Judge Yvonne Gonzalez Rogers ruled there could be no antitrust violation without a viable infringement case. Then Niro died unexpectedly in August 2016, a week after filing Cascades' opening brief in the Ninth Circuit. Former Niro attorney Dan Ferri, now with DiCello Levitt & Casey, argued the appeal last month.

“Are there any cases challenging RPX's conduct in a situation where the patent was infringed?” Judge Michelle Friedland asked Ferri. “This doesn't seem like your best test case for this antitrust theory.”

“It may not be,” Ferri allowed.

Judge Richard Clifton sounded as if he thought there might be legal room for such a theory in a different case. “As soon as you start talking about [negotiating] collectively and don't do it individually, doesn't that suggest what antitrust law tries to prohibit?” he asked RPX's attorney, Sheppard Mullin Richter & Hampton partner Michael Scarborough.

That's not how RPX operates, Scarborough assured the court. “There's not a suggestion by RPX to 'don't do it individually,'” he said.

I won't be operating next week either, which means this will be the last Skilled in the Art of 2017 (though you might get a bonus edition if big IP news breaks next week). In the meantime, enjoy the holiday season, and I'll see you all in 2018.