Patent Case Summaries July 29, 2020

Patent Case Summaries | Week Ending July 24, 2020

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.


Uniloc 2017 LLC v. Hulu, LLC, et al., No. 2019-1686 (Fed. Cir. (PTAB) July 22, 2020). Opinion by Wallach, joined by Taranto. Dissenting opinion by O’Malley.

During an IPR proceeding challenging a Uniloc patent, Uniloc proposed substitute claims via a motion to amend. In a Final Written Decision, the Patent Trial and Appeal Board denied the motion, ruling that the substitute claims were directed to non-statutory subject matter under 35 U.S.C. § 101. Uniloc then requested rehearing, arguing that the law does not permit the Board to consider a § 101 challenge to the substitute claims. The Board denied the request, and Uniloc appealed.

The Federal Circuit affirmed. After determining that the case is not moot, the Federal Circuit considered the text, structure, and legislative history of the IPR statutes in concluding that the Board “was authorized by statute to assess Uniloc’s proposed Substitute Claims for eligibility under § 101 and, finding the claims ineligible, to deny the motion to amend.”

Uniloc argued that the Board is limited in its review of proposed substitute claims to anticipation or obviousness, as provided by § 311(b). The Federal Circuit disagreed, ruling that the Board “correctly concluded that it is not limited by § 311(b) in its review of proposed substitute claims in an IPR, and that it may consider § 101 eligibility.”

The Federal Circuit determined that Congress unambiguously intended to permit the Board to review proposed substitute claims more broadly than the bases provided in § 311(b). “The IPR Statutes plainly and repeatedly require the PTAB to determine the ‘patentability’ of proposed substitute claims,” and “a § 101 analysis constitutes a ‘patentability’ determination.” Also, § 311 “is confined to the review of existing patent claims, not proposed ones.” Proposed substitute claims “have not undergone a patentability review by the USPTO,” and leaving the question of eligibility to post-issuance challenges would be “grossly out of keeping with the statutory regime as a whole.”

Judge O’Malley dissented. In her view, the case was moot due to an intervening determination that the original claims were ineligible, meaning Uniloc “could not, therefore, substitute its old claims for new ones.” Also, in her view the IPR statutes limit the Board’s analysis to anticipation and obviousness. She explained that the majority’s “conclusion that, when it comes to substitute claims, anything goes, is … contrary to the policy supporting the IPR system” since “IPRs are meant to be an efficient, cost-effective means for adjudicating patent validity.”

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Gensetix, Inc. v. The Board of Regents of the University of Texas System, et al., No. 2019-1424 (Fed. Cir. (S.D. Tex.) July 24, 2020). Opinion by O’Malley. Opinion concurring in part and dissenting in part opinion by Newman. Opinion concurring in part and dissenting in part opinion by Taranto.

“This case involves the interplay of state sovereign immunity under the Eleventh Amendment and required joinder of parties under Rule 19 of the Federal Rules of Civil Procedure.”

Gensetix exclusively licensed two patents from the University of Texas (UT), an arm of the state of Texas. Gensetix then sued certain entities for infringement, naming UT as an involuntary plaintiff under Rule 19(a). The district court determined that the Eleventh Amendment barred joinder of UT as an involuntary plaintiff, but also concluded that, under Rule 19(b), the suit could not proceed without UT. The district court therefore dismissed the suit.

The Federal Circuit affirmed in part and reversed in part. First, the Federal Circuit held that sovereign immunity does not allow coercive joinder of UT under Rule 19(a)—even though UT voluntarily entered into a license agreement that required cooperation in an infringement suit—because UT had not waived sovereign immunity. The court held: “It is immaterial that there are no claims against UT, or that UT is named an involuntary plaintiff rather than an involuntary defendant. The Eleventh Amendment serves to prevent ‘the indignity of subjecting a State to the coercive process of judicial tribunals’ against its will.” 

Next, the Federal Circuit addressed whether the district court properly concluded that the case cannot proceed in UT’s absence. “Rule 19(b) provides that, where joinder of a required party is not feasible, ‘the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed.” The inquiry involves considering four factors, and Gensetix argued that the district court abused its discretion by failing to meaningfully analyze each of the Rule 19(b) factors. The Federal Circuit agreed. For example, the district court did not give enough weight to the fact that Gensetix is without recourse to assert its patent rights in the absence of UT. Accordingly, the Federal Circuit reversed the district court on this point.

Judge Newman dissented in part, disagreeing with the court’s holding that UT has Eleventh Amendment immunity from joinder in the litigation. She concurred in the court’s judgment, however, because in her view “this infringement suit may proceed without the University as a party, in conformity with” Rule 19(b).

Judge Taranto also concurred in part and dissented in part. In his view, the court correctly ruled that joinder of UT under Rule 19(a) would “improperly subject UT to the coercive process of judicial tribunals at the instance of private parties,” even though UT is a “required” party under Rule 19(a). He disagreed, however, with the court’s conclusion “that the district court erred in ruling that the infringement action should not proceed under Rule 19(b) without the presence of required-party UT.”

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