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Latest Federal Court Cases, 07/13/20

July 13, 2020

Overview

PATENT CASE OF THE WEEK 

Uniloc 2017 LLC v. Apple, Inc., Appeal Nos. 2019-1922, -1923, -1925, -1926 (Fed. Cir. July 9, 2020)

This week’s case of the week focuses, not on a patent issue, but on a procedural issue common to nearly all patent cases – motions to seal confidential information.  The motion to seal dispute in this case rose to the level of an appeal, resulting in the longest precedential decision issued by the Federal Circuit this week.  The case provides a cautionary tale for litigators. 

Uniloc filed four patent infringement actions against Apple.  Apple moved to dismiss based on a license agreement.  Its motion referenced material that Uniloc had designated as highly confidential pursuant to the protective order issued by the district court.  Thus, Apple filed a motion to seal the material.  Uniloc also filed a motion to seal documents referenced in its opposition brief, including twenty-three exhibits, which included some of public record, such as lists of Uniloc’s active patent cases.  Uniloc also sought to seal most of the materials in the parties’ briefs, including citations to case law and quotations from published opinions.  In support, Uniloc filed three short declarations listing the exhibits and asserting that they contained “sensitive, confidential and proprietary information.” 

The Electronic Frontier Foundation sought to intervene for the limited purpose of opposing Uniloc’s sealing motions.  The district court thereafter denied in full the motions to seal, noting that Uniloc’s motion sought to seal large swaths of publicly-available information, violated the local rule requirement that motions to seal be “narrowly tailored,” and failed to support its “generalized assertion of potential competitive harm.”  

Uniloc thereafter filed a motion for reconsideration, substantially paring down the list of information and exhibits it sought to have sealed.  It limited the request to information concerning its license agreements with third parties, an agreement with a third party company, materials about a purportedly proprietary software platform, and financial information.  The district court denied the motion for reconsideration, asserting that Uniloc should have submitted a narrowly tailored request “right from the outset rather than over-classifying and then trying to get away with whatever [it could] on a motion to reconsider.”  The court also found that Uniloc’s purported harm did not overcome the public’s right to the information, particularly because of the public nature of patent disputes.  Uniloc then appealed.

The Federal Court found the appeal to qualify under the collateral order doctrine, which generally allows interlocutory appeals when the rights affected will be irretrievably lost in the absence of an immediate appeal.

On the merits, the Court divided the materials into two categories: Uniloc’s own information, and third party information.  With respect to the first category, the Court found that Uniloc failed to comply with the local rules governing both motions to seal and motions for reconsideration.  With respect to the motion to seal requirements, the Court found Uniloc had fallen “woefully short.”  And with respect to the motion for reconsideration, the Court found that Uniloc identified no intervening change in the law, or any facts that were not available to it with respect to its initial motion.  Rather, the Court held, “Uniloc’s filing was, in reality, an attempt to gain a ‘second shot’ at complying with Local Rule 79-5’s prerequisites for filing documents under seal.”

The Court also rejected an argument that courts in that district frequently allow parties multiple opportunities to correct sealing motions.  “A district court does not abuse its discretion simply because it elects to strictly enforce its local procedural rules.”

The Court sent a strong cautionary note to those who may overdesignate information in sealing requests:

“In denying Uniloc’s sweeping motion to seal, the district court sent a strong message that litigants should submit narrow, well-supported sealing requests in the first instance, thereby obviating the need for judicial intervention. Because the court ‘took seriously the presumption of public access and did so in accord with precedent from the Supreme Court and [the Ninth Circuit],’ . . . we conclude that there was no abuse of discretion in its decision to deny Uniloc’s requests to seal its purported confidential information and that of its related entities.”

With respect to the third parties, the Court took a different approach, noting that those “third parties were not responsible for Uniloc’s filing of an overbroad sealing request.”  The Court concluded that the district court failed to make factual findings sufficient to allow the Federal Circuit to determine whether the proper balancing test was applied: the rights of the third parties as opposed to the public’s right to review the documents.  The Court thus remanded the case “so that the court may make particularized determinations as to whether and, if so, to what extent, the materials of each of these parties should be made public.”

The opinion can be found here.

By Nika Aldrich

ALSO THIS WEEK 

Fitbit, Inc. v. Valencell, Inc., Appeal No. 2019-1048 (Fed. Cir. July 8, 2020)

In this case, the Federal Circuit found that the right of appeal of a petitioner joined to an existing inter partes review proceeding was not limited to the specific grounds raised in its individual petition.  The IPR in this case was initially petitioned by Apple Inc., not a party to the appeal, and the Patent Trial and Appeal Board had instituted review as to some challenged claims, but not others.  Following the institution decision, appellant Fitbit filed an IPR petition for review of the instituted claims only, and sought and obtained joinder with Apple’s IPR.  Between PTAB’s hearing of oral argument and issuance of a final written decision, the Supreme Court decided SAS Insitute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), holding that all claims challenged in an IPR petition must be reviewed if the petition is granted.  The Board then re-instituted the IPR for further proceedings as to the non-instituted claims, and ultimately found that those claims were not shown to be unpatentable. 

Fitbit appealed, and appellee Valencell argued that Fitbit had no right to appeal the decision on the previously non-instituted claims because they were not challenged in Fitbit’s IPR petition.  The Federal Circuit rejected Valencell’s arguments that Fitbit’s participation in the IPR was limited and that arguments not presented in its petition should be deemed waived.  Instead, relying on its precedent that joined parties enjoy a statutory right to appeal under 35 U.S.C. § 319, the Court held that this right applies to the entirety of the proceedings, which conforms to the statutory purpose of avoiding redundant actions by facilitating consolidation while preserving statutory rights such as judicial review.

The Court also vacated PTAB’s decision that the claims were not shown to be obvious.  The Court found that the PTAB erred by concluding its analysis after rejecting the petitioner’s proposed claim construction without analyzing the prior art, and also by refusing to address claim terms lacking an antecedent basis where the parties agreed that the issue resulted from a simple claim re-numbering error during the patent’s prosecution.

The opinion can be found here.

By Jason Wrubleski

In re: Boloro Global Limited, Appeal Nos. 2019-2349, -2351, -2353 (Fed. Cir. July 7, 2020)

In this brief precedential order, the Federal Circuit held that its recent decisions in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019) and VirnetX Inc. v. Cisco Sys., Inc., No. 2019-1671, 2020 WL 2462797 (Fed. Cir. May 13, 2020), which found that administrative patent judges (“APJs”) were not constitutionally appointed, should be extended to ex parte proceedings before the Patent Trial and Appeal Board (“the Board”).  In extending the reasoning of Arthrex and VirnetX, applicable to inter partes reviews and inter partes re-examinations, respectively, to ex parte proceedings, the Court applied the remedy of those cases to the ex parte reexamination at issue here, vacating the Board’s decisions and remanding for proceedings before a different panel of APJs. 

The opinion can be found here.

By Erin Forbes

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