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  • 91%: That is the Rate at Which the PTAB Affirms Examiner Section 101 Rejections

    By Michael Borella, Mackenna Dunn*, and Garrett "Jake" Lee** —

    USPTO SealOver the last two years, we have studied the examiner affirmance rates of the Patent Trial and Appeal Board (PTAB) for § 101 rejections.  The PTAB is the administrative court of the U.S. Patent and Trademark Office (USPTO) that handles applicant appeals of examiner rejections, as well as inter partes reviews (IPRs) and post-grant reviews (PGRs).  Our analyses of 2021 and 2022 data were less than good news for applicants, with the PTAB affirming examiner § 101 rejections 87.1% and 88.4% of the time, respectively.

    Given that the PTAB's overall affirmance rate is about 58%,[1] the extreme difficulty of winning a § 101 dispute at the PTAB is shocking.  While some might contend that this is a natural process through which the PTAB weeds out weak inventions, it is actually because § 101 jurisprudence has evolved into a hot mess.  The Supreme Court's decision in Alice Corp. v. CLS Bank Int'l set forth a notoriously vague test, the Federal Circuit followed this with conflicting case law, and the PTAB does not even follow the USPTO's own 101 examination guidance.  This has opened the door to arbitrary and conclusory reasoning often winning the day.

    As a result, there have been a number of absurd outcomes, such as the ITC finding a diamond-encrusted drill bit to be an abstract idea and the Federal Circuit coming to the same conclusion about a camera phone.  Furthermore, prosecution of software applications before the USPTO has become highly examiner-dependent rather than being based primarily on the actual claim language at issue.  In other words, we are living in a timeline in which something went terribly wrong over the last two decades.

    In any event, the examiner affirmance rates for 2023 provide little hope for applicants.  As noted in the title, it is 91% — an increase from its already high numbers in 2021 and 2022.

    To gather the underlying data, we adopted an approach that was virtually identical to that of last year. From the PTAB's search interface, we specified the following criteria:  decision dates between January 1, 2023 and December 31, 2023, a proceeding type of "appeal", a decision type of "decision", and an issue type of "101".  These search results were filtered to focus only on decisions in which the applicant appealed an examiner's Alice-based § 101 rejection and the PTAB ruled on this basis of appeal.[2]  In other words, we excluded cases in which: (i) the appeal was not of a § 101 issue but the PTAB set forth a new grounds of rejection based on § 101, and (ii) the appeal was of a § 101 issue but the PTAB did not decide the case on § 101 grounds (e.g., the examiner withdrew the § 101 rejections after the appeal was filed).

    This took the 633 decisions returned by the search engine down to 495 substantive § 101 decisions.[3]  Compared to 2022, the 2023 overall numbers are quite similar.  There were 634 decisions and 482 substantive § 101 decisions in 2022.

    Figure 1

    Figure 1

    Figure 1 shows these overall results broken down by technical center (TC) from which the appeals originated.[4]  While the affirmance rate per TC is all over the map, the outliers are TCs 3600 and 3700 which are both over 95%.  This should surprise no one as so-called "business method" inventions are routed to these TCs.  When considered together, the vast majority (over 76%) of all appeals are out of TCs 3600 and 3700, demonstrating how frequently examiners in those TCs issue § 101 rejections.

    The affirmance rate for TC2100 (computing technologies) has ticked up from last year, jumping to over 85% from 80%.  This demonstrates that current § 101 practice is having a deleterious impact on software patenting in general and not just software-implemented business methods.  Also, the number of appeals out of TC2100 has increased from 45 to 70, suggesting that examiners in this TC have been issuing more § 101 rejections starting in late 2021.  The affirmance rate for TC1600 is also fairly high, likely due to a number of notoriously tough examiners in the bioinformatics art units.

    There are too few data points in any of the other TCs to draw any conclusions.  But these results do suggest that a software invention is likely to receive a more favorable examination in TC2100 than TCs 3600 or 3700, and that TCs 2400 and 2600 may be the most favorable TCs for software examination.

    Figure 2

    Figure 2

    Next we considered the type of abstract idea used in the examiners' § 101 rejections.  For the abstract idea exception to patentable subject matter, the three main categories are mathematics, mental processes, and methods of organizing human activity.  In other words, a claim is deemed ineligible for patenting if it is directed to mathematics, a mental process, or a method of organizing human activity without significantly more.  Unfortunately, these categories are ill-defined.

    As shown in Figure 2, of all substantive affirmances of § 101 rejections by the PTAB, 17% were based on mathematics, 48% on mental processes, and 68% on methods of organizing human activity.  The reason that these three numbers do not sum to 100% is because some examiners and PTAB panels concluded that claims were directed to more than one of the categories (some were placed in all three).  Not surprisingly, mental steps was the most prevalent category for TC2100 (likely due to the fact that this category has been interpreted to be broadly applicable to software inventions by the Federal Circuit).  Likewise, the high rate of organizing human activity categorizations in TC3600 was expected due to most business methods being conducive to placement therein.

    Finally, we looked into situations where the PTAB provided new grounds of rejection based on § 101 (as noted above, most of these decisions were omitted from the analysis leading to Figures 1 and 2).  This is a troublesome thought for many applicants considering whether to appeal a § 102 or 103 rejection.  The PTAB is permitted to reverse the examiner on those grounds but set forth a new § 101 rejection, even if the examiner found the claims eligible under § 101 and the issue was not a subject of the appeal.

    Figure 3

    Figure 3

    The results are shown in Figure 3.  The overall likelihood of receiving a new ground of rejection under § 101 is only 10%.  But it is slightly higher for TC2100 and slightly lower for TC3600.  This is probably because examiners in TC2100 tend to give fewer § 101 rejections while examiners in TC3600 already give § 101 rejections very frequently.  While the numbers for TCs 2400 and 2600 may be too small to be significant, they appear to confirm the supposition that examiners in those TCs give relatively fewer § 101 rejections.

    Notably, most of these new grounds of rejection were given for applications where the examiner did not provide a § 101 rejection that was ultimately the subject of the appeal.  The results indicate that the concern of receiving a new § 101 rejection from the PTAB in this situation is not unfounded, though it does not happen frequently.

    Summing all of this up, the 2023 data is further confirmation that appealing a § 101 rejection to the PTAB is a highly risky endeavor and likely to result in an affirmance.  Further, appealing any non-101 rejection to the PTAB could result in the PTAB issuing its own § 101 rejection. Thus, continuing to work with an examiner to find allowable subject matter is the recommended course of action, even if the examiner is difficult.  Of course, some examiners — such as those with very low allowance rates — are unlikely to consider any amendment to be allowable, and therefore an appeal may be justified.  Moreover, the 2023 data also confirms that the use of TC steering tools should be part of every practitioner's workflow.  These tools use analytics to predict the TC to which a patent application is likely to be routed, and with them it is easier to prepare applications that are more likely to avoid applicant-hostile TCs 3600 and 3700.

    * Mackenna Dunn is a summer clerk with MBHB who is attending Chicago-Kent College of Law. Mackenna graduated from the University of Rhode Island with a Bachelor of Science degree in Biomedical/Medical Engineering.

    ** Garrett "Jake" Lee is a summer clerk with MBHB who is attending George Washington University.  Jake graduated from George Mason University with a Masters in Applied and Engineering Physics.

    [1] From the USPTO's appeal statistics for its fiscal year 2023.  This number jumps to around 67% if affirmances-in-part are considered.

    [2] To simplify the analysis, we considered a decision to be an "affirmance" of the examiner's § 101 rejection if the PTAB held at least one claim invalid under § 101.

    [3] Many of the 633 decisions were of rejections on other grounds (e.g., §§ 102 or 103).  We did not consider anything but the § 101 determinations.  But we omitted decisions with § 101 rejections based on laws of nature or natural phenomena, non-statutory double patenting, utility, and claims that did not fall into one of the four statutory categories (which accounted for only a handful of the decisions).

    [4] RD00 is a new, experimental TC that supposedly is an attempt to make examination more efficient and consistent.

  • Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc. (Fed. Cir. 2024)

    By Kevin E. Noonan –

    Federal Circuit SealThe Federal Circuit once again had an opportunity to opine on the extent of behavior by a generic drugmaker who opts to accept a "section viii carve-out" in its FDA approval (resulting in a so-called "skinny label) on liability for inducing infringement in Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc.

    The case arose over Amarin's Vascepa® (icosapent ethyl) drug product, an omega-3 fatty acid from fish oil, for treatment of severe hypertriglyceridemia (blood triglyceride levels at least 500 mg/dL; normal range is less than 150 mg/dL) (the "SH indication").  Amarin also later received approval for a second indication, reducing cardiovascular disease risk (wherein the second approval removed a Limitation of Use in this regard on the original label) (the "CV indication").  Hikma filed its ANDA against the first approved Vascepa® product; upon Amarin receiving its second FDA approval Hikma filed a section viii statement to carve-out the CV indication under 21 U.S.C. § 355(j)(2)(A)(viii) (the so-called "skinny label").  FDA approved Hikma's skinny label ANDA in 2020 not containing the CV Limitation of Use on the label.

    Thereafter, in a series of press releases, Hikma asserted its product as a "generic version of Amarin's Vascepa®."  In a particular press release, Hikma claimed its two-month U.S. sales to be $1.1 billion, a figure for all uses of its product, with up to 75% of these sales being for the putatively carved-out CV (off-label) indication (albeit there being other press releases emphasizing the limitation of FDA approval to the SH indication).  And on Hikma's website, while asserting an AB rating for its product (generic approval for all indications on the label), the website also said "Hikma's generic version is indicated for fewer than all approved indications of the Reference Listed Drug."

    In the ensuing litigation (this case), Amarin sued Hikma for inducement of infringement under 35 U.S.C. § 271(b) of Orange Book listed U.S. Patent Nos. 9,700,537 and 10,568,861 (for claim 1 of the '527 patent and claim 1 and 2 of the '861 patent):

    '537 patent:

    1.  A method of reducing occurrence of a cardiovascular event in a hypercholesterolemia patient consisting of:
        identifying a patient having triglycerides (TG) of at least 150 mg/DL and HDL-C of less than 40 mg/dL in a blood sample taken from the patient as a risk factor of a cardiovascular event, wherein the patient has not previously had a cardiovascular event, and administering ethyl icosapentate in combination with a 3-hydroxy3-methylglutaryl coenzyme A reductase inhibitor,
        wherein said 3-hydroxyl-3-methylglutaryl coenzyme A reductase inhibitor is administered to the patient at least one of before, during and after administering the ethyl icosapentate; and wherein the 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitor is selected from the group consisting of pravastatin, lovastatin, simvastatin, fluvastatin, atorvastatin, pitavastatin, rosuvastatin, and salts thereof, and
        wherein daily dose of the 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitor are 5 to 60 mg for pravastatin, 2.5 to 60 mg for simvastatin, 10 to 180 mg for fluvastatin sodium, 5 to 120 mg for atorvastatin calcium hydrate, 0.5 to 12 mg for pitavastatin calcium, 1.25 to 60 mg for rosuvastatin calcium, 5 to 160 mg for lovastatin, and 0.075 to 0.9 mg for cerivastatin sodium.

    '861 patent:

    1.  A method of reducing risk of cardiovascular death in a subject with established cardiovascular disease, the method comprising administering to said subject about 4 g of ethyl icosapentate per day for a period effective to reduce risk of cardiovascular death in the subject.

    2.  The method of claim 1, wherein the subject has a fasting baseline triglyceride level of about 135 mg/dL to about 500 mg/dL and a fasting baseline LDL-C level of about 40 mg/dL to about 100 mg/dL.

    In its complaint, Amarin asserted Hikma's press releases, website content, and product label as evidence of "specific intent to actively encourage physicians to directly infringe the asserted patents by prescribing its generic icosapent ethyl product for the off-label CV indication, an indication for which Hikma did not get FDA approval."

    The District Court granted Hikma's motion to dismiss under Fed. R. Civ. Pro. 12(b)(6) for failure to state a claim in Amarin's complaint alleging inducement of infringement, based on its determination that the complaint failed to allege facts that Hikma had taken "affirmative steps" to induce infringement (a decision contrary to the recommendation of the magistrate judge to whom the district court judge referred the motion).  The District Court judge cited the cautionary language in Hikma's label regarding side effects as "hardly instruction or encouragement" for the alleged off-label use and that removal of the CV Limitation of Use from Hikma's label would not have been persuasive that its product had been "shown to reduce cardiovascular risk" and thus to have "encourage[d] its use for that purpose."  The distinction relied upon by the District Court was that "'merely describing an infringing [treatment] mode is not the same as recommending, encouraging, or promoting an infringing use,'" quoting, with alterations, Takeda Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 631 (Fed Cir. 2015).  With regard to Hikma's press releases and other public statements, the District Court considered that while they "may be relevant to Hikma's intent to induce infringement" (emphasis in opinion), they were not evidence of "an inducing act" constituting a separate element for inducement under § 271(b). The website evidence was deemed insufficient because it did not "rise to the level of encouraging, recommending, or promoting taking Hikma's generic for the reduction of CV risk," comparing GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 7 F.4th 1320, 1336 (Fed. Cir. 2021) (per curiam) ("GSK"), with Grunenthal GmbH v. Alkem Lab'ys Ltd., 919 F.3d 1333, 1339 (Fed. Cir. 2019).

    The Federal Circuit reversed in an opinion by Judge Lourie, joined by Chief Judge Moore and District Court Judge Albright (W.D. Tx), sitting by designation.  The opinion begins by emphasizing that the matter below was not an ANDA case under 35 U.S.C. § 271(e)(2)(A), wherein the alleged infringement does not involve an infringing act other than filing the ANDA (what the opinion denotes as a "hypothetical" act of infringement, based on what would arise if the ANDA applicant received FDA approval and marketed the allegedly infringing generic drug).  The panel also asserted that this is not a typical "skinny label" case under section viii wherein the plaintiff asserts the generic label isn't "skinny enough" and wherein "the label alone induces infringement," relying on H. Lundbeck A/S v. Lupin Ltd., 87 F.4th 1361, 1370 (Fed. Cir. 2023), and HZNP Meds. LLC v. Actavis Lab'ys UT, Inc., 940 F.3d 680, 699 (Fed. Cir. 2019).  The basis for Amarin's assertions, in the Federal Circuit's view, is the combination of the skinny label and Hikma's "public statements and marketing" of its approved generic product (which the opinion states makes this "nothing more than a run-of-the-mill induced infringement case," a characterization perhaps motivated by the contretemps arising in its decisions in GSK, see "GlaxoSmithKline LLC v. Teva Pharmaceuticals USA (Fed Cir. 2020)" and "GlaxoSmithKline LLC v. Teva Pharmaceuticals USA (Fed. Cir. 2022)", and Hikma's assertions of the consequences that would arise if the Federal Circuit reversed, see below).  In such a case, the standard the Court applied was "whether the totality of the allegations, taken as true, plausibly plead that Hikma induced infringement" (emphasis in opinion) that would provide "substantial evidence to support a jury verdict of induced infringement."

    The panel noted that the case has come before them in a "nascent" stage, without the benefit of discovery or as an appeal of denial of a preliminary injunction motion or an appeal of a summary judgment motion or post-trial motion (citing several of the Court's earlier precedent on skinny label cases having those attributes).  As a consequence, the Court stated it is responsible here for "reviewing allegations, not findings, for plausibility, not probability" under Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)(emphasis in opinion).

    Turning to the evidence relied upon by the District Court in granting Hikma's motion, the opinion states as being "undisputed" that there has been direct infringement by doctors and other healthcare providers in prescribing Hikma's alleged infringing product for off-label use (the CV indication) and that Hikma had "the requisite intent and knowledge to induce that infringement" as found by the District Court.  This leads the Court to determining whether Hikma "actively" induced healthcare providers' direct infringement.  At least due to the analytical basis for reviewing motions to dismiss ("[a]ccepting all well-pleaded facts as true and drawing all reasonable inferences in Amarin's favor"), the opinion finds that it did.  However, the panel discarded any implication that Hikma's label (the "Indications & Usage" section) provides "implied or express instruction to prescribe the drug for the CV indication."

    The panel instead turned to the parties' contentions.  First, Amarin's complaint alleged that other portions of Hikma's label (specifically, "the clinical studies section, which describes statin-treated patients with the same cardiovascular event history and lipid levels covered by the asserted patents") would teach physicians that the product could be prescribed for treating cardiovascular risk (because, inter alia, the patient populations for the SH and CV indications overlap).  Moreover Amarin contended that while FDA approved removal of the CV Limitation of Use regarding CV indications from their label it did not do so for Hikma's label.  Hikma's removal of the CV Limitation of Use regarding CV indications as well as including warnings of potential cardiovascular side effects from its drug, Amarin contended, communicated to physicians that its generic drug could be used off-label for the CV indication.

    Hikma for its part argued that Amarin was asserting a requirement (and infringement liability for the absence thereof) for language discouraging infringement contrary to law, relying on Takeda Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 631 (Fed Cir. 2015).  Hikma attempted to take refuge (as has arisen in other skinny label disputes) on FDA's requirement that the label for generic copies of branded approved drugs be "the same as the labeling approved for the listed drug" under 21 U.S.C. § 355(j)(2)(A)(v).  Also, Hikma argued that its silence regarding its product's effects on risk of cardiovascular complications "cannot plausibly instruct infringement."  Finally, Hikma argued that it is "implausible" and "borderline frivolous" to contend (as Amarin does) that information related to clinical studies and attendant warnings about side effects would encourage a physician to prescribe their drug.

    The Federal Circuit conceded that Hikma's label does not "recommend[], encourag[e], or promot[e] an infringing use" as a matter of law as found by the District Court.  But (agreeing with the magistrate judge) the Court (and Amarin) did not rely on the label alone.  Rather, it is the combination (emphasis in opinion) of the label and Hikma's "public statements and marketing materials" that render the District Court's grant of Hikma's motion to dismiss to be in error.  Specifically, the Court considered that while the "AB rating" description on Hikma's website may be broad enough to encompass both infringing and non-infringing uses (and thus not support a finding of inducement liability) their press releases consistently characterized their drug as being a "generic equivalent to Vascepa®" and cite the SH indication limitation as being only a part of their approved indication.  These implications were supported by reports on sales figures resulting in large (75%) part from off-label use for CV indications.  "Those allegations, taken together with those relating to Hikma's label, at least plausibly state a claim for induced infringement," the Court held.

    Importantly, these allegations by Amarin regarding Hikma's inducement liability are, according to the opinion, "question[s] of fact—not law" and therefore are "not proper for resolution on a motion to dismiss."  The panel asserted they "[we]re unpersuaded" by Hikma's arguments that, because these facts are not in dispute the District Court was correct in deciding to grant Hikma's motion to dismiss on legal grounds.  And the opinion distinguishes earlier cases where inducement was decided as a matter of law on the procedural posture of one such case, wherein HZNP was decided ("critically") on summary judgment and was solely based on the contents of the label; the parties access to discovery placing this case (motion to dismiss) on a different footing, insofar as Amarin was entitled to having all factual considerations and inferences in its favor (finding Amarin's contentions on how Hikma's statements and representations could "plausibly" suggest to a physician that its drug was effective the CV indications).  The panel also refused to interpret Hikma's representations regarding its AB rating for the drug as being sufficient to insulate it from inducing infringement liability.

    The opinion also rejects Hikma's assertions that reversing the district court would be contrary to the Court's decision in GSK, distinguishing that decision on the basis of procedural differences (a motion to dismiss here with a post-trial judgment as a matter of law there) as well as substantive distinctions (there, the label itself taught an infringing use and hence "it was reasonable for the jury to find that the generic manufacturer's marketing of its product as an "AB rated generic equivalent" encouraged physicians to prescribe the drug for the infringing use instructed by the label"), which is not the case here.  Here, Amarin was entitled to have all its allegations accepted as true in the context of a motion to dismiss, including their allegations that "Hikma did much more than call its product a 'generic version' of Vascepa" in the face of evidence of Hikma's other activities.

    The opinion disdainfully rejects Hikma's "inflated characterizations" regarding the dire consequences for section viii carve-outs should the Court rule (as it does) against them.  The opinion states its decision is "limited to the allegations before us" and "guided by the standard of review appropriate for this stage of proceedings," while pledging fealty to the "careful balance struck by the Hatch-Waxman Act regarding section viii carve-outs."  The Court cautioned generic drugmakers that "clarity and consistency in a generic manufacturer's communications regarding a drug marketed under a skinny label may be essential in avoiding liability for induced infringement," which was not found here.

    This case is remanded to the District Court where, absent settlement (unlikely in view of Hikma's $1 billion + annual sales) the Federal Circuit will likely have the opportunity to rule on the substantive questions regarding skinny label inducement raised by these circumstances.

    Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc. (Fed. Cir. 2024)
    Panel: Chief Judge Moore, Circuit Judge Lourie, and District Judge Albright (sitting by designation)
    Opinion by Circuit Judge Lourie

  • The NO FAKES Act: Bipartisan Group of Senators Introduce Bill to Protect against Unauthorized Uses of Digital Replicas

    By Michael Borella and Joshua Rich—

    Senate SealAfter floating a discussion draft last fall, a bipartisan group of Senators formally introduced the Nurture Originals, Foster Art, and Keep Entertainment Safe Act of 2024 ("the NO FAKES Act" or "the Act") on July 31, 2024.  The Act is remarkable not only because its sponsors span the ideological spectrum — the Act was introduced by Senators Coons, Blackburn, Klobuchar, and Tillis — but also because it has received the backing of groups such as the Motion Picture Association, the Recording Industry Association of America, the Independent Film & Television Alliance, as well as the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) and major artist representation agencies.[1]  In a Congress that is more often than not too polarized to actually legislate, the bipartisan nature and widespread support for the Act may indicate that it has a fighting chance of becoming a law.

    To date, any regulation of the use of individual's names, images, or likenesses has been governed by copyright law, the Lanham Act, or state statutes and common law.  Those laws have generally been sufficient to protect individuals' rights, but there is a mounting concern that generative AI replications fall through the cracks of existing law.  For example, the song "Heart On My Sleeve" — purportedly a collaboration between musicians Drake and The Weeknd — went viral last year on social media and streaming platforms.[2]  Earlier this year, OpenAI quickly shuttered a digital voice assistant that sounded remarkably similar to actress Scarlett Johansson.[3]  A recent lawsuit alleges that an AI company used deceptive practices to obtain samples from voice actors, which were later used to produce content that was not actually spoken by the actors.[4]  Even more recently, voice actors and motion capture artists in the video game industry voted to strike over potentially exploitative uses of their images and likenesses by AI.[5]  More generally, the public is slowly becoming aware of menacing uses of "deepfakes" — highly-realistic, AI-enabled audio, image, or video representations of individuals appearing to be saying or doing something they never actually did.

    The NO FAKES Act is an attempt to cure those deficiencies by providing civil remedies that protect people against misuse of their images and voices.  In particular, the Act creates a federal cause of action through which actors, artists, creators, and other individuals can seek relief for certain types of uses of their digital replicas.  A digital replica is defined by the Act as "a newly-created, computer-generated highly realistic electronic representation that is readily identifiable as the voice or visual likeness of an individual."  Critically, the digital replica must be:

    embodied in a sound recording, image, audiovisual work, including an audio-visual work that does not have any accompanying sounds, or transmission (i) in which the actual individual did not actually perform or appear; or (ii) that is a version of a sound recording, image, or audiovisual work in which the actual individual did perform or appear, in which the fundamental character of the performance or appearance has been materially altered.

    Of course, the NO FAKES Act creates liability only for unauthorized use of the digital replica; it therefore includes provisions related to identifying the holders of rights (that is, the individual or "any other person that has acquired, through a license, inheritance, or otherwise, the right to authorize the use of such voice or visual likeness in a digital replica").

    The Act's foundation is the precept that "each individual or right holder shall have the right to authorize the use of the voice or visual likeness of the individual in a digital replica."  The right is "(I) a property right; (II) not assignable during the life of the individual; and (III) licensable, in whole or in part, exclusively or non-exclusively, by the right holder."  This right continues past the death of the individual whose voice or visual likeness is at issue, with it becoming transferrable to heirs or assignable to other parties.  One who acquires a postmortem right in this fashion must periodically (first every ten years but after that every five years) demonstrate public use of the voice or visual likeness in order to prevent the right from expiring.  Regardless of public use and renewals, the right will expire 70 years after the death of the individual, aligning the expiration with expiration of rights under the Copyright Act.

    Although the right of publicity is most analogous to privacy or trademark rights, the NO FAKES Act aligns more closely with other federal laws, including the Copyright Act and the Communications Decency Act (CDA), rather than the Lanham Act.  The Act also leverages the existing administrative framework established by the Copyright Act, instructing the Copyright Office to set forth a procedure for a rights holder to carry out the renewals and to maintain an online directory of current post-mortem digital replication rights and a directory of representatives of websites and other potential hosts of media incorporating digital replicas (which allows protections analogous to Section 230 of the CDA).

    The Act creates a civil cause of action that can be brought based on: "(A) The production of a digital replica without consent of the applicable right holder[, or] (B) The publication, reproduction, display, distribution, transmission of, or otherwise making available to the public, a digital replica without consent of the applicable right holder."  Like the Copyright Act (but unlike the Lanham Act), the liability requires that a person engaging in either activity must have actual knowledge of their unauthorized use of a digital replica or has willfully avoided having such knowledge.  Also like the Copyright Act but unlike the Lanham Act, a three-year statute of limitations applies starting from the date when "the party seeking to bring the civil action discovered, or with due diligence should have discovered, the applicable violation."

    The remedies also align most closely to copyright law, allowing a plaintiff to receive statutory damages or actual damages (including both the harm to the individual and disgorgement of the defendant's profits).  Specifically, the remedies available are the greater of: (a) $5,000 per work embodying the applicable unauthorized digital replica, $5,000 per violation by an entity that is an online service, and $25,000 per work embodying the applicable unauthorized digital replica by an entity that is not an online service, or (b) "any actual damages suffered by the injured party as a result of the activity, plus any profits from the unauthorized use that are attributable to such use and are not taken into account in computing the actual damages."  The Act makes it clear that a plaintiff can seek injunctive or other equitable relief, and that punitive damages in the case of willful violations can include attorney's fees.

    Analogous to fair use defenses in copyright law, the Act carves out certain exclusions to ensure that the Act does not conflict with the First Amendment.  For example, the NO FAKES Act does not protect against the use a digital replica (even without authorization) in bona fide news accounts, documentary, historical, or biographical uses, or commentary, criticism, scholarship, satire, or parody. Further exclusions include de minimis uses as well as advertising or commercial uses in conjunction with any of the aforementioned exceptions.  However, the Act makes it clear that the exclusions do not apply — that is, it creates an exclusion to the exclusions — "where the applicable digital replica is used to depict sexually explicit conduct."

    Likely in order to attain support of AI, tech, and media companies, the Act sets forth a number of safe harbors similar to the Communications Decency Act.  For products and services capable of producing digital replicas, there is no secondary liability unless those products and services are designed primarily to produce unauthorized digital replicas with limited commercial purpose beyond that.[6]  For online services, referring or linking to an unauthorized digital replica also does not incur liability.  As a quid pro quo, online services hosting user uploaded material have a takedown obligation upon receiving notice of violations of the Act.  That is, they will not be liable for violating any rights if the online service:

    (i) removes, or disables access to, all instances of the material (or an activity using the material) that is claimed to be an unauthorized digital replica as soon as is technically and practically feasible for that online service; and

    (ii) having done so, takes reasonable steps to promptly notify the third-party that provided the material that the online service has removed or disabled access to the material.

    However, these safe harbors are not available unless the online service designates, with the Copyright Office, an agent to receive notice of such violations.  The designation must include at least the name, address, telephone number, and email address of the agent.  The Copyright Office must maintain an online public registry of such agents.

    All of those provisions are generally not very contentious.  There is controversy, however, over whether the state law causes of action should be preempted and the balance between clarity and uniformity of the law and allowing States to provide greater protection.[7]  The Act explicitly preempts any state laws that protect "an individual's voice and visual likeness rights in connection with a digital replica, as defined in this Act, in an expressive work."  But there are exceptions to this preemption including pre-existing state laws (defined as "statutes or common law in existence as of January 2, 2025, regarding a digital replica"), state laws "regulating a digital replica depicting sexually explicit conduct," or "causes of action under State statutes or common law for the manufacturing, importing, offering to the public, providing, making available, or otherwise distributing a product or service capable of producing 1 or more digital replicas."  In other words, state right of publicity and privacy laws protecting image and likeness rights in general would not be preempted but any specifically addressing the protection of digital replicas would be nullified if enacted after January 2, 2025.

    The NO FAKES Act appears to be necessary because tech companies producing generative AI tools or providing them as services seem unwilling or unable to effectively self-regulate how they exploit the labors of others to train their models.  Copyright law is unlikely to provide sufficient protection for the training of a generative AI model with the voices and visual likenesses of performing artists, even if those works are copyrighted.  Further, it is not clear how similar the output of such models needs to be when compared to the original work for there to be copyright infringement.

    If passed, the NO FAKES Act will plug a significant part of this gap.  How a generative AI model is trained, or even if generative AI is used at all, does not matter.  The digital replica need only be "computer-generated" and "readily identifiable as the voice or visual likeness of an individual."  In doing so, the Act would be the first federal law in the U.S. that protects publicity rights.

    Deepfakes, by their very nature, undermine public trust and can cause significant harm by distorting perceptions of reality and spreading misinformation.  The appeal of this legislation lies in its commitment to limit the malicious misuse of technology, yet allowing authorized uses.  However, while the bill has garnered bipartisan support, it will require a concerted effort and extensive backing in both the Senate and the House to pass into law, not to mention the support and signature of the president (whoever that might be if and when the Act is passed by Congress).

    Even if the NO FAKES Act is enacted, there remains a question as to whether it is constitutional.[8]  Unlike patents and copyrights, Article I of the Constitution provides no explicit basis for a federal right of privacy or publicity.  Rather, the cause of action created by the Act is limited to violations that affect interstate commerce or use means of facilities of interstate commerce, tying the Act to the commerce clause.  But there remains a tension with the Act's express statement that it is establishing a new property right in name, image, or likeness.  So, ultimately, the courts may have the last word on whether constitutionality should be judged based on the nature of the right or the scope of the remedy.

    [1] https://www.coons.senate.gov/news/press-releases/senators-coons-blackburn-klobuchar-tillis-introduce-bill-to-protect-individuals-voices-and-likenesses-from-ai-generated-replicas.  Notably absent from this list are Microsoft, Alphabet, Meta, xAI (affiliated with Twitter/X), Apple, and several other AI tech players.

    [2] https://en.wikipedia.org/wiki/Heart_on_My_Sleeve_(Ghostwriter977_song).

    [3] https://www.patentdocs.org/2024/05/black-widow-versus-openai-and-what-it-means-for-singers-and-voice-actors.html.

    [4] https://www.cbsnews.com/news/two-voice-actors-sue-ai-company-lovo/.

    [5] https://www.mbhb.com/intelligence/snippets/interplay-between-image-and-likeness-rights-and-ai-central-to-gaming-actor-strike-and-newly-proposed-legislation/.

    [6] This provision was likely included to protect the developers of generative AI large language models, such as OpenAI, Microsoft, and Google.

    [7] For example, at an August 5, 2024 USPTO "Public roundtable on AI protections for use of an individual's name, image, and likeness," the representative of the Motion Picture Association spoke in favor of complete preemption and was immediately followed by the representative of the Recording Industry of America who spoke against preemption.

    [8] This issue was raised by one of the speakers during the virtual portion of the USPTO roundtable, but it came too late for most other speakers to comment.

  • Legislators Introduce RESTORE Act

    By Kevin E. Noonan –

    Washington - Capitol #5
    U.S. Senator Chris Coons (D-DE), along with Sen. Thom Tillis (R-NC), have been the motivating force for patent reform for almost a decade, primarily in their efforts to roll back legislative efforts and judicial decisions having negative effects on U.S. innovation and the patent system (see "Senator Coons And Co-Sponsors Introduce the PREVAIL Act"; "Senators Tillis and Coons Once More Attempt to Fix Patent Eligibility"; "Senate Bill Proposed to Provide Subject Matter Eligibility Solution"; "Senate Subcommittee on Intellectual Property Holds Hearings on Proposed Revisions to 35 U.S.C. § 101"; "Congress Releases Framework for Section 101 Reform").  Yesterday, Sen. Coons and Sen. Tom Cotton (R-AR) introduced the Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act of 2024 in yet another such effort, this time to restore the presumption that a patentee who has prevailed against an infringer at trial is entitled to an injunction (subject to equitable principles and a demonstrated negative effect on the public interest).  Representatives Nathaniel Moran (R-TX1) and Madeleine Dean (D-PA4), joined by co-sponsors Hank Johnson (D-GA4), Deborah Ross (D-NC2), and Chip Roy (R-TX24) introduced a companion bill in the House of Representatives.

    The bill, entitled the "Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive Patent Rights Act of 2024," contains but two substantive sections.  Sec. 2 sets forth Findings, including that:

    (1) Securing effective and reliable patent protection for new technologies is critical to maintaining the competitive advantage of the United States in the global innovation economy;

    (2) The Constitution of the United States empowers Congress to grant inventors the "exclusive Right" to their inventions in order to "promote the Progress of Science and the useful Arts";

    (3) The right to prevent others from making, using, offering to sell, selling, or importing a patented invention without authority from the inventor is the core of the patent right, ensuring that an inventor enjoys, for a limited time, the sole benefit of the inventor's invention or discovery;

    (4) Congress and the courts of the United States have long secured the constitutionally protected patent right through the traditional equitable remedy of an injunction;

    (5) Given the irreparable harm that is caused by multiple acts of infringement or willful infringement of a patent, courts historically presumed that an injunction should be granted to prevent such acts, with a burden on defendants to rebut such presumption with standard equitable defenses;

    (6) Recently, courts have ended the approach described in paragraph (5), which contradicts the traditional, historical practice governing the equitable remedy described in that paragraph; [and]

    (7) Eliminating the traditional, historical equitable practice of applying a rebuttable presumption of injunctive relief in the case of continuing acts of infringement or willful infringement of a patent has-

    (A) substantially reduced the ability of patent owners to obtain injunctions to stop continuing or willful infringement of patents; and

    (B) created incentives for large, multinational companies to commit predatory acts of infringement, especially with respect to patents owned by undercapitalized entities, such as individual inventors, institutions of higher education, startups, and small or medium-sized enterprises.

    The remedy, set forth in Section 3, proposes to amend Title 35, Section 283 of U.S. Code to provide a rebuttable presumption:

    (b) REBUTTABLE PRESUMPTION.-If, in a case under this title, the court enters a final judgment finding infringement of a right secured by patent, the patent owner shall be entitled to a rebuttable presumption that the court should grant a permanent injunction with respect to that infringing conduct.

    If enacted, this provision would return patent litigation to status quo ante from the Supreme Court's decision in eBay v. MercExchange, where the Court removed the traditional presumption of the injunction right in the first wave of its now two-decade crusade to reestablish its primacy in patent law after a generation of the Federal Circuit decisions "quietly (and sometimes not so quietly) walking away from Supreme Court decisions the appellate court found inter alia contrary to it Congressional mandate to harmonize patent law" (and that stemmed from various periods in the Court's history where the Justices were more or less "friendly" towards the exclusivities awarded to patentees; see, e.g., Justice Jackson's adage that "the only valid patent is one which this Court has not been able to get its hands on."  Jungerson v. Ostby & Barton Co., 335 U.S. 560, 572 (1949) (Jackson, J., dissenting).

    It is unlikely that this effort will get much traction before the 118th Congress adjourns this fall, and its prospects will depend at least on the outcome of the November elections.  But as many commentators (see, e.g., Mossoff, 2021, The Injunction Function: How and Why Court's Secure Property Rights in Patents, 96 Notre Dame L. Rev. 1581) have argued, and the Findings reflect, the absence of a presumption of an injunction has emboldened "efficient infringers," usually economic Goliaths, from infringement against patent-holding Davids on the basis that even if adjudged to infringe the penalty will be a royalty that may be less costly to satisfy than what a license would have cost them for respecting patent rights in the first place.  It has often been the case that these Davids (Gates, Jobs, Amgen, Genentech, as well as university technology transfer) have been the engines of innovation for over forty years, and bringing back balance to these competing interests is likely to benefit American innovation and the economy.  Stay tuned.

  • Judge Newman Suspension Renewed

    By Kevin E. Noonan –

    Judge Newman_1Not surprisingly, the Special Committee of the Federal Circuit after an Oral Hearing on July 10th voted unanimously to maintain the suspension (see "Judge Newman Suspended for One Year by Federal Circuit") handed down against Judge Pauline Newman on July 23, 2023 until such time that the Judge complies with the Order that she "undergo specified full neuropsychological testing and a neurological examination with independent experts selected by the Committee and to turn over medical records to the neurologist and . . . that Judge Newman sit for an interview."  In response, Judge Newman has submitted evidence from her personal physicians and brought suit in the D.C. District Court (see "Judge Newman and the On-Going Attempts to Remove Her from the Federal Circuit"), which suit was dismissed and is on appeal before the District of Columbia Circuit Court (see "Judge Newman's Suit Comes to an End").

    The Court has made public the Special Committee's 97 page Report and Recommendation setting forth its evidentiary and legal rationales for the decision to maintain the suspension.  One notable aspect is the numerous citations and references that "[t]he Committee had amassed extensive ("voluminous") evidence [elsewhere in the Report specified as "393 pages of supporting evidence"] raising concerns that Judge Newman may suffer from cognitive impairments material to her job.  According to the Special Committee '[o]ver the past year, Judge Newman's conduct has not changed" although whether that is said in reference to the Judge's refusal to comply or further incidents of distressing behavior is not clear (tellingly, the Report states that "Judge Newman continues to refuse to cooperate with the Committee's orders and continues to thwart the Committee's ability to fulfill its responsibilities under the Judicial Conduct and Disability Act (Act)", suggesting the basis for the Special Committee's conclusion is the former).  The Report asserts that "Judge Newman has not presented any information to undermine the voluminous record the Committee compiled last year raising serious concerns about Judge Newman's cognitive state," and dismisses the "handful of occasions over the past year in which [Judge Newman] delivered some public remarks or sat for an interview."  The Special Committee asserts it has "strong concerns established by the extensive record compiled by the Committee showing troubling signs of cognitive decline" which include "angry and abusive behavior towards staff, with many witnesses describing increasingly erratic behavior in 2023."  And the Special Committee rejects Judge Newman's contention that the Judge's continuing litigation against these sanctions provides a basis for the Judicial Council to "refrain from addressing her continuing misconduct with an additional sanction."  One justification for the continuing sanction enunciated by the Special Committee is that staying sanctions "would seriously impair the public interest [by] impair[ing] the expeditious functioning of the self-policing mechanism in the Act that Congress intended to allow the judiciary to swiftly address issues of disability" [and] "in light of the extensive record developed in this case, permitting Judge Newman to resume hearing cases would raise a serious risk that litigants may be having their disputes decided by a judge who is not fit for executing the duties of her office."

    The Report also addresses (and dismisses) three types of "new" information submitted in support of Judge Newman's response to the Committee's Order to Show Cause why the sanctions should be lifted.

    The first is the Supreme Court's reliance upon Judge Newman's position (in dissent of an en banc decision by the Federal Circuit) in Rudisill v. McDonough, 601 U.S. 294 (2024).  The Report dismisses this argument, contrasting one example with the "voluminous evidence"** adduced by the Special Committee.

    The Report also finds unpersuasive examples of Judge Newman's public activities and participation in four conferences or interviews over the past year, saying these do not "eliminate the concerns about her cognitive state already found sufficient to support the medical examination orders."  The Report goes on further to say:

    The question under the [Judicial Conduct and Disability Act] process at issue concerns disability for fulfilling the particular duties of her office, which require abilities involving short-term memory, clarity about and concentration in working with numerous concrete facts, and stamina in doing so with multiple cases—abilities that go well beyond the ability to be or seem coherent in the settings Judge Newman now highlights.

    Turning to Judge Newman's assertions that "no one, including her regular treating physicians and other medical professionals, save for members of this Committee, has suggested that Judge Newman's behavior or medical data would indicate need for any neuropsychological or psychiatric examinations," the Report responds that "[to] the extent Judge Newman claims that no one except the Committee found that the evidence of record created a reasonable basis for the Committee to order medical examinations and production of medical records, that is incorrect.  All eleven of Judge Newman's colleagues at the Federal Circuit unanimously found such a reasonable basis, . . . and all seven members of the JC&D Committee affirmed."  The Report also asserts that Judge Newman has provided no evidence regarding her physicians' assessment and judgment, nor that these physicians subjected the Judge to "the full battery of neuropsychological testing that the Committee has been seeking for over a year."  "The evaluations of Judge Newman by physicians of her choosing did not carry sufficient probative value to undermine the basis for the Special Committee's concerns" according to the Report.

    The Report goes on to say that:

    Far from providing evidence to allay the ample concerns supporting the medical examination orders, Judge Newman's response—by what is absent from it—has reinforced the concerns about cognitive impairment.  Nothing in the response faces up to her conduct, and why it raises various concerns, including regarding cognitive impairment, or presents meaningful evidence of changed circumstances.  Indeed, Judge Newman appears, even now, to be unable to grasp that her behavior toward staff has been inappropriate and has had a serious impact on court staff.

    (It is somewhat ironic that the Special Committee seems to refuse to accept evidence from Judge Newman's physicians but places great weight on "sworn testimony from staff members in multiple units within the Court including the Clerk's Office, IT, HR, General Counsel's office, and Judge Newman's own chambers"; and that "[t]his testimony detailed interactions with Judge Newman that indicated 'significant mental deterioration' manifested in highly inappropriate and unprofessional behavior by the judge," which regardless of their probity seems to put greater weight on lay opinion rather than professional opinions bound by medical ethics (and it cannot fairly be said that the sources making up the "voluminous evidence" are entirely neutral — it is worth considering how solicitous anyone would be who felt personally aggrieved in such a situation.)

    The Report further asserts in justification of continuing sanctions the existence of "overwhelming evidence of Judge Newman's troubling interactions with staff" that "continues to provide a reasonable basis for concern over Judge Newman's ability to discharge the duties of her office."  While seeking (apparently) to minimize the burdens of the required testing ("Those medical examinations are quite limited in the burden they place on Judge Newman.  The required neurological evaluation should last 30–45 minutes and will not involve invasive procedures, such as blood work or imaging studies.  The required neuropsychological testing involves a clinical interview, administration of questionnaires related to personality and mental health symptoms, and cognitive testing.  No aspect of the process is physically invasive, and the entire examination is likely to take up to six hours") they are also qualitative in nature and thus will depend entirely on medical opinions by (necessarily) strangers.

    The Report also dismisses Judge Newman's call that her suspension be lifted and the Special Committee's decision on sanctions be stayed during the course of her appeal, because "if [Judge Newman's] mental status is in question then permitting her to sit on panels while the appellate case progresses is not possible," further stating:

    As the Judicial Council concluded, failing to act where there is voluminous evidence raising a reasonable concern that she may suffer from a mental disability "would breach our obligations under the Act, display disregard for the rights of litigants bringing their cases before this Court, ignore the rights of court staff to be free from increasingly dysfunctional behavior in the workplace, and undermine public confidence in the judiciary."

    In brief summaries, the Report asserts that "[t]he Judicial Council found Judge Newman to have committed misconduct by non-cooperation with its investigation," that "Judge Newman's refusal to cooperate was a serious matter because it prevented the Committee from being able to fulfill its assigned task under the Act—namely, making an informed assessment (and recommendation for the Judicial Council) about whether Judge Newman suffers from a disability," and that because Judge Newman's conduct has not changed the appropriate sanction the Special Committee recommends for "[t]hwarting the Committee's ability to complete the process established by Congress for determining whether a life-tenured judge suffers from a disability" is "a further one-year sanction during which Judge Newman will not be permitted to hear cases at the panel or en banc level.

    "This sanction is not for past misconduct.  Instead, it addresses Judge Newman's continuing misconduct through her continuing refusal to cooperate with the Committee's orders," the Report states.

    The Report is accompanied by copies of some e-mail correspondence relating to squabbles concerning whether Judge Newman was (or was not) invited to professional and social functions at the Court, as well as the transcript of the Oral Hearing.  Judge Newman's counsel, Gregory Dolan, after fielding questions from the bench reached the Constitutional basis that Judge Newman has raised in the Judge's complaint before the District Court (abridged somewhat here for clarity), Dr. Dolan arguing:

    "Our separation of powers are not meant to allow fellow judges to self-impeach even for terrible misconduct" and the recourse is to recommend to the Judicial Conference that Judge Newman be impeached, counsel making the point that even should the medical exams verify that Judge Newman is not competent the Judicial Council cannot remove her.

    "[T]he interesting part about it is taking the test or not taking the test doesn't change the outcome.  Judge Newman is and will remain an active judge of this Court until she retires, dies, or is impeached."

    "[T]he Committee has repeatedly declined to state that it will be even bound by the test results, a simple step that it might help us to determine things.  But the Committee has never said, not once, that if the doctors give her the green light, [Judge Newman] will be restored to the bench."

    "But the point is that no one except members of this Committee — not people who see Judge Newman socially, not people who have seen Judge Newman professionally, not people who have been on various panels with Judge Newman, not the Supreme Court that affirmed her opinion — thought that Judge Newman is in need of a mental competency exam.  It's only this Committee and the physician who has never seen or evaluated or talked to Judge Newman.  So you have medical evidence on one hand and complaints by disgruntled staff on the other hand.  Respectfully, I think medical evidence warrants more weight."

    "All of that having been said, there are still opportunities to resolve this, as we have suggested on multiple occasions.  And if the Committee is truly interested in figuring out is Judge Newman able or unable to perform this function, rather than just keeping it to itself, there is an opportunity to get a neutral decisionmaker involved and actually resolve it.  So there are off-ramps here, but Judge Newman will not submit to a 'my way or highway' approach.  And I understand it may be frustrating to the Committee, but Judge Newman is an Article III judge nominated, confirmed, and appointed by the President.  She gets to hold her office on good behavior, and she intends to do so."

    It is clear that neither Judge Newman nor the Special Committee is willing to take advantage of these opportunities to resolve this matter amicably.  Nothing has changed, except that Judge Newman is one year older.  The waiting game continues.

    **What is that "voluminous evidence"?

    According to the Report the "voluminous evidence" amounts to:

    Affidavits prepared after more than 20 interviews with Court staff reflect consistent reports of deeply troubling interactions with Judge Newman that suggest significant mental deterioration including memory loss, confusion, lack of comprehension, paranoia, anger, hostility, and severe agitation.  Critically, these reports are not isolated incidents of occasional forgetfulness based on a few interactions with only one or two staffers.  To the contrary, they come from interactions with staff members across a broad range of departments from the Clerk's Office to Information Technology (IT), to Human Resources (HR), to the General Counsel Office, to Judge Newman's own chambers staff.  And contrary to Judge Newman's assertions, the reports indicate that the behaviors suggesting that Judge Newman may have a disability emerged over two years and increased in frequency and severity.  Judge Newman has never specifically disputed any of the staff accounts, many of which are independently substantiated by Judge Newman's own emails attached as exhibits.

  • Loper Bright Enterprises v. Raimondo — Justice Gorsuch’s Triumphant Concurrence

    By Kevin E. Noonan –

    Supreme Court Building #3It has been one of Justice Gorsuch's signature judicial goals to overturn the Court's Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. decision and while it has taken seven years for a case to arise giving him the opportunity to persuade his colleagues to do so, the Loper case provided that opportunity (regardless of the amount of effort or lack of it required to accomplish the goal).

    The concurrence sets out the issue not as one between the co-equal branches of our government but as "between individuals and the government," providing a populist gloss otherwise not mentioned in either the majority opinion or dissent (and perhaps providing a glimpse into the philosophical underpinnings of the Justice's passion for overturning Chevron).  Terming the Chevron approach to be a "radically different approach" the Justice's opines that over time "the error of this approach became widely appreciated" and uses as evidence the Court's refusal to apply the doctrine since 2016 (nicely illustrating the judicial maneuver decried by Justice Kagan in her dissenting opinion of "overruling-through-enfeeblement").  As stated right at the outset, the Justice has penned his concurrence to "address why the proper application of the doc­trine of stare decisis supports that course" (something the dissent vigorously opposes and the majority opinion discussed more cursorily).

    The Justice begins his concurrence with his history of judicial norms, including stare decisis over time, seeking to clarify what in his view is the proper role of judges and to what extent they are (or should be) bound by prior decisions.  In England, the judge's role was limited to specifically not make law (which was restricted to the King and Parliament) but to interpret it in the context of the historical consolidation of England into a single kingdom.  But a judge's opinion and "the law" were not considered "one and the same thing," the Justice providing his own citation to Blackstone (1 W. Blackstone, Commentaries on the Laws of England 71 (1765)).  Rather than bind later judges, an earlier judge's decision was considered to be "evidence" of what the law was which varied with the weight later judges gave them.  These distinctions were also considered regarding the effect on later cases of "[d]icta, stray remarks, and di­gressions" (given less weight but were not considered entirely worthless) as opposed to "[a]n opinion's hold­ing and the reasoning essential to it."

    The relevance of this historical/rhetorical sojourn, according to the concurrence, is that "there are good reasons to think that the common law's understandings of judges and precedent outlined [herein] crossed the Atlantic and informed the nature of the 'judicial Power' the Constitution vests in federal courts" under Article III.  These include that in addition to being drafted and adopted "against the back­drop of these understandings" there are specific passages in our Constitution that support the Justice's insight and interpretations (in his view, of course) throughout that document (which are set out in the concurring opinion).  In this context is the important principle that the judiciary is a "neutral party" [that can] 'interpret and apply' the law without fear or favor in a dispute between others," citing Osborn v. Bank of United States, 9 Wheat. 738, 866 (1824) (the need thereof being consistent with the rather adversarial view of "citizens and their government" espoused at the beginning of the concurrence, rather than mere allocation of the capacity to decide between different branches of those citizens' government).  And the concurrence suggests that the limited power of stare decisis in England was transported to this country due to these similarities (suggesting darkly a broader attack on established legal principles that could lead to unbridled judicial hegemony over established law).  "Plucking" (or at least cherry picking) from numerous 19th Century decisions and extrajudicial statements by past statesmen (Including Abraham Lincoln) the concurrence weaves a tapestry swathed in apparent reasonableness diminishing the power of stare decisis as never being binding on future courts but rather providing evidence or guidance regarding what the later law should or could be.  The Justice's conclusion from these assessments are summarized in the opinion as three "lessons":

    First, "a past decision may bind the parties to a dispute, but it provides this Court no authority in future cases to depart from what the Constitution or laws of the United States ordain."  This principle is supported by consideration of "flawed" decisions and when that flaw is constitutional or related to particular statutes and the Court's capacity for correction (and thus not bound by stare decisis).

    Second, "[w]hile judicial decisions may not supersede or revise the Constitution or federal statutory law, they merit our 'respect as embodying the considered views of those who have come before,'" citing Ra­mos v. Louisiana, 590 U. S. 83, 105 (2020).  A judge must "weigh his view of what the law demands against the thoughtful views of his predecessors" which are "a font of established wisdom richer than what can be found in any single judge or panel of judges."  Precedent's primary power is the power to persuade later judges, the concurrence maintains.  (Ironically, the principles of workability and reliance, the first of which was used by the majority to support their decision to overturn Chevron, "do not often supply reason enough on their own to abide a flawed decision" but do they provide sufficient motivation to overturn it?).

    Third, "it would be a mistake to read judicial opinions like statutes" because judicial decisions "render a judgment based only on the fac­tual record and legal arguments the parties at hand have chosen to develop" (those decisions being made before a backdrop of earlier decisions and settled law being unmentioned).  The concurrence properly notes that judges must "appreciate the possibility that different facts and different legal arguments may dictate a different outcome (but unspoken is the principle that this does not imply that these differences mandate or permit changes in settled law).  The concurrence, placing the blame on the innately digressive characteristic of judges, asserts that many decisions are infused with "va­pours and fumes of law" (citing 2 The Works of Francis Bacon 478 (B. Montagued. 1887)) (apparently meaning dicta) that "cannot 'control the judgment in a subsequent suit,'" citing Cohens v. Virginia, 6 Wheat. 264, 399 (1821).

    The upshot of these considerations in the concurrence is the judicial Goldilocks principle that there is a "just right" amount and degree of precedential authority that such earlier decisions can be given (that "sweet spot" being defined only by the decision maker to which the issue is posed).  Citing Brown v. Davenport, 596 U. S. 118, 141 (2022), the Justice asserts that over reliance on stare decisis can "turn stare decisis from a tool of judicial humility into one of judicial hubris."

    The concurrence applies these "lessons" to Chevron as follows:

    Lesson 1, because Chevron deference contra­venes the law Congress prescribed in the Administrative Procedure Act.

    Lesson 2, because Chevron deference runs against mainstream currents in our law regarding the sep­aration of powers, due process, and centuries-old interpre­tive rules that fortify those constitutional commitments.

    Lesson 3, because to hold otherwise would effectively require us to endow stray statements in Chevron with the authority of statutory language, all while ignoring more considered language in that same decision and the teach­ings of experience.

    The concurrence's explication of these conclusions mirror the analysis in the majority opinion (and won't be repeated here; see "Loper Bright Enterprises v. Raimondo (2024)") except to the extent they do not.  Regarding the APA in Lesson 1 the concurrence is concerned that an agency can interpret a statute outside the scope of what a court has, can, or would do, and such interpretations can be changed at any time by the agency that could "effectively overrule not only their own past interpretations of a law but a court's past interpretation as well."  Lesson 2 "cannot rescue Chevron deference in Justice Gorsuch's opinion because "[i]f stare deci­sis calls for judicial humility in the face of the written law, it also cautions us to test our present conclusions carefully against the work of our predecessors" (reiterating the arguments here and in the majority opinion regarding "how our predecessors traditionally understood the judicial role in disputes over a law's mean­ing"; these arguments include citations to Marbury v Madison, The Federalist, and United States v. Dickson, 15 Pet. 141, 162 (1841) (Story, J.).  And again raising the possibility that a court would need to defer insofar as "the government could propound a 'reasonable' view of the law's meaning one day, a different one the next, and bind the judiciary al­ways to its latest word" or that the Executive could override judicial precedent.  Giving the Executive branch due respect does not require courts to defer wherein "by no means [can the Executive's decisions] con­trol the action or the opinion of this court in expound­ing the law with reference to the rights of parties litigant before them," citing Irvine v. Marshall, 20 How. 558, 567 (1858).  Justice Gorsuch's assessment of the Chevron regime is that "it did not merely depart from our precedents.  More nearly, Chevron defied them."

    The concurrence also sees a parallel between King George's efforts to dominate the colonial judiciary and Chevron, and the American response to the King's effort by making "considered judgment to build judicial independence into the Constitution's design [by] vest[ing] the judicial power in decisionmakers with life tenure" under Article III (as well as other bases for judicial independence).  In the Justice's view, Chevron deference undermines all that (citing many of the aspects of the Chevron regime recited in the majority opinion's grounds for overturning Chevron).  The opinion sees Chevron as enabling the Executive branch to "effectively judge the scope of their own lawful powers," citing Arlington v. FCC, 569 U. S. 290, 296–297 (2013).  And citing Blackstone the interpretive powers granted the Executive bureaucracy echoes the capacity Blackstone warned about should "magistrates" be permitted to "discard an old meaning and assign a new one to a law's terms, all without any legislative revi­sion" under circumstances where a "reasonable bureaucrat may change his mind year-to-year and election-to-election," thereby reducing or destroying public certainty (wherein "the people are left to guess about their legal rights and responsibilities" as a result).

    Justice Gorsuch's analysis of the Chevron regime is frankly disparaging, terming the determinations of ambiguity to be something of a "Snark hunt" (some judges see it everywhere, some judges never see it) but in any case where these decisions always inure to the "benefit" of the Federal government (and the courts' assessment of whether the agency's interpretation of the statute is also fraught with ""wildly different" approaches and reached wildly different conclusions" even in similar cases, citing Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2152 (2016) (the cases before the Court on appeal illustrating this situation in the Justice's view).

    The concurrence also has little use for claims that allegiance to Chevron involves reliance interests, asserting that "the whole point of Chevron defer­ence is to upset [reliance interests]," ostensibly because "executive officials can replace one 'reasonable' interpretation with another at any time, all without any change in the law itself" (citing National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 982–983 (2005), as an example of such changes in how agencies interpret the law; tellingly that decision arose prior to any of these changes).  The concurrence purports to be concerned with the effects of such changes on "ordinary people" because "sophisticated entities" (and, ominously, "their lawyers") can take steps (from "keeping up" with such changes to lobbying), illustrating the "ordinary people" example with Buffington v. McDonough involving an Air Force veteran injured in the line of duty that fell afoul of regulations ("self-serving," according to the Justice) involving disability benefits.  The concurrence asserts that the government used Chevron to convince a court that the Department of Defense's interpretation of the statute resulting in the loss of those benefits was reasonable (it was not sufficiently unreasonable for the Court to grant certiorari, apparently).  The Justice also includes the story of a case in which he presided at the appellate court in which the Board of Immigration Appeals overturned an earlier interpretation of a rule to the detriment of immigrants who had relied on it (other examples among the "so many" are further cited in the opinion).  The concurrence pits "the Constitution, the APA, and our longstanding precedents" against government claims that Chevron deference "has become a 'fundamenta[l] . . . ground rul[e] for how all three branches of the government are operating together,'" further illustrating the fundamentally adversarial tone of the concurrence (and to a lesser degree the majority opinion).

    The concurrence also characterizes Chevron as "a counter-Marbury revolution, one at war with the APA, time honored precedents, and so much surrounding law" that is the result of "endow[ing] a stray passage in a judicial decision with extraordinary authority."  In Chevron, a "bare quorum" of the Chevron Court (the same quorum reaching the majority's decision) affirmed the Environmental Protection Agency's definition of the term "stationary sources."  According to the concurrence, from "bits and pieces" of this decision arose the Chevron analytical regime that the concurrence and majority opinions so mightily complain about, wherein much of these bits and pieces of legal analysis not arising from positions taken by the government (and of course not taking into account the majority's and concurrence's concerns regarding contrary considerations  under the APA).

    The concurrence attempts to normalize the disregard for stare decisis in the Court's overthrow of Chevron by first "blaming" deceased former Justice Scalia for promoting the Chevron regime in NLRB v. Food & Commercial Workers, 484 U.S. 112, 133–134 (1987), and then, acting like a repentant apostate losing faith with its consequences and arguing for the Court to reconsider it in Northwest Environmental Defense Center, 568 U.S. 597, 617–618, 621 (2013), and Perez v. Mortgage Bankers Assn., 575 U.S. 92, 109–110 (2015).  The concurrence notes that several current members of the Court began to show similar reservations, so much so that the Chevron decision was effectively ended (by what Justice Kagan's dissent terms "overruling-through-enfeeblement") until this case raised the opportunity to, in Justice Gorsuch's words, "place[] a tombstone on Chevron no one can miss."

    Ultimately, the concurrence bases its justification for overturning Chevron as an opportunity to correct mistakes, and certainly there is an argument to be made that if there is a Court where it can be inappropriate to use stare decisis as a guiding principle (insofar as it prevents mistake correction) it is the Supreme Court (see "Alternative Reasoning for Supreme Court's Life Sciences Subject Matter Eligibility Jurisprudence").  But that aspect of the Court's power under Article III comes with the need for due consideration of the consequences, something apparently understood by the dissent more readily than either the majority or the concurrence, for whom it appears that correcting doctrinal error is more important that (potentially) throwing into chaos how the laws enacted by Congress are executed (and inflating the powers of unelected judges to counter the policies of their elected officials).  This decision creates another governance experiment in a system whose very existence is an experiment.  If it fails during the tenure of any of the Justices who concurred with this decision it can be hoped that in their turn they will have the "judicial humility" to admit their mistakes.

  • Senators Get Their Colleagues to Agree on Drug Patent Litigation Legislation

    By Kevin E. Noonan –

    Senate SealRecent history of Congress's performance as a legislative body has been, to be kind, mixed, and a great many bills, resolutions, and other activities have appeared to be more for show than to accomplish anything worthwhile.  President Truman's characterization of the 80th Congress as the "Do Nothing" Congress might effectively be resurrected; after all, that Congress passed 906 bills while, in contrast, the current Congress (the 118th) has passed 253 bills.  In some ways this is good, analogous to Hippocrates' exhortation to "First, do no harm" and this is particularly true when it comes to proposals to amend patent and regulatory laws in an effort to "do something!" about drug prices.  Many of these proposals (see "House Bill Would Allow HHS Secretary to Authorize Competitive Licenses for Drug Patents; A Solution in Search of a Problem"; "More Ill-conceived Remedies from Congress Regarding Prescription Drug Costs"; "Even More Ill-Conceived Remedies from Congress Regarding Prescription Drug Costs") have involved as their underlying motivation to blame patents and patent laws as the cause of the undesired outcome of the generic (Hatch-Waxman) and biosimilars (under the Biologics Price Competition and Innovation Act, BPCIA) regimes, which have not miraculously produced (more) affordable drugs.

    Recently, the Senate passed S.150 entitled the Affordable Prescriptions for Patients Act.  Those paying attention might recall that Senator Cornyn (R-TX) introduced this bill (joined by Senator Blumenthal (D-CT) and seven other Senators) at the beginning of the 118th Congress and it arrives, like a sheep in wolf's clothing, being the result of the unappreciated benefits of the "sausage-making" (or perhaps "breadcrumb-making") aspects of the legislative process.  The earlier bill (see "FTC to the Rescue Regarding High Drug Prices and Patents") set forth a list of prohibited behaviors and activities, including patent thicketing (defined as "an action taken to limit competition by a patentee with respect to a drug [wherein] the Federal Trade Commission (FTC) determines that the patentee improperly limited competition by obtaining patents [as defined in the statute], and wherein "an action by a drug manufacturer that constitutes patent thicketing shall be considered to be an unfair method of competition in or affecting commerce in violation of section 5(a)."  It also empowered the FTC to investigate whether "the anticompetitive effects of the action do not outweigh the pro-competitive effects of the action" (saying that patent thicketing was prima facie anticompetitive behavior).  The bill also prohibited "product hopping."

    Perhaps because the Senators don't think FTC Chairwoman Lina Kahn needs any more encouragement (or arrows in her regulatory quiver), the bill passed by the Senate is much more restricted in scope and contains no express role for the FTC (paradoxically, the title remains "An Act to amend the Federal Trade Commission Act to prohibit product hopping, and other purposes" but contains no amendments to the FTCA).  While still aimed at what the Senators believe is anticompetitive behavior by branded drug and biologics makers, the provisions themselves are directed towards amendments to the Patent Act and to the BPCIA.  These amendments provide:

    • Amendments to 35 U.S.C. § 271(e)(2) that include under the definition of an act of infringement "the biological product, a method of using the biological product, or a method or product used to manufacture the biological product";

    • New subsection 7(A) added to 35 U.S.C. § 271(e)(2) that limits the number of patents that can be asserted in an infringement action by a reference product sponsor under section 351(i) of the Public Health Service Act (42 U.S.C. § 262(i)) to a total of 20 patents that claim a biological product, a method of using the biological product, or a method or product used to manufacture the biological product, with the further limitation that not more than 10 of such patents have issued after the date specified under section 351(l)(7)(A) (42 U.S.C. § 262(l)(7)(A)), i.e., after expiration of the 12-year exclusivity period for a reference biologic product under the BPCIA;

    • To this limitation on the number of patents asserted under section 351(l)(3)(A) (42 U.S.C. § 262(l)(3)(A)) (the initial round of litigation under the "patent dance") are those that have an actual filing date of more than 4 years after the date on which the reference product is approved, and those that include a claim to a method for a manufacturing process that is not used by the reference product sponsor.

    In addition, courts are empowered to increase the number of such patents asserted by a reference product sponsor, provided that the request is made without "undue delay," in the interest of justice, or for good cause shown.  Bases for such good cause include instances where the biosimilar applicant fails to provide the information on its abbreviated biologics license and ancillary information under § 351(k)(2)(A) of the Public Health Service Act (42 U.S.C. § 262(k)(2)(A)) (a tactic successfully employed by Sandoz in its BPCIA litigation against Amgen; see "Sandoz Inc. v. Amgen Inc. (2017)").  Further grounds for "good cause shown" are if there is a "material change" in the biological product (or process with respect to the biological product) by the biosimilar applicant or if the patent otherwise prohibited by its issue date under section 351(l)(7)(A) (42 U.S.C. § 262(l)(7)(A) was due to failure of the Office to issue the patent or for Patent Office delay under 35 U.S.C. § 154(b), or other reasons "determined appropriate by the court."  The Act also provides standards for courts to apply for "good cause" to include "whether the reference product sponsor has provided a reasonable description of the identity and relevance of any information beyond the subsection (k) application that the court believes is necessary to enable the court to form a belief with respect to whether a claim of infringement under this section could reasonably be asserted."  Further, the limitations on the number of patents, their subject matter, and when they were granted relative to the approval date of the reference product is limited to those instances where the biosimilar applicant has complied with ("completes all actions required by") the provisions of §§ 351(l) (2)(A), (3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) (the conditions imposed on a biosimilar applicant during the patent dance by the BPCIA).  On the other hand, these provisions do not apply "with respect to any patent that claims, with respect to a biological product, a method for using that product in therapy, diagnosis, or prophylaxis, such as an indication or method of treatment or other conditions of use."

    These amendments shall only apply to any abbreviated biologics license application submitted for approval after the date of enactment of the Act.

    (And illustrating the "sausage-making" aspect, the bill also contains a provision increasing a portion of the Medicare Improvement Fund under Section 14 1898(b)(1) of the Social Security Act (42 U.S.C. § 15 1395iii(b)(1)) from $0 to $1,800,000,000.)

    While S.150 likely will have an effect on biosimilar litigation and market entry it should be appreciated that these effects are limited to address a historical anomaly:  because most biologic drugs facing competition were approved by FDA prior to enactment of the BPCIA they do not benefit from the 12-year market exclusivity provided under that statute.  The timing of these approvals is shown in the table, which also illustrates one basis for biosimilar competition for these drugs:

    Table
    The patents protecting the drug product itself, and at least the initial indications, have in most cases expired (the Humira patents, for example, expired in 2016) and consequently reference product sponsors have sought (and obtained) patents on novel indications, formulations, and manufacturing methods, Humira being something of a poster child for these "patent thicketing" efforts; see "Mayor and City Council of Baltimore v. AbbVie Inc. (7th Cir. 2022)".  But this response to the change of circumstances for biologic drugs is at best temporary, and later-approved drugs, having their 12-year exclusivity period to be co-extensive with the timetable envisioned by the drafters of the patent dance provisions of the BPCIA, should have much less incentive to "thicket" their patent portfolios.  Paradoxically, if S.150 is enacted it will also provide a roadmap for reference product sponsor behavior to avoid the effects of the law in reducing the number of patents available for assertion during BPCIA litigation.

    "Do something!" is the exhortation to Congress from interest groups and the public when it comes to drug prices, and patents are an easy target.  There are more systemic (and likely more effective) ways to address the problem, and those targets are beginning to be investigated (see Robbins & Abelson, The Opaque Industry Secretly Inflating Prices for Prescription Drugs, New York Times, June 21, 2024; FTC Deepens Inquiry into Prescription Drug Middlemen, May 17, 2023).  Unweaving the threads of the American healthcare system being responsible for "high" drug prices is much more difficult to accomplish than making patents and pharmaceutical companies the culprit, and thus it is likely that this trend of demonizing the only source of new drugs to address heretofore intractable diseases will continue.

  • Beteiro, LLC v. DraftKings, Inc. (Fed. Cir. 2024)

    Federal Circuit Calls "No Bet" on Beteiro's Asserted Patents

    By Andrew Velzen —

    Federal Circuit SealRecently, the Court of Appeals for the Federal Circuit (CAFC) issued an opinion in Beteiro, LLC v. DraftKings Inc.[1]  This case is yet another case where the Federal Circuit upheld invalidity under § 101.  Here, the patents in question were directed to monitoring gaming / gambling activities at various physical locations, primarily with the idea that a user can be located in one location, but place wagers at a computer in a different location.

    In my view, the opinion illustrates what is, at best, a strained § 101 analysis.  The court simply could not get past what it viewed as a substantial imbalance of non-technical content to technical content in the specification.  Notwithstanding, though, there are certainly ways in which Beteiro could have better structured their claims and specification to withstand § 101 scrutiny.  Herein, I'll briefly discuss both of these points.

    Case Summary

    As a preliminary point, I think it's prudent to at least briefly summarize the procedural posture of the case and the Federal Circuit's decision.  The appeal to the CAFC arose based on multiple lawsuits filed by Beteiro against various gaming entities (DraftKings, PointsBet, BetMGM, Betfair, etc.) in the District of New Jersey.  In those lawsuits, Beteiro asserted patent infringement of four different patents.  Worth noting, despite claiming priority back to applications from 2002, 2003, and 2008, each of the asserted patents was filed in 2016 or later (i.e., each of the asserted patents was prepared and filed after the U.S. Supreme Court's decision in Alice Corp. v. CLS Bank International).  Notwithstanding, each of the defendants (now appellees) filed a motion to dismiss alleging that the asserted patents were invalid under § 101.  The District Court agreed and Beteiro appealed to the CAFC thereafter.

    Claim 2 of U.S. Patent No. 10,255,755 was deemed by the parties, the District Court, and the CAFC as representative of all the asserted claims for purposes of § 101 analysis.  This claim recites:

    2.  A computer-implemented method, comprising:
        detecting, with or using a computer which is specially programmed for processing information for providing for a placement of a bet on or regarding a gaming activity, a gambling activity, or a sporting event, a posting of information regarding the gaming activity, the gambling activity, or the sporting event;
            generating, with or using the computer, a notification message regarding the gaming activity, the gambling activity, or the sporting event;
            initiating, with or using the computer, a communication link with a first communication device and transmitting the notification message to the first communication device as an electronic transmission, or transmitting, from the computer, the notification message as an electronic mail message, wherein the electronic mail message is received by or received at a first communication device, wherein the first communication device is associated with an individual;
            receiving, with the computer, a bet message transmitted from the first communication device or from a second communication device, wherein the second communication device is associated with the individual, and further wherein the first communication device or the second communication device comprises a global positioning device, wherein the global positioning device determines a position or location of the first communication device or the second communication device, and further wherein the bet message contains information regarding a bet to be placed on or regarding the gaming activity, the gambling activity, or the sporting event, and information regarding the position or location of the first communication device or the second communication device; and
            determining, with or using the computer, whether the bet is allowed or disallowed using the information regarding the position or location of the first communication device or the second communication device and, if the bet is allowed, processing information for placing the bet for or on behalf of the individual, or, if the bet is disallowed, processing information for disallowing the bet [emphases added].

    The above-emphasized portions are where the CAFC focused the bulk of its analysis under § 101.  After said analysis, the CAFC ultimately affirmed the determination of invalidity.

    Court's § 101 Analysis

    As is rote at this point, in order to analyze whether a claimed invention is directed to patent-eligible subject matter, the Federal Circuit applied the Alice/Mayo test (i.e., Step 1 — Is the claim directed to a process, machine, manufacture, or composition of matter; Step 2A — Is the claim directed to a judicial exception to eligibility, such as an abstract idea; and Step 2B — Does the claim amount to significantly more than the judicial exception to eligibility).[2]  It bears noting that the patent examiner who examined these patent applications explicitly evaluated eligibility for the claims under § 101 and found them patent-eligible based on their recitation of a particular machine or processor.

    Step 2A

    Under Step 2A of the Alice/Mayo test, the CAFC agreed with the District Court that the claims were directed to the abstract idea of "exchanging information concerning a bet and allowing or disallowing the bet based on where the user is located."  In doing so, the CAFC indicated that the claims include many alleged "well-settled indicators of abstractness."  Setting aside the fact that that phrase borders on word salad, these so-called "indicators" included: (1) the claims broadly reciting generic steps of detecting information, generating and transmitting a notification based on the information, receiving a message, determining, and processing information; (2) the claims being drafted using largely result-focused functional language, while containing no specificity about how the purported invention achieves the results; (3) the claims being analogous to claims held abstract in other CAFC cases; and (4) the claims being analogous to longstanding "real-world" activities.

    Regarding item (1) above — Like many claims, if you abstract away all the substance and merely recite some gerunds, claims can quickly devolve into sounding rather patent-ineligible.  Regarding item (2) above — Whether something is described overly functionally is rather subjective.  Beteiro's claims recite "a computer," "a first communication device," "a second communication device," and "a global positioning device" and also describe communications among those devices.  Obviously, more detail can always be provided in a claim, but not without the cost of narrowing the claim.  Beteiro did not want to limit their claims to any particular type of communication protocol or type of communication devices, nor did Beteiro want to provide any additional unnecessary details about the "computer" or "communication devices."  Further, clearly Beteiro did not need to incorporate such narrowing details (at least in the patent examiner's opinion) in order to demonstrate that the claims were new and non-obvious.  Hence, the CAFC demanding that additional technical details be added to the claims for § 101 purposes when Beteiro already recited multiple devices performing different acts seems dubious.

    The CAFC's claim in item (3) is questionable, at best.  The Federal Circuit referenced Affinity Labs of Tex., LLC v. DIRECTV, LLC and Intell. Ventures I LLC v. Capital One Bank (USA) as allegedly containing analogous claims to Beteiro's.  The claims at issue in those cases, however, do not refer to any sort of "global positioning device" and are certainly much less tailored to communication protocols between devices.[3]  For example, the claim considered in Affinity Labs was:

    1.  A broadcast system, comprising:
        a network based resource maintaining information associated with a network available representation of a regional broadcasting channel that can be selected by a user of a wireless cellular telephone device; and
            a non-transitory storage medium including an application configured for execution by the wireless cellular telephone device that when executed, enables the wireless cellular telephone device:
                to present a graphical user interface comprising at least a partial listing of available media sources on a display associated with the wireless cellular telephone device, wherein the listing includes a selectable item that enables user selection of the regional broadcasting channel;
                to transmit a request for the regional broadcasting channel from the wireless cellular telephone device; and
                to receive a streaming media signal in the wireless cellular telephone device corresponding to the regional broadcasting channel, wherein the wireless cellular telephone device is outside of a broadcast region of the regional broadcasting channel, wherein the wireless cellular telephone device is configured to receive the application via an over the air download.

    Likewise, the claim considered in Intell. Ventures recites:

    1.  A system for providing web pages accessed from a web site in a manner which presents the web pages tailored to an individual user, comprising:
        an interactive interface configured to provide dynamic web site navigation data to the user, the interactive interface comprising:
            a display depicting portions of the web site visited by the user as a function of the web site navigation data; and
            a display depicting portions of the web site visited by the user as a function of the user's personal characteristics.

    These claims are only analogous to Beteiro's claims at a relatively high level of abstraction.  For example, neither relate to gambling / gaming in any sense.  Further, the primary purpose of both claims above is to determine what is displayed to a user, whereas the primary purpose of Beteiro's claims is to determine whether to allow or disallow a bet.

    Regarding claim (4) — Analogizing claim language to "real-world" activities, while sometimes done in § 101 cases, has always struck me as a bit ironic.  Namely, if claims are more akin to physical "real-world" activities, those claims are somehow less patent-eligible.  The "real-world" is the exact opposite of "abstract."  Thus, this flavor of analysis is essentially equivalent to saying "the claimed invention is not abstract, therefore it is an abstract idea and patent-ineligible."  It simply strains credulity.

    To illustrate the "real-world" nature of Beteiro's claims, the CAFC points to an analogy posited by the District Court of a teller at a casino that straddles state lines.  This analogy is absurd.  As an initial point, I'm not aware of any real casinos that actually fit this description (i.e., where you can place bets in two different states within the same casion).  In fact, I'd assume casinos intentionally avoid this issue so they don't have to simultaneously deal with multiple sets of state laws.  Hence, this issue rarely, if ever, comes up in the context of placing physical bets at a teller.  Oppositely, with modern technology, the issue of confirming location comes up in >90% of all sports bets placed.[4]  Further, even if the scenario proposed by the District Court / CAFC did come up in reality, there would be no "global positioning device" or "communication device(s)" needed or used because the bettor and the teller would be in the same physical location.  Hence, any attempted patent claim to this fabricated "real-world" scenario would look totally different than Beteiro's claims.

    On behalf of eligibility, Beteiro argued that their claims involved technological improvements and, therefore, are not directed to abstract ideas.  According to the CAFC, though, because the claims do not provide an improvement to the way computers operate nor do they solve a technical problem, the claims remain abstract ideas.

    Step 2B

    Under Step 2B of the Alice/Mayo test, Beteiro argued that the inclusion of a global positioning system (GPS) device in their claims was unconventional, which should provide for a path to patentability.  The CAFC attempted to refute this point by referring to the relatively limited discussion of GPS in the specification.  In particular, the lengthy specifications of the asserted patents only includes a single sentence concerning a mobile phone with an equipped GPS device.  Given this, the CAFC concluded that the inclusion of the GPS device on a mobile phone must have been conventional at the time.  This is, at the very least, a dramatic departure from the CAFC's Berkheimer decision.[5]  Regardless, in the CAFC's view, because the inclusion of a GPS on a mobile phone was routine, conventional, and well-understood, the inclusion of the GPS cannot convert a claim that is otherwise patent-ineligible into patent-eligible.

    This also raises an interesting procedural point.  Because this appeal arises from a motion to dismiss, any factual disputes need to be resolved in Beteiro's favor.  Further, Beteiro contended in its complaint that the use of GPS for gaming was unconventional in 2002 (their earliest priority date), and provided evidence to support this.  In 2002, for example, the iPhone had yet to be created.  Even so, the CAFC disregarded this contention based solely on what was (and was not) in the specification.  In doing so, the court cited to the recent AI Visualize case:[6]

    Conclusory allegations, or those "wholly divorced" from the claims or the specification, cannot defeat a motion to dismiss. And a patentee that emphasizes a claim's use of certain technology, for example, a general-purpose computer, fails at step two when the intrinsic record establishes that the technology is conventional or well-known in the art.

    While the Beteiro patents may not have described how one incorporates GPS devices into mobile phones, in detail, I think the court's reliance on the above precedent borders on dubious.  Beteiro's claims did specifically recite a "communication device" that "comprises a global positioning device, wherein the global positioning device determines a position or location of the first communication device or the second communication device."  Hence, Beteiro's allegations were not "'wholly divorced' from the claims."  Still, the court drew a distinction between Beteiro's complaint and the complaint in Cellspin Soft, Inc. v. Fitbit, Inc. where the contentions were purportedly much more rooted in the patent-in-suit.[7]

    Lastly, it is perhaps worth mentioning that the CAFC rightly wholly disregarded the patent examiner's previous consideration of § 101 issues under well-established law.  Regardless, though, the patent examiner apparently applied pre-Alice caselaw and relied on the existence of one or more physical components in deciding that the claims were patent-eligible.  This was clearly an overbroad view by the patent examiner.

    Suggested Improvements to Bolster Claims Under § 101

    The above clearly highlights, yet again, just how sticky § 101 is for patentees, even when physical devices (e.g., mobile devices and/or GPS sensors) are involved.  Perhaps, though, there are some ways that Beteiro could have reframed their specification or claims that would have provided a stronger bulwark for a § 101 analysis.  In that vein, let's highlight a few of them.

    One step that Beteiro could have taken, and which is explicitly contemplated by the CAFC opinion, would be to bolster the description of the GPS device in the specification.  Had the specification dedicated more space to technical details about the inclusion of the GPS device in a mobile device, the court clearly thinks that would help patentability (e.g., by demonstrating how the GPS device is a technical improvement) or, at the very least, would have provided fodder to get over a motion to dismiss under § 101 (i.e., because the additional technical details could raise a genuine question of material fact over whether inclusion of a GPS in a mobile device was truly well-understood, routine, and conventional).

    There are likely other technical details besides how a GPS device is integrated into a mobile device that could have been included in the specification to show that the use of a GPS device in the claimed way was unconventional.  For example, additional details on the ways in which the mobile device communicates the measured GPS data to the gaming facility computer (e.g., message communication protocols, formats in which the GPS data is communicated, where the GPS data is stored, how the GPS data is accessed / used by the gaming facility computer, etc.) could have been included.  Such additional details would not only serve to demonstrate the level to which the inventors had considered the importance of communicating the GPS data, but would also show why the inclusion of GPS data is central to the claimed invention serving its intended purpose.  Any of these technical details about the GPS could have been explicitly recited in the claims, as well, if Beteiro wanted to further strengthen their § 101 position.

    Additionally, as is sage advice these days in almost any patent application that might need to pass muster under § 101, the specification could have laid out a technical problem to be solved and how the claims provide a technical solution.  The claims and specification clearly address what is, in the eyes of the CAFC, non-technical problems (e.g., gambling jurisdiction and legal compliance).  This is simply not helpful based on current § 101 jurisprudence.  Instead, if the specification had couched the discussion in terms of the gaming facility computer being unable to reliably determine the location of the mobile device based on conventional messaging between the two, and then later provided the GPS device as a means of enabling a reliable determination of location in the invention, the court may have been more inclined to find that the claims amounted to "significantly more" (based on the claims providing an arguably technical solution to a technical problem).  While this borders on quibbling about semantic differences, unfortunately, that is the present state of the law under § 101.

    In addition to the changes to the specification described above, there are certainly some modifications that could have been made to the claims (many without requiring modification to the specification at all).  One that I would suggest, and this is purely psychological, is to remove references to "gaming activity," "gambling activity," "sporting event," etc. from the claims.  While these terms shouldn't impact a court's view or an examiner's view eligibility under § 101, they implicitly connote non-technical concepts to some readers.  Thus, anecdotally, their inclusion makes patent-eligibility a bit more of an uphill battle.  Hence, broadening the claims to only refer to things like "requests" and "confirmations" rather than "bets" could only help (at least in terms of § 101).

    Conclusion

    Ensuring compliance with jurisdictional regulations is of paramount importance to the gambling industry.  Further, Beteiro's claimed invention was, at least in the eyes of the patent examiner, a novel and non-obvious way of doing so using a GPS device. While it may seem pedestrian to use a GPS device for such purposes by modern standards, in 2002, it was likely anything but. Still, the morass that is post-Alice § 101 has claimed yet another victim.  If you're hoping to see more clarity in § 101 law soon, I wouldn't bet on it (pun intended).

    Beteiro, LLC v. DraftKings, Inc. (Fed. Cir. 2024)
    Panel: Circuit Judges Dyk, Prost, and Stark
    Opinion by Circuit Judge Stark

    [1] https://cafc.uscourts.gov/opinions-orders/22-2275.OPINION.6-21-2024_2337276.pdf

    [2] Note that the CAFC opinion basically glosses over Step 1 of the Alice/Mayo test.  Hence, what I am calling "Step 2A" is referred to as "Step 1" by the Federal Circuit and what I am calling “Step 2B” is referred to as "Step 2" by the Court. The nomenclature does not matter so much, but I prefer to go with the more traditional naming that contemplates the full eligibility analysis.

    [3] Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253 (Fed. Cir. 2016); Intell. Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed. Cir. 2015)

    [4] https://www.gamingtoday.com/revenue/ (On July 14, 2024 – "In most markets, more than 90% of sports betting is online.  For markets where mobile wagering is heavily favored, like New York and New Jersey, more than 90% of betting happens online")

    [5] Berkheimer v. HP Inc., 890 F.3d 1369 (Fed. Cir. 2018) ("Whether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.  Whether a particular technology is well-understood, routine, and conventional goes beyond what was simply known in the prior art.  The mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional.")

    [6] AI Visualize, Inc. v. Nuance Commc’ns, Inc., 97 F.4th 1371 (Fed. Cir. 2024)

    [7] Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306 (Fed. Cir. 2019)

  • USPTO Publishes Updated Subject Matter Eligibility Guidance Focusing on AI

    By Michael Borella —

    USPTO SealAs required by President Biden's Executive Order 14110 ("Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence"), the U.S. Patent and Trademark Office has published an update to its subject matter eligibility guidance for examiners regarding inventions employing artificial intelligence (AI).  As this is the first update to the USPTO's subject matter eligibility guidance in almost five years, there was some hope that it would address stakeholders' long-held concerns.  These include the difficulty of crafting claims and a specification directed to an invention that incorporates AI, especially in view of the dramatic disparity in how examiners apply the law in view of the USPTO's previous guidance.

    However, the updated guidance is remarkably non-substantive at best, and at worst appears to take the position that advances in AI and uses of AI are ineligible unless they are implemented in specific hardware circuitry or cause a significant change to the state of an ancillary system.  Moreover, the updated guidance largely reads as general eligibly guidance with few actual AI-specific considerations.

    Indeed, the updated guidance makes it painfully clear that it (like the USPTO's previous guidance on the topic) "does not create any right or benefit, substantive or procedural, enforceable by any party against the USPTO."  In other words, examiners are free to ignore the updated guidance as they see fit, which is how examiners have approached the USPTO's previous subject matter eligibility guidance over the last decade.

    In any event, it is not until the halfway point of the updated guidance that it addresses the USPTO's currently eligibility test.  In particular, the updated guidance focuses on Step 2A, prong one (determining whether a claim recites a judicial exception) and step 2A, prong two (determining whether the claim integrates the recited judicial exception into a practical application of the exception).  Unfortunately, the USPTO largely employs hypothetical examples in doing so.

    Regarding Step 2A, prong one, the USPTO reminds us that "USPTO personnel must draw a distinction between a claim that 'recites' an abstract idea . . . and one that merely involves, or is based on, an abstract idea."  In the former case, the claim requires further eligibility analysis and in the latter case the claim is eligible.

    The USPTO sets forth three hypothetical examples of claims that do not recite an abstract idea: (i) custom and specific circuits designed to implement arrays of neurons and synaptic weights, (ii) a processor, livestock herd monitor, and transmitter collectively arranged for monitoring health and activity in a herd of dairy livestock animals, and a "treatment method comprising administering rapamycin to a patient identified as having Nephritic Autoimmune Syndrome Type 3."  Notably, only the first of these examples even relates to AI.

    The USPTO goes on to state that examiners should identify specific claim limitations that fall within the three groupings of abstract ideas:  mathematical concepts, certain methods of organizing human activity, and mental processes.  This leads to the rather absurd result that more specific recitations in a claim (which are encouraged by a large number of Federal Circuit eligibility opinions) can ultimately render a claim ineligible, whereas broader recitations of the same invention (which are discouraged by these Federal Circuit eligibility opinions) can result in a claim being eligible because it does not recite an abstract idea.

    Regarding math, the USPTO essentially repeats it's thin and unworkable distinction between claims that recite mathematical concepts and claims that are based on or involve a mathematical concept.  In practice, examiners do not understand this distinction and the USPTO's terse discussion in the updated guidance suggests that they are not alone.  To state what should be obvious, all science and engineering advances involve mathematical concepts in one way or another — a claim that recites "taking the sum of a first output and a second output" should not be subject to more scrutiny than a claim that recites "determining a result based on a first output and a second output."

    The certain methods of organizing human activity category has been viewed expansively by the courts and some examiners to include anything remotely related to human activity.[1]  Here, the USPTO relies on three recent Federal Circuit eligibility opinions to flesh out the category.  The problem is that all three examples found claims to be ineligible.  It would be nice if the USPTO could provide at least a hint of what might not fall within this gaping chasm of a category.

    On mental processes, the USPTO continues to apply what can only be considered a legal fiction.  In essence, the current practice is that any invention that, even in theory, could be performed by one or more human beings with thought, pencil and paper, or other tools, is a mental process even if it would take millions of years to obtain a useful result.  Indeed, the mental process category encompasses processes that are not performed mentally.

    Here, the USPTO at least gives us one example of an invention that (in its view) does not recite a mental process ("a specific, hardware-based RFID serial number data structure [that is] uniquely encoded").  However, when compared to the other examples that do recite a mental process (e.g., "the collection of information from various sources and understanding the meaning of that information"), the USPTO appears to be slicing the bacon transparently thin.[2]

    Moving on to Step 2A, prong two, the USPTO reiterates that examiners should determine whether "there are any additional elements recited in the claim beyond the judicial exception(s), and [evaluate] those additional elements individually and in combination to determine whether they integrate the exception into a practical application of that exception."  Despite the USPTO's reminder that claims are to be considered "as a whole" in this inquiry, such language is, in practice, a paper tiger.  Neither the USPTO nor the courts have ever explained what it means to consider claims as a whole, and both have routinely considered claims piecemeal while contending that they are actually considering claims as a whole.

    There are three ways to find a claim non-abstract under Step 2A, prong two — where the claim (i) improves the functioning of a computer, (ii) improves another technology or technical field, or (iii) is meaningfully limited to a particular technological environment.  But none of these have been defined in the case law, much less clearly defined.  The USPTO notes that specific solutions to specific problems are more likely to be eligible, but provides little insight that fleshes out this notion.  Instead, the USPTO again falls back on case law examples.

    These examples demonstrate that an eligible invention may look ineligible if you tilt your head three degrees to the left and vice-versa.  For example, a very specifically-worded claim for determining haplotype phase based on pedigree data in human genetic sequences was an improvement over prior attempts to do so, but not a "technical" improvement because the entire claim was putatively a mathematical process that ran on general-purpose computers.

    While the USPTO touted the claims of McRO, Inc. v. Bandai Namco Games America Inc. as an example of eligibility (which it is despite a lot of math being calculated by a general-purpose computer driving the thrust of the claimed invention), in practice it is rare that making an analogy to these claims will sway an examiner.  Instead (tilting their heads three degrees to the left), examiners typically conclude that any claim similar to McRO actually recites an ineligible abstract idea executing atop a non-specific chunk of silicon.[3]  In other words, there is little or no appreciable difference between the haplotype claim and those of McRO despite one being eligible and the other not.

    Toward the very end of the updated guidance, the USPTO addresses AI-assisted inventions.  It states:

    For the subject matter eligibility analysis under 35 U.S.C. 101, whether an invention was created with the assistance of AI is not a consideration in the application of the Alice/Mayo test and USPTO eligibility guidance and should not prevent USPTO personnel from determining that a claim is subject matter eligible.  In other words, how an invention is developed is not relevant to the subject matter eligibility inquiry.

    Thus, the words of the claim matter but the use of AI in developing the underlying invention does not.  Aside from this clear statement, the updated guidance is cagey in general and surprisingly thin on AI-specific content.[4]

    Practitioners have looked forward to iterations of the USPTO's subject matter eligibly guidance to add clarity and expedite prosecution.  After a decade of such guidance, it is clear that the USPTO's example-based approach has failed.  The chosen examples do not clarify the murky principles and distinctions that the words of the guidance set forth.  Moreover, the USPTO's reasoning regarding these examples is contradictory, muddled, opaque, and ultimately not helpful.  The greatest evidence for this is how different examiners apply the guidance in dramatically different ways.

    Again, the fault lies with the Federal Circuit's incoherent parade of patent eligibility horribles masquerading as judicial decisions.  But instead of acknowledging that the emperor is stark raving naked, the USPTO once again tries to pretend otherwise.

    It is time to stop.

    [1] One of my favorite examples is the examiner I spoke to who insisted that fully-automated navigation of a self-driving vehicle was a method of organizing human activity because the goal of the invention was to deliver people from point A to point B.

    [2] Credit for this confusion should be placed at the feet of the Federal Circuit, the decisions of which these examples are based.  

    [3] A relevant definition of "analogy" in the American Heritage Dictionary is "[a] form of reasoning based on the assumption that if two things are known to be alike in some respects, then they are probably alike in other respects."  Too many examiners seem to think that, to be analogous, two things must be exactly the same.

    [4] The USPTO has released three new sets of example claims to support the guidance.  They were not specifically addressed herein and may be discussed in a subsequent article.  In short, they do not provide enough further insight to render the updated guidance particularly helpful.

  • Judge Newman’s Suit Comes to an End

    By Kevin E. Noonan –

    Judge Newman_1Today, D.C. District Court Judge Christopher R. Cooper put an end to Judge Pauline Newman's lawsuit against her colleagues, granting the Federal Circuit Judicial Council's motion to dismiss Judge Newman's suit on due process and 4th Amendment grounds (see "Judge Newman and the On-Going Attempts to Remove Her from the Federal Circuit").

    To recap, Judge Newman filed a complaint in May 2023, asserting 12 claims:

    • Claim I asserted "improper removal [and] violation of separation of powers" based on Article III (life tenure of federal judges) and Article I (giving the House of Representatives the sole authority to remove a judge through impeachment after trial by the Senate).

    • Claim II asserted that the Judicial Complaint is ultra vires for "improper removal [and] violation of separation of powers."

    • Claim III alleged Fifth Amendment violations of due process because the members of the Special Committee are also purported witnesses to the alleged judicial misconduct.

    • Claim IV asserts a First Amendment violation for unlawful prior restraint for the gag order.

    • Claim V asserted that the gag order is also ultra vires as being an unlawful prior restraint on speech.

    • Claim VI asserted a Fifth Amendment violation for unconstitutional vagueness of the provisions of the Disability Act.

    • Claim VII asserted that the activities are ultra vires for unconstitutional examination because "[n]either the Act nor the U.S. Constitution authorizes compelling an Article III judge to undergo a medical or psychiatric examination or to surrender to any investigative authority her private medical records in furtherance of an investigation into whether the judge suffers from a mental or physical disability that renders her unable to discharge all the duties of office."

    • Claim VIII also asserted a Fifth Amendment violation for unconstitutional vagueness regarding the Act's investigative authority.

    • Claim IX alleged a Fourth Amendment violation for an unconstitutional search regarding the "compelled medical or psychiatric examination of an Article III judge without a warrant based on probable cause and issued by a neutral judicial official or a demonstration of constitutional reasonableness."

    • Claim X alleged a Fourth Amendment violation for an unconstitutional search and seizure of a "compelled surrender of private medical records."

    • Claim XI alleged a Fourth Amendment violation for "lack[ing] either a warrant issued on probable cause by a neutral judicial official or a constitutionally reasonable basis for requiring Plaintiff to submit to an involuntary medical or psychiatric examination."

    • Claim XII alleged a Fourth Amendment violation for "lack[ing] either a warrant issued on probable cause by a neutral judicial official or a constitutionally reasonable basis for requiring Plaintiff to surrender her private medical records none of which bear on her fitness to continue serving as an Article III judge."

    The District Court previously dismissed Counts II, III, IV, VI, X and XI for lack of subject matter jurisdiction and Count I and parts of Count VII under Fed. R. Civ. P. 12(b)(6).  Thus, only Counts V, VII (in part), VIII, and IX remained before the Court, which was the subject of Judge Newman's motion in opposition (see "Judge Newman's Suit Continues") and the Judicial Council's reply (see "Special Committee of the Judicial Council of the Federal Circuit Replies").

    Judge Newman's legal arguments were that, first, as an Article III judge she is "constitutional officer of this Republic, and not merely a federal employee" who "does not have a supervisor and does not need to meet any performance metrics to keep her job."  "Congress alone has the power to remove her," her brief in opposition asserted.

    Second, the operative statute, the Disability Act, lacks a definition of what constitutes a disability nor what factors are to be considered.  Rather than relying on medical professionals, her brief asserted, the determination is left "in the hands of lay people like Chief Judge Moore and her colleagues, all without providing them with any tools to determine when a disability exists."

    Third, there is no provision in the statute for judicial review of any Orders or actions taken pursuant to the statute, permitting violations of the Fourth Amendment, including "invasive searches of private medical information" and allowing "self-executing" administrative orders to be promulgated by the Judicial Council, "a wholly administrative body."  The result is a regime where the Council can "employ and manipulate entirely standardless criteria in order to start and to continue investigations into and to impose unconstitutional sanctions on Article III judges."  In this regard, the brief reminds the District Court that the putative grounds and factual justifications for the Council's Orders have "evolved" in the year since the proceedings began.

    The Judicial Council replied, arguing with regard to Counts VIII and IX that the orders it issued under the statute, 28 U.S.C. § 353(c), are per se reasonable and do not implicate the Fourth Amendment.  Regarding Judge Newman's Count V challenge of the disability provisions of the statute for vagueness, the Judicial Council argued that Judge Newman failed the requirement of a facial challenge to show that "the law in question is impermissibly vague in all of its applications," citing Crooks v. Mabus, 845 F.3d 412, 417 (D.C. Cir. 2017), and, on the merits, argued that the Act is not constitutionally vague because the Act permits a judicial council to "take action where a 'judge is unable to discharge all the duties of office by reason of mental or physical disability" under 28 U.S.C. § 351(a).  And with regard to Count VII, the Judicial Council argued that that Judge Newman has not asserted any reason "to doubt the sufficiency of [the standard that] "an investigation [is] as extensive as [a Judicial Council] considers necessary" (other than the implication that this is no standard at all, being entirely discretionary to the whims of the Court's Judicial Council), and that the constitutional clarity of the statute is "settled law."

    The District Court's opinion granting the Judicial Council's motion to dismiss addresses the four remaining Counts in two groups: Counts VII and IX on unconstitutionality grounds and Counts V and VII for vagueness.  For Count VIII and Count IX comprised facial challenges on 4th Amendment grounds against the Judicial Conduct & Disability ("JC&D") Act, 28 U.S.C. §§ 353(a), (c) empowering the Chief Judge to form a committee to investigate the allegations against Judge Newman.  Judge Newman alleged that § 353(c) "violates the Fourth Amendment to the extent it authorizes a compelled medical or psychiatric examination of an Article III judge" (Count VIII) or "a compelled surrender of medical records belonging to an Article III judge" (Count IX) "without a warrant based on probable cause."  The opinion recites the burden for prevailing on such a facial challenge to be that the statute is "unconstitutional in all of its applications," citing Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442, 449 (2008).  The Court found the statute not to be facially invalid because a special committee under the statute could engage in investigations that "do[] not run afoul of the Fourth Amendment," citing Florida v. Bostick, 501 U.S. 429, 434 (1991); United States v. Miller, 425 U.S. 435, 443 (1976); and United States v. Simons, 206 F.3d 392, 395–96, 398 (4th Cir. 2000) (notably, all of which had to do with court employees, a status which Judge Newman argued does not properly describe an Article III judge ("it should be noted that Judge Newman is not an employee, but an independent constitutional officer and that neither Chief Judge Moore, nor the Special Committee, nor the Judicial Council are her 'supervisors'" as was the case in many of the decisions cited by Defendants in their Motion").  The opinion rejects the distinction Judge Newman drew that a Chief Judge could always interrogate a court employee, on the grounds that a special committee could not do so (but apparently ignoring the fact that this special committee had as a member the Chief Judge herself).  The Court also ignored Judge Newman's distinctions with the circumstances of City of Los Angeles, Calif. v. Patel, 576 U.S. 409, 415, 418 (2015), and further applies more general standards for facial challenges (e.g., regarding drones and the FAA; see Brennan v. Dickson, 45 F.4th 48 (D.C. Cir. 2022), that seem somewhat far afield from the case before the Court).

    Regarding Count V and Count VII for vagueness, Judge Newman's contentions were that the JC&D Act violates the due process clause of the Fifth Amendment and were unconstitutionally vague.  As for Count V, the Court says that statutes are not impermissibly vague "merely because they 'require[] a person to conform his conduct to an imprecise but comprehensible normative standard, whose satisfaction may vary depending upon whom you ask,'" citing United States v. Bronstein, 849 F.3d 1101, 1107 (D.C. Cir. 2017).  Based upon "the text, legislative history, and implementing rules of the JC&D Act, section 351(a)" the Court held the statute not to be unconstitutionally vague.  According to the Court, the text defines the standard of conduct to be the "duties of [judicial] office" (which is not vague inter alia because "judges, the only individuals against whom § 351(a) can be enforced, are well aware of their duties" and because judges swear an oath to "faithfully and impartially discharge and perform all the duties incumbent upon" them" under 28 U.S.C. § 453).  The Court also relies upon the legislative history to the effect that the statute is directed towards "judicial transgression" (which, on its face, seems to be more directed to outcome rather than process, which is what seems to be at issue here and behind Judge Newman's complaint).  Citations to the Code of Judicial Conduct and the Canons of Judicial Ethics of the American Bar Association also seem inappropriate in this case because, after all, the basis for Judge Newman's suspension was contrary to neither of these canons but was based on the Judge's allegations that the "independent neurological testing and provide it relevant medical records" was outside the scope of the special committee's powers and an infringement on her due process and privacy rights.  And the "[e]xamples of disability" including "substance abuse, the inability to stay awake during court proceedings, or impairment of cognitive abilities that renders the judge unable to function effectively" under JC&D R. 4(c) of the Rules for Judicial-Conduct and Judicial-Disability Proceedings do not seem to apply to Judge Newman's circumstances, either, although they are cited by the Court in support of the lack of vagueness in the statute.  The Court rejects Judge Newman's rebuttals to the special committee's arguments as being subjective ("which is not unconstitutional") and interprets the distinctions Judge Newman makes between a federal employee and an Article III judge by citing definitions of "judicial independence" as "not giv[ing] 'judges "absolute freedom from" discipline or sanctions that fall short of removal or salary diminution," quoting McBryde v. Comm. to Rev. Cir. Council Conduct & Disability Ords. of Jud. Conf. of U.S., 264 F.3d 52, 65 (D.C. Cir. 2001)), citing these as "accepted limits on judicial independence."

    Regarding Count VII, the Court asserts that the investigative provisions of the JC&D Act fall within the scope of prohibition in neither of two scenarios:  "[I]f it leaves judges and jurors free to decide, without any legally fixed standards, what is prohibited and what is not in each particular case, . . . or permits them to prescribe the sentences or sentencing range available," citing Beckles v. United States, 580 U.S. 256, 266 (2017), and  El-Shifa Pharm. Indus. Co. v. United States, 607 F.3d 836, 856 n.4 (D.C. Cir. 2010).  This is because, in the Court's view, "[i]t does not vest a special committee with authority to decide what judicial conduct is or is not permissible, nor does it allow a committee to choose the proper penalty for such conduct."  The Court finds the scope of the special committee's powers to be consistent with activities of federal prosecutors and agencies.  The Court further rejects what the opinion terms "tangential arguments" by Judge Newman, the first that the statute provides no standards (the opinion having set forth its opinion on these standards) and the second that the special committee can compel the Judge to disclose private documents and "directly sanction" her for not doing so (the opinion characterizing this argument as "repackaging" an argument made in an earlier round of motions that the Court rejected, and further that the special committee has no enforcement power, which is reserved to the Judicial Council which have such power).

    Thus ends Judge Newman’s attempts to regain her position on the Federal Circuit (absent appeals, of course).  This unfortunate situation has harmed the stature of the Court.  Judge Newman deserved better.  Her wonderful and admirable legacy, on the other hand, remains and will be long remembered.