US Supreme Court: A Year in Review - Part IV: Securities Law, Intellectual Property, and Procedure

Part IV – Securities Law, Intellectual Property, and Procedure

Mr. Rosenkranz began with a discussion of Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, a case not in the course materials but nevertheless quite interesting. Although a very context-specific case under Section 11 of the Securities Act of 1933, this case highlights the court’s belief that couching untrue statements as in terms of “beliefs,” if unreasonable, materially untrue or subjectively disbeliever is unfair and in appropriate. Mr. Rosenkranz suggested that Congress’s crackdown on securities fraud cases has led to the significantly reduced number of such cases before the Court.

In contrast, there has been a sharp increase in the Court’s patent cases per term (2-3 per year for the last few terms, versus almost none for the 15 years prior to that). The patterns Mr. Rosenkranz suggested included (1) that the Supreme Court has fairly consistently reversed the Federal Circuit on patent cases, despite its supposed expertise in the field, rendering the Federal Circuit similar to the Ninth Circuit in many ways, and (2) that patent law statutes are being interpreted in ways that follow regular statutory construction rules.

Mr. Rosenkranz highlighted the Teva Pharmaceuticals, USA, Inc. v. Sandoz, Inc. decision for the proposition that it follows both patterns. Teva is about claim construction. He noted that the Federal Circuit gave the District Court no deference in the case, despite involving credibility issues and fact finding. In reversing (7-2 decision), the Court held that fact finding is only reviewed for clear error. There was, however, a debate between the majority and decent about what a patent is: a contract (involving facts) v. a creature of statutory interpretation (not involving fact finding). Based on this decision, Mr. Rosenkranz anticipates that District Courts will document more fact finding in claim construction cases.

The last case discussed in this portion of the program was Commil USA, LLC v. Cisco Systems, Inc., a case involving “patent trolls” and induced infringement of patents. Here, the Court reversed the Federal Circuit (again following the pattern described above) and held that good faith regarding the validity or invalidity of a patent is irrelevant to whether the patent is infringed. This case surprised Mr. Rosenkranz, who thought the Federal Circuit had properly decided the opposite.

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Tagged: Litigation, Appellate Practice, Supreme Court of the United States