Vringo Inc. (VRNG), the patent licensing company run by CEO Andrew Perlman, made a sound and reasonable argument in its petition to the U.S. Supreme Court to overturn an appellate court’s ruling throwing out a $30 million award and running royalty and invalidating patents at issue in an infringement action against Google Inc. (GOOG), though success remains doubtful, attorneys say.
New York-based Vringo on Thursday filed a petition for writ of certiorari with the Supreme Court asking the high court to review and overturn the divided opinion of the U.S. Court of Appeals for the Federal Circuit. The original verdict came in a trial before the U.S. District Court for the Eastern District of Virginia.
David Boies, chairman of Boies Schiller & Flexner LLP, filed the petition on behalf of I/P Engine. Boies and Vringo officials declined to comment.
The petition calls for the Supreme Court to reverse the Federal Circuit and articulate a clear standard of review that would prevent the Federal Circuit from substituting its own factual findings for that of the jury.
According to the petition, the Supreme Court should intervene to ensure that patent litigation does not continue to be at risk of arbitrary re-litigation years after a patent has been issued by appellate judges who did not witness the trial and have only the cold record to review.
I/P Engine’s petition asks the Supreme Court to reverse the Federal Circuit’s decision finding the patents-in-suit invalid as obvious, which gave no weight to the jury’s explicit factual findings to the contrary, and to clarify the standard of review which the Federal Circuit must apply when reviewing a jury’s explicit findings.
The petition argues that the Federal Circuit substituted its own opinion for that of the judge and jury, who after a twelve-day trial in the Eastern District of Virginia found the patents valid and infringed.
Vringo’s petition says the jury’s finding was consistent with the Patent and Trademark office, where eight different patent examiners found I/P Engine’s patents valid.
Absent a grant of certiorari, I/P Engine asks the Supreme Court to vacate the decision below and direct the Federal Circuit to reconsider its decision in light of the Supreme Court’s recent decision in Teva Pharmaceuticals USA Inc. v. Sandoz, which emphasized the need for the Federal Circuit to review the factual findings of the trial court deferentially.
Shares of Vringo lost two thirds of their value after the Federal Circuit’s decision August 15. Today, the shares fell 0.96 cents to 66 cents in trading. They’ve traded between 46 cents and $3.69 over the past year.
“In looking through Vringo’s petition, it looks to me like the argument that is being made is sound and consistent to the Court’s recent decision in Teva v. Sandoz,” said Chandran Iyer, a partner with Sughrue Mion PLLC in Washington, D.C. in an email.
In January, the Supreme Court ruled in Teva that factual conclusions made by the trial court in its claim construction decision must be given great deference on appeal. As a result, the Supreme Court held that the claim construction ruling must be reviewed for “clear error,” instead of using a de novo review.
“The argument made in Vringo’s petition is consistent with this test and I figured such motions were coming in light of the Teva decision,” Iyer said.
The question is “should all factual determinations made by the lower court in a patent case be reviewed for clear error?,” he said. “I can see, based on the Teva decision, the Supreme Court going there pretty easily and, in my opinion, that is probably the correct approach.”
“While I’m not sure if Vringo’s patent is valid or invalid, the argument that the correct standard of review must be used to determine validity is one that is correct and should resonate with the Supreme Court.”
Another patent attorney, who spoke on condition of anonymity because he didn’t want his words used against him in another matter, echoed Iyer’s remarks, saying the concern is whether the Federal Circuit improperly invaded the domain of the fact finder in reviewing the jury’s obviousness determinations.
In this case, the Federal Circuit didn’t have the advantage of the Supreme Court’s Teva v. Sandoz decision concerning claim construction when it decided this case. Indeed, the Federal Circuit denied Vringo’s en banc appeal in December and the Supreme Court didn’t issue its ruling in Teva until January.
“The Teva ruling provides Vringo with the argument that the Federal Circuit should have given deference to the jury with respect to factual determinations. A litigant could analogize between claim construction deference as to the district court’s factual determinations, and similarly advocate for deference to the jury’s factual determinations regarding obviousness. So the Supreme Court may be tempted to vacate the ruling and send it back to the Federal Circuit to consider the implications of Teva.”
Robert Taylor, the owner and founder of RPT Strategies in San Francisco, said the Supreme Court typically has shown an unwillingness to undo the validity determinations made by the Federal Circuit, making it challenging for Vringo to do so here.
“A cert petition is by definition a long shot,” said Mark Lemley, the William H. Neukom professor at Stanford Law School in an email. “And this one on a fact-specific issue is even more of a long shot.”
If the petition catches the high court’s interest, it may be on the question of what the proper role of the jury is in deciding validity, Lemley said.
“But Vringo might not like the answer the court gives if it does address that issue.”
Critics of abusive patent monetization firms were much less optimistic about Vringo’s chances as might be expected.
“Vringo is desperately fighting for its miserable, advantage taking existence,” said Lee Cheng, the general counsel for Newegg Ltd., the Los Angeles-based online retailer of computer equipment.
“And in these United States, they will not find any shortage of high priced legal mercenaries willing to take their money to allow them to continue to extract extortionate tolls from honest businesses and ultimately, every American.
Cheng said he hoped “Boies soaked them hard on fees–millions and millions.”
Soverain Software “did the same thing when the CAFC invalidated the infamous shopping cart patents asserted against Newegg,” he said. “They hired Seth Waxman of the Wilmer Hale firm to try to convince the Supreme Court to grant a rehearing and spent millions on that pathetic effort. FAIL. This will fail too.”
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