by Dennis Crouch

Capella Photonics, Inc., v. Cisco Systems, Inc., SCT Docket No. 18-304 (Supreme Court 2018) (on petition for writ of certiorari)

Capella Photonics has asserted its patents covering wavelength-separating technology using array of “fiber collimators” in at least ten separate infringement lawsuits, including a still pending action against Cisco filed in 2014. After being sued, Cisco reached-out to the USPTO seeking an inter partes review of two patents. RE42,678 and RE42368. The USPTO complied and issued final decisions finding the claims obvious. The PTAB’s decision particularly found the use of collimators to be obvious based upon the use of prior art circulators. On appeal, Capella argued that the Board had erred as a matter of law in both its claim construction and obviousness conclusions (issues to be reviewed de novo on appeal).

For its part, the Federal Circuit heard oral arguments in the case on February 8, 2018 and allowed one business day to pass before issuing its judgment on February 12, 2018: AFFIRMED WITHOUT OPINION R. 36. [Appendix of Decisions in the Case]

The Federal Circuit has repeatedly vacated District Court and PTAB decisions when the lower tribunal failed to explain the basis for its decision. Unfortunately, the Federal Circuit continues to rampantly use its self-directed power to issue judgments without any opinion or explanation — even when the review is de novo and thus requires an affirmative statement from the court. In a 2017 article, I argued that the Patent Act speaks to this issue — and requires that the Federal Circuit provide an opinion in cases on appeal from the USPTO.

The United States Court of Appeals for the Federal Circuit shall review the decision from which an appeal is taken on the record before the Patent and Trademark Office. Upon its determination the court shall issue to the Director its mandate and opinion.

35 U.S. Code § 144 – Decision on appeal. There are many situations where Congress and the various states have similarly required tribunals to provide their opinion rather than simply the mandate or judgment. Prior to 1989, the Federal Circuit always wrote opinions as did its predecessor court, the CCPA. In 1989, however, the Federal Circuit adopted its Local Rule 36 that permitted no-opinion-judgments. I have found no evidence (anecdotal or otherwise), that the court considered the text of Section 144 when implementing its local rule.

Now to the Supreme Court, Capella has asked the Supreme Court to review the issue -with the following question presented:

Whether the Federal Circuit’s practice of routinely issuing judgments without opinions in appeals from the Patent Trial and Appeal Board violates 35 U.S.C. § 144, which provides that the Federal Circuit “shall issue . . . its mandate and opinion” in such appeals.

Petition for Writ of Certiorari. I explain in the article, that the issue was rather low-level up until 2013 and the explosion of inter partes review (IPR) proceedings and resulting appeals to the Federal Circuit. Because those cases typically involve complex obviousness analysis (as in the case at hand), the shortcut route has been for the court to issue R.36 Judgments Without Opinion in these IPR appeals. The result has been hundreds of R. 36 Judgments of PATO appeals over the past few years.

Although a number of parties have raised the issue with the Federal Circuit, the court has not yet addressed the issue directly (other than by continuing to issue no-opinion-judgments). I will note that the same question is also presented in the pending petition in Leon Stambler v. Mastercard International, Inc., SCT Docket No. 17-1140.

Rob Sterne’s team at Sterne Kessler is representing the patentee-petitioner. Sarah Guske (Baker Botts) represented Cisco in the appeal.