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Noted with Interest: Federal Circuit Grants Patentee Dismissal of IPR Appeal Under the Voluntary Cessation Doctrine

June 15, 2021

The United States Court of Appeals for the Federal Circuit recently granted a patentee’s request to dismiss an appeal of an inter partes review brought by an accused infringer, relying on the patentee’s voluntary resolution of litigation on the patent.  In ABS Global Inc., v. Cytonome/St, LLC, 984 F.3d 1017 (Fed. Cir. Jan. 6, 2021), the panel set forth a framework for the specific circumstances under which a patentee can obtain such relief, explaining how a patent owner may moot such an appeal by expressly declining to appeal a district court judgement of non-infringement obtained by the petitioner.  

A. District Court Litigation and Inter Partes Review of Cytonome’s Patent

As is often the case, the parties before the Patent Trial and Appeal Board in the inter partes review were also involved in district court litigation on the patent.  In June 2017, Cytonome and others filed a complaint asserting infringement of six patents, including U.S. Pat. No. 8,529,161, which is assigned to Cytonome.  The ’161 patent at issue is directed to devices and methods for microfluidic systems; defendant ABS was accused of infringing the patent in its cattle breeding business.  In October 2017, ABS filed a petition for inter partes review of all claims of the ’161 patent.  The Board instituted review and in April 2019 issued its final written decision, finding some claims of the ’161 patent invalid but also that ABS had failed to carry its burden to demonstrate that other claims were unpatentable.  

 By the time the final written decision issued, summary judgment motions were pending in the district court action, and indeed two weeks later the district court granted summary judgment that the accused ABS products did not infringe any of the ’161 patent claims.  Then, in June 2019, ABS filed its notice of appeal of the Board’s decision to the Federal Circuit, seeking to reverse the finding that it had failed to show the remaining claims to be unpatentable.  

B. The Federal Circuit Finds No Applicable Exception to Mootness and Applies the Voluntary Cessation Doctrine from the Supreme Court’s Already Opinion

In November 2019, ABS filed its opening brief on appeal.  In its February 2020 response brief, Cytonome argued that ABS lacked Article III standing to appeal the Board’s decision.  In support of that contention, Cytonome included an affidavit by counsel stating that Cytonome “has elected not to pursue an appeal of the district court’s finding of non-infringement as to the ’161 patent and hereby disclaims such an appeal.”  ABS Global, 984 F.3d at 1019.  The brief argued that Cytonome’s disavowal removed the requisite injury in fact required for Article III standing.  And specifically, Cytonome argued that in order to maintain its appeal, ABS needed to—but could not—demonstrate a basis to conclude that ABS remains at substantial risk of enforcement of the ’161 patent claims.  ABS’s reply brief argued that jurisdiction should be analyzed under the jurisprudence of mootness, not standing, and that the Federal Circuit recognizes a purported exception to the mootness doctrine for patent actions.   

The Federal Circuit agreed with ABS’s argument that mootness provides the correct framework to evaluate jurisdiction, but did not agree that there is any applicable exception.  As to the proper framework, the Court of Appeals cited to the Supreme Court’s explanation that “[M]ootness can be described as the doctrine of standing set in a time frame: The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).”  Id. at 1021 n. 1 (quoting Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 189 (2000)).  Understood that way, the question raised by Cytonome was not one of standing, but whether the voluntary cessation doctrine applied to render moot ABS’s appeal.

The Court of Appeals looked to Already, LLC v. Nike, Inc., 568 U.S. 85 (2013), for the law on voluntary cessation in the context of competing claims of infringement and invalidity.  That case involved Nike’s allegations of trademark infringement and Already’s counterclaims of invalidity.  Nike sought to dismiss the entire case, including Already’s counterclaims, by voluntarily issuing a broad covenant not to sue.  But Already argued this was not sufficient at least because its future products could again be threatened under Nike’s trademark rights.  As noted by the Federal Circuit, the Supreme Court set forth that in such circumstances the voluntary cessation doctrine places the initial burden on Nike, as the rights-holder, to show that it “could not reasonably be expected” to resume enforcement efforts against Already, the accused infringer.  Where that initial burden is met by a covenant not to sue that covers all the alleged infringing conduct, the accused infringer then bears the burden to counter that it has engaged or has concrete plans to engage in activities not covered by the granted covenant.  In Already, the Supreme Court held Nike had met its initial burden and Already had not met its counter-burden, and therefore the case was moot.

As to the alleged exception to mootness in the context of patent law urged by ABS, the Court of Appeal found no such rule in its jurisprudence.  Id. at 1026.  Accordingly, the Court of Appeals applied the voluntary cessation doctrine as set forth in Already to the patent dispute in this case. 

C. Finding Cytonome Met Its Burden While ABS Failed to Meet Its Counter-Burden, the Federal Circuit Dismissed the Appeal as Moot

Applying the voluntary cessation doctrine, the Federal Circuit held that Cytonome’s disavowal of an appeal of the district court’s summary judgment of non-infringement was sufficient to meet the initial burden to show its efforts to enforce the ’161 patent against ABS could not reasonably be expected to resume.  In reaching this result, the Court of Appeal stated that “Cytonome’s disavowal of its right to appeal effectively made final the district court’s judgment of noninfringement.”  ABS Global, 984 F.3d at 1022.  Under the Federal Circuit’s preclusion jurisprudence, and specifically under the Kessler doctrine, a final judgment of no infringement confers on the accused products the status of  “noninfringing devices” which bars the future assertion of the same patent against future activity based on these noninfringing products or any products that are “essentially the same.”  Id.  In light of that law, Cytonome’s disavowal effectively estopped any future enforcement against ABS for infringement of the ’161 patent claims based on the same or similar products.  Hence, Cytonome met its initial burden to show its efforts to enforce the ’161 patent against ABS could not reasonably be expected to resume.  

Turning then to ABS’s opportunity to present contrary evidence that it reasonably expected Cytonome to sue again for infringement of the ’161 patent, or that ABS engaged in or had concrete plans to engage in activities not covered by Cytonome’s disavowal, the Federal Circuit noted the absence of any such evidence in the record.  Accordingly, the Court of Appeal dismissed the appeal as moot (though Chief Judge Prost filed an opinion dissenting in part on the grounds that the proper disposition should be vacatur of the challenged portions of the Board’s decision).  Id. at 1028. 

D. Conclusions

This precedential decision confirms that the voluntary cessation doctrine applies in the context of an appeal of a final written decision from inter partes review.  By relying on the Supreme Court’s exegesis of the doctrine in the trademark case Already, and confirming the affidavit submitted by Cytonome in this case to be sufficient, at least for the appellee’s initial burden, the Federal Circuit provided guidance to future litigants to obtain similar relief.  The analysis also suggests that accused infringers may face a substantial hurdle in coming forth with contrary evidence that they are engaged in or have concrete plans to engage in activities not covered by the scope of disavowal of allegations of infringement.