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Ethics Committee Urges SCOTUS Review Case Against PEIX...

https://www.law360.com/articles/1341845/ip-ethics-atty-urges-justices-to-take-up-standards-case

IP Ethics Atty Urges Justices To Take Up Standards Case
By Tiffany Hu

Law360 (January 5, 2021, 8:37 PM EST) -- The chairman of an American Bar Association ethics committee for intellectual property lawyers has urged the U.S. Supreme Court to take up the question of whether an issue decided on partial summary judgment but not reopened at trial should be reviewed under an abuse of discretion standard or a de novo one.

Michael E. McCabe Jr., who chairs the American Bar Association Section of Intellectual Property Law's ethics and professional responsibility committee, filed an amicus brief Monday in support of GS CleanTech Corp.'s petition for the high court's review of the Federal Circuit's decision affirming that its patents were invalid under the on-sale bar, which prohibits an invention from being patented if it was sold a year before the patent filing.

CleanTech had argued that because an Indiana federal judge's summary judgment order resolved the issue of invalidity, which was not reopened at trial, the sole issue on appeal was whether the company acted deceptively when it made false statements to the U.S. Patent and Trademark Office. The Federal Circuit should have reviewed the summary judgment de novo, but instead held that it could review the issue under the abuse of discretion standard meant for the lower court's finding of inequitable conduct, it said.

McCabe, also a managing partner of McCabe & Ali LLP, said in his brief that an abuse of discretion standard like the Federal Circuit used is unfair to attorneys accused of inequitable conduct, as a federal court's finding of such wrongdoing will be a "centerpiece of any subsequent disciplinary prosecution," he said.

"Proper review provides reliability, uniformity, predictability and consistency for the members of the Patent Bar as well as the patent applicants and owners they represent," McCabe wrote. "Application of the proper standard of appellate review ensures fairness while promoting uniformity and consistency in decision making."

McCabe told Law360 in an email late Monday that "patent cases often involve issues resolved by summary judgment, and every court — except the Federal Circuit — uniformly applies de novo appellate review."

"The Federal Circuit's application of abuse of discretion review denies the parties the opportunity for a three person panel to deliberate independently and assess the evidence," McCabe wrote. "This did not occur here and hopefully the court will take this case as an opportunity to clarify and align the standard of appellate review for summary judgment rulings."

CleanTech had launched a series of suits between 2009 and 2014 accusing companies of infringing four patents covering the "recovery of oil from a dry mill ethanol plant's byproduct, called thin stillage." The Judicial Panel on Multidistrict Litigation centralized that litigation in Indianapolis.

The case turned in part on an offer by CleanTech to install its system at another company before filing for a patent, which CleanTech maintained was a test, rather than an offer for sale.

The district judge found that this was actually a sale, meaning that the patent application should have been rejected under the on-sale bar. The judge later held a bench trial on inequitable conduct and found that CleanTech's attorneys at Cantor Colburn LLP had failed to make disclosures to the USPTO, making the patents unenforceable.

The Federal Circuit reviewed the judge's inequitable conduct decision for abuse of discretion, while opting not to conduct a de novo review of the summary judgment decision. It affirmed in March and subsequently denied rehearing, prompting CleanTech to lodge the present appeal.

CleanTech is represented by Lawrence M. Hadley and Stephen Underwood of Glaser Weil Fink Howard Avchen & Shapiro LLP.

The various defendants are represented by attorneys from Stoel Rives LLP, Woodard Emhardt Henry Reeves & Wagner LLP, Patterson Belknap Webb & Tyler LLP, BrownWinick Law Firm, McKee Voorhees & Sease PLC, Locke Lord LLP, Michael Best & Friedrich LLP, Stinson LLP and Dicke Billig & Czaja PLLC.

The case is GS CleanTech Corp. v. Adkins Energy LLC et al., case number 20-769, before the U.S. Supreme Court.

--Additional reporting by Dani Kass and Ryan Davis. Editing by Emily Kokoll.