IMG_0195Antitrust v. patent

The extraordinary risk in antitrust cases has prompted courts to erect ever-higher hurdles to them. Extending a trend that began decades before, the Supreme Court used a sprawling antitrust case — Bell Atl. Corp. v. Twombly (2007) — to toughen the test for pleading a claim. It warned about the high costs of “false positives” and “interminable litigation” in a monopolization case, Verizon Communications, Inc. v. Trinko (2004). And it extended its dislike of big class actions to the antitrust arena in Comcast Corp. v. Behrend (2013).

Until about a decade ago, courts did not show similar skepticism about another kind of complex commercial dispute — patent infringement cases. Entire judicial districts, in fact, seemed to open their adjudicatory arms to them, acquiring expertise that permitted them to streamline and expedite resolutions on the merits.

But will patent cases become more like antitrust actions? Have they already?

A string of new decisions suggests a one-word answer.


New rulings

Three of the four opinions originate from the Federal Circuit, which has exclusive jurisdiction to hear appeals from final orders that arise under patent law.

The first, Intellectual Ventures I LLC v. Capital One Bank (USA), N.A., No. 14-1506, slip op. at 7 (Fed. Cir. July 6, 2015), held under Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), that patents on “tracking financial transactions to determine whether they exceed a pre-set spending limit (i.e., budgeting)” and “customizing web page content as a function of navigation history and information known about the user” involved “abstract ideas” that did not qualify for patenting.

In In re Cuozzo Speed Technologies, LLC, No. 14-1301, slip op. at 5-10 (Fed. Cir. July 8, 2015), a different panel of the Federal Circuit concluded that it lacked jurisdiction to consider challenges to decisions by the U.S. Patent and Trademark Office (USPTO) to institute “inter partes review” of patents under the America Invents Act. The panel also approved the USPTO’s use of a test — the “broadest reasonable interpretation” (BRI) standard — that increases the likelihood of patent’s invalidation as obvious. Id. at 10-19. And the court affirmed an obviousness determination against the patent holder. (The full court denied en banc reconsideration by a 6-5 vote.)

The court in Versata Devel. Group, Inc. v. SAP Am., Inc., No. 14-1194, slip op. at 25-26 (Fed. Cir. July 8, 2015), ruled that it could second-guess decisions by the Patent Trial and Appeal Board (PTAB), a branch of the USPTO, to treat a patent as a “covered business method” patent and therefore eligible for possible invalidation. But it also held that the PTAB did not err in deeming the patent-in-suit a CBM, in giving it BRI treatment, and invalidating it as an “abstract idea” under Alice.

The last of the four decisions dealt with the “exclusive jurisdiction” matter I mentioned at the outset of this section. In Amity Rubberized Pen Co. v. Market Quest Group Inc., No. 13-55796 (9th Cir. July 13, 2015), the district court dismissed a patent infringement case not on any patent-law ground but because principles of res judicata precluded the patent holder from suing again. The Ninth Circuit held that it had no power to consider the appeal and that only the Federal Circuit could do that.

Patent as the new antitrust

What theme unites these four outcomes? Each made getting a patent infringement case to trial and a resolution on the merits harder and therefore riskier and more expensive. Intellectual Ventures, Cuozzo Speed, and Versata all resulted in invalidations of patents. Cuozzo Speed and Versata also adopted a construction test (BRI) that makes invalidation more likely. Cuozzo Speed also put IPR institution decisions beyond the reach of appellate review. And Amity Rubberized Pen points up the unique procedural complexity of patent infringement suits.

Looking ahead

The recent placement of obstacles in patent cases recalls similar developments in antitrust cases years before. What lessons can we learn about what happened in antitrust cases? Do they apply in the context of patent infringement actions?

I will present observations on those questions in the next post, on Monday, July 20.

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Photo of Barry Barnett Barry Barnett

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck…

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck Redden).

Barnett is a Fellow in the American College of Trial Lawyers, and Lawdragon has named him one of the top 500 lawyers in the United States three years in a row. Best Lawyers in America has honored him as “Lawyer of the Year” for Bet-the-Company Litigation (2019 and 2017) and Patent Litigation (2020) in Houston. Based in Texas and New York, Barnett has tried complex business disputes across the United States.

Barnett’s background, training, and experience make him indispensable to his clients. The small-town son of a Texas roughneck and grandson of a Texas sharecropper, Barnett “developed an unusual common sense about people, their motivations, and their dilemmas,” according to former client Michael Lewis.

Barnett has been historically recognized for his effectiveness and judgment. His peers chose him, for example, to the American College of Trial Lawyers and American Law Institute. His decades of trial and appellate work representing both plaintiffs and defendants have made him a master strategist and nimble tactician in complex disputes.

Barnett focuses on enforcement of antitrust laws, the “Magna Carta of free enterprise,” in Supreme Court Justice Thurgood Marshall’s memorable phrase. “Barry is one of the nation’s outstanding antitrust lawyers,” according to Joseph Goldberg, a member of the Private Antitrust Enforcement Hall of Fame. Named among Texas’s top ten antitrust lawyers of 2023, Business Today calls Barnett a “trailblazer” among the “distinguished legal minds” who “dedicate their skill and expertise to the maintenance of healthy competition in various sectors” of the Lone Star State’s booming economy. Barnett is also adept in energy and intellectual property matters and has battled for clients against a Who’s Who list of corporate behemoths, including Abbott Labs, Alcoa, Apple, AT&T, BlackBerry, Broadcom, Comcast, Dow, JPMorgan Chase, Samsung, and Visa.

Barnett commands a courtroom with calm and credibility and “is the perfect lawyer for bet the company litigation,” said Scott Regan, General Counsel of former client Whiting Petroleum. His performance before the Supreme Court in Comcast Corp. v. Behrend prompted the Court to withdraw the question on which it had granted review. The judge in a trial involving mobile phone technology called Barnett “one of the best” and that his opening statement the finest he had ever seen. Another trial judge told Barnett minutes after a jury returned a favorable verdict against the county’s biggest employer that he was one of the two best trial lawyers he’d ever come across—adding that the other one was dead.

A versatile trial lawyer, Barnett knows how to handle a case all the way from strategic pre-suit planning to affirmance on appeal. He’s tried cases to verdict and then briefed and argued them when they went before appellate courts, including the Second, Third, Fifth, and Tenth Circuits, the Supreme Court of Louisiana, and (in the case of Comcast Corp. v. Behrend) the Supreme Court of the United States.

Barnett is a sought-after public speaker, often serving on panels and talking about topics like the trials of antitrust class actions and techniques for streamlining complex litigation. He also comments on trends in commercial litigation and the implications of major rulings for outlets such as NPR, Reuters, Law360, Corporate Counsel, and The Dallas Morning News. He’s even appeared in a Frontline program about underfunding of state pensions, authored chapters on “Fee Arrangements” and “Techniques for Expediting and Streamlining Litigation” (the latter with Steve Susman) in the ABA’s definitive treatise on Business and Commercial Litigation in Federal Courts, 5th, and commented on How Antitrust Enforcers Might Think Like Plaintiffs’ Lawyers.

Clients and other hard graders have praised Barnett for his courtroom skills and legal acumen.

A client in a $100 million oil and gas case, which Barnett’s team won at trial and held on appeal, said Barnett and his team “presented a rare combination of strong legal intellect, common sense about right and wrong, and credibility in the courtroom.” David McCombs at Haynes and Boone said Barnett “has a natural presence that goes over well with juries and judges.”

Even former adversaries give Barnett high marks. Lead opposing counsel in a decade-long antitrust slugfest said “Barry is a highly skilled advocate. He understands what really matters in telling a narrative and does so in a very compelling manner.”

Barnett relishes opportunities to collaborate with all kinds of people. At the Center for American and International Law (CAIL), founded by a former prosecutor at Nuremberg in 1947 and headquartered in the Dallas area, he has served on the Executive Committee, co-chaired the committee that produced CAIL’s first-ever strategic plan, supported CAIL’s Institute for Law Enforcement Administration and other development efforts, and proposed formation of a new Institute for Social Justice Law. CAIL’s former President David Beck said “Barry is extremely bright” and is “very well prepared in every lawsuit or professional task he undertakes.”

Barnett is also a Trustee of the New-York Historical Society, a Sterling Fellow at Yale, a member of the Yale University Art Gallery’s Governing Board, a winner of the Class Award for his work on behalf of his college class, and a proud contributor to the Yellow Ribbon Program at Harvard Law. Barnett’s pro bono work includes leading the trial team representing people who are at greatest risk of severe illness and death as a result of being exposed to the novel coronavirus SARS-CoV-2 while being detained in the Dallas County jail—work for which he received the NGAN Legal Advocacy Fund RBG Award.

At Susman Godfrey, Barnett has served on the firm’s Executive Committee, Employment Committee, and ad hoc committees on partner compensation, succession of leadership, and revision of the firm’s partnership agreement. He also twice chaired the Practice Development Committee.

Barnett understands that clients face many pressures. Managing the stress is important, especially in matters that take years to resolve. He encourages clients to call him whenever they have a question or concern and to keep the inevitable ups and downs in perspective. He wants them to know that he will do his level best to help them achieve their goals. He also strives to foster trust and to make working with him a pleasure.

Cyrus “Skip” Marter, the General Counsel of Bonanza Creek in Denver and a former Susman Godfrey partner and client, said Barnett is “excellent about communicating with clients in a full and honest manner” and can “negotiate for his clients from a position of strength, because he is not afraid to take a case through a full trial on the merits.” Stacey Doré, the President of Hunt Utility Services and a former client, said that Barnett is “an excellent trial lawyer and the person you want to hire for your bet-the-company cases. He is client focused, responsive, and uniquely savvy about trial and settlement strategy.” A New York colleague said, “Barry is a joy to work with as co-counsel. He tackles complex procedural and factual hurdles capably, efficiently, and without drama.”

Barnett’s wide-ranging experience and calm, down-to-earth approach enable him to connect with clients, judges, jurors, witnesses, and even opposing counsel. He grew up in Nacogdoches, Texas. He co-captained his high school varsity football team as an All-East Texas middle linebacker while also serving as the Editor of Key Club’s Texas-Oklahoma District, won the Best Typist award, took the History Team to glory, and sang in the East Texas All Region Choir. As Dan Kelly of client Vistra Corp. put it, Barnett is “a great person to be around.”

Barnett is steady and loyal. He has practiced at Susman Godfrey his entire career. He and his wife Nancy live in Dallas and enjoy spending time in Houston and New York. Their daughter works for H-E-B in Houston, and their son is a Haynes and Boone transactions lawyer in Dallas.

As a member of Ivy League championship football teams in his junior and senior years at Yale and a parent of two Yalies, Barnett has no trouble choosing sides for “The Game” in November. And he knows how important fighting all the way to the end is. On his last play from scrimmage, in the waning minutes of The Game on Nov. 22, 1980, he recovered a Crimson fumble.

Yale won, 14-0.