Opinion ID: 799322
Heading Depth: 2
Heading Rank: 2

Heading: Suit-Within-a-Suit Analysis

Text: The crux of Minkin's allegations is that Gibbons negligently drafted patent claims overly narrow in scope, constituting legal malpractice. Because state law creates Minkin's cause of action for legal malpractice, this court must apply the law of New Jersey to decide whether Gibbons is liable. See, e.g., Warrior Sports, 631 F.3d at 1371-72 (applying Michigan law); Davis, 596 F.3d at 1359-60 (Ohio law); Air Measurement, 504 F.3d at 1268-69 (Texas law). To establish legal malpractice in New Jersey, a variation on the tort of negligence, a plaintiff must demonstrate in its case-in-chief: (1) the existence of an attorney-client relationship imposing a duty of care upon the attorney; (2) breach of that duty, defined as deviation from the standard of care; (3) proximate causation; and (4) damages. See Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 357, 845 A.2d 602 (2004); Conklin v. Hannoch Weisman, 145 N.J. 395, 416, 678 A.2d 1060 (1996). This case hinges on the third prong, that is, whether Gibbons's actions proximately caused the loss to Minkin. New Jersey law provides several ways of establishing proximate causation in malpractice cases, including a suit-within-a-suit. Garcia, 179 N.J. at 358, 845 A.2d 602. The suit-within-a-suit approach applies where recovery depends on success in the underlying matter and aims to clarify what would have taken place but for the attorney's malpractice. Id.; see also Conklin, 145 N.J. at 417, 678 A.2d 1060 (Cause in fact is sometimes referred to as `but for' causation.... The simplest understanding of cause in fact in attorney malpractice cases arises from the case-within-a-case concept.). New Jersey trial courts commonly employ this approach where the parties agree to that process. Garcia, 179 N.J. at 358-61, 845 A.2d 602. There can be no causation demonstrated under the suit-within-a-suit rubric for patent prosecution malpractice where any claim drawn to the alleged invention would have lacked patentability ab initio. Davis, 596 F.3d at 1363-64. Thus, a required element of the causation proof is for the plaintiff to demonstrate that the invention would have been patentable. See id. at 1360-64. Malpractice suits in a patent prosecution context most frequently arise where attorney negligence results in a final PTO rejection. Here, Minkin complains not that a patent did not issue, but that the allowed claims were drafted too narrowly to protect the ERP against competitors, namely Danaher. Because the parties agree that the suit-within-a-suit analysis applies, Minkin must prove by preponderant evidence that alternate claim language would have been deemed patentable by the PTO and that it would have read on the Danaher tool. Cf. id. (requiring plaintiff to prove by a preponderance of evidence that the PTO would have issued a patent on the invention but for attorney negligence in preparing and filing the application); Warrior Sports, 631 F.3d at 1372 (requiring plaintiff to prove proximate causation by showing that it would have prevailed in an infringement suit against the competitor); Garcia, 179 N.J. at 357-58, 845 A.2d 602 (requiring plaintiff in a suit-within-a-suit format to prove by a preponderance of evidence that he would have recovered a judgment in an action against the main defendant); see also Byrne v. Wood, Herron & Evans, LLP, 450 Fed.Appx. 956, 962 (Fed.Cir.2011) (In the context of a malpractice suit in which a plaintiff alleges that, but for the attorney's negligence, he would have obtained broader patent claims, a plaintiff must show that broader patent claims `would have been held patentable on examination in the [PTO] ..., in accordance with the criteria of patentability applied during examination.') (quoting Davis, 596 F.3d at 1364).
In granting summary judgment, the district court held that Minkin failed to raise a genuine dispute of material fact regarding patentability. Specifically, Minkin provided no evidence showing that Gearhart's alternative claim language would have overcome an obviousness rejection at the PTO. See Minkin, 2010 WL 5419004 at , 2010 U.S. Dist. LEXIS 135847 at  (In short, Gearhart has entirely failed to provide any evidence demonstrating that his sample claims are not obvious.). This court reviews a district court's grant of summary judgment under the law of the regional circuit. Lexion Med., LLC v. Northgate Techs., Inc., 641 F.3d 1352, 1358 (Fed.Cir.2011). The Third Circuit review[s] an order granting summary judgment de novo, applying the same standard used by the District Court. Azur v. Chase Bank, USA, 601 F.3d 212, 216 (3d Cir.2010) (quoting Nicini v. Morra, 212 F.3d 798, 805 (3d Cir.2000) (en banc)). Summary judgment is granted if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Under Federal Rule of Civil Procedure 56, the burden of showing that no genuine dispute of material fact exists rests initially on the moving party. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant may discharge this burden by exposing the absence of evidence to support the nonmoving party's case. Id. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party to set forth specific facts showing that there is a genuine dispute for trial. Azur, 601 F.3d at 216. Where a nonmoving party fails to make a showing sufficient to establish an element essential of that party's case, and on which that party will bear the burden of proof at trial, summary judgment is required under the plain language of Rule 56. See Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548. On appeal, Minkin argues that (a) it did not have the burden of showing the nonobviousness of the alternate claims at the summary judgment stage of the proceeding, (b) even if it did have the burden at the summary judgment stage, the nonobviousness of the alternate claims was shown in the 37-page Gearhart supplemental report, and (c) the trial court should have inferred the nonobviousness of Gearhart's alternative claim language because the '363 patent issued after an in-person interview. None of these arguments has merit.
Minkin contends, based on this court's opinion in Davis, 596 F.3d at 1363-64, that it did not have the burden on summary judgment of establishing that its alternative claims were nonobvious, beyond simply distinguishing prior art. In Davis, summary judgment was granted in favor of the defendant because the aggrieved applicant's expert had provided only naked conclusions regarding the patentability of the invention. Id. This court affirmed the result, but added: [W]e reject the suggestion that Ms. Davis would have had to identify claims for her inventions or perform a patentability analysis similar to that required in an invalidity trial. Ms. Davis's ultimate burden in this case is to establish the likelihood that her inventions would have been held patentable on examination in the PTO.... At the summary judgment stage, she had only to introduce evidence sufficient to establish an issue of material fact as to patentability. Ms. Davis could have satisfied this initial burden in any number of ways.... Mr. O'Shaughnessy [plaintiff's expert] could have reviewed the prior art references cited in the office actions and discussed their effect on patentability. Id. at 1364. Minkin argues that this language in Davis announced a more deferential standard in malpractice cases than is required in ordinary infringement suits, and that the district court erred in requiring any discussion of nonobviousness at the summary judgment stage. Minkin misreads Davis. The statement above does not establish a more deferential standard for malpractice cases specifically; rather, it is a routine observation about evidentiary showings required under Rule 56 generally. Compare id. with Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548 (We do not mean that the nonmoving party must produce evidence in a form that would be admissible at trial in order to avoid summary judgment.... Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c)....). Thus, while a full patentability analysis similar to that required in an invalidity trial is not necessary, Davis, 596 F.3d at 1364, summary judgment is nonetheless `proper where the pleadings, depositions, answers to interrogatories, admissions, and affidavits show there is no genuine issue of material fact,' Azur, 601 F.3d at 216 (quoting Nicini, 212 F.3d at 805). We find that under the regular evidentiary burdens of Rule 56, Minkin had to introduce evidence sufficient to establish an issue of material fact as to patentability. Davis, 596 F.3d at 1364. Patentability necessarily includes the condition that an invention consist of nonobvious subject matter. 35 U.S.C. § 103; Graham v. John Deere Co., 383 U.S. 1, 14, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Minkin's ERP claims, unlike Davis, had already drawn numerous obviousness rejections from across a very crowded art field. See Minkin, 2010 WL 5419004, at -7, 2010 U.S. Dist. LEXIS 135847, at . In its motion for summary judgment, Gibbons identified § 103(a) issues with respect to the alternate claims, submitting expert opinion questioning Minkin's ability to obtain even broader scope in light of the record. Because it was Minkin's ultimate burden at trial to establish nonobviousness, it bore the burden on summary judgment of demonstrating a disputed material fact regarding this essential element of its case, especially given that Gibbons put § 103(a) directly at issue. Univ. of W. Va., Bd. of Trs. v. VanVoorhies, 278 F.3d 1288, 1295 (Fed.Cir.2002) (Summary judgment must be granted against a party who has not introduced evidence sufficient to establish the existence of an essential element of that party's case, on which the party would bear the burden of proof at trial.). Minkin defends that it would have been too cumbersome in the first instance to prove a negative by addressing every potential combination of prior art that could be used in an obviousness rejection. [4] Minkin suggests that merely distinguishing each prior art reference individually was sufficient to defeat summary judgment, reflecting actual practice before the PTO where applicants often await an examiner's specific § 103(a) rejections before discussing nonobviousness. We recognize that applicants do not typically prove validity against all prior art, and only show that claims are not invalid over references cited against them. But the order of typical prosecution practice is irrelevant to the procedural posture here. Malpractice cases under a suit-within-a-suit framework require as part of the plaintiff's case-in-chief a demonstration of the likelihood of patentability. See Davis, 596 F.3d at 1363-64. In the context of summary judgment, we hold that the district court was obligated to determine whether Minkin could satisfy its ultimate burden of showing patentability in light of Gibbons's motion. Rule 56 is designed to assess sooner rather than later the parties' proof in order to see whether there is a genuine need for trial. See Fed.R.Civ.P. 56, Notes of Advisory Committee of Rules, 1963 Amendment, Subdivision (e). Minkin's improper reliance on dicta from Davis to save it from summary dismissal is incompatible with a basic purpose of Rule 56. Id.; see also Celotex Corp., 477 U.S. at 323-24, 106 S.Ct. 2548 (One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and we think it should be interpreted in a way that allows it to accomplish this purpose.). Rule 56 requires a party opposing summary judgment to present specific facts demonstrating that there exists a genuine dispute of material fact to be resolved by a factfinder. Id. at 324, 106 S.Ct. 2548; see also Azur, 601 F.3d at 216. If Minkin had factual disputes concerning nonobviousness it was obligated to raise them in response to the properly supported motion for summary judgment expressly relying on § 103(a). See id. at 323, 106 S.Ct. 2548. Minkin, however, failed to raise a single material fact in dispute as to the nonobviousness of the proposed alternate claims.
Minkin argues that even if it did have the burden as to nonobviousness, it met that burden by thoroughly analyzing sixteen prior art references and their relationship to the alternate claims. While admitting that there is no express discussion of § 103(a) in any report, Minkin argues that the district court ignored the nonobviousness implications of Gearhart's 37-page supplemental report. The district court did consider and address Gearhart's 37-page supplemental expert report in detail. See Minkin, 2010 WL 5419004, at -8, 2010 U.S. Dist. LEXIS 135847, at -21. It found that Minkin did not carry its burden with respect to patentability in the supplemental expert report, which did not touch on obviousness whatsoever. Id. at , 2010 U.S. Dist. LEXIS 135847 at . According to the district court, while Gearhart's supplemental expert report does provide certain opinions on the patentability of his alternate claims, it was nonetheless clear beyond all doubt that the opinions contained therein are strictly limited to novelty/anticipation concerns. Id. The district court concluded that Gearhart has failed to provide any sort of evidence demonstrating that his sample alternative claims are non-obvious. Id. at , 2010 U.S. Dist. LEXIS 135847 at . We agree. Gearhart's supplemental expert report only states his view that the alternate claims would have overcome a § 102 challenge. We have held, however, that anticipation and obviousness are separate conditions of patentability, requiring different tests and different elements of proof. Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351, 1364 (Fed.Cir.2008); Duro-Last, Inc. v. Custom Seal Inc., 321 F.3d 1098, 1107-08 (Fed.Cir.2003); see generally KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398, 406-07, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007). Minkin's attempt to recast its anticipation analysis as sufficient for nonobviousness purposes is unavailing. Gearhart testified that his expert analysis of the prior art was limited to potential rejections under § 102; he further conceded that he did not undertake any analysis of § 103(a) and admitted that it would be `very speculative' to say that the PTO would have issued his sample claims. Minkin, 2010 WL 5419004, at , 2010 U.S. Dist. LEXIS 135847, at -17 (internal citations omitted). Indeed, Gearhart's expert reports failed even to discuss the nonobviousness of his sample claims over the prior art cited in § 103 rejections during the prosecution history of the '363 patent, including not only Brindos '279, but Grieshaber, Zlotnicki, and Neff. We find that the 37-page Gearhart report contains nothing to assist the trier of fact with respect to the unique tests and proofs of § 103(a), and provides no insight into the question of whether the alternate claims would ultimately have been allowed by the PTO. The movant may prevail under Rule 56 by exposing the absence of evidence to support the nonmoving party's case. Celotex Corp., 477 U.S. at 325, 106 S.Ct. 2548. The trial court did not err in finding that Minkin failed to provide evidence demonstrating that its alternate claims are nonobvious. [5]
Minkin argues that since that the examiner ultimately granted the '363 patent after an office interview, the court should infer from that favorable history that Gearhart's alternate claim language would also be deemed nonobvious. The district court refused to recognize that a presumption of non-obviousness attaches in this context, calling this Minkin argument weak, unsupported, and contrary to common sense. Minkin, 2010 WL 5419004, at -7, 2010 U.S. Dist. LEXIS 135847, at -18. We agree. The challenge for Gibbons all along, as noted by the district court, was drafting broadly in the face of such a crowded art field. Id. at -7, 2010 U.S. Dist. LEXIS 135847 at . Including a 3:1 pivot ratio limitation was the final compromise to the claim language agreed on by the examiner and inventor in an effort to secure patentability. The language of the issued '363 patent, however, is entirely distinct from the alternate claim language drafted by Gearhart, who attempts to capture more scope for purposes of this litigation. An inference of nonobviousness does not attach to the alternate claims by virtue of the issued '363 patent because the claim terms are different. The fact that the ERP was ultimately deemed nonobvious after handling a prototype does not mean that an examiner would necessarily decide same thing if the claims were broader. We therefore refuse to conclude that an examiner would have allowed Gearhart's alternate claims of greater scope just because the more narrow '363 patent issued after an in-person interview.