Saturday, January 2, 2021

Former Federal Circuit Chief Judge Randall R. Rader assures Texas court of fairness and quality of Chinese patent litigation process

In the last week of 2020, Chief Judge Rodnay Gilstrap of the United States District Court for the Eastern District of Texas granted Ericsson an unprecedented--and in my view, outrageously overreaching--temporary restraining order (TRO) against Samsung's pursuit of a Chinese action intended to resolve a global FRAND rate dispute. Samsung had pre-empted Ericsson's December 12 action in Texas by bringing a complaint five days earlier in the Intermediate People's Court in Wuhan, China, a court that has previously enaged in global FRAND rate-setting. Yesterday (i.e., on New Year's Day), Samsung filed its opposition, which I'll discuss in the next post. What I'd like to highlight here in a separate post--warranted by the enormous significance of this declaration--is what Professor Randall R. Rader, the former Chief Judge of the United States Court of Appeals for the Federal Circuit, tells his colleagues about China as a patent jurisdiction (this post continues below the document):

21-01-01 Randall R. Rader D... by Florian Mueller

The professor is probably America's most prominent patent-specialized judge of the past several decades, at a level with, if not above, his predecessor as Federal Circuit Chief Judge, Paul Michel.

For my taste, even then-Judge Rader was far too patentee-friendly. For example, I was outraged when he called the panels Patent Trial and Appeal Board "patent death squads" instead of appreciating the important work they do to weed out patents. Most patents are invalid as granted. The patent system is so dysfunctional (with patent offices incentivizing their examiners to grant ever more patents, particularly to mass filers who receive platinum "customer" service) that patent litigation has basically become a crapshoot activity and most patents are junk patents--the non-material equivalent of pollution.

But I also heard good things about then-Judge Rader from tech companies, particularly about his approach to damages awards in some cases.

That said, RRR's positions are closer to the worst patent extremists--such as Judge Gilstrap--than to critics of the system like me.

The circumstances of his resignation are a complicated story. On the one hand, I really dislike the fact that patent judges in various jurisdictions are a bit too cozy with attorneys, which I first noticed in 2004 when I became involved with patent policy and saw the bond of friendship between some judges and litigators in the context of government and parliament hearings. I believe there should be much more of a distance between judges and lawyers. But, on the other hand, if one applied the same standard under which RRR resigned--or even a significantly more excating one--to the interactions that happen between patent judges and patent litigators in Germany on a daily basis, such as in connection with conferences and seminars, a number of judges would be in serious trouble. So, by international comparison, I don't see RRR's resignation from the Federal Circuit as suggesting any issue with his integrity.

Even prior to his resignation, RRR was known to follow with great interest the developments in other patent jurisdictions around the globe, especially in Asia. In recent years, he's obviously had--and presumably enjoyed--the freedom to spend even more time teaching and researching internationally.

RRR fundamentally disagrees with Ericsson's exceedingly negative portrayal of the Chinese judiciary:

"Although the Chinese system for IP disputes clearly differs from our system in the United States, China has devoted resources and training to ensure that its IP courts achieve an unrivaled assessment of quality and fairness amongst Chinese courts. Having visited many of these courts, I can personally attest that their processes often grant faster and more complete access to the adjudication process than even some U.S. courts. Intellectual property cases, especially patent cases between international companies, as a rule receive praise and credit for high-quality adjudication in China by both parties as well as by legal commentators and observers." (emphases added)

"In particular, Chinese IP courts have welcomed and resolved numerous cases involving rate-setting under FRAND standards. One study covering the period of 2011-2019 counted 160 cases accepted by Chinese courts related to standard essential patents. See,, 2020/07/13. Those statistics compare favorably, if not exceeding outright, similar accountings in the world’s leading national judicial systems."

"I am most confident that the China Court at issue will apply the laws and rules appropriately and treat an international company like Ericsson quite fairly in a litigation against another international company like Samsung." (emphasis added)

RRR's declaration in support of Samsung's opposition to Ericsson's motion is a silver bullet. I don't have much hope for Judge Gilstrap drawing the appropriate conclusions here, but his decision, frankly, won't be the one that matters, and the relevant appellate judges all know that the Eastern District of Texas is an outlier district when it comes to patent cases. This will go up to the Federal Circuit, as Ericsson has meanwhile thrown some patent infringement claims into the case (which I'll discuss later in a separate post)--i.e., to the court from which RRR resigned not so long ago.

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