So, roughly 16 days have passed since DECN put its appeal in front of the Federal Circuit court, countered by J&J and two former divisions of J&J. This appeal rises as a result of a ruling by a District Court judge in Nevada who granted J&J a Summary Judgment against DECN's patent infringement claims using an extremely arcane and almost never used implementation of Estoppel. I do not want to go into great detail because patent law is extremely boring, imprecise, and subject to many interpretations. But the Nevada judge's ruling on this was just terrible. Terrible based on his interpretation of the law, and even more terrible because his ruling ended up comparing DECN's invention to itself ---- that is not how patent challenges work nor how patent law is supposed to work.
The Nevada case is of great interest to patent lawyers. First because it involves J&J, the ultimate corporate boogeyman, a reputation richly deserved. Lawyers are guided by their statistics and defeating J&J is much more important for a law firm than defeating DECN. The second reason this case was rich for appeal is because there is no current patent law or previous ruling on the books related to this type of Estoppel challenge. DECN's lawyers would not only slay J&J for a third time, using DECN as their sharp tool, but they would make new law while doing so.
The DECN appeal is very straight forward. The judge was wrong because he applied Estoppel incorrectly, but also because in his application of Estoppel he used J&J's argument almost word for word and never bothered to check whether J&J was arguing correctly, incorrectly, of just full of spam. The Nevada judge took the lazy route and bought J&J's feeble arguments. But because, in my opinion, J&J's arguments leading up to the hearing were so feeble, and wrong, it turned out that J&J was unable to put on much of an oral argument without being laughed out of court. Panel judges in the Federal Circuit know all about patent law, and J&J was left only to argue that the Nevada judge was right.
A lot has been written about the co-called Rule 36. This rule is a favorite of this court because it allows the panel judges to dispose of a case without additional opinion if all three judges in the panel agree that the Nevada judge, in this case, was either correct in his ruling, or close enough to correct that it is not worth spending court resources to get it totally right. This did not happen in the DECN case. There was no "knee jerk" Rule 36, meaning that the judges could not unanimously sustain the lower courts ruling. This means that at least one judge on the panel thinks that DECN won a point, or more. In my humble opinion, and I have been to many of these hearings, I believe that at least two judges will vote in DECN's favor, and I would not be surprised if the entire panel bought DECN's arguments. So I believe that when the written ruling comes down in 6 weeks, and it could be before Christmas, and it might be right after Thanksgiving, I think it would yield a Precidential new law ruling by a vote of 2.5 to .5, one judge, in my opinion Judge Moore voting some in favor, some not in favor. She, to me, did not appear to be totally sold.
On the other hand, if there is only one judge supporting DECN's arguments, there will be another opportunity in about 2-3 weeks for this panel to reconvene and the two already opposed to DECN's arguments could convince the one judge who bought the arguments to change his/her mind, and then Rule 36 it at that time. But this occurrence is so rare that I do not see it happening. I think, in terms of the court, it goes to panel ruling.
Which brings me to handicap things. If the appeal is now to be adjudged at 2.5 to .5, or even 2 to 1, for DECN, it will generate a Precidential ruling over Estoppel, and a rebuke to the Nevada judge. The Precidential ruling is easily valued at $15 million in a settlement, the ruling with a rebuke is easily worth another $10 million for a total of $25 million. Estoppel as it turns out is an expensive part of the law because it has been around for 250 years.
The case taken to trial at the bloody end should be valued at $100 - $125 million. A settlement on the courthouse steps just prior to trial in early 2021 is easily valued at $40 million. But what would it cost to get there. J&J spent about $50 million in its first battles with DECN. They are probably into the current case for $8-$9 million. J&J has already put on most of its case through its summary judgment which is a trial on paper. It is easily foreseeable that they would spend another $25 million to get to trial. And if J&J loses at trial they would have the expense of appeal, another $5 - $10 million.
Nope, J&J will settle this case and they are already feeling the pressure, and the pressure is growing daily. They, as well as anyone, know that their case is weak.
The lack of a short term Rule 36 must be scaring J&J's lawyers a lot. How much will determine when they make a call to DECN. That call will be just after the start of November. In my opinion, of course.
The Nevada case is of great interest to patent lawyers. First because it involves J&J, the ultimate corporate boogeyman, a reputation richly deserved. Lawyers are guided by their statistics and defeating J&J is much more important for a law firm than defeating DECN. The second reason this case was rich for appeal is because there is no current patent law or previous ruling on the books related to this type of Estoppel challenge. DECN's lawyers would not only slay J&J for a third time, using DECN as their sharp tool, but they would make new law while doing so.
The DECN appeal is very straight forward. The judge was wrong because he applied Estoppel incorrectly, but also because in his application of Estoppel he used J&J's argument almost word for word and never bothered to check whether J&J was arguing correctly, incorrectly, of just full of spam. The Nevada judge took the lazy route and bought J&J's feeble arguments. But because, in my opinion, J&J's arguments leading up to the hearing were so feeble, and wrong, it turned out that J&J was unable to put on much of an oral argument without being laughed out of court. Panel judges in the Federal Circuit know all about patent law, and J&J was left only to argue that the Nevada judge was right.
A lot has been written about the co-called Rule 36. This rule is a favorite of this court because it allows the panel judges to dispose of a case without additional opinion if all three judges in the panel agree that the Nevada judge, in this case, was either correct in his ruling, or close enough to correct that it is not worth spending court resources to get it totally right. This did not happen in the DECN case. There was no "knee jerk" Rule 36, meaning that the judges could not unanimously sustain the lower courts ruling. This means that at least one judge on the panel thinks that DECN won a point, or more. In my humble opinion, and I have been to many of these hearings, I believe that at least two judges will vote in DECN's favor, and I would not be surprised if the entire panel bought DECN's arguments. So I believe that when the written ruling comes down in 6 weeks, and it could be before Christmas, and it might be right after Thanksgiving, I think it would yield a Precidential new law ruling by a vote of 2.5 to .5, one judge, in my opinion Judge Moore voting some in favor, some not in favor. She, to me, did not appear to be totally sold.
On the other hand, if there is only one judge supporting DECN's arguments, there will be another opportunity in about 2-3 weeks for this panel to reconvene and the two already opposed to DECN's arguments could convince the one judge who bought the arguments to change his/her mind, and then Rule 36 it at that time. But this occurrence is so rare that I do not see it happening. I think, in terms of the court, it goes to panel ruling.
Which brings me to handicap things. If the appeal is now to be adjudged at 2.5 to .5, or even 2 to 1, for DECN, it will generate a Precidential ruling over Estoppel, and a rebuke to the Nevada judge. The Precidential ruling is easily valued at $15 million in a settlement, the ruling with a rebuke is easily worth another $10 million for a total of $25 million. Estoppel as it turns out is an expensive part of the law because it has been around for 250 years.
The case taken to trial at the bloody end should be valued at $100 - $125 million. A settlement on the courthouse steps just prior to trial in early 2021 is easily valued at $40 million. But what would it cost to get there. J&J spent about $50 million in its first battles with DECN. They are probably into the current case for $8-$9 million. J&J has already put on most of its case through its summary judgment which is a trial on paper. It is easily foreseeable that they would spend another $25 million to get to trial. And if J&J loses at trial they would have the expense of appeal, another $5 - $10 million.
Nope, J&J will settle this case and they are already feeling the pressure, and the pressure is growing daily. They, as well as anyone, know that their case is weak.
The lack of a short term Rule 36 must be scaring J&J's lawyers a lot. How much will determine when they make a call to DECN. That call will be just after the start of November. In my opinion, of course.
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