Contextualizing Decision Making in the District Courts

District court judges are unique in numerous ways, but perhaps none is more critical for understanding decision making than the fact that these trial judges make decisions across the life of a case (Boyd Reference Boyd2016, 791). This reflects “the dynamic, multistaged nature of litigation at the trial level” (Boyd, Kim, and Schlanger Reference Boyd2020, 467) and has prompted calls to study the decisions of federal district judges as opposed to their opinions (Kim et al. Reference Kim2009). Not every decision that district court judges make is memorialized in an opinion—in fact, precisely the opposite is true (Hoffman, Izenman, and Lidicker Reference Hoffman2007, 727)—and even when cases resolve without a final opinion, judges have almost certainly made choices that helped structure the outcome (see Kim et al. Reference Kim2009, 85).

As Kim et al. (Reference Kim2009, 100) illustrate with the example of ideology, this risks generating erroneous conclusions: “[Perhaps] decisions not memorialized in a written opinion are less subject to political influences. … Alternatively, district judges may be more inclined to allow their policy preferences to hold sway when their decisions are subject to the least scrutiny,” especially in instances in which—as with the motions to stay we examine—that decision is essentially unreviewable by a higher court.Footnote ¹ In other words, a single-minded focus on opinions raises the possibility of selection bias. A series of studies on motion practice in district court litigation underscores the importance of looking beyond final opinions when it comes to understanding trial court decision making (Hoffman et al. Reference Hoffman2007; Boyd and Hoffman Reference Boyd2013; Boyd Reference Boyd2015), and, as described in subsequent sections, we focus on such a decision here.

District judges oversee proceedings in the intake courts of the federal system. This vantage point affords these judges the opportunity to assess controversies for the first time, and they routinely do so in civil cases that range from torts and contracts to prisoner petitions and intellectual property (Moore Reference Moore2015). Within this context, federal judges routinely complain about lawsuits that are meritless or even frivolous (Fradella Reference Fradella1999, 48).Footnote ² These preliminary assessments about the merits of a case are important, given the dynamic nature of trial court decision making we have already noted. Conventional wisdom suggests that “eliminating meritless and frivolous claims as early in a case’s trajectory as possible … [will ensure] that available remedies are properly distributed to deserving plaintiffs” (Reinert Reference Reinert2014, 1191). That is primarily the trial judge’s responsibility. However, determining what is “meritless” or “frivolous” may frequently lie in the eye of the beholder. Tort law has typically taken center stage in these debates (e.g., Rhode Reference Rhode2004); however, the issue is also prominent in patent law (Hosie Reference Hosie2008, 85). Typically, frivolousness is a primary concern of the political Right, with efforts led by interest groups like the US Chamber of Commerce and the American Tort Reform Association (Rhode Reference Rhode2004, 451–52). An analogue exists in patent law in the form of efforts backed by large technology companies (Hosie Reference Hosie2008, 87). Even in the many instances in which cases clear the bar of legitimacy, judges can and do diverge in terms of the seriousness with which they ultimately approach the case (e.g., Guthrie Reference Guthrie2000).

Directly related to this point, many of the choices district judges make are “procedural” in nature. Yet, as others have pointed out, this is somewhat misleading: decisions that are “‘procedural’ can have an enormous influence on the scope of the subsequent litigation and thus the likelihood that a given litigant will ultimately prevail” (Kim et al. Reference Kim2009, 92). Even decisions simply related to delaying litigation can have serious consequences for the litigants. Whether a district court judge grants a motion to stay patent litigation in her court pending the outcome of administrative review is precisely the sort of discretionary, unreviewable choice that is procedural—yet, as we show in the next section, it carries with it more substantive implications as well.

Administrative Patent Challenges and Federal Litigation

The AIA was a truly wide-ranging policy response. It supplanted the “first-to-invent” system that had characterized US patent law with a “first-to-file” priority rule, thereby adopting the prevailing international standard for patent rights. It broadened the definition of prior art and expanded the prior use defense to patent infringement (Thomas Reference Thomas2014), created new administrative procedures for reevaluating the validity of patents, and gave the PTAB responsibility for conducting those procedures. Two in particular are relevant to the empirical examination that follows: IPR and CBM, both of which are adversarial processes that are typically conducted before three administrative patent judges. The PTAB must “institute” both IPR and CBM proceedings before ruling on the validity of any patents in dispute. While exceptions can be made, final decisions must typically issue within 12 months of institution.

The legal standards in these PTAB actions are broader than those used in district court litigation, which makes it easier for parties to demonstrate patent invalidity (Motl Reference Motl2015, 1976).Footnote ³ Congress’s creation of these procedures was largely driven by the belief that patent litigation had become too burdensome and expensive, and the PTAB has garnered a reputation for invalidating challenged patents. The former chief judge of the Court of Appeals for the Federal Circuit, which hears appeals from the USPTO, famously termed the PTAB’s panels “death squads killing property rights” (Williams and Eaton Reference Williams2015, 9). Others have argued that, as per Congress’s intent, the forum “is attractive to defendants in patent litigation and others seeking to invalidate low quality and potentially threatening patents” (Motl Reference Motl2015, 1978). Even though Congress envisioned IPR and CBM as cheaper and more efficient substitutes for traditional litigation over patent validity (see Vishnubhakat et al. Reference Vishnubhakat2016, 65), the vast majority of these administrative challenges involve patents that are also the focus of federal litigation.

There are some differences between these two adversarial administrative proceedings. Validity challenges in IPR are limited to prior-art patents and prior-art publications; CBM is often thought to be even more advantageous to parties seeking cancellation of patents because it permits wider-ranging patentability challenges, although those patents must relate to financial products or services (Stach and Strickland Reference Stach2014). These methods patents have been described as “the bane of the corporate world, and business groups say they encourage frivolous lawsuits based on faulty application of patent law” (Wyatt Reference Wyatt2011). IPR is a permanent program; Congress designed CBM review to be transitional, and it expired in September 2020. Finally, when instituted IPRs result in written decisions, individuals are prevented from pursuing issues that were either “raised or reasonably could have been raised” in the proceedings (Stach and Strickland Reference Stach2014). This prohibition extends to USPTO hearings, matters involving the International Trade Commission, and future federal court litigation. In contrast, CBM review is more forgiving—it prohibits raising similar issues in later USPTO proceedings, but that bar does not apply to federal court litigation (Vishnubhakat et al. Reference Vishnubhakat2016, 63). We elaborate on the ways in which these sorts of distinctions may relate to our analysis shortly.

In instances in which patents are the subject of traditional litigation and administrative challenges, district court judges have the option of staying litigation before them pending the outcome of PTAB proceedings if a party moves to do so. Although these stays are discretionary—and any determinations by the PTAB are not binding on district courts, in part because slightly different standards of claim construction and demonstrating invalidity exist (Motl Reference Motl2015, 1990)—there are certain legal guidelines that trial court judges are expected to weigh when deciding them.Footnote ⁴ The AIA does not articulate a specific standard to guide the issuance of IPR stays, and there is no inherent legal right to them, but several factors rooted in precedent play an important role (Frontz Reference Frontz2015; Vishnubhakat et al. Reference Vishnubhakat2016). District Judge Michael Simon’s decision denying a motion to stay represents a textbook articulation of these factors:

1. 1. whether discovery is complete and whether a trial date has been set;

2. 2. whether a stay will simplify the issues in question and trial of the case; and

3. 3. whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party. (Drink Tanks Corp. v. Growlerworks, Inc., No. 3:16-cv-410-SI, 2016 WL 3844209, at *2 [D. Or. July 15, 2016])

In contrast, Congress specified a particular test that “shall” be used to govern CBM-related stays in the AIA (Vishnubhakat et al. Reference Vishnubhakat2016, 65).Footnote ⁵ We unpack the potential implications of these considerations when we present our hypotheses in the next section.

District Court Judges, Ideology, and Patent Law

It is beyond serious dispute that ideology plays a role in judicial behavior, but findings about its influence on decision making by federal trial judges are mixed (for an overview, see Boyd and Boldt [Reference Boyd2017, 266–69]). The more equivocal nature of these conclusions is likely a partial function of the unique institutional context we have described, which also bears on the acknowledged importance of law and precedent in trial venues (Boyd Reference Boyd2017, 136). These considerations, in turn, produce in district judges a broad range of goals as well as substantial variation in how those goals are ordered (Baum Reference Baum1997, 24–25; Zorn and Bowie Reference Zorn2010, 1213).

Ideology’s role in judging is almost always conceived as tapping substantive dimensions rooted squarely in the legal domain the case involves—does a judge’s decision favor the corporation or the individual, the government or the accused, private property rights or governmental regulation? But thinking about ideology’s relevance to district court judges in this way alone seems to us both incomplete and inconsistent with the guidance of those who have urged scholars to look beyond mere opinions (Kim et al. Reference Kim2009). Given the unique nature of district court decision making, our interest lies in approaching the potential influence of ideology on more procedural decisions.

Rowland and Carp (Reference Rowland1996) suggest that the special responsibilities of district judges may activate different cognitive processes in them. This raises an interesting possible corollary—might the influences of procedure and fact-finding, along with the iterative nature of their decision making and their gatekeeping role in the federal judiciary, lead district court judges to exert ideologically consistent behavior in ways that map onto questions of procedure? Another way of posing this question is to ask whether we would expect procedural considerations to be especially dominant or salient to district court judges, given the institutional context in which they operate. Collins (Reference Collins2008, 868) has shown that judges are more likely to evince ideologically consistent behavior when issues are especially salient to them, and it seems plausible to argue that the federal judiciary’s gatekeepers—district court judges—may find issues related to judicial access especially salient as compared to many questions related to actual legal substance.Footnote ⁶ To the extent that this is the case, a lack of attention to the ideological valence of procedural issues would underestimate or ignore an important aspect of ideology’s role in district court decision making.

We probe the influence of ideology on a specific procedural motion in the district courts—a judge’s decision to grant or deny a stay pending the resolution of parallel administrative proceedings in the PTAB. We refer to the stay decision as a procedural one, although procedural decisions can ultimately play a role in the substantive outcomes of litigation (see Kim et al. Reference Kim2009). A cursory look at our data illustrates this; the granting of a stay is associated with a decrease in the likelihood that the plaintiff will win the case.Footnote ⁷ As table 1 demonstrates, when no stay is granted in a case, the probability of the plaintiff winning is 67%, but that drops to just 33% when a stay is granted. Notably, the granting of a stay is also associated with an increase in the likelihood of a settlement.

Table 1.

Dispositions in Cases with Stay Request

Using patent cases to test for the existence of this “procedural ideology” is advantageous for several reasons. First, fundamental ideological distinctions are relevant to issues involving “frivolous litigation,” access to justice, and judicial efficiency. These constructs are highly pertinent to patent litigation because, as Gugliuzza (Reference Gugliuzza2018, 640) observes, “policy discussions of patent litigation regularly invoke tropes about abusive and frivolous lawsuits—the same rhetoric that has pervaded policy discussions of civil litigation generally.” Calls for curtailing frivolous litigation implicate clear ideological divides, with Republican politicians and conservative interests including the US Chamber of Commerce and the American Tort Reform Association being strongly supportive of civil litigation reform (Haltom and McCann Reference Haltom2004; Rhode Reference Rhode2004, 451–53). The ideological valence of the judicial access issue is apparent across all levels of American government, with executives, legislators, and judges alike taking positions that reflect this divide (e.g., Sugarman Reference Sugarman2006).Footnote ⁸

This ideological cleavage has also been displayed in recent Supreme Court decisions. For example, in 2013 the justices split along ideological lines, with the conservative majority upholding an arbitration clause to foreclose judicial access. Two years before that, the liberal bloc objected to making it more difficult to certify class actions.Footnote ⁹ In Ashcroft v. Iqbal (556 U.S. 662 [2009]), the Court’s conservatives made it easier for judges to dismiss civil cases at an early stage—in fact, the New York Times characterized Iqbal as arguably “the most consequential ruling” in Chief Justice Roberts’s then-10-year leadership of the Court, owing to its procedural implications for judicial access in federal civil cases (Liptak Reference Liptak2015).

Modern patent litigation represents an inviting target for those who have expressed concern over frivolous litigation in the federal courts. One litigator has argued that these sorts of attacks have played a role in “shaping the way federal district court judges view patent cases” (Hosie Reference Hosie2008, 77). Others have lamented that “vexatious patent litigation … cost[s] defendants and taxpayers tens of billions of dollars each year and delay[s] justice for those who legitimately need a fair hearing of their claims” (Rader, Chien, and Hricik Reference Rader2013). The classic target for critics is the nonpracticing entity, or so-called patent troll, which holds a series of patents that it does not use but asserts in suing a defendant or defendants for infringement. Scholars differ as to exactly what qualifies as a patent troll (e.g., Schwartz and Kesan Reference Schwartz2014), but certain behavior tends to generate suspicion. For example, one indicator of the “nuisance patent plaintiff” is when a patent holder sues a large number of defendants in the same action (Sudarshan Reference Sudarshan2008, 164). We use this indicator to identify suits filed by potential trolls in the models that follow.

An examination of patent cases represents a stringent test of ideological influence as it relates to questions of judicial access. When it comes to the pure “substance” of patent rights, ideologically conservative judges should generally be more protective of patent rights than their liberal counterparts. This predilection, which has been found to characterize the behavior of federal appellate judges, tends to be true of both patent rights specifically and intellectual property more generally (Landes and Posner Reference Landes2003; Miller and Curry Reference Miller2009; Sag, Jacobi, and Stych Reference Sag2009).Footnote ¹⁰ Owing to the PTAB’s reputation as a forum that is generally hostile to patent rights, a district judge’s decision to stay litigation pending administrative review is tantamount to a liberal outcome with respect to patent law itself. Substantively, all else equal, a conservative jurist who is favorably inclined toward patent rights should disfavor pausing her own proceeding to await what is likely to be an antipatent administrative decision. This means, in some sense, that any finding of ideological decision making with respect to procedure in these cases must overcome a countervailing substantive concern.

A district court judge’s stay is a fundamentally conservative decision when considered from a procedural perspective rooted in concern over frivolous litigation. Why? The answer turns on the distinction between assessments of patent validity and patent infringement. Only valid patents can be infringed, and examiners sometimes issue patents to low-quality inventions when they probably should not have.Footnote ¹¹ If a patent is later deemed invalid for obviousness, any attempt to recover damages from an “infringer” is essentially rendered frivolous. Sudarshan (Reference Sudarshan2008, 186) captures the logic of why a district court stay pending reassessment of a patent’s validity is a procedural move that cuts against those who bring potentially frivolous cases by referencing litigation costs: “Staying the infringement portion of the case gets to the heart of the advantage enjoyed by nuisance-value patent plaintiffs because it requires all parties to focus first on validity, where neither plaintiffs nor defendants enjoy a particular cost advantage.” Because they require defendants to hire experts and devote significant time and money to interpreting claims, it is these questions surrounding infringement that drive up litigation costs (165). Prioritizing this assessment of validity “is merely a matter of procedure as far as the patent right is concerned” (187). It bears repeating that district courts are not required to hold the infringement portion of litigation in abeyance while the PTAB adjudicates patent validity.

We believe these sorts of procedural issues will dominate among most district court judges, given the daily importance of such matters and the fact that substantive ideology of patent law is probably not akin to the salience that ideological divisions in, say, civil liberties or civil rights cases hold for these judges. Furthermore, the procedural issue in play in these cases—involving otherwise highly contested questions of access to justice (e.g., Sugarman Reference Sugarman2006; Reinert Reference Reinert2014)—should enhance the ideological salience of procedure vis-à-vis whether to grant a stay.

Our first four hypotheses are motivated by the centrality of legal factors to decision making by district court judges, and, in generating them, we draw on the legal guidelines governing stays described in the previous section. Recall that three basic legal considerations govern IPR- and CBM-related stays, with the caveat that the CBM framework is statutorily specified and includes a fourth provision that is thought to enhance the probability of a stay (see n. 5). Under the first common factor, district courts consider the progression of a litigation action under the procedural schedule. The third factor is related, because it instructs judges to consider whether a stay would introduce a clear strategic disadvantage to the nonmoving party. As a general rule, these two factors suggest that, the more advanced the case, the less likely the court should be to issue a stay. This leads to hypothesis 1:

According to the second factor, district courts consider whether granting a stay is likely to simplify the issues in question. As part of this calculation, many courts first consider whether the PTAB has instituted proceedings or whether the parties are still waiting for an institution determination. If administrative review has not been instituted, this probability of simplification by a decision on the merits is far more uncertain. In addition, courts under this factor generally examine the overlap between the patents and claims at issue in the litigation and those implicated before the PTAB. For example, in Acqis, LLC, v. EMC Corp. (109 F. Supp. 3d 352, 357 [D. Mass. 015]), the district court found that this factor weighed in favor of a stay for which only two of the 11 patents in suit and only three of the 22 asserted claims were under review in the instituted IPRs. However, the court noted that there was significant overlap between all 22 of the asserted claims as well as among all 11 patents. While the Acqis court stayed the entire case, some courts will only stay the overlapping portions of cases. Put differently, the more patents and patent claims at issue in a case, the less likely an IPR or CBM review is to significantly simplify the substantive issues.

Finally, for reasons we have already outlined, the factors courts are required to consider when faced with whether to stay litigation pending CBM make it especially likely that stays will be granted in that context. This informs hypothesis 4:

The final consideration we test involves the influence of ideology on stay decisions. Given the context in which district judges operate, because of the salience of procedural issues related to judicial access in that context, as well as the points we have raised about frivolousness in the realm of patent litigation, we offer hypothesis 5: