text:
For a variety of reasons, additional insureds (and even named insureds) under commercial general liability policies will sometimes wait months, and even years, to tender the defense of a claim or lawsuit, incurring significant legal fees in the interim. When the claim finally is tendered, a dispute often arises over who should pay the pre-tender defense costs. Surprisingly, there is very little Florida legal authority specifically dealing with this issue. However, the recent federal 11th Circuit Court of Appeals case of EmbroidMe.com, Inc. v. Travelers Property Casualty Co. of America, No. 14-10616, 2017 U.S. App. LEXIS 368 (11th Cir. Jan. 9, 2017), applying Florida law, addresses the issue head-on and provides CGL carriers with a large hammer in refusing to pay pre-tender fees.
In EmbroidMe.com, the named insured under a CGL policy issued by Travelers was sued in a federal district copyright infringement action. Despite the existence of the Travelers policy, the insured, EmbroidMe, failed to notify Travelers of the lawsuit for over eighteen months, incurring over $400,000 in legal fees before finally tendering the claim to Travelers. While Travelers agreed to defend the lawsuit under a reservation of rights, they refused to reimburse EmbroidMe for their pre-tender fees.
In the ensuing breach of contract action filed by EmbroidMe for reimbursement of the pre-tender fees, the United States District Court for the Southern District of Florida entered summary judgment in favor of Travelers. In affirming the Southern District’s grant of summary judgment, the 11th Circuit relied on a standard conditions clause in the CGL policy providing that “no insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.” Id. at *14 (emphasis in original). The 11th Circuit also referenced a standard Supplementary Payments provision in the policy providing that Travelers would pay ”[a]ll reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or ‘suit’. . .” Id. (emphasis in original). Based on these provisions, the 11th Circuit reasoned that even the most unsophisticated of insureds “could not expect its insurer to reimburse it for attorney’s fees it unilaterally incurred unless the insured had first obtained [the insurer’s] permission to incur those expenses.” Id.
While the EmbroidMe.com case dealt with a named insured’s request for reimbursement of pre-tender fees, the rationale behind the decision could be applied with equal vigor to an additional insured’s demand for fee reimbursement insofar as “the rights of an additional insured can be no greater than those of the named insured.” Hartford, Ins. Co. v. BellSouth Telecomms., Inc., 824 So.2d 234,241 (Fla. 4th DCA 2002), citing Maxwell v. U.S. Fidelity & Guar. Co., 399 So.2d 1051,1056 (Fla. 1st DCA 1981). Thus, under EmbroidMe.com, CGL carriers now have an even stronger argument in denying a named insured’s or additional insured’s request for reimbursement of pre-tender fees.
by Felipe L. Meija, Esq.
Two recent decisions out of the Southern District of New York in a dispute between the University of Pittsburgh and two insurance carriers exemplify the importance of not only prompt reporting of “a claim” but the need to report the claim properly according to the terms of the insurance contract. The University of Pittsburgh had hired an architectural firm, Ballinger, as the designer and architect for the construction of a hall at the university. Shortly after construction began, issues arose with the design of the Project which caused substantial delays. Ballinger had a claims-made policy with Lexington Insurance Company (“Lexington”) which ran from February 1, 2011 through February 1, 2012. Upon the expiration of its policy with Lexington, Ballinger then switched its policy to Axis Insurance Company (“Axis”) and the policy was in effect from February 1, 2012 until February 1, 2013. At no time was it claimed that Ballinger’s insurance had lapsed. The question was whether Ballinger had properly complied with the notice requirements in each of its policies.
On January 31, 2012 (during the Lexington policy period), Ballinger submitted a Notice of Occurrence/Claim to Lexington. The Notice of Claim listed the location of the claim as “University of Pittsburgh Salk Hall, Pittsburgh PA and stated “Senior management has been advised by the University of Pittsburgh that this project is experiencing problems and delays in its early stages” and provided the date of notice as January 31, 2012. In July 2016, a district court for the Southern District of New York was presented with the issue of whether the above-noted notice was sufficient notice pursuant to the policy between Lexington and Ballinger. The Court began its analysis by noting that the contract required, as a condition precedent to coverage, that any written notice of a claim contain: (1) the actual or alleged breach of duty of circumstance which was subject to the potential claim; (2) a description of the professional services rendered by the insured which could result in the claim; (3) the date of the conduct which could result in the claim; (4) a description of the injury or damage that could result in a claim; (5) the identity and address of any potential claimant; (6) the anticipated location of any potential claim; and (7) circumstances by which the insured first became aware of the potential claim.
After the Court granted Lexington’s motion for summary judgment, Axis moved for summary judgment claiming that, because Ballinger had knowledge of “a claim” before the inception of its policy, there was no coverage under its policy. The Court noted that under Axis’ policy, coverage would not be afforded if a “principal of the insured had knowledge of any act, error, omission, situation or event that could reasonably be expected to result in a claim.” Axis thereupon provided evidence, including the notice of claim mentioned above, to prove that Ballinger’s principals had notice of a potential claim involving its work at the University of Pittsburgh prior to the policy’s inception on February 1, 2012. Ballinger argued that at the time it filed its notice with Lexington it did not have knowledge that a claim would be specifically directed towards Axis. The Court disagreed and reasoned that, under the plain language of the insurance contract, Ballinger did not have to be certain that a claim would be made against it. It only had to have a reasonable expectation, which the Court found when it sent out the notice to Lexington.
As a result of the Court’s rulings, although Ballinger did not have a lapse in insurance coverage, its notice of claim to its first carrier was deemed insufficient and its notice to its second carrier was deemed untimely. Ballinger, therefore, did not have any insurance coverage for the claims being made by the University of Pennsylvania. In order to avoid this potentially dangerous pitfall, the holder of a claims-made policy should review the policy to determine exactly what information must be contained in any notice to its carrier about any potential claim. Further, the holder of a claims-made policy must clearly understand how “a claim” is defined in a policy and properly report any “claim” immediately upon becoming aware of it. The failure to follow the requirements of a claims-made policy in regards to notice and timeliness could result in the potentially catastrophic consequence of a claim’s denial, leaving an individual or company without insurance coverage.
 Univ. of Pittsburgh v. Lexington Ins. Co., 2016 U.S. Dist. LEXIS 95355 (S.D.N.Y. 2016); 2016 U.S. Dist. LEXIS 170285 (S.D.N.Y. 2016).
 Gulf Ins. Co. v. Dolan, 433 So. 2d 512, 514 (Fla. 1983).
 What does or does not qualify as “a claim” is generally described in the policy and the policy holder should be aware of how the term is defined in their policy.
 Univ. of Pittsburgh, 2016 U.S. Dist. LEXIS 170285 *5.
 Univ. of Pittsburgh v. Lexington Ins. Co., 2016 LEXIS 170285 (S.D.N.Y. 2016).

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In his recent Yale Law Journal article, Patent Inflation, Professor Jonathan Masur argues that the asymmetry in appeals from the U.S. Patent and Trademark Office (PTO)—i.e., that only rejected patent applications are appealed to the Court of Appeals for the Federal Circuit—creates an “inflationary pressure” toward expanding the boundaries of patentability. This effect has two causes: first, the PTO errs on the side of granting patents to avoid appeals; and second, the Federal Circuit tends to leave doctrine static when affirming PTO rejections and to expand patentability when reversing the PTO. Masur’s elegant public choice model goes beyond prior institutional analyses of patent law by emphasizing the systemic, structural nature of the “patent inflation” effect.
But Masur’s account of the Federal Circuit does not fit the empirical data. Under the second half of Masur’s model, the cases doing all the work in expanding patentability requirements are those in which the Federal Circuit reverses a PTO patent denial; other cases, such as patentability rulings in infringement suits, should have no net effect on the doctrine under Masur’s theory. Most of the patentability cases cited in casebooks and treatises do not fit Masur’s description. To test the theory more rigorously, I examined all published Federal Circuit patentability rulings during five years (1990, 2000, and 2008 to 2010). Of these 324 cases, only twenty-five were reversals or vacaturs of PTO denials. But these twenty-five cases—which Masur’s model suggests are driving patent inflation—are not doctrinally significant, and they are statistically significantly less likely to be cited than other cases in my data set. While Masur is likely correct that the PTO errs on the side of granting patents, asymmetric appeals from the PTO are unable to explain patent inflation.
Part I of this Essay examines Masur’s model and situates it in the prior literature about the effects of institutional structures on patent doctrine. Part II discusses two preliminary reasons to be skeptical of Masur’s model: this asymmetry has been present in the patent system since before the creation of the Federal Circuit and before complaints about patent inflation, and few of the patent-inflating cases highlighted in casebooks and treatises are reversals of PTO patent denials. Part III describes my more systematic study of patentability cases and demonstrates that Masur’s model is not supported by my empirical analysis. Finally, Part IV examines what went wrong in Masur’s theory and begins to sketch out a new model for the development of patentability doctrine. In particular, I argue that patent infringement cases and the role of the Supreme Court are both more significant than Masur suggests.
Masur frames his model as an explanation for the “patent crisis,” in which the PTO “allow[s] significant numbers of invalid patents to issue” and “the Federal Circuit has pushed the law in an excessively pro-patent direction.” While it is true that a higher percentage of litigated patents were found valid and infringed after the creation of the Federal Circuit, this may have been Congress’s purpose in creating the court, as scholars like Professor Rochelle Dreyfuss and Federal Circuit judges like Chief Judge Randall Rader and former Chief Judge Paul Michel argue. In any case, Masur’s model does not depend on his premise that “patent inflation” is bad, and this Essay tackles his descriptive model—his explanation for how patent inflation occurs—without making a normative judgment about the “correct” boundaries of patent protection.
Masur’s model is based on the asymmetry of appeals from the PTO to the Federal Circuit: patent applicants whose claims are rejected can challenge the PTO’s decision, but “[w]hen the PTO grants a patent . . . there is no losing party to appeal.” It is not exactly true that PTO patent grants are never appealed. Third parties can challenge granted patents through ex parte or inter partes reexamination or interference proceedings, and inter partes reexamination or interference decisions upholding the patent grant may be appealed to the Federal Circuit. But while reexaminations are growing in popularity and generally favor the third-party requesters, the number of appealed patent grants remains miniscule compared with the number of appealed patent denials. The Federal Circuit can also hear appeals brought by the PTO if the patent applicant chooses to challenge the PTO’s decision in a district court under 35 U.S.C. § 145, though § 145 suits are uncommon. Masur is thus clearly correct that there is currently an asymmetry in appeals from the PTO to the Federal Circuit, one which other scholars have also identified.
Masur argues that this asymmetry has two effects: one internal to the PTO and one external. First, “one would expect the self-interested administrators of the Patent Office to minimize the number of appeals and reversals,” which means that the PTO “will err on the side of approving every application that the Federal Circuit is at all likely to grant.” Melissa Wasserman reaches a similar conclusion in a recent article, and both accounts complement prior institutional analyses of the PTO by Professor Arti Rai and Professors Dan Burk and Mark Lemley, although neither Rai nor Burk and Lemley focus (as Masur does) on the PTO’s fear of Federal Circuit reversal. Numerous other scholars have argued that the PTO’s funding structure and patent examiner incentives cause examiners to err on the side of granting patents. Whatever the exact cause, this Essay does not challenge the generally accepted validity of Masur’s first claim.
Masur then proposes a second effect external to the PTO—his “patent inflation”—that builds on the first. He suggests that “nearly every case that the Federal Circuit hears on direct appeal from the PTO will concern a boundary-pushing patent.” While most of these rejections will be affirmed under existing case law, “every once in a while . . . the Federal Circuit will grant one of these patents,” creating a precedent “that expands the boundaries of patentability.” (Masur acknowledges that the Federal Circuit might “seize upon a patent that the PTO has denied as a vehicle for retrenchment,” but argues that “[t]hese cases will be rare.”) Arti Rai has similarly argued that Federal Circuit reversals of PTO denials in the case of “certain biotechnology and computer program inventions” have contributed to “the recent proliferation of patents.” But while Rai focuses on the interaction of the Federal Circuit and the PTO in particular areas, Masur argues that inflation is a systemic effect that touches all patentability issues and that will occur regardless of the composition of the Federal Circuit.
This is an elegant and intriguing theoretical model, but it is unclear whether it reflects the reality of Federal Circuit practice. Masur notes that “a full empirical examination is beyond the scope of [his article].” The only specific Federal Circuit cases he offers to illustrate his theory are State Street Bank & Trust Co. v. Signature Financial Group, Inc. and In re Bilski, but neither case fits his model: State Street was a declaratory judgment action brought by an alleged infringer; and in Bilski, the Federal Circuit affirmed the PTO denial. Masur’s software and business method patent case study helps illustrate his claim that the PTO played a role in the expansion of patentable subject matter, but he offers no evidence that this expansion stems from the asymmetry of appeals to the Federal Circuit. The remainder of this Essay attempts a fuller empirical examination of this part of Masur’s theory.
[S]tructural features of both the [PTO] and the CCPA made them overly favorable to granting patents. The problem was that the PTO heard ex parte applications for patents, and the CCPA heard only appeals from denials. . . .
To correct the imbalance, Congress consolidated both patentability and enforcement appeals in the [Federal Circuit] by granting it jurisdiction over appeals from the district courts as well as from the PTO.
Masur is thus arguing that the Federal Circuit suffers from the same problem it was intended to correct. If, as Masur claims, patent inflation is driven by the asymmetric nature of PTO appeals, it seems odd that patent inflation increased dramatically when stewardship over patent appeals passed from the CCPA to the Federal Circuit, as Masur and his sources suggest.
Masur asserts, however, that the extra patent cases the Federal Circuit acquired in comparison to the cases heard by the CCPA—primarily appeals from district court infringement suits—have no net effect on the boundaries of patentability. He argues that parties will settle all cases except those very close to the current patentability boundary, so that infringement suits “will provide the circuit with approximately symmetric opportunities to expand and contract the boundaries of patentability.” This symmetry will produce no net effect on patentability doctrine, so patent inflation will be entirely driven by asymmetric appeals from the PTO. Therefore, based on the cases that matter under Masur’s theory, the CCPA and the Federal Circuit should have had effectively identical effects on patentability doctrine, and patent inflation should have begun much earlier.
There is an additional reason for skepticism. If Masur’s model is an accurate description of patent inflation, then doctrinal shifts in patentability standards should be driven by Federal Circuit reversals of PTO patent rejections. But most of the well-known patentability cases do not fit this pattern. For example, out of over seventy Federal Circuit cases cited in the patentability section of a leading intellectual property casebook, only ten were reversals of PTO patent rejections. The Supreme Court has granted certiorari on seven patentability appeals since the creation of the Federal Circuit, but none of these involved Federal Circuit reversals of the PTO. And one of the most watched recent patentability cases before the Federal Circuit, Association for Molecular Pathology, was appealed not from the PTO but from a district court holding.
The relative unimportance of Federal Circuit reversals of PTO rejections is also apparent in focusing on the nonobviousness requirement, which has been described as the “touchstone of patentability.” The leading patent treatise agrees that nonobviousness is the most important patentability doctrine and states that the Federal Circuit’s “major role in shaping and refining the nonobviousness standard” is “evident in the early decisions of the [court].” Yet none of the ten cited cases are Federal Circuit reversals of PTO rejections. A 1993 student comment described fourteen cases through which the Federal Circuit had relaxed the test for obviousness, only one of which involved reversing a PTO denial. Similarly, a 2001 examination of doctrinal changes in obviousness cited twenty-seven Federal Circuit cases, only two of which were reversals of PTO denials.
It is possible, however, that these accounts overlook key cases—that the cases doing the doctrinal work are just not the ones that end up in treatises and casebooks. The following Part thus looks more systematically at every Federal Circuit patentability ruling from five different years of its history to see whether these cases support Masur’s model.
Table 1, 11 cases turned on patentable subject matter, 1 on utility, 119 on anticipation, 167 on obviousness, 14 on nonstatutory (or “obviousness-type”) double patenting, 15 on enablement, 32 on written description, 11 on best mode, 28 on indefiniteness, 2 on design patent issues, and 10 on problems with amending claims. (These numbers sum to more than 324 because many cases involved holdings on more than one issue.) Because this study focuses on patentability requirements, the data set does not include cases in which patents were found unenforceable for inequitable conduct. The data set includes opinions designated as nonprecedential—as these can still influence other decisions—but does not include decisions made without written opinion under Federal Circuit Rule 36, which would be unable to cause doctrinal shifts. The complete data set is available online.
Each case was also coded based on how it reached the Federal Circuit. As shown in Table 2, 60 cases came from PTO patent application denials, 14 from PTO patent rejections after ex partereexamination, 2 from PTO rejections of reissue applications, 11 from PTO interference proceedings, 222 from infringement actions in U.S. district courts, 12 from infringement actions before the International Trade Commission (ITC), and 3 from infringement actions in the Court of Federal Claims. Table 2 also illustrates that the Federal Circuit found the patent claims invalid or unpatentable in 146 cases and valid or patentable in 104 cases; in the remaining 74 cases, the court reached different conclusions on different claims or simply vacated the decision below. The number of precedential cases in each category is also displayed in parentheses. Under Masur’s theory, the shaded cases (or some subset of them) are doing all the work in doctrinal patentability shifts, as discussed in the next Section.
“Invalid” means the Federal Circuit ruled all claims at issue invalid or held that the patent application should be rejected. “Mixed” means the Federal Circuit reached different conclusions on different claims or simply vacated the decision below. “Valid” means the Federal Circuit rejected an argument that the patent was invalid or reversed a PTO decision to deny a patent.
Masur’s theory predicts that the broadening of patentability standards is caused by cases in which the Federal Circuit reverses a PTO patent-application rejection. Only sixty cases in my data set were appeals from patent-application rejections, and the Federal Circuit reversed the PTO in only nine of those cases. Five of these nine reversals were designated by the deciding Federal Circuit panel as nonprecedential and have not been cited by any court. One nonprecedential case, In re Ceccarelli, turned on whether there was substantial evidence to support a BPAI finding, and the other four nonprecedential cases involved fact-specific interpretations of prior art patents. Of the four precedential cases, In re Mills was also based on a misinterpretation of a prior art patent, In re Pleuddemann noted that an applicant’s own patent specification cannot be used as prior art, and In re Skvorecz merely restated “patent law fundamentals.” The fourth and most significant of the precedential cases, In re Webb, clarified that the “‘normal and intended use’ of an article” for design patent purposes is not limited to the final use of the article. This is the best example in my data set of “patent inflation,” but it is a doctrinal development of minor importance.
In the spirit of Masur’s theory, some additional cases also should be considered. Although Masur says “the Federal Circuit has essentially two options” in appeals from Patent Office rejections—“affirm the Patent Office’s denial, or . . . reverse the PTO and grant the patent”—the court also has a third option: it can vacate the rejection and ask the PTO to try again. The Federal Circuit vacated patent application rejections in an additional nine cases, but these cases also do not support Masur’s model.
Three of the nine vacaturs were nonprecedential, and all three were fact-specific and of no doctrinal importance. Of the six precedential vacaturs, two arose from different patents by the same inventor, Gilbert Hyatt, who appealed his PTO rejections to a district court rather than directly to the Federal Circuit, as allowed under 35 U.S.C. § 145. One of these cases, Hyatt v. Dudas, actually contradicts Masur’s theory because it was the PTO, not the patent applicant, who appealed to the Federal Circuit after losing in district court. The second case, Hyatt v. Kappos, involves a question of administrative law on which the Supreme Court recently granted certiorari. However, neither case considered substantive patentability standards: Hyatt v. Dudas considered how the PTO could group claims for a common “ground of rejection,” and Hyatt v. Kappos considered exclusion rules for evidence in § 145 actions.
The remaining four precedential cases in which the Federal Circuit vacated a PTO rejection also did not involve any noteworthy doctrinal shifts. In re Bond and In re Lister were based on the PTO’s failures to make specific factual findings, and In re Chapman corrected the description of a prior art patent but noted that the BPAI “is in no way precluded from, and indeed may be correct in, finding the claims to be obvious.” Finally, In re Comiskey clearly cuts against Masur’s thesis: the court did not consider the BPAI’s ground for decision because it sua sponte requested supplemental briefing and concluded that many claims were not patentable subject matter, remanding to the PTO to determine whether the other claims were patentable subject matter. None of these vacaturs seem like examples of patent inflation.
In addition to reversals and vacaturs of PTO patent application denials, one final category of cases might be considered as part of Masur’s theory. As discussed in Part I, although Masur considers only appeals during the prosecution of a patent application, appeals on granted patents may be made during reexamination. During the years studied, the Federal Circuit issued fourteen opinions in appeals from ex parte reexaminations. Although third parties may instigate these reexaminations, only the patentee may appeal the result to the Federal Circuit. Cases in which the Federal Circuit reverses or vacates an ex partereexamination patent rejection would therefore also raise Masur’s concern about asymmetric appeals.
My data set contains seven such cases, which also fail to support Masur’s model. Two of these cases, In re Bart and In re McNeil-PPC, Inc., are nonprecedential and have never been cited by a court. A later appeal brought by McNeil-PPC was noteworthy only for a jurisdictional question. In re Suitco Surface, Inc. and In re Baker Hughes Inc. turned on issues of claim construction, not patentability. The sixth case, Takeda Pharmaceutical Co. v. Doll, is evidence against Masur’s theory because the appeal was made by the PTO (from an adverse district court decision in a § 145 action) and because the Federal Circuit contracted the patentability boundary from what the district court would have allowed.
The seventh ex partereexamination case, In re Kotzab, is the most highly cited of the twenty-five cases discussed in this section because it clearly stated the “teaching, suggestion, or motivation” (TSM) test for obviousness, which was regularly used until the Supreme Court rejected it in KSR International Co. v. Teleflex Inc. For example, the Federal Circuit’s KSR opinion cites Kotzab as an example of how the court “consistently held” part of the TSM test. But the TSM test did not originate with Kotzab, and the Federal Circuit later used Kotzab’s language that “the teaching, motivation, or suggestion may be implicit” to make the TSM test more flexible—contracting the patentability boundary. The case may be more notable for its role in defining the power balance between the PTO and the Federal Circuit, which is a different issue from patentability boundaries.
Depending on how broadly one interprets Masur’s model, it predicts that the nine, eighteen, or twenty-five cases described above should be responsible for any broadening of patentability standards that occurred during the years studied. But these cases are a poor fit for Masur’s model, both quantitatively and qualitatively. Quantitatively, as shown in Table 3, these twenty-five cases represent less than 8% of all patentability cases in the data set, and the fifteen of these cases that were designated as precedential represent less than 7% of all precedential cases. Masur might argue that these cases should be rare (because the PTO is risk averse), but that they will still drive patent inflation because they will stand out from other patentability precedents as highly doctrinally significant and will be cited frequently. But qualitatively, this Section has demonstrated that these twenty-five cases represented at most minor shifts in patentability doctrine.
Masur’s model might still be somewhat descriptively accurate if the other 299 cases in my data set were even less important than the twenty-five Federal Circuit reversals or vacaturs of PTO rejections described in Section III.B—i.e., if there simply were no important doctrinal shifts in patentability in 1990, in 2000, or from 2008 to 2010. But many other cases do seem more doctrinally significant. For example, a number of important cases arose from patent litigation suits in district court: Pioneer Hi-Bred International, Inc. v. J.E.M. Ag Supply Inc. held that plants are patentable subject matter under 35 U.S.C. § 101; Prometheus Laboratories, Inc. v. Mayo Collaborative Services held that the diagnostic methods at issue were patentable subject matter; and Ariad Pharmaceuticals, Inc. v. Eli Lilly & Co. held that the written description requirement is distinct from enablement. And in a “much anticipated” case affirming a PTO application rejection, In re Kubin, the Federal Circuit expanded the “obvious to try” test for obviousness.
To permit a more quantitative comparison, I conducted a multivariate regression analysis, focusing on the number and type of citations to these Federal Circuit decisions, in order to assess whether the cases that are considered “inflationary” in Masur’s model actually prove to be particularly important for future patent adjudication. I recorded the number of total citations and the number of citations marked as “positive” in LEXIS for each case in my data set.
Table 4 shows the coefficients from twelve linear regressions in separate rows. The dependent variable for the first six rows is the total number of citations a case received; the dependent variable for the last six rows is the number of those citations recorded as “positive” by LEXIS. The first three independent variables (listed in separate columns) are dummy variables for the three sets of cases that might be included within Masur’s model: (1) the nine reversals of PTO patent application rejections; (2) the eighteen reversals or vacaturs of PTO patent application rejections; and (3) the twenty-five reversals or vacaturs of any PTO rejection (including during reexamination). The final independent variable, in the last column, is a control for the time since the decision.
The regression coefficients on the patent inflating cases under Masur’s model are all negative (and statistically significant at the 1% level)—whether we include the nine, eighteen, or twenty-five cases identified in Section III.B. That is, they receive fewer total citations and fewer “positive” citations than other cases in my data set, even when controlling for time since decision. Indeed, there were seventy-four cases with a higher number of positive citations than the most cited case of the type that drives inflation in Masur’s model. While citation analysis is far from dispositive, these results strongly suggest that courts and commentators also view the cases highlighted in Masur’s model as less important than other patentability cases.
Under the public choice model in Patent Inflation, Federal Circuit reversals (or vacaturs) of PTO rejections should be responsible for shifting outward the boundaries of patentability. This Essay has demonstrated that Masur’s model fails an empirical test. I examined every Federal Circuit patentability ruling from five different years, and my results suggest that the cases that should be most significant under Masur’s model are of at most minor doctrinal importance, and they are cited statistically significantly less often than other cases.
I am not claiming that cases of the kind Masur highlights are never important. As discussed in Part I, Arti Rai has described the significance of particular Federal Circuit reversals of PTO denials in the biotechnology and software contexts. Rather, I am claiming that Masur’s cases are not doing all—or even a significant portion of—the work in shifting the boundaries of patentability. This is true both because there are few of these cases (at most 25 out of the 324 decisions in my data set) and because they are relatively less important than other Federal Circuit patentability rulings.
What went wrong with Masur’s model? One important problem is his assumption that patent infringement litigation will have no net effect on patentability doctrine. Masur cites the famous Priest-Klein analysis to support his claim that only highly uncertain cases will reach the Federal Circuit, which means that each litigated patent will have a 50% chance of being invalidated. Judge Kimberly Moore has argued that Priest-Klein fails in the patent context because generally “the patent holder has a much greater stake . . . than does the alleged infringer.” While Masur acknowledges that “[p]atent law has never satisfied the strong form of the Priest-Klein hypothesis,” he argues that patents will still be evenly distributed on both sides of the Federal Circuit’s current patentability boundary. My data set suggests that patents litigated before the Federal Circuit do have a roughly 50% chance of being invalidated; Table 2 shows that the court invalidated the claims at issue in eighty-three cases and rejected the invalidity challenge in seventy-nine cases (with the other sixty cases resulting in mixed rulings or vacaturs).
But the presumption of patent validity might cause these patent infringement cases to be a source of patent inflation. Even if litigated patents have a 50% chance of being invalidated, these patents are probably not initially evenly distributed across the patentability boundary. Because of the presumption of patent validity and the “clear and convincing evidence” standard for proving invalidity, the highly uncertain patent cases—those with a 50% win rate—may be more likely to be invalid under current doctrine when considered from the “preponderance of the evidence” perspective of patent examination. Priest-Klein’s 50% win prediction does not depend on the standard of review, but if the “clear and convincing evidence” standard requires 75% certainty that a patent is invalid, then close cases will probably be those in which parties are initially approximately 75% certain that the patent is invalid under current doctrine. And when this uncertainty about validity stems from mixed questions of fact and law, then these patents may fall disproportionately on the “unpatentable” side of the current doctrinal patentability boundary. When the Federal Circuit upholds the validity of some of these patents, the patentability boundary would expand to include these new precedents.
In other words, because of the presumption of patent validity, infringement suits are more likely to validate the PTO’s boundary-pushing patent grants than to check PTO-driven patent inflation. And although it would often constitute legal error for a court or the PTO to apply the patentability boundary from the “clear and convincing evidence” infringement context to the “preponderance of the evidence” examination context, the Federal Circuit distinguished a precedent based on the different evidentiary standards in only one of the 324 cases I reviewed. In contrast, the Federal Circuit regularly cites patentability decisions from the infringement context in the examination context without discussing whether this reliance is appropriate. And while there are few cases in which the Federal Circuit upholds a patent in the examination context, the PTO relies on infringement precedents when considering some of the hundreds of thousands of patents it grants each year.
By assuming that patent litigation cases have no net effect on doctrine and by assuming that patentability can be collapsed to a single dimension with a single boundary, Masur ignores the role that the presumption of patent validity might play in causing patent inflation. But to the extent that patent inflation can be partially captured by a mechanistic explanation, this presumption appears worthy of further investigation. Furthermore, unlike the asymmetry of appeals from the PTO, which existed before the creation of the Federal Circuit, the presumption of patent validity was strengthened in the early years of the Federal Circuit, making the presumption a more plausible explanation for the dramatic increase in patent inflation that occurred after that court’s creation in 1982.
Another reason to suspect that patent infringement cases are more influential than Masur believes is that parties generally invest more resources in patent litigation, where an adverse decision might result in an injunction against a successful product, than in patent prosecution, where significant resources generally have not yet been invested in commercializing the invention. In 2011, the median cost of a large patent infringement case—with over $25 million at risk—was $5 million per side, compared with only $200,000 to handle even an inter partes reexamination from the PTO through a Federal Circuit appeal. It seems probable that doctrinal innovation like patent inflation will be more likely when the parties are willing to pay for the highest quality lawyers, who are likely to make more creative arguments and write stronger briefs. And if patentees spend more on litigation than alleged infringers, as argued by Professors Joseph Farrell and Robert Merges, this could be another important source of patent inflation, although one would also need to explain why this effect became more pronounced once patent infringement cases were consolidated from the regional courts of appeals to the Federal Circuit.
While the presumption of patent validity and the differing stakes of litigating parties might explain some of the patent inflation that has occurred over the past thirty years, I remain skeptical of any mechanistic explanation of the Federal Circuit’s doctrinal developments, and I would challenge Masur’s conclusion that continued patent inflation is inevitable. Many Federal Circuit judges have seen their role as strengthening patent protection, but this does not mean that they will strengthen it without limits. I think Masur also underappreciates the role of the Supreme Court in resetting the boundaries of patentability. Masur argues that “[e]ven an aggressive Supreme Court cannot staunch the flow of improperly granted patents from the PTO,” but this argument ignores his own emphasis on the importance of the current boundary. Federal Circuit Judge Timothy Dyk has stated that “[t]he Supreme Court necessarily plays a critical role in reinterpreting, or even overruling, earlier Supreme Court decisions and in altering our jurisprudence to keep up with the demands of a changing world.” And Professor John Duffy has argued that the Court “can continue to be important in the [patent law] field even if it is hearing only five or ten patent cases per decade” because “[i]nfluence is driven not so much by the quantity of decisions, but by the quality and authority of those decisions.” Diamond v. Chakrabarty and Diamond v. Diehr—pre-Federal Circuit Supreme Court cases that reversed PTO rejections—surely did more to create patent inflation than the Federal-Circuit specific dynamics Masur describes, and recent cases like KSR International Co. v. Teleflex Inc. play a critical role in redrawing narrower boundaries of patentability and resetting any growth in patent inflation. The Federal Circuit and the PTO play an important role in interpreting and implementing these precedents, but that role defies a simple mechanistic explanation.
Although the simplicity of Masur’s model is appealing, this Essay has demonstrated that his patent inflation model does not accurately capture the development of patent doctrine. As Masur noted in his article, scholars have highlighted a host of other concerns with the current system, ranging from the asymmetric incentives provided by the PTO bonus structure to the possibility of Federal Circuit capture. A model of the shifting patentability bounds should include many of these complicated factors. In addition, a complete model should acknowledge doctrinal presumptions, the different stakes for parties in different postures (and the varying amounts those parties are therefore willing to invest in litigation), as well as the important role of the Supreme Court in causing large shifts in the boundaries of patentability. The phenomenon of patent inflation is far more complicated than Masur’s elegant, but ultimately incomplete, model can capture.
Lisa Larrimore Ouellette received her J.D. from Yale Law School in 2011 and is a former Articles Editor of The Yale Law Journal. She wrote this Essay before beginning a clerkship on the Court of Appeals for the Federal Circuit, and the opinions expressed here are solely her own. She thanks Adam Chandler, Tun-Jen Chiang, William Eskridge, Amy Kapczynski, Melissa Wasserman, and the exceptional editors of The Yale Law Journal Online, especially Arpit Garg, Daniel Hemel, and Emily Stolzenberg.
Preferred citation: Lisa Larrimore Ouellette, What Are the Sources of Patent Inflation? An Analysis of Federal Circuit Patentability Rulings, 121 Yale L.J. Online 347 (2011), http://yalelawjournal.org/forum/what-are-the-sources-of-patent-inflation-an-analysis-of-federal-circuit-patentability-rulings.


Memorandum to the 11th Circuit Court of Appeals in support of jurisdiction to hear a crewmember's jones act injury case.
HomeWork in ProgressPlaintiff v. Royal Caribbean Cruises, Ltd.
Plaintiff v. Royal Caribbean Cruises, Ltd.
One of the most common challenges faced by passengers and cremembers is jurisdiction. Cruise lines and shipping companies argue that because your accident happened overseas, you are not a U.S. citizen, the defendant is not a U.S. citizen, or that a contract calls for a different venue, that the Court does not have power over the subject matter of the case or the Defendant itself. Jurisdictional challenges can bring an end to your case before it has had the chance to even get underway. That is why it is important to hire an experienced maritime attorney, like the attorneys of Lipcon, Margulies, Alsina & Winkleman, P.A. Our lawyers regularly face and defeat jurisdictional challenges brought by defendants like shore excursion operators, cruise ship doctors, and foreign shipping companies. In this memorandum to the 11th Circuit Court of Appeals, our maritime attorneys fight for a crewmembers right to have his day in court.
I. THIS HONORABLE COURT HAS JURISDICTION UNDER THE FAA. THE LOWER COURT’S ORDER WAS FINAL AND APPEALABLE. MOREOVER, THIS COURT HAS JURISDICTION AS A MATTER OF PUBLIC POLICY: PLAINTIFFS WERE VICTIMS OF FORCED LABOR AND PEONAGE IN THE UNITED STATES ABOARD RCCL CRUISE SHIPS. IF THIS HONORABLE COURT DECLINES TO HEAR THEIR APPEAL, THEY WILL BE FOREVER DEPRIVED OF A REMEDY AND OF THEIR OPPORTUNITY TO BRING CLAIMS AGAINST THEIR EMPLOYER.
1. Appellants’ are seafarers, wards of the admiralty courts and historically a protected class by Congress.
Plaintiffs are citizens of Jamaica who worked aboard cruise ships owned and operated by Defendant, Celebrity Cruises Inc. (“NCL”), a company based in Miami, Florida. Because they worked full time aboard ships operated by an American based cruise line, Plaintiffs are considered seamen – a protected class.
Since the foundation of the Republic, “[t]he policy of Congress, as evidenced by its legislation, has been to deal with [seafarers] as a favored class.” Bainbridge v. Merchants’ & Miners’ Transp. Co., 287 U.S. 278 (1932). Further, as the Fifth Circuit explained in Castillo v. Spiliada Maritime Corp., 937 F. 2d 240, 243 (5th Cir. 1991), “[h]istorically, seamen have enjoyed a special status in our judicial system. They enjoy this status because they occupy a unique position. A seaman isolated on a ship on the high seas is often vulnerable to the exploitation of his employer. Moreover, there exists great inequality in bargaining position between large ship-owners and unsophisticated seamen.” Id.at 243.
Thus, “[t]o shield seamen against unfair conduct by ship-owners, Congress enacted special wage protection statutes. Congress did not limit this statutory coverage to American seamen; rather, Congress extended protection to seamen who serve on a foreign vessel when located in a United States harbor. 46 U.S.C. §10313. ” Castillo, 937 F. 2d at 243; see also Su v. MV Southern Aster, 978 F. 2d 462 (9th Cir. 1992) (“The Wage Act’s jurisdictional provision makes clear that foreign seafarers discharged in an American port may invoke the Act’s protections.”). As such, because appellants – foreign seafarers – were discharged in American ports, they may invoke the Act’s protections.
Thus, in making its determination as to whether or not it should retain jurisdiction over this appeal, this Honorable Court should be mindful of the special status of seamen in our judicial system.
The Federal Arbitration Act (FAA) allows an immediate appeal from any “final decision with respect to arbitration.” 9 U.S.C. § 16 (a)(3). A decision is final within the meaning of Section 16(a)(3) where the court “dispose[s] of the entire case on the merits and leaves no part of it pending before the court. Green Tree Financial Corp. – Ala. v. Randolph, 531 U.S. 79 (2000) (internal quotations omitted). When it compelled arbitration, dismissed the complaint and entered a judgment, the district court resolved “the entire case on the merits” and left no part of it pending before the Court. Id. Citing the United States Supreme Court in Green Tree.
The question before us, then, is whether that order can be appealed as “a final decision with respect to an arbitration” within the meaning of § 16(a)(3) & Section 16(a)(3) ..preserves immediate appeal of any “final decision with respect to an arbitration,” regardless of whether the decision is favorable or hostile to arbitration. And as petitioners and respondent agree, the term “final decision” has a well-developed and longstanding meaning. It is a decision that “ ‘ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment. &The District Court’s order directed that the dispute be resolved by arbitration and dismissed respondent’s claims with prejudice, leaving the court nothing to do butexecute the judgment.That order plainly disposed of the entire case on the merits and left no part of it pending before the court. The District Court’s order was therefore “a final decision with respect to an arbitration” within the meaning of § 16(a)(3), and an appeal may be taken.
Id., at 84 – 87. (emphasis added).
2. This case is too important to be denied review. If the Court declines to hear the appeal, the Plaintiffs will be forever deprived of a remedy and their employer will be free to continue its unlawful practices (forced labor, wage deductions, and peonage).
During a period of approximately two years the Plaintiffs in this case were victims of forced labor, peonage and other slave-like working conditions in United States ports, aboard Royal Caribbean’s cruise ships.
As a result of Royal Caribbean’s policies, on May 27, 2011, Plaintiffs filed a lawsuit, alleging claims under the Seaman’s Wage Act, 46 U.S.C. §10313, 46 U.S.C. §10504 (Counts II and III), the General Maritime Laws of the United States (Counts IV and V), and 18 U.S.C. §1595 (Count VI).
The District Court below, did not examine or made any rulings with respect to the merits of the seafarers claims. Rather, it compelled the claims to arbitration.
No rights in arbitration under Norwegian law. The subject arbitration provision contains a choice of law clause which provides, in part, at paragraph 3 of the employment contract that “[t]he procedural and substantive law of the arbitration shall be the law of Norway without regard to conflict of law principles” [D.E. 11-3, pg. 3]. Further, at paragraph E, titled “governing law” the contract provides, that “[a]ny grievance or dispute shall be governed in accordance with the laws of Norway, without regard to any conflicts of law principles.” Pursuant to the terms of Royal Caribbean’s arbitral provision, therefore, if Plaintiffs were compelled to arbitrate this matter, Plaintiffs would be forced to arbitrate their claims exclusively under Norwegian law.
This Act applies to any person who is employed on board a Norwegian ship, and who does not only work on board while the ship is in port.
Persons who are neither residents in Norway nor Norwegian nationals and who are hired by a foreign employer to serve passengers on board a cruise ship, are only subject to provisions in §4, §18, subsection 1, first and second paragraph, however, with the exception of the right to be transferred under the second paragraph, §18 subsection 3 as well as §27, Chapter II A and Chapter II A and Chapter II B, §§39, 43, 45 and 49. Nationals of countries to which the EEA Agreement applies shall be considered equal to Norwegian Nationals.
Here, Plaintiffs are citizens and residents of Jamaica, Costa Rica, and St. Vincent and the Grenadines. Plaintiffs are neither citizens or residents of Norway. Plaintiffs also work aboard cruise ships for a non-Norwegian (U.S. based) employer, on Bahamian flagged vessels. The Norway Seaman’s Act Wage sections are §§21, 22, 23, 24, and 25 (neither of which are listed as exceptions in §1 above). Finally, Plaintiffs’ are not nationals of countries to which the EEA Agreement applies.
Therefore, as set forth in of §1 the Norway Seaman’s Act, Plaintiffs do not have remedies for unpaid wages under Norwegian law.
Thus under the terms of the Arbitration clause, Thomas must arbitrate in the Philippines (choice-of-forum) under the law of Panama (choice-of-law). As the arbitrator is bound to effectuate the intent of the parties irrespective of public policy considerations, these arbitration requirements have “operated in tandem” to completely bar Thomas from relying on any U.S. statutorily created causes of action. This inability to bring a Seaman’s Wage Act claim certainly qualifies as a “prospective waiver” or rights, including one of a private litigant’s “chief tools” of statutory enforcement of the Act’s treble-damages wage penalty provision for late payments. see, e.g. Mitsubishi, 473 U.S. at 635 (“The treble- damages provision wielded by the private litigant is a chief tool in the anti-trust enforcement scheme, posing a crucial deterrent to potential violators).
Id., at 1123. (Emphasis added).
All in all, there is no question that if the Plaintiffs are forced to arbitrate under Norwegian law, they will not be able to pursue any claims under either U.S. law or even Norwegian law. In effect, requiring them to arbitrate, tantamounts to these seafarers being deprived of every opportunity and right to bring claims against their employer. As a consequence, Royal Caribbean will be given free rein to maintain its policies of forced labor and peonage.
3. If appellants are required to arbitrate their claims, they will have no opportunity for subsequent review.
Moreover, there is no assurance of “opportunity for review&in this case Thomas would only be arbitrating a single issue claim, one derived solely from a U.S. statutory scheme. If applying Panamanian law, Thomas receives no award in the arbitral forum – a distinct possibility given the U.S. based nature of his claim – he will have nothing to enforce in U.S. Courts, which will deprive him of any later opportunity to review.
Moreover, as the record in this case makes clear, the application of Norwegian law makes Plaintiffs’ claims not arbitrable in the first place. Therefore, there is no point – and no justice- in requiring Plaintiffs to go to arbitration, and then, upon a showing that they were deprived of all of their causes of action at arbitration, require him to come back to United States District Court to vacate the award.
As Judge Barkett has pointed out, interpreting the Convention on the Enforcement and Recognition of Foreign Arbitral Awards in this way, “would require a court to compel arbitration in a dispute involving a sale of slaves, despite knowing full well that any resulting arbitral award would be unenforceable as a matter of public policy.” Lindo, at 1288, citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., 723 F. 2d 155, 164 n. 9 (1st Cir.1983). “ While this example may be extreme, it illustrates the absurdity and inefficiency of requiring a court to refer a matter to arbitration where it is apparent from the face of the agreement that any subsequent award would be unenforceable as a matter of public policy.” Id.
The Convention also does not contemplate actions for vacatur. There is no provision under the Convention for a vacatur action. This problem was directly addressed in a recent decision from the U.S. District Court for the Southern District of Florida, Ingaseosas Intern. Co. v. Alconcagua Investing Ltd., 2011 WL 500042 *2-3 (S.D. Fla. 2011).
As has been pointed out in Ingaseosas, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards explicitly regulates only two types of proceedings – (1) for order confirming an arbitration award (9 U.S.C. §207), and (2) for an order compelling arbitration pursuant to an arbitration agreement (9 U.S.C. §206), but makes no provision at all for vacatur proceedings. Thus, arguably unless the ship owner-employer initiates a proceeding for an order confirming an arbitration award (and the ship owners will never have any need for such a proceeding – or any desire to open the door to a seafarer’s affirmative defenses under the Convention – including voidness under public policy), the aggrieved seaman has no opportunity for review.
4. Alternatively, this Court has jurisdiction under the Collateral Order Doctrine.
The collateral order doctrine requires that an order (1) conclusively determine the disputed question; (2) resolve an important issue completely separate from the merits of the action; and (3) be effectively unreviewable on appeal from final judgment. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949).
[The] decision appears to fall in a small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.
It follows that an order granting a motion to compel arbitration is also one of that small category of orders which finally determine claims of right separable from, and collateral to, rights asserted in the action. An order granting a motion to compel arbitration is also “too important to be denied review and too independent of the cause itself that appellate consideration be deferred until the whole case is adjudicated” – particularly a case centered on slavery and violations of forced labor statutes.
WHEREFORE, the district Court’s May 31, 2012 order granting Defendants’ Motion to Compel Arbitration is final and appealable.
 Congress first enacted laws to protect the wages of seafaring employees in 1790. See Griffin v. Oceanic Contractors, Inc., 458 U.S. 64, 572-73 (1982). The statute, referred to as the “Seaman’s Wage Act, ” was recodified in 1983 at 46 U.S.C. §10313.
 The Seaman’s Wage Act, 46 U.S.C. §10313 , focuses on ensuring wage payment to seamen via a treble-damages wage-penalty provision assessed on employers for late wages. The “primary purpose of the Act” is to ensure that a seaman will be paid his wages promptly upon discharge in a U.S. port, and will not be turned ashore with nothing in his pockets” after his right to food and shelter is terminated. Chung Yung II v. Overseas Navigation Co., 774 F. 2d 1043 (11th Cir. 1985). The purpose of the penalty wage statutes is to secure prompt payment of seaman’s wages and thus protect them from the harsh consequences of arbitrary and unscrupulous action by their employers. Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 572 (1982).
 Pursuant to 18 U.S.C. §1595 (a) an individual who is a victim of forced labor and/or “peonage” may bring a civil action against the perpetrator (or whoever knowingly benefits, financially or by receiving anything of value from participating in a venture which that person knew or should have known has engaged in an act of forced labor and/or peonage) in an appropriate district court of the United States and may recover damages and reasonable attorneys fees.
 Royal Caribbean is an American business entity, with its principal place of business in Miami, Florida. Presumably for tax purposes, Royal Caribbean is incorporated in Liberia.
 The EEA agreement applies to citizens of European Union nations, citizens of Sweden, Norway, Iceland and Liechtestien. Plaintiffs are not European Union nationals, and are not citizens of Sweden, Norway Iceland or Liechtestien.


The conceptual framework establishes the shared vision for the unit’s efforts in preparing educators to work effectively in P-12 schools.
Provides coherence among curriculum, instruction, field experiences, clinical practice, candidate assessment, and program evaluation.
Establishes the philosophy, purpose, goals, and standards of the program or unit.
Reflects renewing commitment to current research and best practices.
Supports the state’s goals for P-12 student learning and program approval Standard 5.
Programs recruit, admit, retain, and transition candidates to the field who meet program goals and state standards.
Learner expectations for program requirements, progression, and completion are identified, published, and accessible.
Faculty regularly review recruitment and retention data for effectiveness of program.
D. Meet the content areas identified by workforce data of the state and region.
The program(s) and its school partners design, implement, and evaluate field experiences and clinical practices.
Field experiences are integrated throughout the preparation program.
A. Field experiences provide opportunity to plan, practice and reflect on methods of instruction and differentiation.
B. Field experiences provide opportunity to work with diverse communities and populations, e.g., racial/ethnic, socioecomonics, English language learners; C. Faculty supervision, including on-site visits, will be provided on an on-going basis.
Mentors are instructional leaders identified collaboratively with the partner school or district.
A. Mentors and principals are provided with a set of internship expectations.
B. Mentors receive or provide evidence of training on mentoring of adult learners.
C. Mentors must be fully certificated school personnel and have a minimum of three years of professional experience in the role they are supervising.
D. Effectiveness of mentor preparation and communication are reviewed annually by faculty.
Entry and exit criteria and a process for mitigating concerns during clinical practice are provided for candidates and the mentor.
1. Programs shall administer the pedagogy assessment adopted by the professional educator standards board to all candidates in a residency certificate program.
2. Clinical practice (defined as supervised planning, instruction, and reflection) for teacher candidates should consist of no less than four hundred fifty hours in classroom settings.
1. Candidates complete a supervised internship in the schools that includes a minimum of four hundred hours of on the job professional service and one hour per week of individual supervision provided by the mentor.
2. Prior to the internship, the candidate will complete a faculty supervised practicum (a distinctly defined clinical experience intended to enable the candidate to develop basic counseling skills and integrate professional knowledge).
1. Candidates complete a supervised internship in the schools that includes a minimum of one thousand two hundred hours of on the job professional service and one hour per week of individual supervision provided by the mentor.
2. Prior to the internship, the candidate will complete a faculty supervised practicum (a distinctly defined clinical experience intended to enable the candidate to develop basic school psychology skills and integrate professional knowledge).
1. The internship for administrators shall take place in an education setting serving under the general supervision of a certificated practitioner who is performing in the role for which certification is sought.
3. An approved preparation program for superintendents shall require an internship of at least three hundred sixty hours.
4. An approved preparation program for principals shall require for those persons beginning their internship August 1, 2009, and after, an internship which requires practice as an intern during the full school year. A “full school year” shall mean five hundred forty hours of which at least one-half shall be during school hours, when students and/or staff are present: Provided further, That an approved preparation program for principals shall require an internship that shall include demonstration by the candidate that she or he has the appropriate, specific skills pursuant to the standards identified in WAC 181-78A-270(2) and meets, at minimum, the standards-based benchmarks approved and published by the professional educator standards board. The benchmarks may not be changed without prior professional educator standards board approval.
Faculty within the program and unit collaborate for continuous program improvement.
Faculty collaborate with members of the broader professional community.
Faculty collaborate with members of under-represented populations for program improvement.
1. Candidates have significant interaction with diverse populations including colleagues, faculty, P-12 practitioners, and P-12 students and families.
A. Candidates reflect on interactions with diverse populations in order to integrate professional growth in cultural competency as a habit of practice.
B. Candidates integrate their cultural and linguistic backgrounds into classroom activities in order to build the multicultural capacity of the preparation program cohort.
A. Interaction with diverse populations.
B. Reflective practice on their own professional growth in cultural competency.
C. Culturally relevant communication and problem solving.
D. Personalized instruction that addresses cultural and linguistic backgrounds.
Statutory Authority: RCW 28A.410.210. WSR 14-07-067, § 181-78A-264, filed 3/17/14, effective 4/17/14; WSR 12-02-028, § 181-78A-264, filed 12/28/11, effective 1/28/12.
Statutory Authority: RCW 28A.410.210 and 2009 c 548, 2010 c 235, 2009 c 128 [2009 c 468]. WSR 10-17-029, § 181-78A-264, filed 8/9/10, effective 9/9/10.
Statutory Authority: RCW 28A.410.210. WSR 10-07-077, § 181-78A-264, filed 3/17/10, effective 4/17/10; WSR 06-14-010, § 181-78A-264, filed 6/22/06, effective 7/23/06. WSR 06-02-051, recodified as § 181-78A-264, filed 12/29/05, effective 1/1/06.
Statutory Authority: RCW 28A.410.010. WSR 05-23-040, § 180-78A-264, filed 11/9/05, effective 12/10/05; WSR 04-21-038, § 180-78A-264, filed 10/15/04, effective 11/15/04.
Statutory Authority: RCW 28A.410.010. WSR 03-19-021, § 180-78A-264, filed 9/5/03, effective 10/6/03. Statutory Authority: RCW 28A.305.130 (1) through (4). WSR 02-04-014, § 180-78A-264, filed 1/24/02, effective 2/24/02.
Statutory Authority: RCW 28A.410.010, 28A.305.130 (1) and (2). WSR 01-03-153, § 180-78A-264, filed 1/24/01, effective 2/24/01; WSR 99-23-023, § 180-78A-264, filed 11/9/99, effective 12/10/99.
Statutory Authority: RCW 28A.305.130 (1) and (2), 28A.410.010 and 28A.150.220(4). WSR 99-01-174, § 180-78A-264, filed 12/23/98, effective 1/23/99.


More than five years ago, two worried judges on the New York Court of Appeals described the emerging electronic mortgage recording industry as a potential nightmare for consumers and local governments, and urged the Legislature to make sure old statutes conformed to modern realities.
But nothing was done in Albany, and the concerns raised by then Chief Judge Judith S. Kaye and current senior associate Judge Carmen Beauchamp Ciparick are now allegations in a lawsuit Attorney General Eric T. Schneiderman filed last week targeting the Mortgage Electronic Registration System (MERS) and the financial industry that created and uses it.
In recent days, as settlement discussions in the nationwide mortgage servicing agreement intensified, the banks demanded the elimination of the MERS claims as a settlement condition, but Mr. Schneiderman refused to yield.
If we can only turn back time!
EDWARD P. ROMAINE, ETC., ET AL., respondents-appellants.
Hiscock & Barclay, LLP, Buffalo, N.Y. (Charles C. Martorana of counsel), for appellants-respondents.
Cahn & Cahn, LLP, Melville, N.Y. (Richard C. Cahn and Daniel K. Cahn of counsel), for respondents-appellants.
Bainton McCarthy, LLC, New York, N.Y. (J. Joseph Bainton of counsel), for American Land Title Association, amicus curiae.
Decher, LLP, New York, N.Y. (Joseph P. Forte and Kathleen N. Massey of counsel), for Mortgage Bankers Association, amicus curiae.
Howard Lindenberg, McLean, VA., for Federal Home Loan Mortgage Corporation, amicus curiae, and Kenneth Scott, Washington, D.C., for Federal National Mortgage Association, amicus curiae (one brief filed).
Brigitte Amiri, Brooklyn, N.Y., for South Brooklyn Legal Services, amicus curiae, April Carrie Charney, Jacksonville, FL., for Jacksonville Area Legal Aid, Inc., amicus curiae, and Daniel P. Lindsey, Chicago, IL, for Legal Assistance Foundation of Metropolitan Chicago, amicus curiae (one brief filed).
Before: ROBERT W. SCHMIDT, J.P., BARRY A. COZIER, REINALDO E. RIVERA, STEVEN W. FISHER, JJ.
ORDERED that the order and judgment is modified, on the law, by (1) deleting the provision thereof denying that branch of the petitioners’ motion for summary judgment which was to compel the Suffolk County Clerk to record and index the subject assignments and discharges, and substituting therefor a provision granting that branch of the motion, and (2) adding thereto a provision declaring that the mortgages, assignments, and discharges which name Mortgage Electronic Registration Systems, Inc., as the lender’s nominee or the mortgagee of record are acceptable for recording and indexing; as so modified, the order and judgment is affirmed insofar as appealed and cross-appealed from, with one bill of costs to the petitioner.
The petitioners, Merscorp, Inc. (hereinafter Merscorp), and its subsidiary, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), operate a national electronic registration system (hereinafter the MERS System) for residential mortgages and related instruments (hereinafter MERS Instruments). In essence, lenders who subscribe to the MERS System (hereinafter MERS Members) designate MERS as their nominee or the mortgagee of record for the purpose of recording MERS Instruments in the county where the subject real property is located. The MERS Instruments are registered in a central database, which tracks all future transfers of the beneficial ownership interests and servicing rights among MERS Members throughout the life of the loan.
Merscorp and MERS commenced this hybrid proceeding and action in response to the announcement by the Suffolk County Clerk (hereinafter the Clerk) that, as of May 1, 2001, he would no longer accept MERS Instruments that listed MERS as the mortgagee or nominee of record unless MERS was, in fact, the actual mortgagee. In June 2002 this court granted the motion by Merscorp and MERS to preliminarily compel the Clerk to record MERS Instruments and list MERS as the mortgagee in the County’s alphabetical indexes pending the SupremeCourt’s determination of the hybrid proceeding and action on the merits (see Matter ofMerscorp, Inc. v. Romaine, 295 AD2d 431).
The Supreme Court properly compelled the Clerk to record MERS mortgages (seeKlostermann v. Cuomo, 61 NY2d 525, 539). In short, the Clerk has a statutory duty that is ministerial in nature to record a written conveyance if it is duly acknowledged and accompanied by the proper fee (see Real Property Law §§ 290, 291; County Law § 525). Accordingly, the Clerk does not have the authority to refuse to record a conveyance which satisfies the narrowly-drawn prerequisites set forth in the recording statute (see People ex rel. Frost v. Woodbury, 213 NY 51; People ex rel. Title Guar.& Trust Co. v. Grifenhagen, 209 NY 569;Matter of Westminster Hgts. Co. v. Delany, 107 App Div 577, affd 185 NY 539; Putnam v. Stewart, 97 NY 411).
Similarly, Real Property Law § 316-a (1), which only applies to the Suffolk County indexing system, provides that the Clerk must record and index “[e]very instrument affecting real estate or chattels real, situated in the county of Suffolk, which shall be, or which shall have been recorded in the office of the clerk of said county . . . pursuant to the provisions of this act.” Pursuant to Real Property Law § 316-a(2), the Clerk must maintain the indexes so they “contain the date of recording of each instrument, the names of the parties to each instrument and the liber and page of the record thereof” (see also Real Property Law § 316-a and ). Thus, the Clerk’s duty to index recorded instruments is mandatory and ministerial in nature.
Contrary to the Supreme Court’s determination, there is no valid distinction between MERS mortgages and MERS assignments or discharges for the purpose of recording and indexing. Pursuant to Real Property Law § 321(1), the discharge document may be signed either by the mortgagee, the person who appears from the public record to be the last assignee, or their personal representatives.
As the proponents of a motion for summary judgment, Merscorp and MERS made a prima facie showing that they were entitled to judgment as a matter of law by tendering sufficient evidence to establish that they complied with the applicable recording statutes (see Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853; Artistic Landscaping v. Board of Assessors,303 AD2d 699). Once this showing was made, the burden shifted to the Clerk, who failed to raise a triable issue of fact in opposition to the motion (Alvarez v. Prospect Hosp., 68 NY2d 320, 324; Zuckerman v. City of New York, 49 NY2d 557, 562).
Since this is a declaratory judgment action, the order and judgment must be modified, inter alia, by adding a declaration that the mortgages, assignments, and discharges which name MERS as the lender’s nominee or the mortgagee of record are acceptable for recording and indexing (see Lanza v. Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied372 US 901).
SCHMIDT, J.P., COZIER, RIVERA and FISHER, JJ., concur.
EDWARD P. ROMAINE et al., Respondents.
S. Miller, J.P., Krausman and Cozier, JJ., concur.
Ordered that the order is reversed, without costs or disbursements, and the motion for a preliminary injunction is granted pending the Supreme Court’s determination of the hybrid proceeding and action on the merits.
The petitioners, Merscorp, Inc. (hereinafter Merscorp), and its subsidiary, MortgageElectronic Registration Systems, Inc. (hereinafter MERS), operate a national electronicregistration system (hereinafter the MERS System) for residential mortgages and related instruments (hereinafter MERS Instruments). In essence, lenders who subscribe to the MERS System (hereinafter MERS Members) designate MERS as their nominee or the “mortgagee of record” for the purpose of 432*432 recording MERS Instruments in the county where the subject real property is located. The MERS Instruments are registered in a central database, which tracks all future transfers of the beneficial ownership interests and servicing rights among MERS Members. As of May 2001, the MERS System had recorded more than four million MERS Instruments in more than 3,000 counties in all 50 states, including more than 16,000 MERS Instruments in Suffolk County.
On April 5, 2001, the Attorney General issued Informal Opinion No. 2001-2 (2001 Atty Gen [Inf Ops] 2001-2) in response to two questions posed by the Nassau County Clerk regarding the latter’s obligation to record and index MERS Instruments. Although the Attorney General concluded that the Nassau County Clerk had a statutory duty under Real Property Law § 291 to record MERS Instruments if they were duly acknowledged and accompanied by the proper fee, he advised the Nassau County Clerk to list the MERS Instruments in the County’s alphabetical indexes under the names of the actual lenders. Based in part on the Attorney General’s Informal Opinion, the Suffolk County Clerk announced that as of May 1, 2001, he would no longer accept MERS Instruments which listed MERS as the mortgagee or nominee of record unless MERS was, in fact, the actual mortgagee.
Simultaneously with commencing this hybrid proceeding and action, Merscorp and MERS moved, inter alia, for a preliminary injunction to compel the Suffolk County Clerk to record MERS Instruments and list MERS as the mortgagee in the County’s alphabetical mortgagee-mortgagor indexes for recorded conveyances. Although the Supreme Court, Suffolk County (Bivona, J.), granted the request of Merscorp and MERS for a temporary restraining order on May 2, 2001, the same court (Catterson, J.), subsequently denied their request for a preliminary injunction on May 22, 2001.
It is well established that the decision to grant or deny a preliminary injunction lies within the sound discretion of the Supreme Court (see Doe v Axelrod, 73 NY2d 748, 750). In exercising that discretion, however, the Supreme Court must consider several factors, including whether the moving party has established (1) a likelihood of success on the merits, (2) irreparable harm if the injunction is denied, and (3) a balance of the equities in favor of the injunction (see CPLR 6301, 6312 [a]; Grant Co. v Srogi, 52 NY2d 496, 517; Clarion Assoc. v Colby Co., 276 AD2d 461). Upon our review of the record, we find that the Supreme Court failed to set forth specific findings with respect to the tripartite test for injunctive relief and 433*433 improvidently exercised its discretion in denying the motion for preliminary injunctive relief.
Merscorp and MERS demonstrated a reasonable probability of success on the merits of its claim for a writ of mandamus to compel the Suffolk County Clerk to record MERS Instruments (see Klostermann v Cuomo, 61 NY2d 525, 539). Contrary to the contention of the Suffolk County Clerk, he has a statutory duty that is ministerial in nature to record a written conveyance if it is duly acknowledged and accompanied by the proper fee (see Real Property Law § 290 ; § 291; County Law § 525 ). Accordingly, the Clerk does not have the authority to refuse to record a conveyance which satisfies the narrowly drawn prerequisites set forth in the recording statute (see People ex rel. Frost v Woodbury, 213 NY 51; People ex rel. Title Guar. & Trust Co. v Grifenhagen, 209 NY 569; Matter of Westminster Hgts. Co. v Delany, 107 App Div 577, affd 185 NY 539; Putnam v Stewart, 97 NY 411).
This Court notes that the Suffolk County index is governed exclusively by Real Property Law § 316-a. Real Property Law § 316-a (1) provides that the Suffolk County Clerk shall record and index “[e]very instrument affecting real estate or chattels real, situated in the county of Suffolk * * * which shall have been recorded in the office of the [C]lerk of said county * * * pursuant to the provisions of this act” (emphasis supplied). Pursuant to Real Property Law § 316-a (2), the Suffolk County Clerk must maintain the indexes so they “contain the date of recording of each instrument, the names of the parties to each instrument and the liber and page of the record thereof and shall be substantially the forms of the schedules hereto annexed” (emphasis supplied; see also Real Property Law § 316-a ).
Therefore, in light of Real Property Law § 316-a, Merscorp and MERS also demonstrated a reasonable probability of success on the merits of their claim to compel the Suffolk County Clerk to perform his ministerial duty to index MERS Instruments as the language of Real Property Law § 316-a is mandatory and not permissive (see Klostermann v Cuomo, supra at 539).
Moreover, to the extent that the Suffolk County Clerk has recorded approximately 16,000 MERS Instruments before May 1, 2001, MERS established irreparable harm to its business operation, the mortgage lending industry, and the general public, in the absence of a preliminary injunction compelling the Suffolk County Clerk to record and index MERS Instruments (see Clarion Assoc. v Colby Co., supra; McLaughlin, Piven, 434*434 Vogel v Nolan & Co., 114 AD2d 165, 174), particularly since Real Property Law § 316-a (8), (9) and (10) sets forth a mechanism for correcting any mistakes in the indexes.
Under these circumstances, a preliminary injunction should be granted to maintain the status quo while the legal issues are determined in a deliberate and judicious manner (see Moody v Filipowski, 146 AD2d 675, 678; Incorporated Vil. of Babylon v Anthony’s Water Cafe, 137 AD2d 791, 792; Tucker v Toia, 54 AD2d 322, 326).
Although I do not necessarily agree with my colleagues that there is a likelihood of success on the merits, I nevertheless concur in granting a preliminary injunction, as the Supreme Court failed to take into consideration and address the other factors which must be taken into account, namely, irreparable harm to the movant absent the granting of a preliminary injunction, and a balancing of the equities (see Melvin v Union Coll., 195 AD2d 447, 448). Where, as here, the case involves issues of first impression in the courts, it is appropriate to grant a preliminary injunction, “`to hold the parties in status quo while the legal issues are determined in a deliberate and judicious manner'” (Time Sq. Books v City of Rochester, 223 AD2d 270, 278,quoting Tucker v Toia, 54 AD2d 322, 326; State of New York v City of New York, 275 AD2d 740; Sau Thi Ma v Xuan T. Lien, 198 AD2d 186).