Today the Federal Circuit issued one precedential opinion in a patent case, one precedential opinion in an international trade case, one precedential opinion in an IRS case, and one nonprecedential Rule 36 judgment. Here are the introductions to the opinions and a list of the Rule 36 judgments.

Fraunhofer-Gesellschaft v. Sirius XM Radio Inc. (Precedential)

Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung E.V. (“Fraunhofer”) sued Sirius XM Radio Inc. (“SXM”) alleging infringement of claims of four of Fraunhofer’s patents. The district court granted SXM’s motion to dismiss for failure to state a claim on the ground that it had a valid license to the patents-in-suit. We conclude that this license defense cannot be resolved on a motion to dismiss. We vacate the judgment, and remand to the district court for further proceedings. We also reverse the district court’s denial of Fraunhofer’s motion for leave to amend.

Mid Continent Steel & Wire, Inc. v. United States (Precedential)

The United States Department of Commerce determined that Oman Fasteners, LLC, a foreign producer and exporter of steel nails, was selling its products into the United States at less than fair value as judged by those nails’ “normal value” in the home country (or, in certain circumstances, a relevant third country) under the controlling statute. Because the company did not sell a significant volume of nails in its home market, Commerce, to assess the normal value, calculated a “constructed value” of the nails through use of one of four methods provided by the governing statute. Oman Fasteners (“OF”) challenges several aspects of Commerce’s calculation of constructed value: Commerce’s initial choice of method; Commerce’s selection of certain information as an input into the calculation required by the chosen method; and Commerce’s conclusion that it could not calculate a “cap” limiting the profit component of the constructed value. We reject OF’s challenge to the basic choice of method and the profit-cap ruling. As to Commerce’s information selection when applying the chosen method, we partly reject OF’s challenge, but we remand to secure further explanation from Commerce about one ground of this challenge—Commerce’s refusal to consider the effect of subsidies on whether the information it selected was accurate for the relevant statutory purpose.

Charleston Area Medical Center, Inc. v. United States (Precedential)

This case is about the interpretation of 26 U.S.C. § 6621(a)(1), which provides the interest rate that the Internal Revenue Service (“IRS”) must use in calculating the amount of interest owed on a tax refund. Section 6621(a)(1) requires the IRS to apply a lower interest rate for refunds owed to “corporations” than for refunds owed to other types of entities. Charleston Area Medical Center, Inc. and CAMC Health Education and Research Institute (collectively, “the Taxpayers”) applied for a tax refund arguing that they are entitled to the higher interest rate because they are nonprofit entities and not corporations. The IRS disagreed and applied the lower interest rate to calculate the refund owed to the Taxpayers. The U.S. Court of Federal Claims (“Claims Court”) affirmed, reasoning that the Taxpayers, who are incorporated under state law, are corporations under § 6621(a)(1) notwithstanding their status as nonprofit entities. Charleston Area Med. Ctr., Inc. v. United States, 138 Fed. Cl. 626 (2018). The Taxpayers appeal.

Although this is an issue of first impression for our court, four other circuits have concluded that a nonprofit entity that is incorporated under state law is a corporation under § 6621(a)(1). Maimonides Med. Ctr. v. United States, 809 F.3d 85 (2d Cir. 2015) (“Second Circuit”); United States v. Detroit Med. Ctr., 833 F.3d 671 (6th Cir. 2016) (“Sixth Circuit”); Med. College of Wis. Affiliated Hosps. v. United States, 854 F.3d 930 (7th Cir. 2017) (“Seventh Circuit”); Wichita Ctr. for Graduate Med. Educ., Inc. v. United States, 917 F.3d 1221 (10th Cir. 2019) (“Tenth Circuit”). While it is not unheard of for appellants revisiting questions previously considered by other courts to hit the circuit split jackpot, this is not such an instance. We agree with the interpretative path taken by our sister circuits—not because those decisions came first, but because they were correct. Therefore, we affirm.

Rule 36 Judgments