Addressing issues of copyright and patent infringement, the US Court of Appeals for the Federal Circuit found that the Federal Insecticide, Fungicide, and Rodenticide Act did not preempt copyright protection and that patent infringement under 35 U.S.C. § 271(g) does not require that the claimed process be performed by a single entity. Syngenta Crop Protection, LLC v. Willowood, LLC, Case Nos.18-1614, -2044 (Fed. Cir., Dec. 18, 2019) (Reyna, J.).
Addressing the proper test for shifting fees under 35 U.S.C. § 285, the US Court of Appeals for the Federal Circuit held that a district court erred when it shifted fees to the accused infringer because the district court found that only a series of events was exceptional but did not determine that the “case ” was exceptional. Intellectual Ventures LLC v. Trend Micro Inc., Case No. 19-1122 (Fed. Cir. Dec. 19, 2019) (Stoll, J.). Because it was unclear what standard the district court used when making its “exceptional case” determination, the Federal Circuit vacated and remanded for an analysis under the proper legal standard.
Intellectual Ventures owns a patent directed to filtering data files (such as email messages) based on their content. Intellectual Ventures asserted the patent against Trend Micro. Early in the case, the district court adopted Intellectual Venture’s proposed construction of the claim term “characteristic” to mean “an attribute of the document” that includes “whether it contains . . . bulk email.” For the first time at trial, however, Intellectual Venture’s expert changed his opinion, testifying that bulk email was not within the scope of a “characteristic.” He further testified that he “changed [his] opinion after [he] had a chance to prepare for trial working with Intellectual Venture[‘s] lawyers.” After trial, Trend Micro moved for clarification of the claim construction in light of the expert’s changed opinion. The district court maintained its construction, including “bulk email” as being within the scope of the claimed “characteristic.” Under this construction, Trend Micro prevailed on its invalidity defense. The district court’s invalidity judgment was affirmed in a previous appeal.
Following the first appeal, Trend Micro moved for fees under § 285, citing Intellectual Ventures’ last-minute and surprising change of course on the construction of “characteristic.” The district court granted Trend Micro’s motion, concluding that Intellectual Ventures’ conduct was exceptional “solely with respect to this collection of circumstances regarding [its expert’s] changed testimony.” However, considering “whether the case overall is exceptional,” the district court expressly found that “it was not” and that “it would be wrong to say that [Intellectual Ventures’s] case was objectively unreasonable.” Intellectual Ventures appealed.
The Federal Circuit found that a district court has discretion to find a case exceptional based on a single, isolated act. However, in this case, the district court failed to make that determination at a case level, and instead focused on the exceptional nature of the last-minute change in Intellectual Ventures’ claim construction position. The Court stated that proper legal standard is whether the conduct, isolated or otherwise, is such that the case is exceptional when considered as along with the totality of circumstances. As such, the Court vacated and remanded with instructions for the district court to make a finding under the proper standard: whether there was an exceptional case—not whether a portion of the case was exceptional.
Raising the hurdle for proving secondary considerations, the US Court of Appeals for the Federal Circuit found that the “coextensiveness” requirement for purposes of nexus requires that the practicing product be “essentially the claimed invention.” FOX Factory, Inc. v. SRAM, LLC, Case No. 18-2024, -2025 (Fed. Cir. Dec. 18, 2019) (Prost, J.).
Bicycle chainrings are the toothed disks to which bicycle chains engage. SRAM owns a patent directed to an improved chainring structure that better maintains the chain, obviating the need for extraneous structures. The independent claims of the patent recite a chainring with alternating narrow and wide tooth tips and teeth offset from the center of the chainring. Some of the claims recite tooth tips offset toward the body of the bicycle (inboard offsets) and other claims recite teeth offset away from the body of the bicycle (outboard offsets). The specification discloses additional chainring features that are not recited in the claims. Each of the disclosed but unclaimed features contribute to improving chain retention. For example, the specification discloses forwardly protruding tip portions that function to engage a chain link earlier than a chain lacking the tip portion, a hook feature formed on the rear flank of each tooth to provide better guiding of the chain, and also that the narrow and wide teeth preferably fill at least 80% of the axial distance of the corresponding space in the chain link (>80% gap filling). SRAM sells 13 different versions of its “X-Sync” chainrings, 12 of which embody the inboard offset claims and one of which embodies the outboard offset claims. The X-Sync chains also embody the unclaimed features disclosed in the specification.
FOX filed two petitions for inter partes review (IPR) of SRAM’s patent, arguing that the outboard offset and inboard offset claims were obvious. After instituting the petitions, the Board found that the asserted prior art references disclosed all the limitations of the challenged patent claims and that a skilled artisan would have been motivated to combine the asserted prior art to arrive at the claimed invention. However, the Board found that the prima facie case of obviousness was overcome by secondary considerations. In finding secondary considerations, the Board found SRAM was entitled to a presumption of nexus between the challenged outboard offset claims and secondary considerations evidence pertaining to SRAM’s X-Sync since the outboard offset claims broadly covered the X-Sync. FOX appealed.
On appeal, FOX argued that the Board applied the wrong standard for determining whether SRAM was entitled to a presumption of nexus between the challenged claims and SRAM’s evidence of secondary considerations. In addressing the presumption of nexus, the Federal Circuit reaffirmed its “coextensiveness” precedent, stating that “a patentee is entitled to a rebuttable presumption of nexus between the asserted evidence of secondary considerations and a patent claim if the patentee shows that the asserted evidence is tied to a specific product and that the product “is the invention disclosed and claimed.” In a similar vein, the Court explained that the patentee is not entitled to a presumption of nexus “[w]hen the thing that is commercially successful is not coextensive with the patented invention—for example, if the patented invention is only a component of a commercially successful machine or process.”
While the parties disputed whether the X-Sync chainrings are coextensive with the independent claims, the parties did not dispute that the X-Synch chainrings include unclaimed features. For instance, SRAM did not dispute that its X-Sync chainrings embody the independent claim of a different patent that cover a chainring with both wide and narrow teeth and wide teeth with >80% gap filling. The Court found that because the claims of the challenged patent did not recite this additional feature, the challenged claims were not coextensive with the X-Sync chainrings.
The Federal Circuit also found that the lack of coextensiveness between the challenged claims and the X-Sync chainrings extended beyond the gap filling feature. For instance, the X-Sync chainrings include features relating to: (1) forwardly protruding tooth tips; (2) hook features on the teeth; and (3) mud-clearing recesses, all of which were disclosed in the patent specification but not recited in the challenged claims. The Court also noted that SRAM’s marketing materials described and touted these additional unclaimed features. The Court, however, was careful to note that it has “never held that the existence of one or more unclaimed features, standing alone, means nexus may not be presumed. Indeed, there is rarely a perfect correspondence between the claimed invention and the product.” The Court stressed that “the purpose of the coextensiveness requirement is to ensure that nexus is only presumed when the product tied to the evidence of secondary considerations ‘is the invention disclosed and claimed.’ Thus, if the unclaimed features amount to nothing more than additional insignificant features, presuming nexus may nevertheless be appropriate.” The Court explained that to meet the coextensiveness requirement, the patentee must demonstrate that the product is essentially the claimed invention. This is normally a fact-intensive inquiry that “should ordinarily be decided by the fact finder in the first instance.”
In this case, where it was undisputed that the X-Sync chainrings include unclaimed features that the patentee describes as “critical” to the product’s ability to “better retain the chain under many conditions” and that go to the “heart” of another one of SRAM’s patents, the Federal Circuit found that no reasonable fact finder could conclude that these features are insignificant, and that no reasonable fact finder could conclude, under the proper standard, that the X-Sync chainrings are coextensive with the patent claims. The Court vacated and remanded with instructions that the Board reevaluate the import of the evidence of secondary considerations with the burden of proving nexus on SRAM.
The US Court of Appeals for the Federal Circuit affirmed a district court’s award of attorneys’ fees and expenses to deter serial patent filers’ future “abusive litigation.” Blackbird Tech LLC, DBA Blackbird Technologies v. Health in Motion LLC, DBA Inspire Fitness, Leisure Fitness Equipment LLC, Case No. 18-2393 (Fed. Cir. Dec. 16, 2019) (Wallach, J.).
Blackbird sued Health in Motion and Leisure Fitness (HIM) for infringing a patent directed to exercise equipment that includes a housing with a structural surface defining an arcuate path and multiple pairs of pulleys positioned along the arcuate path. Shortly after filing the case, Blackbird offered to settle for $80,000. HIM rejected the offer, stating that they believed that Blackbird would be ordered to pay their attorneys’ fees, and countered with a settlement offer that included Blackbird paying HIM $120,000. Over the course of the next year, Blackbird continued to negotiate until it eventually offered HIM a license to the patent for zero dollars. HIM declined.
HIM filed a motion for summary judgment shortly before discovery was scheduled to end. Blackbird opposed. Without notifying HIM in advance, Blackbird filed a notice of voluntary dismissal with prejudice, executed a covenant not to sue, and filed a motion to dismiss for lack of subject matter jurisdiction. Blackbird argued that since it issued a covenant not to sue, there was no case or controversy and the suit had to be dismissed.
The district court dismissed Blackbird’s claims, but denied its motion to dismiss. The court authorized HIM to seek recovery of costs, expenses and attorneys’ fees. After HIM filed such a request, the district court granted HIM attorneys’ fees and expenses for $364 thousand, which was the total amount requested by HIM. The district court found the case was “exceptional” under 35 U.S.C. § 285 because of Blackbird’s litigation positions and the unreasonable manner in which Blackbird litigated the case. Blackbird appealed.
On appeal, Blackbird argued that its infringement positions and claim construction were reasonable. The Federal Circuit found Blackbird’s arguments unpersuasive, finding that the district court did not abuse its discretion in concluding the case “stands out” with respect to the lack of substantive strength in Blackbird’s litigation position and the manner in which Blackbird litigated. Specifically, the Court noted Blackbird’s unorthodox settlement offers, delay tactics in discovery, and filings to dismiss the case on the eve of trial were indicative of abusive litigation. The Court also noted that “the exercise of even a modicum of due diligence by Blackbird, as part of a pre-suit investigation, would have revealed the weaknesses in the litigation position.”
The Federal Circuit also found that the district court did not abuse its discretion in considering the need to deter future abusive litigation. At the time the district court granted HIM’s motion for fees, Blackbird had filed more than 100 patent infringement lawsuits, none of which had been decided on the merits in favor of Blackbird. The Court agreed that granting a fee award was warranted to curb the abusive litigation. Accordingly, the Court affirmed the district court’s award.
Addressing an emergency request for a writ of mandamus to compel discovery of electronically stored information, the US Court of Appeals for the Sixth Circuit declined to set aside a district court’s denial of a request to create forensic images of all the defendant’s business and personal computers and cell phones. In re FCA US LLC, Case No. 19-1923 (6th Cir. 2019) (per curiam).
FCA filed trade-secret misappropriation and other claims against Patrea Bullock, a lawyer who formerly served as outside counsel to FCA. According to FCA, while serving as defense counsel, Bullock had access to extensive confidential and proprietary information belonging to FCA, including its “defense playbook.” After she resigned from her law firm, but before returning her computer, Bullock downloaded her files from the laptop onto several USB drives. Thereafter, she opened her own law firm representing plaintiffs against automobile manufacturers, including FCA. During discovery, Bullock produced 1,345 documents in response to FCA’s requests for the documents she had taken FCA, however, moved to compel a forensic image of all of Bullock’s business and personal laptops and cell phones so an expert could investigate what documents Bullock took.
The district court denied FCA’s forensic image request. Though acknowledging the importance of Bullock’s electronics to FCA’s case, the district court found that asserting a trade secret claim does not give a plaintiff free reign to examine all of the defendant’s electronics in search of evidence absent some more particularized need to do so. FCA requested emergency mandamus relief to compel the immediate forensic imaging.
The Sixth Circuit denied the writ. The Court concluded that FCA had “arguably established” that it could be permanently prejudiced by waiting to appeal until after final judgment because relevant data could be deliberately erased or disappear over time, even though civil litigants have a duty to preserve. The Court found, however, that FCA could not clear the hurdle to establish that the district court’s decision went so beyond an abuse of discretion as to warrant the extraordinary mandamus remedy. Nor could the alleged novelty of the question prompt issuance of the writ, given that courts have exhaustively analyzed discovery issues, including the permissible scope of discovery. Accordingly, the Court denied the writ of mandamus.
Practice Note: A writ of mandamus is an extraordinary remedy. The Court’s rejection of the writ here serves a broader purpose of ensuring that every discovery dispute does not morph into an appeal.
Finding that inherency can be used to show the presence of a missing claim limitation, the US Court of Appeals for the Federal Circuit affirmed a district court decision that asserted claims in pain management method patents were invalid as obvious. Persion Pharmaceuticals LLC v. Alvogen Malta Operations Ltd., Case No. 18-2361 (Fed. Cir., Dec. 27, 2019) (Reyna, J.).
Persion has US Food and Drug Administration (FDA) approval for its extended release hydrocodone product, Zohydro ER, and also owns two patents directed to methods of treating pain with extended release hydrocodone in patients with mild to moderate hepatic impairment. Persion sued Alvogen for infringement of certain claims in these two patents after Alvogen filed an Abbreviated New Drug Application (ANDA) requesting approval from the FDA to market a generic version of Zohydro ER. The asserted claims include: (i) non-adjustment claims directed to administering a dose of hydrocodone to patients with mild to moderate hepatic impairment without adjusting the dose relative to a healthy liver patient, and (ii) pharmacokinetic claims directed to pharmacokinetic parameters achieved after treatment with hydrocodone.
The district court found that Alvogen’s generic drug would indirectly infringe the asserted claims, but that the claims were invalid as obvious over the prior art. The district court also found that the pharmacokinetic properties recited in certain claims were obvious due to the fact that they are necessarily present in the formulations claimed and were therefore inherent. Precision appealed.
The Federal Circuit affirmed the district court’s finding that the non-adjustment claims were obvious based on the Devane and Jain publications. The Devane reference is directed to the controlled release of one or more active ingredients, which can include hydrocodone and the Zohydro ER formulation. The Jain prior art is directed to a method of treating pain using extended release formulations of hydrocodone combined with acetaminophen. The Jain reference also disclosed results of a study that show that hydrocodone pharmacokinetic parameters are similar in patients with both liver insufficiency and healthy livers. The Court found there was no clear error in the district court finding that these two references, as well as the labels for immediate release hydrocodone and acetaminophen, rendered the asserted non-adjustment claims invalid.
The Federal Circuit also affirmed the district court’s decision that the pharmacokinetic parameters recited in the pharmacokinetic claims were inherent, and, therefore, these claims obvious in view of the prior art. The Court reiterated that inherency can supply a missing limitation in an obviousness analysis. Specifically in this case, the pharmacokinetic parameters indicating the levels of hydrocodone in patients after administration were properties of these formulations that were necessarily present. The Court also confirmed that inherency can provide a missing claim limitation in an obviousness analysis made up of a combination of prior art references, and not just a single prior art reference.
The US Court of Appeals for the Federal Circuit vacated a district court decision setting license rates for standard-essential patents (SEPs), holding that the district court deprived the patent owner of its constitutional right to trial by jury. TCL Commc’n Tech. Holdings Ltd. v. Telefonaktiebolaget LM Ericsson, Case Nos. 8-1363, -1732 (Fed. Cir., Dec. 5, 2019) (Chen, J.).
Ericsson holds a number of patents that are essential to the 2G, 3G and 4G mobile communications standards set by the European Telecommunications Standards Institute (ETSI). As a member of ETSI, Ericsson has agreed to license its SEPs to implementers of the ETSI standards on fair, reasonable and non-discriminatory (FRAND) terms. TCL manufactures mobile devices that implement the ETSI standards.
The US Court of Appeals for the Federal Circuit denied counterclaim plaintiff’s petition for panel rehearing and rehearing en banc with respect to its decision that the counterclaim plaintiff was estopped from bringing antitrust counterclaims in a patent infringement suit. Intellectual Ventures 1, LLC v. Capital One Financial Corporation, Case No. 18-1367 (Fed. Cir. Dec. 11, 2019) (per curium). In its decision, the Federal Circuit determined that the counterclaim plaintiff could not invoke Tuttle v. Arlington County School Board (4th Cir. 1999) to save its counterclaim and left unaddressed the trial court’s decision with respect to the scope of the Noerr-Pennington doctrine, which was an alternative trial court basis for dismissal of Capital One’s counterclaim.
In its prior decision applying Fourth Circuit law, the Federal Circuit determined that Capital One, the counterclaim plaintiff, could not bring an antitrust counterclaim against Intellectual Ventures based on the doctrine of collateral estoppel. Intellectual Ventures 1, LLC v. Capital One Financial Corporation, (IP Update, Vol. 22, No. 10). In that decision, the Court reviewed Capital One’s appeal of the trial court’s denial of its counterclaims against a prior litigated case in which Capital One’s identical antitrust counterclaim had been denied by the trial court. In bringing its initial appeal, Capital One argued that the antitrust issues related to market definition and Intellectual Ventures’ market power in the initial case were different from the market definition and Intellectual Ventures’ market power issues in the instant case. In its prior decision, the Federal Circuit disagreed and held that the doctrine of collateral estoppel applied as (1) the issues in the instant case was identical to the issues in the prior case; (2) the issues were actually decided in the prior proceeding; (3) the issues were critical and necessary to the judgment in the prior proceeding; (4) the judgment was valid and final; and (5) Capital One had a full and fair opportunity to litigate the issues.
A divided panel decision of the US Court of Appeals for the Federal Circuit affirmed a summary judgment of noninfringement, finding no disputed issues of material fact to preclude summary judgement. Plastic Omnium Advanced v. Donghee America, Inc., Case No. 2018-2087 (Fed. Cir., Nov. 21, 2019) (Reyna, J) (Clevenger, J, dissenting).
Plastic Omnium filed suit against Donghee for patent infringement of patents generally relating to manufacturing plastic fuel tanks formed by blow molding. A portion of this process, as claimed, requires “cutting and opening an extruded parison of closed cross section.” The primary dispute on appeal is the meaning of the claim term “parison.” In its claim construction order, the district court found the patentee had acted as its own lexicographer, defining the key disputed term “parison” as “referring to a plastic tube with a closed cross section that is shaped by—and has reached the end of—a die and is split either immediately upon exiting the die or at some point thereafter.” Following claim construction, the district court granted Donghee’s motion for summary judgment of noninfringement as to the asserted claims. Plastic Omnium appeals the grant of summary judgment under both literally infringement and infringement under the doctrine of equivalents.
Addressing reverse confusion and scope of available remedies, the US Court of Appeals for the Seventh Circuit upheld a district court’s refusal to award infringing profits and a broad permanent injunction after a jury found infringement. Fabick, Inc. v. JFTCO, Inc., Case Nos. 19-1760; -0072 (7th Cir. Dec. 9, 2019) (Flaum, J.)
This trademark dispute originates with a family feud. John Fabick, founder of the John Fabick Tractor Company, purchased two Caterpillar equipment dealerships intending for his son, Joe, to operate the dealerships. At the time, the John Fabick Tractor Company had used the mark FABICK in connection with its business. Joe later founded FABCO, which sold Caterpillar equipment and related goods. Eventually, one of Joe’s sons, Jeré, took over FABCO.