The US Court of Appeals for the Federal Circuit vacated a district court invalidity determination finding that judicial estoppel prevented a patent owner from relisting an inventor previously removed for strategic litigation purposes. Egenera, Inc. v. Cisco Sys., Inc., Case Nos. 19-2015, -2387 (Fed. Cir. Aug. 28, 2020) (Prost, C.J.).
Egenera sued Cisco for infringement of a patent directed to a reconfigurable virtual network that included a “logic to modify” and transmit received messages. In response Cisco petitioned for inter partes review (IPR). During the IPR’s pendency, Egenera realized that all claim limitations were conceived of before inventor Schulter began working at the company, and petitioned the US Patent and Trademark Office (PTO) to remove Schulter as a listed inventor. The Patent and Trial Appeal Board (PTAB) declined to institute Cisco’s IPR, and the PTO granted Egenera’s petition to remove Schulter shortly thereafter.
During the litigation, the district court construed the patent claims’ “logic” terms as means-plus-function elements and concluded that the “logic to modify” limitation corresponded to a “tripartite structure” described in the specification. Cisco then asserted invalidity under pre-America Invents Act (AIA) § 102(f), contending that Schulter invented the tripartite structure, and that the patent therefore did not list all inventors. Egenera attempted to re-correct inventorship to include Schulter, but the court rejected the attempt. The district court found the patent invalid under § 102(f), reasoning that judicial estoppel precluded Egenera from “resurrecting” Schulter’s inventorship. Egenera appealed both the means-plus-function construction and the judicial estoppel finding.
The Federal Circuit first addressed whether Egenera could correct inventorship absent any judicial estoppel. The Court looked to the plain meaning of post-AIA § 256, which provides that “the error of omitting inventors . . . shall not invalidate the patent . . . if it can be corrected.” Notably, post-AIA § 256 removed the requirement that an inventorship error occur “without . . . deceptive intent.” The Federal Circuit stated it plainly: “‘Error’ is simply the incorrect listing of inventors” and does not exclude even deceptive intention. The Court explained that the inequitable conduct rules provide a safety valve for such actions, not § 256. The Court also noted that at the time Egenera removed Schulter as an inventor, no one had argued that “logic to modify” was means-plus-function language, which it presumptively was not. Egenera’s preferred construction of that term was consistent with its assertion that Schulter was not an inventor. The omission of Schulter as inventor was thus an “error” within the scope of § 256.
The Federal Circuit next turned to whether Egenera was judicially estopped from relisting Schulter as an inventor. Applying the First Circuit’s New Hampshire factors, the Federal Circuit looked to whether Egenera’s positions were inconsistent, whether its first position was successfully accepted by the court, and whether Egenera would derive an unfair advantage if not estopped. The Federal Circuit found that the district court erred in finding Egenera’s changing inventorship positions inconsistent. The Court explained that inventorship is complex and can depend on claim construction. Egenera’s initial pre-construction assertion that Schulter was not an inventor was not inconsistent with its later request to relist him in response to the court’s means-plus-function construction, which Egenera had contested.
The Federal Circuit also disagreed with the district court as to whether Egenera’s position was “accepted.” The Court explained that “acceptance” is a term of art that must implicate a tribunal’s “truth-seeking function.” This was not the case here because the PTO simply confirmed that the proper paperwork and fees were in order for the inventorship change. However, the Court was careful to note that its holding on this issue was narrow; the Court did not hold that judicial estoppel cannot apply to statements made in substantive prosecution or other similar proceedings.
Finally, the Federal Circuit found that there was no unfair advantage to Egenera since Cisco’s IPR petition was denied without consideration of Egenera’s priority arguments. The Court noted that its ruling might have been different if Egenera had successfully sworn behind the art, as there would have been a potential for two judicial decisions predicated on opposite inventorship statuses. But here, even if there was an advantage for Egenera, Cisco failed to explain why such an advantage would be “unfair.” The Federal Circuit found that the district court legally erred as to all three New Hampshire factors and abused its discretion by applying judicial estoppel.
The Federal Circuit also addressed the district court’s construction of “logic to modify” as a means-plus-function element. While there is a presumption that claim terms omitting the word “means” do not invoke § 112(f), a challenger may rebut this presumption by simply showing that the claim term fails to recite sufficient structure. The Court found that “logic” was no more than a “black box recitation of structure” that was simply a generic substitute for “means.” Accordingly the presumption against applying § 112(f) was overcome.
Accordingly, the Federal Circuit affirmed the district court’s claim construction but vacated the invalidity judgment and cost award and remanded for further proceedings.