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Context Is Key in Claim Construction

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit reiterated that intrinsic evidence trumps extrinsic evidence in determining the meaning of claim terms. Sequoia Technology, LLC v. Dell, Inc. et al., Case Nos. 21-2263; -2264; -2265; -2266 (Fed. Cir. Apr. 12, 2023) (Stoll, Lourie, Dyk, JJ.)

Sequoia Technology owns a patent directed to data storage methods involving storing the same data across multiple physical disk drives to make up a virtual disk drive. Sequoia asserted the patent against several companies, all based on a product sold by Red Hat. During litigation, the parties disputed the construction of the terms “computer-readable recording medium,” “disk partition” and “logical volume.” Related to the latter two claim construction issues, the parties construed the term “used or not used” in the context of an extent’s usage in an “extent allocation table.”

The district court adopted Red Hat’s construction of “computer-readable recording medium” to include transitory media (i.e., signals or waves). The district court found no clear language in the specification that excluded transitory media and found Red Hat’s extrinsic evidence to be persuasive, “particularly given the lack of any substantive rebuttal from Sequoia’s expert.” For “disk partition” and “logical volume,” the district court agreed with Red Hat and construed “disk partition” to mean a “section of a disk that is a minimum unit of a logical volume” and “logical volume” to mean an “extensible union of more than one disk partition, the size of which is resized in disk partition units.” These constructions require that a logical volume is constructed by whole disk partitions, not subparts of disk partitions such as extents. The district court also construed the phrase “used or not used” in the limitation “extent allocation table for indicating whether each extent in the disk partition is used or not used,” adopting Red Hat’s construction that “used or not used” means that an extent “is or is not storing information.”

Following claim construction, the parties stipulated that under the district court’s claim construction of “logical volume” and “disk partition,” the accused products did not infringe the asserted claims. The parties also stipulated that under the district court’s construction of “computer-readable recording medium,” certain claims were subject matter ineligible under 35 U.S.C. § 101 as including transitory media. Sequoia appealed.

The Federal Circuit concluded that the district court erred in construing “computer-readable recording medium.” Starting with the claim language, the Court noted that the claim recited a “computer-readable recording medium storing instructions” and not simply a “computer-readable medium.” The Court reasoned that an ordinarily skilled artisan would understand transitory signals to be incompatible with the claimed invention because such fleeting signals would not persist for sufficient time to store instructions. Turning to the specification, the Court explained that although the specification did use open-ended “including” language to describe a computer-readable medium, the relevant portion of the specification defined computer-readable media as “including compact disc read only memory (CDROM), random access memory (RAM), floppy disk, hard disk, and magneto-optical disk,” all of which are non-transient [...]

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Allegations in Complaint Prevail over Statements in Exhibit

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit, prioritizing specific allegations in the complaint over disclosures in exhibits to the complaint, reversed and remanded a district court decision dismissing an original complaint, denying leave to file an amended complaint. Healthier Choices Management Corp. v. Philip Morris USA, Inc.; Philip Morris Products S.A., Case Nos. 22-1268; -1563 (Fed. Cir. Apr. 12, 2023) (Taranto, Cunningham, Stoll, JJ.)

Healthier Choices Management (HCM) filed a complaint for patent infringement against two Philip Morris defendants in the Northern District of Georgia. The infringement allegation involved a patent for a nicotine delivery device. The relevant language from the claims focused on a heating element in the device “initiating . . . a combustion reaction . . . [with] the combustion reaction at least partially combusting the combustible material.” In its complaint, HCM alleged that the heating in the accused product resulted in at least partial combustion.

Philip Morris defended the claim by arguing that its accused product aerosolized the nicotine at a low temperature and, therefore, never combusted the tobacco. Philip Morris filed a motion under Fed. R. Civ. Pro. 12(b)(6) against HCM arguing that an exhibit to the complaint “conclusively demonstrated” that the accused product did not initiate a combustion reaction. The district court agreed and granted the motion to dismiss, prompting HCM to file a motion for leave to amend its complaint to more definitively allege infringement. The district court denied the motion and granted Philip Morris’s subsequent motion for attorneys’ fees under 35 U.S.C. § 285. HCM appealed.

Since the issues raised were not unique to patent law, the Federal Circuit addressed HCM’s appeal under the law of the relevant regional circuit, the Eleventh Circuit. The Court noted that in the Eleventh Circuit, exhibits attached to a complaint can be considered and the exhibit controls in the event of any conflict with allegations pertaining to the exhibit. However, when an exhibit is alleged to be factually false in some way and the allegations in a complaint are specific and well pleaded, then the allegations in the complaint control. The exhibit regarding the accused product in this case was alleged to be incorrect, as far as it stated that there was no combustion initiated by the “heat-not-burn” method described in the exhibit. HCM contended that combustion occurred despite the assertions in that document. Relying on several cases disavowing the truth of the exhibit, the Federal Circuit found Eleventh Circuit law to be both clear and in alignment with HCM. The Court concluded that in light of the detailed allegations as to the basis underlying HCM’s disagreement with the facts asserted in the exhibit, the complaint should not have been dismissed based on the exhibit.

The Federal Circuit next turned to HCM’s amended complaint. Noting that the amended complaint “superseded” the earlier complaint, the Court found that the amended complaint removed the offending exhibit and any references to the offending exhibit and included a declaration of a technical expert to further support HCM’s allegations. [...]

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PTO to Host Listening Session on Role of AI in Innovation

by | Apr 13, 2023 |

As previously reported, the US Patent & Trademark Office (PTO) published a Request for Comments Regarding Artificial Intelligence and Inventorship, seeking input from stakeholders on inventorship issues that may arise as artificial intelligence (AI) and emerging technologies play a greater role in the innovation process. In the wake of the request, the PTO published a Notice announcing that it is hosting a listening session to address the “current state of AI technologies and inventorship issues,” including whether AI should qualify as an inventor and whether the PTO should expand its current guidance.

The listening session will be held at the PTO’s headquarters in Alexandria, Virginia, on April 25, 2023, from 10:30 am to 2:45 pm EDT. Anyone seeking to speak at the listening session must register by 5:00 pm EDT on April 20, 2023. Anyone seeking to attend, either virtually or in person, but not speak at the event must register by April 24, 2023.

Registration information is available here.



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It’s All in the Grammar: “A” Still Means “One or More,” but Single Component Must Perform All Claimed Functions

by | Apr 13, 2023 |

The US Court of Appeals for the Federal Circuit affirmed a jury’s noninfringement verdict, finding that the district court correctly interpreted the article “a” and antecedent “said” in the asserted claims to require that a single microprocessor be capable of performing every one of the recited microprocessor functions. Salazar v. AT&T Mobility LLC et al., Case No. 21-2320; -2376 (Fed. Cir. Apr. 5, 2023) (Stoll, Schall, Stark, JJ.)

Joe Salazar owns a patent directed to technology for wireless and wired communication, including command, control and sensing systems for two-way communications. In 2016, Salazar sued HTC, alleging that HTC infringed the patent by selling certain phones that allegedly embodied the asserted claims. A jury returned a verdict finding that HTC did not infringe. In 2019, Salazar sued AT&T, Sprint, T-Mobile and Verizon (collectively, the Telecom Providers) asserting the same patent against the same HTC products. HTC intervened, arguing that the accused products did not infringe. The district court severed HTC and stayed that portion of the case.

At claim construction, the parties disputed limitations that required “a microprocessor for generating, . . . said microprocessor creating . . . , a plurality of parameter sets retrieved by said microprocessor . . . , [and] said microprocessor generating.” The essence of the dispute was “whether the claims require one microprocessor that is capable of performing the recited ‘generating,’ ‘creating,’ ‘retrieving,’ and ‘generating’ functions.” The district court answered the question in the affirmative and construed the term to mean “one or more microprocessors, at least one of which is configured to perform the generating, creating, retrieving, and generating functions.” The district court further reasoned that “at least one microprocessor must satisfy all the functional (and relational) limitations recited for ‘said microprocessor.’” At trial, the jury found that the accused products did not infringe and that the patent was not invalid. Salazar appealed, and the Telecom Providers cross-appealed.

Salazar argued that the district court erred in construing “a” microprocessor and “said” microprocessor and that the court should have interpreted the claim terms to require one or more microprocessors, any one of which may be capable of performing the “generating,” “creating” and “retrieving” functions recited in the claims. Put another way, in Salazar’s view, the correct claim construction would encompass one microprocessor capable of performing one claimed function and another microprocessor capable of performing a different claimed function, even if no single microprocessor could perform all of the recited functions.

The Federal Circuit rejected Salazar’s argument. Generally, the indefinite article “a” means “one or more” in open-ended claims containing the transitional phrase “comprising.” An exception to the general rule arises where the language of the claims themselves, the specification or the prosecution history necessitates a departure from the rule. The Court found that while the claim term “a microprocessor” does not require that there be only one microprocessor, the subsequent limitations referring to “said microprocessor” require that at least one microprocessor be capable of performing each of the claimed functions. The Court further explained that [...]

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Press Pause: De Novo Review Not Always Required for Obviousness

by | Apr 6, 2023 |

A divided panel of the US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s finding that certain challenged claims were nonobvious after applying the substantial evidence test to resolve a dispute regarding the scope and content of the prior art that the Board had resolved as a purely factual question. Roku, Inc. v. Universal Elec’s, Inc., Case No. 2022-1058 (Fed. Cir. Mar. 31, 2023) (Reyna, Stoll, JJ.) (Newman, J., dissenting). In her dissent, Judge Newman stated that even though the issue on appeal related to an underlying factual finding, the ultimate issue of obviousness remains a question of law that requires de novo review.

Universal Electronics owns a patent directed to a universal control engine (within a universal remote) that allows for communication between a “controlling device” (i.e., remote) and an “intended target appliance” (e.g., TV, DVD player). The universal control engine uses different communication methods “according to the optimal method of communication for each target appliance and command,” such as Consumer Electronic Control (CEC) commands or infrared (IR) commands.

The Federal Circuit majority first noted that the disposition of the appeal rested on a single, narrow factual issue: whether the prior art’s list of command codes that are formatted to be transmitted via different communication methods is the same as the list of different communication methods recited in the challenged claims.

The panel majority began by recognizing two relevant standards of review to be used when resolving an obviousness inquiry. First, the Federal Circuit noted that it reviews “underlying factual findings” for “substantial evidence.” Substantial evidence review considers whether a “reasonable fact finder could have arrived at the [Board’s] decision.” The Court specified that the underlying findings of fact relevant to an obviousness inquiry include the Graham factors, which comprise “the scope and content of the prior art,” among others. Next, the Court acknowledged that “[t]he ultimate question of obviousness is a legal question that it reviews de novo.”

The panel majority noted that both Roku and Universal persuasively argued their positions related to the scope and content of the prior art, that “the factual dispute . . . was highly contested and closely decided,” and that substantial evidence supported the Board’s finding. On that basis, the Federal Circuit affirmed the Board’s holding that Roku failed to show that the challenged claims were obvious. The Court declined to perform de novo review of the ultimate question of obviousness, reasoning that because Roku only raised factual questions on appeal (i.e., whether the prior art taught a particular claim element), the Court only needed to consider whether the Board’s determination on that issue was supported by substantial evidence.

In her dissent, Judge Newman disagreed with the majority decision to abstain from a de novo review of obviousness notwithstanding the majority’s conclusion that the underlying findings of fact were supported by substantial evidence. Judge Newman argued that both forms of review are appropriate—and required—in cases such as this. In her de novo review, Judge Newman concluded [...]

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No Smoking Gun Here: Soliciting Input Sufficient to Satisfy Commission’s Statutory Obligation

by | Apr 6, 2023 |

Addressing a decision by the US International Trade Commission finding a violation of Section 337, the US Court of Appeals for the Federal Circuit agreed with the Commission on a slew of issues, including its determination that soliciting comments from a sister agency regarding the products at issue was sufficient consultation to satisfy the Commission’s statutory obligation to consult. Philip Morris Products S.A. v. Int’l Trade Comm’n, Case No. 22-1227 (Fed. Cir. Mar. 31, 2023) (Prost, Reyna, Stoll, JJ.)

R.J. Reynolds Tobacco Company filed a complaint at the Commission asserting a Section 337 violation by Philip Morris based on alleged infringement of three patents directed to tobacco heating products. During the course of the investigation, the administrative law judge (ALJ) granted summary determination in favor of R.J. Reynolds on the economic prong of the domestic industry requirement as to two of the asserted patents. The ALJ issued his initial determination finding that Philip Morris had violated Section 337 with respect to two of the asserted patents. On review, the Commission affirmed the ALJ’s decision with minor modifications and issued a limited exclusion order and a cease-and-desist order. Philip Morris appealed.

Philip Morris raised numerous issues on appeal. It claimed, for the first time, that the Commission erred in failing to consult with the US Food & Drug Administration (FDA), the US Department of Health & Human Services (HHS) agency exclusively tasked with regulating the tobacco products at issue. The Federal Circuit agreed with the Commission that Philip Morris forfeited this issue because, notwithstanding several rounds of briefing on the public interest factor, it never raised the issue before the ALJ nor the Commission until a motion filed after entry of the remedial orders. The Court also rejected Philips Morris’ consultation argument on the merits, finding that the Commission’s request for comments sent to the FDA was sufficient to meet the statutorily required “consult with[] and seek advice and information from” HHS, even though the FDA failed to respond.

Philip Morris next argued that the Commission abused its discretion by not concluding that the public interest in reduced-risk tobacco products at issue should have barred relief. But the Federal Circuit held that the Commission’s public interest finding had a sufficient basis in the record in the form of expert testimony, scientific articles and FDA documents regarding the products at issue to support its findings regarding the availability of alternative non-tobacco therapies and that the tobacco products were still potentially harmful.

Philip Morris also argued that the Commission erred by finding a domestic industry based on R.J. Reynolds’s competing products that had not yet received FDA approval. The Federal Circuit rejected this argument, explaining that those competing products were being sold at the time of the complaint and that the recently approved law imposing FDA regulation on those products was still in its grace period.

Finally, the Federal Circuit rejected Philip Morris’s various patent-related arguments, finding that the Commission’s determinations were based on substantial evidence.



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UK High Court Issues Landmark Global FRAND Rate Decision

by | Apr 6, 2023 | ,

The UK High Court of Justice issued its long-anticipated decision establishing a global Fair, Reasonable and Non-Discriminatory (FRAND) royalty rate for a patent portfolio essential to 3G, 4G and 5G cellular technologies. InterDigital Tech. Corp. et al. v. Lenovo Group Limited, Case No. HP-2019-000032, [2023] EWHC 529 (Pat) (Mar. 16, 2023) (Mellor, J.)

InterDigital owns a portfolio of standard essential patents (SEPs) that have been declared essential to the European Telecommunications Standard Institute’s (ETSI) 3G, 4G and 5G cellular technology standards. InterDigital sought to license the SEPs to Lenovo, which implements these cellular standards in its mobile phones, tablets and PCs. After the parties could not agree on the terms under which Lenovo should take a license, InterDigital filed a lawsuit. The High Court held several technical trials in which it found that Lenovo infringed certain of the patents.

Based on the result of the technical trials, the High Court determined that InterDigital had established the right to a FRAND determination of its portfolio. The parties presented two issues regarding FRAND. The first issue was whether the InterDigital license offer was FRAND, and if not, what terms would be FRAND for a license to Lenovo of the InterDigital patent portfolio. The second issue was whether InterDigital was entitled to an injunction based on the parties’ negotiation conduct, including whether InterDigital acted as a willing licensor and whether Lenovo acted as a willing licensee.

The High Court concluded that Lenovo should pay InterDigital a FRAND rate of $0.175 per cellular unit for a worldwide license to InterDigital’s portfolio. The $0.175 rate yields a lump sum payment of $138.7 million for sales from 2007 to the end of 2023. The Court’s FRAND rate determination was closer to Lenovo’s offered rate of $0.16/unit than to InterDigital’s demand of $0.498/unit.

In determining the appropriate FRAND rate, the High Court analyzed whether InterDigital’s proposed rate was comparable to the rate in InterDigital’s other license agreements for SEPs. InterDigital argued that its license offer to Lenovo was consistent with “program rates” under which it had already licensed its SEPs to other companies. The Court, however, rejected InterDigital’s program rates as comparable because the other licenses included volume discounts ranging from 60% to 80% of InterDigital’s program rate. InterDigital argued that Lenovo was not entitled to the same type of steep volume discount and, therefore, those licenses with discounts applied were not comparable licenses for Lenovo. The Court disagreed, finding that the volume discounts applied to those licenses “do not have any economic or other justification” and that their primary purpose was to “shore up InterDigital’s chosen program rates.” The Court further observed that the primary effect of the volume discount in the other licenses was to discriminate against smaller licensees, which is exactly what FRAND is supposed to avoid.

InterDigital tried to bolster its argument that its program rate was FRAND by applying a top-down cross-check. The top-down approach starts with the cumulative value of all royalties that should be paid on FRAND [...]

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PTO Reduces Small and Micro-Entity Fees

by | Mar 30, 2023 |

The US Patent & Trademark Office (PTO) issued a final rule reducing certain patent fees for small and micro-entities on March 22, 2023. The Federal Register notice can be found here. Small entity filing fee discounts are increased to 60% (from 50%) and micro-entity filing fee discounts are increased to 80% (from 75%). The fee reductions apply to PTO fees for filing, searching, examining, issuing, appealing and maintaining patent applications and patents.

The fee reductions were mandated by the Consolidated Appropriations Act, 2023 (the Act), which included the Unleashing American Innovators Act of 2022. The Act was signed into law by President Biden on December 29, 2022. The new PTO fee schedule can be found here.



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No One Likes a Sore Winner: IPR Prevailing Party Can’t Appeal

by | Mar 23, 2023 |

Reaffirming precedent, the US Court of Appeals for the Federal Circuit reiterated the rule that the prevailing party in an inter partes review (IPR) cannot appeal a Patent Trial & Appeal Board decision. Termax Co. v. Illinois Tool Works, Inc., Case Nos. 23-1252; -1254 (Fed. Cir. Mar. 8, 2023) (Dyk, Reyna, Chen, JJ.)

Illinois Tool Works (ITW) asserted that Termax had infringed a patent directed to an automobile fastener. Termax challenged the asserted patent by filing a petition for IPR. The petition was granted, and ultimately the Board agreed with Termax that all the challenged claims of ITW were unpatentable. Both parties appealed.

ITW moved to voluntarily dismiss its own appeal and to dismiss Termax’s cross-appeal. Termax opposed, arguing that the Board erred in its construction of certain claim limitations that have also been incorporated into a new ITW patent.

The Federal Circuit dismissed both appeals. Citing what it called a “familiar rule,” the Court stated that the winner in a lower court or other tribunal cannot ordinarily seek relief in the appellate court. The Court was not persuaded by Termax’s argument that the Board erred in its construction of certain claim limitations, noting that Termax sought to appeal the constructions in the hopes that a Federal Circuit decision in its favor would “collaterally estop Illinois Tool Works from asserting those newly issued claims.” However, the Court refused to hear the appeal prematurely, stating that if ITW asserts the claims of its new patent against Termax in the future, Termax can address the issue at that time.

Practice Note: While an IPR can be a powerful tool for accused infringers, it is not without future risks.



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Prior Art Coherency and Cache Incoherency: “Known-Technique” Rationale for Motivation to Combine

by | Mar 23, 2023 |

The US Court of Appeals for the Federal Circuit, addressing the issue of whether certain factual and legal conclusions relating to obviousness were supported by substantial evidence, held that the Patent Trial & Appeal Board improperly rejected evidence of “known-technique” rationale to provide a motivation to combine. Intel Corp. v. PACT XPP Schweiz AG, Case No. 22-1037 (Fed. Cir. Mar. 13, 2023) (Newman, Prost, Hughes, JJ.)

PACT owns a patent that “relates to multiprocessor systems and how processors in those systems access data.” The claimed multiprocessor system addressed cache incoherency, a problem associated with the use of multiple cache memories to store data, particularly local copies of the same data stored on multiple processors. Cache incoherency (i.e., inconsistencies among different cache processors) “may arise if one processor changes its local copy of the data and that change isn’t propagated to the other copies of that data.”

Intel petitioned for inter partes review of claims 4 and 5 of the patent, relying on two prior art references, Kabemoto and Bauman. Kabemoto and Bauman both address the problem of cache incoherency. As the Federal Circuit explained, Kabemoto maintains cache coherency “by ‘snooping’ along a shared ‘bus,’” while Bauman “us[es] a global, segmented secondary cache.”

The Board upheld the patentability of the challenged claims, concluding that “Intel failed to prove the obviousness of each limitation of [independent] claim 4,” from which claim 5 depended. Intel had contended that a person of ordinary skill in the art would combine Kabemoto and Bauman to teach all limitations in claim 4 by “replac[ing] Kabemoto’s secondary caches” with “Bauman’s segmented global [secondary cache],” which is a separate cache. PACT did not dispute that the combination of Kabemoto and Bauman taught each limitation of claim 4 but argued that Intel failed to demonstrate a motivation to combine Kabemoto and Bauman.

The Board nevertheless found that Intel failed to demonstrate that the prior art disclosed the segment-to-segment limitation and concluded that Intel failed to show that a person of ordinary skill in the art would have been motivated to combine the teachings of Kabemoto and Bauman. Intel appealed.

The Federal Circuit first addressed Intel’s contention “that substantial evidence d[id] not support the Board’s determination that the prior art fails to disclose the segment-by-segment limitation” of claim 4. The Court found that “Bauman’s Figure 6 teaches—if not plainly illustrates—the segment-to-segment limitation of the claims interconnect system” and reversed the Board’s contrary conclusion.

Next, the Federal Circuit addressed Intel’s contention that the Board’s determination that there was no motivation to combine Kabemoto and Bauman was not supported by substantial evidence. On this issue, the Court reasoned that under KSR, it was “enough for Intel to show that there was a known problem of cache incoherency in the art, that Bauman’s secondary cache helped address that issue, and that combining the teachings of Kabemoto and Bauman wasn’t beyond the skill of an ordinary artisan.” As the Court put it, “[n]othing more is required to show a motivation to combine under KSR.”

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