SoCal IP Law Group

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Category Archives: Unenforceability

SoCal IP Institute :: December 10, 2012 :: Administrative Procedures Act and Claim Construction

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, December 10, 2012. Brief synopses are presented below.

Pregis v. Kappos, Case No. 2010-1492, -1532 (Fed. Cir. December 6, 2012) (attached).

In 2009, Pregis sued Free-Flow for declaratory judgment of invalidity and non-infringement of Free-Flow’s Patent Nos. 7,325,377, 7,526,904 and 7,536,837.  These patents relate to air-filled packaging technology used for shipping boxes.  In the same lawsuit, Pregis also sued the USPTO alleging that the  issuance of the patents by the PTO was arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.  Pregis sought to hold unlawful and set aside the actions of the PTO in issuing two of the patents at issue. Pregis argued that under the Administrative Procedures Act (APA), the issuance of the patents should be nullified by the court.

The district court for the Eastern District of Virginia rejected Pregis’ claims for lack of subject matter jurisdiction, holding that “the Patent Act and its own scheme clearly expresses Congress’ intent to preclude putative third party infringers from seeking judicial review” under the APA of PTO decisions to issue patents.

On appeal, the Federal Circuit affirmed the dismissal. The Court held that a potential infringer cannot sue the PTO under the APA to attack the validity of an issued patent. The Court stated that judicial review of PTO decisions to issue patents may be precluded when Congressional intent to do so is “fairly discernible in the statutory scheme.”

The APA authorizes judicial review only where the agency action is “made reviewable by statute” or where there is a “final agency action for which there is no other adequate remedy in a court.”  The Court stated that third parties have an “adequate remedy in a court” for challenging an issued patent, such as inter partes reexamination or suits in court.

John Deere v. Bush Hog, Case No. 2011-1629, -1630, -1631 (Fed. Cir. December 4, 2012) (attached).

John Deere sued Bush Hog for infringing its U.S. Patent No. 6,052,980, which is toward an “easy clean dual wall deck” for rotary cutters.   A rotary cutter is a device pulled behind a tractor and used to mow wide swaths of ground.

One of the claim limitations in the patent was for upper deck walls that sloped downwardly “into engagement with, and being secured to” the lower deck wall.   The district court ruled that the “into engagement with” limitation required direct contact and since in Bush Hog’s accused device the upper deck wall does not directly contact the lower deck wall, there was no literal infringement of the claim.

On appeal, the Federal Circuit reversed the district court’s decision as erroneously construing the term “into engagement with” to require direct contact.  The Court looked to the specification of the patent which illustrated that “engagement” included indirect contact between the upper and lower deck walls. For example, the patent discloses a filler plate (blue) that provides the engagement between the upper deck (yellow) and the lower deck (red).

rotary cutter

The Federal Circuit also reversed the district court’s determination that John Deere could not assert the doctrine of equivalents.  The district court had held that because they construed “contact” to mean “direct contact,” allowing no direct contact under the doctrine of equivalents would vitiate the court’s construction.  In reversing, the Federal Circuit stated that a reasonable jury could find that a small spacer connecting the upper and lower deck walls represents an insubstantial difference from direct contact.  Thus, the trial court had erred by invoking the vitiation exclusion in this context.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, December 10, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

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SoCal IP Institute :: November 26, 2012 :: Overcoming Prima Facie Obviousness and Standing

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, November 26, 2012. Brief synopses are presented below.

Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., Case No. 2011-1555 (Fed. Cir. November 15, 2012) (attached).

This case involves a patent for offshore drilling technology that allows a single derrick on a rig to have parallel drilling operations for faster and cheaper oil well drilling.  In a previous case related to this litigation, the Federal Circuit had overturned the district court’s summary judgment finding of obviousness, noting that although Maersk showed a prima facie case of obviousness, the summary judgment was improper in view of Transocean’s significant objective evidence of nonobviousness (i.e., secondary considerations).

On remand, the district court allowed the jury to review the prior art references for the purposes of determining obviousness and the strength of the prima facie case of obviousness.  The jury verdict was one of patent validity and awarded $15 million to Transocean.  The district court then granted Maersk’s motion for JMOL notwithstanding the jury verdict.

The Federal Circuit stated in this case that it was error to allow the jury to reconsider whether the references made the patent at issue obvious because that issue was already decided in the first case.  The Court also held that there was no error in allowing the jury to weigh the strength of the prima facie case together against the objective evidence of nonobviousness.  The court 1) reinstated the jury verdict upholding the patent as supported by substantial evidence, 2) held that substantial evidence supported the jury’s finding of enablement, and 3) reinstated the jury’s award of $15 million as a reasonable royalty verdict that was supported by substantial evidence.

Ritz Camera & Image, LLC v. Sandisk Corp., Case No. 2012-1183 (Fed. Cir. November 20, 2012) (attached).

SanDisk owns several patents relating to NAND flash memory.  Ritz, a retailer that sells flash memory products, filed suit alleging that SanDisk had violated antitrust laws.  Ritz contended that SanDisk had fraudulently procured two patents relating to its flash memory products by failing to disclose known prior art and making affirmative misrepresentations to the PTO.  SanDisk moved to dismiss the case on the ground that Ritz lacked standing, arguing that Ritz should not be allowed to bring a declaratory judgment action challenging the validity or enforceability of the patents when Ritz has not been sued for infringement.

The district court denied SanDisk’s motion to dismiss stating that direct purchasers are generally permitted to bring antitrust actions and Ritz’s status as a direct purchaser gives it standing to pursue its antitrust claims even if it could not have sought a declaratory judgment of patent invalidity or unenforceability. The Federal Circuit affirmed saying that antitrust standing is not limited by the rules of patent standing.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 26, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: November 19, 2012 :: Inventorship and Best Mode

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, November 19, 2012. Brief synopses are presented below.

Hor v. Chu, Case No. 2011-1540 (Fed. Cir. November 14, 2012) (attached).

The defendant, Paul Chu, is a professor at the University of Houston.  He is listed as the sole inventor of U.S. Patent Nos. 7,056,866 and 7,709,418, which relate to a super-conducting material that does not require liquid nitrogen coolant.  The patents have earned $680,000 for the university, half of which was given to Chu.  Chu distributed about $140,000 to his lab assistants, including Hor and Meng.  Nevertheless, Hor and Meng brought suit claiming that they should also be listed as co-inventors.

The district court dismissed the case as barred by laches saying that the plaintiffs should have known for a long time that they were not named as inventors on the patent application. The district court also held that the suit was barred by equitable estoppel.

On appeal, the Federal Circuit vacated the lower court’s decision on laches, holding that the period for laches for an inventorship action does not begin to run until the patent actually issues, even if “the omitted inventors knew or should have known prior to patent issuance that their names were omitted.”  The Federal Circuit also vacated the equitable estoppel holding because it had been raised sua sponte by the lower court and in light of defendant’s failure to assert the defense against either plaintiffs.

Joy Mining Machinery v. Cincinnati Mine Machinery, Case No. 2012-1153 (Fed. Cir. November 8, 2012) (nonprecedential) (attached).

35 U.S.C. §112, first paragraph, requires that the best mode of carrying out the invention be disclosed.

Patent No. 6,662,932 is owned by Joy Mining Machinery and is directed to an apparatus for use in mining.  The inventors had determined that the best mechanism for its claimed drive-pin retainer was a press fitting. The patent does not identify a press fitting in the specification and instead suggests welding.  However, a press fitting mechanism was already known to those of skill in the art as a way to construct a drive-pin retainer.

The district court invalidated the asserted claim for failing to disclose the best mode.  The Federal Circuit reversed, holding that the best mode requirement does not require actual disclosure of the best mode, but rather only adequate disclosure to enable one of skill in the art to practice the best mode without undue experimentation.  The defendant, Cincinnati Mine Machinery, had failed to show any clear and convincing evidence upon which a reasonable jury could rely to find that the omission of press fitting from the ‘932 patent “concealed” its use as a drive-pin retaining means from the public.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, November 19, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: October 1, 2012 :: Inequitable Conduct and Judgment as a Matter of Law

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, October 1, 2012. Brief synopses are presented below.

Outside the Box Innovations, LLC. v. Travel Caddy, Inc., Case No. 2009-1171 (Fed. Cir. September 21, 2012) (attached).

Travel Caddy brought suit against Outside the Box Innovations claiming infringement of two of their patents, U.S. Pat. No. 6,823,992 and its continuation, U.S. Pat. No. 6,991,104 both directed to tool carrying cases.  The district court held that the patents were unenforceable based on inequitable conduct during the prosecution of the patents.  Travel Caddy had failed to inform the patent examiner of the existence of litigation in the parent patent prior to the issuance of the ‘104 patent.  Travel Caddy also incorrectly claimed small entity status.  Travel Caddy clearly met the small entity status requirements in having fewer than 500 employees, but Travel Caddy had a commercial arrangement with its distributor and seller, The Rooster Group, who was a large entity of over 500 employees.

On appeal, the Federal Circuit reversed the decision of unenforceability for incorrectly claiming small entity status.  The Court reversed not on the ground of materiality, but on the basis of a lack of intent.  The Court held that  the requirements of Therasense were not met because “there was no clear and convincing evidence of intent to deceive the PTO.”

Regarding the holding of unenforceability for not disclosing the litigation in the parent patent, the Federal Circuit reversed the district court’s pre-Therasense finding of both materiality and intent. On materiality, the Federal Circuit ruled that the failure to disclose the existence of a litigation when there was no citation of prior art, nor any pleading of invalidity or unpatentability in the complaint of the litigation as it existed during pendency of the continuation application, did not constitute clear and convincing evidence of materiality.  On intent, the Court held that there is no evidence that the withholding of the information concerning the litigation could have deceived the examiner and no suggestion of deliberate action to withhold it in order to deceive the examiner.

Mirror Worlds, LLC. v. Apple, Inc., Case No. 2011-1392 (Fed. Cir. September 4, 2012) (attached).

Mirror Worlds owns three patents at issue in this case: US Patents 6,006,227; US Patent 6,638,313; and US Patent 6,725,427.   Mirror Worlds brought a patent infringement action in the District Court for the Eastern District of Texas against Apple claiming that Apple’s Spotlight, Time Machine and Cover Flow features in their Mac operating system infringe the patents.  Cover Flow lets users scroll through album cover art when browsing for music in their iTunes libraries. The feature also works for documents, pictures and other material stored in a computer. Spotlight searches the computer’s hard drive while Time Machine automatically saves copies of files.  Mirror Worlds asserted claims of both direct infringement and induced infringement.

The district court granted Apple’s oral motion for judgment as a matter of law that Apple did not induce infringement of any of the patents.  The district court stated that Mirror Worlds failed to introduce substantial evidence to show that defendant itself induced its customers to infringe the disputed patent’s method claims. The issue of direct infringement by Apple was submitted to the jury, wherein the jury found Apple liable for willfully infringing all three asserted patents and awarded $208.5 million in damages. However, the district court granted Apple’s motion for judgment as a matter of law and vacated the jury verdict.

The Federal Circuit affirmed, concluding that Mirror Worlds failed to present substantial evidence of direct infringement and damages.  The district court had concluded that Mirror Worlds did not establish infringement under the doctrine of equivalents because Mirror Worlds did not provide substantial evidence to show that the accused products have an equivalent for the “cursor or pointer” limitation.  The Federal Circuit also agreed that the evidence presented at trial was not sufficient to support the damages awarded by the jury.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, October 1, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: August 20, 2012 :: Fair Use and Enablement

We will be discussing one Federal Circuit case and one Ninth Circuit case during our weekly SoCal IP Institute meeting on Monday, August 20, 2012. Brief synopses are presented below.

Monge v. Maya Magazines, Inc., Case Nos. 10-56710 and 11-55483 (9th Cir. August 14, 2012) (attached).

Noelia Monge is a pop singer and model in Latin America.  In 2007, she married her manager and music producer Jorge Reynoso in a private, unpublicized wedding in Las Vegas.  Maya Magazines, Inc. and Maya Publishing Group, LLC obtained and publishing previously unpublished photos of the secret wedding in “TVNotas,” a Spanish-language celebrity gossip magazine. The photos were allegedly stolen by a third party.  Monge sued Maya claiming copyright infringement. The district court granted Maya’s summary judgment on the ground that publication of the images was fair use under the Copyright Act of 1976.

On appeal, the Ninth Circuit Court of Appeals reversed and remanded, holding that the balancing of factors must be weighed against defendants’ burden to establish fair use.  The Ninth Circuit determined that not a single factor weighed in favor of the defendants and the defendants’ affirmative defense of fair use failed as a matter of law.

Magsil Corp. v. Hitachi Global Storage Tech., Inc., Case No. 2011-1221 (Fed. Cir. August 14, 2012) (attached).

MIT owns Patent No 5,629,922, which covers read-write sensors for computer hard disk storage systems that use a quantum mechanical effect to pass electric current from one electrode to another.  MIT and the patent’s exclusive licensee Magsil sued Hitachi et al. for infringement of the ’922 patent.  The Federal Circuit upheld the district court’s grant of summary judgment in favor of the defendants, finding the disputed claims invalid for lack of enablement.

The patent claims a device that has a change in resistance of “at least 10%.”  The district court found that the asserted claim coverage includes “resistance changes beyond 120% and up to infinity.”    The defendant was able to prove that the change in resistance levels could not have been achieved at the time of the patent filing without undue experimentation.  The field of art had advanced greatly after the filing of the patent application. The Federal Circuit stated that the specification at the time of filing must teach one of ordinary skill in the art to fully perform the method across the entire scope.  Accordingly, the district court’s finding of invalidity for lack of enablement was upheld.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, August 20, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: May 14, 2012 :: Public Use or Sale and Recapture Rule

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, May 14, 2012. Brief synopses are presented below.

Leader Tech., Inc. v. Facebook, Inc., Case No. 2011-1366 (Fed. Cir. May 8, 2012) (attached).

This patent infringement case relates to software that allows users on a network to communicate and collaborate through “boards” that are accessible through an Internet browser.  In 2008, Leader sued Facebook alleging infringement of their ’761 patent.  The jury in the district court trial found that the ’761 patent was not entitled to the priority date of the provisional application.  The jury also found that the claims of the ’761 patent were invalid for being in public use and on sale more than one year prior to the date the patent application was filed.

On appeal, Leader argued that Facebook failed to offer clear and convincing evidence that the version of Leader’s software offered for sale or used prior to December 10, 2002 fell within the scope of the asserted claims.  The Federal Circuit held that there was legally sufficient evidence to support the jury’s verdict that the version of the plaintiff’s product demonstrated and offered for sale prior to the critical date was an embodiment of the asserted claims.  The court pointed to interrogatory responses and the deposition of Leader’s founder in which Leader admitted that offers for sale of a software product fell within the scope of the asserted claims.

In re Youman, Case No. 2011-1136 (Fed. Cir. May 8, 2012) (attached).

An examiner’s rejection of claims in a reissue patent application for improperly recapturing subject matter surrendered during prosecution of the parent was affirmed by the Board of Patent Appeals and Interferences.

The Board applied the three-step recapture rule analysis.  Under step one, the Board found that the reissue claim was broader than the issued claim, but narrower than the original claim.  Under step two, the Board determined that the broadening related to the surrendered subject matter.  For step three, the Board concluded that other narrowing limitations in the reissue claims were not overlooked during the prosecution and therefore could not avoid the recapture rule.

The Federal Circuit vacated the Board’s decision stating that the Board did not properly conduct step three of the recapture rule analysis.  The Court stated step three as follows: if the patentee modified the added limitation such that it is broader than the patented claim yet still materially narrows relative to the original claim the recapture rule does not bar reissue.  The case was remanded to determine whether the applicant avoided the recapture rule bar on reissue by materially narrowing the claims relative to the original claims.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, May 14, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.

SoCal IP Institute :: August 29, 2011 :: Evidence of Direct Infringement and Reading Out Claim Limitations

We will be discussing one district court case regarding the sufficiency of evidence of direct patent infringement and one Federal Circuit case involving claim construction in our weekly SoCal IP Institute meeting on Monday, August 29, 2011.  Brief synopses are presented below.

Mirror Worlds, LLC v. Apple, Inc., Case No. 06:08 CV 88 (E.D. Tex. April 4, 2011) (attached).  Mirror Worlds is the owner of three patents that collectively cover a method and system of presenting files in a date-ordered “stream.”  Mirror Worlds sued Apple alleging that Apple’s Time Machine and Coverflow capabilities infringed these three patents.  Apple successfully removed the method claims from consideration under the doctrine of equivalents through judgment as a matter of law.  At trial, the jury found that Apple practiced some of the method and system claims and granted monetary damages in the amount of $208.5 million for each patent.

After the verdict, Apple then renewed its motion for judgment as a matter of law of non-infringement.  Apple asserted that Mirror Worlds had failed to provide any evidence of direct infringement of the method claims.  Mirror Worlds countered that they had shown video of Apple’s CEO Steve Jobs demonstrating the use of Coverflow and Time Machine and that it was disingenuous of Apple to assert that functionality built-into every Apple computer was not being used by its customers.  The court agreed with Apple that Mirror Worlds had failed to provide any evidence of direct infringement by consumers and that it had presented, at best, incomplete evidence of the method being practiced by Apple.  Accordingly, it granted judgment as a matter of law for Apple as to the method claims.

As to the system claims, Apple’s contention was very similar.  Namely, that Mirror Worlds had failed to provide evidence showing that each and every element of the system claims were found in the Apple software.  At trial, Mirror Worlds was limited to a doctrine of equivalents argument because the claims did not read on the products identically.  Mirror Worlds acknowledged that its expert failed to provide testimony on the “function, way, result test,” but asserted that the expert’s testimony of “insubstantial differences” was sufficient.  These “insubstantial differences” were not described.  The court agreed with Apple that the expert’s testimony was insufficient to establish infringement under the doctrine of equivalents and granted Apples JMOL motion.

The court then granted Apple’s JMOL motion of no willfulness because none of the claims were infringed and granted Apple’s JMOL motion to vacate the jury’s damages award.  The court denied as moot Apple’s request for a new trial and denied Apple’s motions for invalidity and inequitable conduct findings.

August Tech. Corp. v. Camtek, Ltd., 2010-1458 (Fed. Cir. August 22, 2011) (attached).  Camtek appealed the district court’s final judgment that it infringed U.S. Pat. No. 6,826,298, that the patent was not invalid, that it was not unenforceable, and the award of lost profits and a permanent injunction. Camtek primarily argued that a “plurality of wafers” claim limitation was improperly construed to mean, “a thin slice of semiconductor material with circuitry thereon that is ready for electrical testing, or any part thereof. However, a ‘wafer’ is not the same as a ‘die.’  A wafer is made up of multiple die[s].”  Camtek argued that this construction effectively read dies out of the limitation and, thereby, made the term “wafer” too broad.  The Federal Circuit agreed that the way the claim was drafted, requiring multiple wafers, did not require the court to construe the term “wafer” to encompass “or any part thereof” in its construction of the term.  The court maintained the district court’s construction of the  limitation “based on a velocity of the wafer” over Camtek’s protests.  Thereafter, the Federal Circuit vacated the infringement holding, damages and injunction because they were based on an incorrect claim construction. However, all other holdings were affirmed.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, August 29, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.

SoCal IP Institute :: Monday, September 20, 2010

Please join us for the SoCal IP Institute meeting, Monday, September 20 at Noon. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to  Amanda Jones by 9 am Monday.

We will be discussing the following cases:

Tri-Star Electronics International, Inc. v. Preci-Dip Durtal SA, (Fed. Cir. Sept. 9, 2010) (case is attached)

In a suit for infringement of a patent, the defendant asserted that the plaintiff lacked standing to bring suit because they were not the assignee of the asserted patent.  The assignment of the continuation-in-part application that resulted in the asserted patent was mistakenly assigned to an Ohio corporation that had merged with a California corporation of the same name.  The district court found that the assignment was valid under Ohio law because the Ohio corporation still existed for the purpose of vesting property rights in another entity.  The Federal Circuit on appeal applied Ohio law that required contracts to be read so as to give effect to the intent of the parties.  Because the clear intent of the parties was to assign the application to the inventor’s employer, the Federal Circuit affirmed district court’s holding that the assignment to the successor corporation was valid.

Baseload Energy, Inc. v. Roberts, (Fed. Cir. Sept. 9, 2010) (case is attached)

In a suit for declaratory judgment, the district court held that a settlement agreement between the parties that was the result of a prior case barred the plaintiff from asserting invalidity and unenforceability of a patent.  The Federal Circuit reversed and remanded because the language of the settlement agreement was not clear and unambiguous regarding the release of those claims.