Federal Circuit Affirms Dismissal Of False
Marking Suit
In Kenneth C. Brooks v. Dunlop Manufacturing
Inc. (Appeal No. 2012-1164), the Federal Circuit affirmed the district
court’s dismissal of a complaint asserting false marking.
Kenneth Brooks sued Dunlop
Manufacturing Inc. (hereafter “Dunlop”) under the then-prevailing version of
35 U.S.C. §292(a) and (b), alleging that Dunlop marked a product with the
number of a patent that was both expired and invalid. §292 provided for a qui tam action intended to prevent
deception of the public due to false marking of unpatented articles. §292 allowed
any person to sue, on behalf of the United States, anyone who marked an
unpatented article as “patented” or
“patent pending”.
Shortly after Brooks filed suit,
Congress enacted the America Invents Act (AIA), amending §292 by eliminating
the qui tam actions under that
section. Dunlop moved to dismiss the case and Brooks responded that Congress's
elimination of qui tam actions
constituted a taking of his property without just compensation and violated
the Due Process Clause. According to Brooks, the retroactive application of
amendments to §292 effectuated by AIA to pending actions was unconstitutional
and the pre-AIA version of §292 was an offer to enter into a unilateral
contract with Congress. The United States
intervened to defend the constitutionality of the new 35 U.S.C. §292.
The district court reasoned
that the retroactive application of amended §292 to pending actions was a
rational means of pursuing a legitimate legislative purpose and that no contractual
rights were created in a qui tam plaintiff. On appeal, the Federal Circuit held that Congress’s retroactive
elimination of the qui tam provision from §292 does not violate the Due Process Clause or the
Intellectual Property Clause of the Constitution. Accordingly, the Federal Circuit affirmed
the dismissal.
Federal Circuit Reverses Judgment Of Nonobviousness
In Soverain Software LLC, v. Newegg Inc. (Appeal No. 2011-1009), the Federal Circuit
reversed the district court’s judgment of nonobviousness and held the
patents-in-suit invalid as obvious.
Soverain Software LLC sued
Newegg Inc. for infringement of three patents relating to an electronic
commerce system, wherein a merchant’s products are offered and purchased
online, through computers interconnected by a network. Newegg presented evidence of obviousness,
however the district court did not allow the question of obviousness to go to
the jury on the basis that there was insufficient evidence to support a
finding of obviousness, and that the question would simply “confuse the jury”. Newegg argued that
it was wrongfully deprived of a jury determination on the question of
obviousness and appealed.
Referring to the decisions KSR International Co. v. Teleflex and Graham v. John Deere Co., the Federal
Circuit restated that the question of obviousness is a question of law based
on underlying facts that looks to: (1) the scope and content of the prior
art; (2) the difference between the prior art and the claimed invention; (3)
the level of ordinary skill in the field of the invention; and, (4) any
relevant objective considerations. The Federal Circuit reversed the district
court’s judgment and held that Newegg had presented sufficient evidence to
support a finding of obviousness, and, that in view of the prior art CompuServe Mall, the asserted patent
claims were invalid as obvious. Accordingly,
the Federal Circuit reversed the district court’s judgment of nonobviousness and
vacated the judgment of infringement and damage award.
Federal
Circuit Affirms Judgment Of Noninfringement
In Parallel Networks, LLC v. Abercrombie & Fitch Co. (Appeal
No. 2012-1227), the Federal Circuit
affirmed the district court’s grant of summary judgment of noninfringement.
Parallel Networks, LLC owns a
patent entitled “Method and Apparatus
for Client-Server Communication Using a Limited Capability Client Over a
Low-Speed Communications Link”. This patent-in-suit addressed perceived problems using generic
software applications on “handheld and credit-card-size computers” often
operated over low-speed or wireless networks. The patent claimed an applet –
a small program designed to perform a specific task on a client computer –
geared to these devices and speeds.
Parallel Networks sued 120
different defendants for infringement. Each defendant operated a website that
provided applets in response to user requests. The district court ruled
during claim construction, that the “data manipulation service” and the “particularized
data” were both necessary components of the claimed applet as it is initially
generated before it is transferred
to the client. According to the district court, the accused websites did not
infringe because they did not meet every claim limitation. Subsequently, Parallel
Networks argued that it “reanalyzed” the allegedly infringing websites and
found some that might meet a single-transmission limitation. Parallel
Networks then sought leave to amend its complaint. The district court denied the motion to
amend.
On appeal, the Federal Circuit
affirmed the district court’s order denying Parallel Networks’ motion to
amend its infringement contentions because the district court’s claim
construction was not an intervening change in the law; and Parallel Networks had
no good explanation for not asserting its amended infringement contentions
earlier. Accordingly, the Federal Circuit affirmed the district court’s
judgment of noninfringement.
Federal
Circuit Reverses Motion To Dismiss
In Roger J. Hall v. Bed Bath & Beyond
Inc. (Appeal No. 2011-1165,
-1235), the Federal Circuit reversed the district court’s dismissal the
plaintiff’s design patent infringement claim.
Hall owns a design patent
entitled “Tote Towel” which claims
a towel with bindings around all the edges, zippered pockets at both ends,
and an angled cloth loop in the middle. Hall began producing the Tote Towel
soon after the patent application was filed, with a label marked “patent pending.”
While the patent application
was still pending, Hall met Bed Bath & Beyond (“BB&B”) to discuss
whether BB&B would be interested in retail sales of the Tote Towel and
left samples of his packaged Tote Towel (with “patent pending” marking). BB&B
later had copies of the Tote Towel manufactured in Pakistan which were sold
in BB&B stores. After the Tote Towel patent issued, Hall sued BB&B
(and other defendants) for design patent infringement, unfair competition
under the Lanham Act and misappropriation and unfair competition under New
York statutory and common law.
BB&B
moved to dismiss the complaint, and the district court found that Hall’s
patent infringement complaint did not contain “any allegations to show what
aspects of the Tote Towel merit design patent protection, or how each
Defendant has infringed the protected patent claim.” The district court therefore granted the
motion to dismiss.
On
appeal, the Federal Circuit noted that Hall had presented a lengthy
complaint, stating that the resemblance is such as to deceive an ordinary
observer, in accordance with the Gorham test
for infringement. Hall’s assertion that
the accused towel is “virtually identical in design” to Hall’s Tote Towel was
plausible. Thus, the pleading
requirements for design patent infringement
were
easily met. The Federal Circuit ruled
that the claim for patent infringement was improperly dismissed on the
pleadings, and accordingly, reversed the district court. |
