Federal Circuit
Reverses Award Of Attorney Fees
In Checkpoint Systems, Inc. v. All-Tag Security S.A. et al. (Appeal
No. 2012-1085), the Federal Circuit reversed the district court’s holding
that the case was “exceptional” under 35 U.S.C. §285.
After trial, the jury returned
a verdict in favor of All-Tag, finding that All-Tag did not infringe the
patent-in-suit, and that the patent-in-suit was invalid and
unenforceable. Judgment was entered on
the verdict. All-Tag then moved for
attorney fees.
The district court granted the
motion finding that Checkpoint through its expert witness did not inspect the
tags it accused of infringement, despite having ample opportunity to do so,
and on this basis alone warranted an exceptional case finding.
On appeal, the Federal Circuit noted
that the accused products, which All-Tag admitted were described in certain
All-Tag patents, were specific to resonance tags having a hole in the
dielectric. The All-Tag patents
describe no embodiments without the hole, which is the critical feature of
Checkpoint’s patent-in-suit. The Federal Circuit stated that All-Tag’s
admission that its products are made “generally in accordance” with its patents
could reasonably have been relied on by Checkpoint and its expert, and such
reliance was not objectively baseless.
As such, the Federal Circuit
held that the infringement charge was not shown to have been made in bad
faith or objectively baseless. Thus, the district court’s determination that
this was an exceptional case under §285 was not supported by the record, and
the award of attorney fees with costs and interest was reversed.
Federal
Circuit Vacates Damage Award Based On Worldwide Sales
In Power Integrations, Inc. v. Fairchild Semiconductor International,
Inc. et al. (Appeal Nos. 2011-1218, 1238), the Federal Circuit affirmed
the district court’s finding of non-obviousness; affirmed-in-part and
reversed-in-part on claim construction; vacated the district court’s order of
remittitur and the damages award; found error in the district court’s refusal
to grant Power Integrations a post-verdict accounting; vacated the district
court’s finding of willful infringement; and remanded the case.
The subject matter of the patents-in-suit
related to technology used in power supplies for electronic devices. The jury awarded Power Integrations a total
damages award of $33,981,781. Fairchild moved for remittitur, which the district
court granted, and the damages award was reduced by 82%, to $6,116,720.58.
On appeal, Power Integrations
argued that the jury’s original award of worldwide damages was legally
appropriate. Specifically, Power
Integrations argued that it was foreseeable that Fairchild’s infringement in
the United States would cause Power Integrations to lose sales in foreign
markets. Thus, Power Integrations argued, the law supports an award of
damages for the lost foreign sales which Power Integrations would have made
but for Fairchild’s domestic infringement.
The Federal Circuit found Power
Integrations’ argument not to be novel, and in the end, not persuasive. The Federal Circuit stated: “Regardless of
how the argument is framed under the facts of this case, the underlying
question here remains whether Power Integrations is entitled to compensatory
damages for injury caused by infringing activity that occurred outside the
territory of the United States. The answer is no.”
The Federal Circuit vacated the
district court’s award of damages and remanded the case for a new trial on
damages resulting from Fairchild’s direct infringement. The Federal Circuit further
ordered an accounting limited to post-verdict infringing sales related to
Fairchild’s direct infringement.
Federal
Circuit Overturns Damage Award
In Saffran
v. Johnson & Johnson and Cordis Corp. (Appeal No. 2012-1043), the Federal Circuit held that
the district court erroneously construed the claims of the patent-in-suit
and that, under the correct claim construction, Cordis was entitled to a judgment
of noninfringement as a matter of law.
The jury returned a verdict in favor
of Saffran specifically finding that that the patent-in-suit was not proven invalid;
that Cordis had willfully infringed the patent-in-suit through the
manufacture, use, and sale of its accused stent products; and that Saffran
was entitled to damages totaling $482,000,000. The district court awarded an additional
$111,364,281 in prejudgment interest, bringing the total award to
$593,364,281.
The claim terms at-issue on appeal were
“device” and “release means.” The Federal
Circuit held that Saffran’s statements during prosecution of the
patent-in-suit limited the meaning of the term “device” to a continuous sheet.
On multiple occasions during
prosecution, Saffran sought to distinguish prior art by representing to the examiner
that “[t]he device used is a sheet rather than a
pre formed chamber (Gaskill).” The Federal
Circuit stated that in view of such
definitive statements during prosecution, the interested public was entitled
to conclude that the “device” recited in the claims of the patent-in-suit is
a continuous sheet.
With respect to “release means for
release of … treating material,” the Federal Circuit concluded that the
district court had correctly identified the claimed function as “to release a
drug preferentially toward the damaged tissue,” but erred in identifying the
corresponding structure disclosed in the specification. The Federal Circuit held that the claimed
structure for the “release means” limitation is correctly construed as a hydrolysable
bond.
The accused Cordis stents accordingly
were held not to infringe as a matter of law, because they did not contain a
continuous sheet or hydrolysable bonds. Judge O’Malley concurred, but disagreed on the construction of
“device.” Judge Moore concurred, but
disagreed on the construction of “release means.”
Federal
Circuit Holds Subpoenas Are Not Available In Inter Partes Reexamination Proceedings
In Abbott Laboratories v. Cordis Corp. (Appeal
No. 2012-1244), the Federal Circuit affirmed the district court ruling quashing
two subpoenas duces tecum issued
pursuant to 35 U.S.C. § 24.
In connection with inter partes reexamination proceedings involving Cordis and Abbott, Cordis
sought subpoenas from the district court in Virginia under § 24. The district
court, pursuant to Cordis’s request, issued two subpoenas duces
tecum ordering Abbott to produce documents. The subpoenas were
issued specifically for use in the pending reexamination proceedings.
At the same time, Cordis filed
petitions with the PTO, asking to “clarif[y] . . . the [PTO’s] rules as they
relate to the service of a subpoena under 35 U.S.C. § 24 in inter partes reexaminations,” and in
particular to “confirm that [the PTO’s] current rules impose no requirement
that parties seeking to enforce subpoenas under § 24 must obtain the [PTO’s]
authorization.” In the alternative, Cordis asked the PTO to authorize such
subpoenas if authorization was required. The PTO denied Cordis’s petitions, determining that § 24 subpoenas are “not permitted by the inter partes reexamination statute,
or by any regulation governing inter
partes reexamination proceedings.”
The Federal Circuit concluded that 35 U.S.C. § 24 only empowers a district court
to issue a subpoena for use in a “contested case,” and that contested cases
are limited to those in which the regulations of the PTO authorize the
parties to take depositions. Since the PTO does not provide for depositions
in inter partes reexamination
proceedings, such proceedings are not “contested cases” within the meaning of
35 U.S.C. § 24, and subpoenas under 35 U.S.C. § 24 are not available. |