Greenblum & Bernstein, P.L.C.


Recent Litigation News in Intellectual Property


                                                                                                     April 2013

In This Issue

·    Federal Circuit Reverses Award Of Attorney Fees

·    Federal Circuit Vacates Damage Award Based On Worldwide Sales

·    Federal Circuit Overturns Damage Award

·    Federal Circuit Holds Subpoenas Are Not Available In Inter Partes Reexamination Proceedings

·    Federal Circuit Reverses Grant Of Summary Judgment

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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.


Federal Circuit Reverses Grant Of Summary Judgment

In Frolow v. Wilson Sporting Goods Co. (Appeal No.  2012-1185), the Federal Circuit reversed the district court’s grant of summary judgment and remanded for further proceedings.

On motion for summary judgment, the district court granted judgment of noninfringement to Wilson despite the fact that Wilson had marked the number of Frolow’s patent on certain accused devices.  Specifically, the district court held that Wilson’s marking had no bearing on whether literal or doctrine of equivalents infringement has occurred.

The Federal Circuit stated that placing a patent number on a product is an admission by the marking party that the marked product falls within the scope of the patent claims. Nevertheless, a defendant is free to introduce counter evidence or explanation.

The Federal Circuit then held that where Frolow contested whether the rackets fall within the scope of the claims and provided evidence of marking, that summary judgment was improper. The Federal Circuit clarified that it was not holding that the fact of marking alone is enough to survive summary judgment in every case, but rather, that if a patentee admits that the accused product does not infringe, evidence of marking will not raise a genuine issue of material fact. Similarly, if it is beyond dispute that the accused product was mismarked, summary judgment will also be appropriate. In any event, evidence of marking is circumstantial evidence that the marked product falls within the patent claims and can preclude summary judgment in appropriate cases.

The Federal Circuit ruled, in view of the above, that the evidence in the case pointed in both directions.  “As such, it is the job of the fact-finder—not the court at summary judgment—to weigh that evidence and render a decision.”  Accordingly, the district court’s grant of summary judgment was reversed and remanded.

The GREENBLUM & BERNSTEIN NEWSLETTER is issued by GREENBLUM & BERNSTEIN, P.L.C., an intellectual property firm, to provide timely news in the field of intellectual property.  The NEWSLETTER provides updates on recent issues of general interest in this field.  The views and/or opinions expressed herein do not necessarily reflect those of GREENBLUM & BERNSTEIN, P.LC.  Information regarding the contents of the Newsletter can be obtained by contacting Michael J. Fink at GREENBLUM & BERNSTEIN, P.L.C., 1950 Roland Clarke Place, Reston, VA 20191.  Copyright © 2013 GREENBLUM & BERNSTEIN, P.L.C.