In This Issue
· Federal Circuit Reverses Dismissal of
Complaint For Failure To State A Claim
· Federal Circuit Affirms Summary Judgment
of Non-Infringement and Invalidity
· Federal
Circuit Affirms Dismissal Of Complaint For Lack Of Jurisdiction
· Federal
Circuit Vacates Jury Verdict On Induced Infringement
· Federal
Circuit Affirms Summary Judgment Of Invalidity for Nonenablement and Lack of Written Description
· Federal
Circuit Holds That It Has Jurisdiction To Entertain Appeals From Patent
Infringement Liability Determinations When Damages And Willfulness Issues
Remain Undecided
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Federal Circuit Reverses Dismissal Of Complaint For Failure To State A Claim
In Ultramercial, Inc. v. Hulu,
LLC (Appeal Nos. 2010-1544), the Federal Circuit reversed and remanded
the district court’s dismissal of Ultramercial’s complaint for failure to state a claim.
The patent-in-suit claims a
method for distributing copyrighted products such as songs, movies, and books
over the internet in exchange for viewing an advertisement, and the
advertiser pays for the copyrighted content. Ultramercial sued Hulu, LLC, YouTube, LLC, and WildTangent,
Inc. Hulu and YouTube were dismissed from the case and WildTangent moved to dismiss for failure to state a claim, arguing that no
patent-eligible subject matter was claimed. The district court found the
patent claim to be ineligible because it is “abstract.”
On appeal, the Federal Circuit
reversed noting that “In this procedural posture, the complaint and the
patent must by themselves show clear and convincing evidence that the claim
is not directed to an application of an abstract idea, but to a disembodied
abstract idea itself.” The Federal
Circuit stated that it will be rare that a § 101 suit can be dismissed at the
pleading stage.
The Federal Circuit determined
that the claim was meaningfully limited and stated that possible ways to
achieve meaningful limitations to abstract ideas can include requiring a
particular machine for implementation or reciting added limitations which are
essential to the invention and which do more than recite pre- or
post-solution activity. To be a
meaningful limitation, the requirement must keep the claim from wholly
pre-empting the abstract idea.
The Federal Circuit stated that
the district court should have either construed the claims in accordance with Markman and required the defendant to establish that the only plausible construction
was one that rendered the subject matter ineligible (with no factual
inquiries), or adopted a construction most favorable to the patentee. The Federal Circuit also stated that by
dismissing the claim without performing claim construction, the district
court “improperly made a subjective evaluation that these limitations did not
meaningfully limit the ‘abstract idea at the core’ of the claims,” and
reminded the district court that to determine § 101 eligibility they must
consider the claims as a whole and not “dissect the claims into old and new
elements and … ignore the presence of the old elements in the analysis.” (quoting Diehr).
The Federal Circuit did not
define the level of programming complexity required for a computer
implemented method to be patent-eligible or determine that internet website
use to practice a method is either necessary or sufficient to satisfy § 101,
but held “the claims in this case to be patent-eligible, in this posture, in
part because of these factors.” Accordingly, the Federal Circuit reversed and
remanded the case.
Federal
Circuit Affirms Summary Judgment of Non-Infringement and Invalidity
In Regents of the University of Minnesota v. AGA Medial Corp. (Appeal
No. 2012-1167) the Federal Circuit affirmed the district court’s grant of
summary judgment that the ‘291 patent was not infringed and that the asserted
claims of the ‘281 patent were invalid as anticipated.
The patents-in-suit are
directed toward medical devices used to block holes in a thin wall dividing
the two chambers of the heart. The
‘291 and ‘281 patents are successive divisions of a ‘951 application filed in
1992. Both patents were issued in
2000, and the University filed suit against AGA, alleging infringement of the
‘291 and ‘281 patents, in 2007.
The ‘291 patent claims a
“closure device comprising first and second occluding disks…” The district court construed this to mean two
separate disks which were affixed, or attached to each other. The AGA device is a single piece. The Federal Circuit upheld the district
court’s claim construction, noting that it was consistent with the ordinary
meaning of the claim language, the specification, and the prosecution
history, and therefor affirmed the finding of non-infringement.
The ‘281 patent uses different
language describing two “members” each having a “self-expanding
structure.” The district court held
that “members” did not require separateness and that a reasonable jury could
conclude that the claims were infringed by AGA. However, the district court further held
that the asserted ‘281 patent claims were means-plus-function claims and were
anticipated by prior art by equivalents. In the prosecution history of a related application (family member),
the applicant disclaimed the radial frame used by prior art, and the Federal
Circuit noted that this disclaimer could have overcome the prior art
equivalents. However, the claim language
in the ‘281 patent is materially altered from the language used in the ‘951
application, and thus, the ‘951 disclaimer did not apply.
The Federal Circuit therefore
affirmed summary judgment for invalidity, holding that although “prosecution
history estoppel may act to estop an equivalence argument,” and “that a
disclaimer made during the prosecution of a patent application may operate as
a disclaimer with respect to later patents of the same family,” when the
purported disclaimers are directed to specific claim terms that have been
omitted or materially altered in subsequent applications (rather than to the
invention itself), those disclaimers do not apply. The Federal Circuit found that it was
“inappropriate to apply a narrowing disclaimer to limitations that are
materially different from the limitation to which it originally applied….
Thus, the original disclaimer does not carry over to limit the range of
equivalents here, and does not negate the district court’s anticipation
finding.”
Federal
Circuit Affirms Dismissal Of Complaint For Lack Of Jurisdiction
In Organic Seed
Growers and Trade Assoc. v. Monsanto Co. (Appeal No. 2012-1298), the Federal Circuit affirmed
the district court’s dismissal of the complaints for lack of jurisdiction
and, noted that “because Monsanto has made binding assurances that it will
not ‘take legal action against growers whose crops might inadvertently
contain traces of Monsanto biotech genes’…and appellants have not alleged any
circumstances placing them beyond the scope of those assurances, we agree
that there is no justiciable case or controversy.”
Appellants sought declaratory judgments of
non-infringement and invalidity regarding twenty-three patents owned by
Monsanto. Monsanto has enforced its
patents rights against farmers who planted, or replanted, Monsanto’s
genetically modified seeds without authorization. Between 1997 and 2010, Monsanto brought
some 144 infringement suits and approximately 700 other cases were settled without
litigation. Appellants are growers,
seed selling businesses, and agricultural organization that “do not want to
use or sell transgenic seed” incorporating Monsanto’s technologies, but due
to the proliferation of transgenic seed today they are concerned that if they
become contaminated they could “be accused of patent infringement by the
company responsible for the transgenic seed that contaminates them.” They allege that they can no longer grow
corn, cotton, sugar beets, soybeans, and canola because over 85-90% of these
crops grown in the U.S. contain transgenic seed.
Appellants requested a written covenant not to sue from
Monsanto. Monsanto refused,
referencing a statement on their website that “It has never been, nor will it
be Monsanto policy to exercise its patent rights where trace amounts of our
patented seeds or traits are present in farmer’s fields as a result of
inadvertent means.” Monsanto informed appellants, through counsel, that “You
represent that ‘none of your clients intend to possess, use or sell any
transgenic seed, including any transgenic seed potentially covered by
Monsanto’s patents.’ Taking your representation as true, any fear of suit or
other action is unreasonable, and any decision not to grow certain crops
unjustified.”
The Federal Circuit recognized that “our cases suggest
that one who, within the meaning of the Patent Act, uses (replants) or sells
even very small quantities of patented transgenic seeds without authorization
may infringe any patents covering those seeds.” The district court found that
due to contamination, “some unlicensed-and unintended-use of transgenic seeds
is inevitable.”
Despite the risk of unintended infringement, the Federal
Circuit held that while Monsanto did not provide a covenant not to sue, their
representations have a similar effect. The court’s reliance on Monsanto’s representation to defeat the
appellants’ request for declaratory judgment, creates judicial estoppel, and the representations are binding as to trace
amounts of Monsanto seed (below 1%). “The appellants have alleged no concrete plans or activities to use or
sell greater than trace amounts of modified seed, and accordingly fail to
show any risk of suit on that basis. The appellants therefore lack an
essential element of standing. The district court correctly concluded that it
lacks Declaratory Judgment Act jurisdiction.”
Federal
Circuit Vacates Jury Verdict On Induced Infringement
In Commil USA, LLC v. Cisco Systems, Inc. (Appeal
No. 2012-1042), a split Federal Circuit reversed a
district court’s finding of induced infringement.
The
patent-in-suit related to a method of providing faster and more reliable
handoffs of mobile devices as a mobile device moves through-out a
network. Time sensitive communication protocol
are performed at the base station and other, not time sensitive, parts of the
protocol are performed on a switch. The base station and the switch cooperate to provide connection for
mobile units.
A
jury verdict rejected Cisco’s invalidity contentions, and found Cisco liable
for direct infringement, but not induced infringement. The jury awarded Commil $3.7 million. Commil filed motion for a new trial on induced infringement and damages. A second trial jury returned a verdict in
favor of Commil on induced infringement and
damages, awarding an additional $63.7 million. The district court added $10.3 million in
prejudgment interest and $17,700 in costs.
On
appeal, the Federal Circuit found that the district court gave the jury a
legally erroneous instruction with respect to indirect infringement. The district court, in the second trial,
had instructed the jury on inducement using the “knew or should have known”
standard which is essentially a showing of negligence. The Federal Circuit noted that this
instruction was erroneous in view of the Supreme Court’s decision in Global-Tech Appliance, Inc. v. SEB S.A.,
which requires actual knowledge or willful blindness. Because “good-faith belief of
non-infringement is relevant evidence that tends to show that an accused
inducer lacked the intent required” and “it is axiomatic that one cannot
infringe an invalid patent,” the Federal Circuit held that “evidence of an
accused inducer’s good-faith belief of invalidity may negate the requisite
intent for induced infringement.” The
Federal Circuit did not say that such evidence precludes a finding of
inducement, but that it is evidence that should be considered by the
fact-finder.
In
view of the erroneous jury instruction, the Federal Circuit vacated the
jury’s verdict on induced infringement, vacated the damages award, and
remanded the case for a new trial. |
| |
Federal
Circuit Affirms Summary Judgment Of Invalidity for Nonenablement
In Wyeth and Cordis Corp. v. Abbott Laboratories (Appeal Nos. 2012-1223,-1224), the Federal Circuit
affirmed the district court’s grant of summary judgment of invalidity for nonenablement.
The patents-in-suit relate to the use of rapamycin for treatment and prevention of renarrowing of an artery. Rapamycin refers to a class of compounds,
only one of which is disclosed in the specification. Plaintiff sued defendants for marketing
stents which use two drugs which fall within the rapamycin class using plaintiff’s claim construction. The district court, adopting plaintiff’s claim construction, found
that the patent specifications did not enable one of ordinary skill in the
art to practice the claims without undue experimentation. The patents did not disclose how to modify
the tens of thousands of compounds that fell within the broadly claimed
genus. On this basis, the district
court granted defendants’ joint motions for summary judgment.
The central issue on appeal was “whether practicing the
full scope of the claims requires excessive-and thus
undue-experimentation.” The district
court found that the claims cover any compound that is a structural analog of
the one rapamycin disclosed that exhibits the
effects of suppressing both the immune system and the renarrowing of the artery. The specification
describes methods to ascertain whether a compound exhibits these functional
effects. However, using the described
methods, and narrowing the field by molecular weight as plaintiff’s expert
states one of ordinary skill would have done, there are still tens of
thousands of potential compounds to screen to determine what is included in
the claim. The Federal Circuit agreed
with the district court that this would require excessive experimentation. As such, the Federal Circuit affirmed the
district court’s grant of summary judgment of invalidity for nonenablement.
Federal
Circuit Holds That It Has Jurisdiction To Entertain Appeals From Patent
Infringement Liability Determinations When Damages And Willfulness Issues
Remain Undecided
In Robert Bosch, LLC v. Pylon
Manufacturing Corp. (Appeal Nos.
2011-1363, -1364), the Federal Circuit, in
an en banc decision, held
that it has jurisdiction over appeals from patent infringement decisions when
damages and willfulness issues remain undecided.
Bosch sued Pylon for patent infringement
and Pylon asserted counterclaims against Bosch. The district court granted a motion by
Pylon to bifurcate issues of liability and damages, and stayed damages issues including willfulness. Following a jury trial and motions for
judgment as a matter of law, the district court entered judgment on the
liability issues. Bosch appealed,
Pylon cross-appealed, and Bosch filed a motion to dismiss both its appeal and
Pylon’s cross-appeal on the grounds that the court lacked jurisdiction. The Federal Circuit denied the motion,
Bosch sought reconsideration, and reconsideration was denied. The parties argued the substantive and
jurisdictional issues before a panel and the court sua sponte granted a rehearing en banc to
determine whether it has jurisdiction of the appeal under 28 U.S.C.
§1292(C)(2).
The
Federal Circuit stated that “under §1292(C)(2), an appeal
to this court may be made “from a judgment in a civil action for patent
infringement which would otherwise be appealable to the United States Court
of Appeals for the Federal Circuit and is final
except for an accounting.” The disposition of the case turned on the meaning of “accounting,”
specifically, whether a trial on damages and willfulness is an accounting for
the purposes of §1292(c)(2).”
A
majority of the judges decided that according to the statute, including its
history and policy, and well-settled precedent, a trial on damages and
willfulness is an accounting. Several
Judges dissented. |
