Welcome to Winston & Strawn’s Federal Circuit Patent Decision Summaries. This bulletin provides a short summary of, and a link to, the precedential patent cases decided by the Federal Circuit last week. We hope that these Summaries are useful in keeping you updated on the Federal Circuit’s patent decisions.

An improper revival of an abandoned patent application is not a defense against the validity of the patent.

Aristocrat Technologies Australia Pty Limited et al. v. International Game Technology et al., No. 2008-1016 (Fed. Cir. Sept. 22, 2008)

The patentee paid its application fee for its national stage application one-day late. The PTO mailed a notice of abandonment. The patentee filed a petition to correct the date of the fee payment, and the PTO denied the petition for failing to provide corroborating information to support the timely payment. The patentee filed a petition to revive the application under 37 C.F.R. § 1.137(b) explaining that the late payment was “unintentional.” The PTO granted the petition and revived the prosecution of the patent. The district court agreed with the alleged infringer that the patent was invalid because the PTO improperly revived the patent application.

The Federal Circuit reversed. Section 282 identifies defenses to an act of patent infringement. Section 282(2) authorizes an invalidity defense based “on any ground specified in part II of this title as a condition for patentability.” Interpreting this language, the Court found that the “conditions for patentability” are “defenses of invalidity for lack of utility and eligibility, novelty, and nonobviousness.” Section 282(2) “does not encompass a defense based upon the alleged improper revival of a patent application.”

Section 282(4) is a catch-all provision and “provides a defense for ‘any other fact or act made a defense by’ title 35.” Interpreting this language, the Court required that the defense actually be “made a defense.” “Congress made it clear in various provisions of the statute when it intended to create a defense of invalidity or noninfringement, but indicated no such intention in the statutes pertaining to revival of abandoned applications.” Thus, “‘improper revival’ may not be raised as a defense in an action involving the validity or infringement of a patent.”

A copy of the opinion can be found here.

The sole test for infringement of a design patent is the “ordinary observer” test, conducted in light of the prior art, and the “point of novelty” test is rejected.

Egyptian Goddess, Inc. v. Swisa, Inc., No. 2006-1562 (Fed. Cir. Sept. 22, 2008) (en banc)

The district court granted summary judgment of non-infringement to the accused infringer of the patentee’s design patent on a nail buffer. The court applied the then-existing standard for infringement, namely that 1) the accused device be substantially similar to the claimed design (the “ordinary observer” test), and that 2) the accused device contain substantially the same points of novelty that distinguished the patented design from the prior art (“the point of novelty” test). The district court held that the accused and patented devices were substantially similar, but that the accused device did not incorporate the “point of novelty” that distinguished the claimed design from the prior art.

A Federal Circuit panel affirmed the district court. The Federal Circuit, sitting en banc, also affirmed the grant of summary judgment of non-infringement, but did so under a different infringement standard. The Court held that the “point of novelty” test should no longer be used, nor should the related “non-trivial advance” requirement be imposed. Rather, “the ‘ordinary observer’ test should be the sole test for determining whether a design patent has been infringed.” Under that test, “infringement will not be found unless the accused article ‘embodies the patented design or any colorable imitation thereof.’” However, the “ordinary observer” test should be “conducted in light of the prior art.” The Court explained that “resolution of the question whether the ordinary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art . . . .”

Here, the Court held that no reasonable fact finder could find that “an ordinary observer, taking into account the prior art, would believe the accused design to be the same as the patented design.”

A copy of the opinion can be found here.

After Seagate, lack of an opinion-of-counsel letter is one factor to consider within the totality of circumstances when determining intent in an induced infringement analysis.

Broadcom Corp. v. Qualcomm Inc., Nos. 2008-1199, -1271, -1272 (Fed. Cir. Sept. 24, 2008)

The patentee brought suit against the accused infringer asserting three patents. A jury determined that the accused infringer willfully infringed and/or induced infringement of the three patents and awarded damages. Soon after, however, the Federal Circuit issued its decision in In re Seagate Technology, 497 F.3d 1360 (Fed. Cir. 2007) (en banc), and based on that decision, the district court vacated the willfulness verdict but not the induced infringement verdict.

On appeal to the Federal Circuit, the accused infringer argued that the pre-Seagate jury instructions also required that the induced infringement verdict, which also required a finding of willfulness, be overturned. The accused infringer argued that after Seagate, opinion-of-counsel evidence is no longer relevant in determining the intent of an alleged infringer in the inducement context. The patentee countered that the specific intent standard for induced infringement described in DSU Medical Corporation v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (en banc) still controlled, and that opinion-of-counsel letters are one factor to consider within the totality of the circumstances when determining intent for an induced infringement claim.

The Federal Circuit affirmed and upheld the district court’s jury instruction to consider “all of the circumstances,” including opinion-of-counsel when determining the alleged infringer’s intent to induce infringement. While the Federal Circuit agreed with the accused infringer that there is no affirmative duty to seek an opinion-of-counsel regarding infringement, it also stated that Seagate did not alter the state of mind requirement for induced infringement. In contrast, the Court reaffirmed its en banc holding in DSU. Specifically, the Court explained that because opinion-of-counsel evidence, along with other factors, may reflect whether the accused infringer “knew or should have known” that its actions would cause another to directly infringe, such evidence remains relevant to the intent analysis. Furthermore, the Court noted that failure to procure such opinion may be probative of intent in this context.

A copy of the opinion can be found here.

Ownership of a patent cannot be split between inventors of different claims, and an inventor of one claim of the patent is an owner of all the claims of the patent.

Lucent Technologies, Inc. et al. v. Gateway, Inc. et al., Nos. 2007-1546, -1580 (Fed. Cir. Sept. 25, 2008)

This case involved the infringement of two patents directed to methods of compressing digital audio files. After a jury verdict in favor of the patentee finding infringement of the two patents and an award in excess of $1.5 billion in damages, the district court granted judgment as a matter of law for the accused infringers based on lack of standing for one patent and on non-infringement for the other patent. With regard to the patentee’s lack of standing to assert the first patent, the district court found that while some of the patent’s claims were developed solely by the patentee, other claims were based on “new work” performed under a joint development agreement (“JDA”) by the patentee and another company. The patent thus being jointly owned by both companies, the patentee lacked standing to assert the patent in the absence of the other company. The Federal Circuit affirmed the district court’s decision as to both patents.

In interpreting what was “new work” under the JDA, the Court looked to the specific definitions for “existing technology” in the agreement and rejected patentee’s interpretation that “existing technology” more broadly encompassed any technology in the public domain prior to the JDA. The Court also relied on the lack of disclosure in the specification of the priority application in determining that the claimed invention was developed during the time of the JDA. Specifically, the Court noted that 1) even if the claimed technology would have been obvious to one of skill in the art, demonstration of obviousness is not sufficient to show possession of the invention, and 2) the understanding of one of skill in the art does not relieve the patentee of the duty to disclose sufficient structure to support the claim terms.

As to standing in particular, the Court affirmed the holding in Pope Mfg. Co. v. Gormully & Jeffery Mfg. Co., 144 U.S. 248 (1892) that the owner of a patent cannot split up its ownership rights in a patent and assign different claims to different parties. The Court also affirmed its own holding in Israel Bio-Engineering Project v. Amgen, Inc., 475 F.3d 1256 (Fed. Cir. 2007) that an inventor of one or more claims of a patent is an owner of all claims of the patent. The Court held that the district court properly relied on Israel to conclude that because some of the claims of the patent were invented during the period covered by the JDA, the other company is a co-owner of the patent and thus the patentee lacked standing to sue for infringement of the patent in the absence of such other party.

A copy of the opinion can be found here.

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