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.

Anticipation requires that a reference not only disclose the claimed elements, but disclose them “arranged or combined in the same way as in the claim.”

Net MoneyIN, Inc. v. VeriSign Inc., No. 2007-1565 (Fed. Cir. Oct. 20, 2008)

The district court granted summary judgment that a claim was anticipated. In its Markman ruling, the district court also invalidated several claims of two patents that were written in “means-plus-function” format because they lacked the required corresponding structure, and were therefore indefinite. The Federal Circuit reversed the finding of anticipation, but affirmed the invalidity of the “means-plus-function” claims.

The patents at issue relate to a system for processing credit card transactions over the Internet. In reversing the district court’s anticipation finding, the court held that unless a reference discloses within the four corners of the document all of the limitations “arranged or combined in the same way as in the claim,” the reference cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate. The reference at issue (disclosing two separate protocols for authorizing purchase transactions) contained all the elements of the claim, but the court held it was error for the district court to “find anticipation by combining different parts of the separate protocols … simply because they were found within the four corners of the document.”

In addition, the Federal Circuit noted that where a claim is written in “means-plus-function” format, the specification must disclose the corresponding “structure sufficient to accomplish the recited function.” For computer-implemented inventions, “a means-plus-function claim element for which the only disclosed structure is a general purpose computer is invalid if the specification fails to disclose an algorithm for performing the claimed function.” Because there was no such disclosed algorithm in the patents, the court affirmed the judgment of invalidity of the “means-plus-function” claims.

A copy of the opinion can be found here.

The same burdens and standards of proof that apply at trial must be used when analyzing a patentee’s likelihood of success on the merits for purposes of granting a preliminary injunction.

Abbott Labs. v. Sandoz, Inc., No. 2007-1300 (Fed. Cir. Oct. 21, 2008)

The district court granted the patentee’s request for a preliminary injunction barring the alleged infringer from entering the market with its generic pharmaceutical product. The Federal Circuit affirmed, with Judge Gajarsa dissenting.

The majority found that, in considering whether to grant a preliminary injunction, a district court must assess the likelihood of success on the merits by applying the same burdens and standards of proof that would apply at trial. In the context of a patent case, this means that, as at trial, the patents at issue on a preliminary injunction motion are presumed valid, the burden of establishing invalidity rests on the party asserting invalidity, and that burden must be met by clear and convincing evidence. The court held that, to prevail on the likelihood of success on the merits prong of the traditional preliminary injunction test, an accused infringer asserting invalidity cannot defeat the motion merely by showing that a substantial question of invalidity arises. Rather, applying the same standards that would apply to a trial on the merits, the court agreed that the alleged infringer had failed to meet its burden of showing a reasonable likelihood that it could adduce clear and convincing evidence sufficient to overcome the presumption of validity. Thus, despite the existence of some evidence that the patents-in-suit could be invalidated based on anticipation, obviousness, and/or inequitable conduct, the court found that the alleged infringer had not met its burden of proof.

In dissent, Judge Gajarsa asserted that the district court and the majority applied the wrong standard to the likelihood of success analysis, and that the preliminary injunction should have been denied because the alleged infringer raised a sufficiently “substantial question” of validity so as to render the patents vulnerable.

A copy of the opinion can be found here.

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