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Welcome to Winston & Strawn’s Federal Circuit Patent Decision Summaries. This newsletter provides a short summary of, and links to, the precedential patent cases decided by the Federal Circuit last month.
We hope that these Summaries are useful in keeping you updated on the Federal Circuit’s patent decisions. Questions can be directed to any of the editors listed below. |
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- Lexmark International, Inc. v. Impression Products, Inc.
- Convolve, Inc. v. Compaq Computer Corp.
- Nike, Inc. v. Adidas AG
- Trivascular, Inc. v. Samuels
- Synopsys, Inc. v. Mentor Graphics Corp.
- TransWeb, LLC v. 3M Company, et al.
- Apple v. Samsung Electronics Co., Ltd., et al.
- Trireme Medical, LLC v. AngioScore, Inc.
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The patentee claimed infringement by the resale and import of patented products that were first sold by the patentee both domestically and abroad. Some of the foreign-sold products, and all of the domestically sold products, were subject to an express single-use/no-resale restriction. The alleged infringer challenged the patentee’s rights under the doctrine of exhaustion. Notably, the parties did not consider any implied license issues for the foreign sales.
The district court held that the foreign sales did not exhaust the patentee’s rights, but that the sales subject to the single-use/no-resale restrictions exhausted the patent rights because such rights cannot be preserved by post-sale restrictions. The Federal Circuit affirmed the district court as to the foreign sales, but reversed the holding as to post-sale restrictions.
The Federal Circuit, en banc, reaffirmed its 2001 Jazz Photo decision that only sales in the United States can trigger patent exhaustion. It also rejected the alleged infringer’s contention that a different result was compelled by the Supreme Court’s 2013 copyright decision in Kirtsaeng v. John Wiley & Sons, Inc., which did not address patent law or the treatment under the Patent Act of a foreign sale as neither conclusively nor even presumptively exhausting the patentee’s rights in the U.S.
The Federal Circuit also adhered to its 1992 Mallinckrodt decision that a patentee does not exhaust its rights when it sells a patented article subject to a lawful, clearly communicated single-use/no-resale restriction. The Federal Circuit distinguished the Supreme Court’s 2008 Quanta Computer v. LG Electronics decision, where the court considered a sale by a separate manufacturer under a patentee-granted license conferring unrestricted authority to sell. |
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| Written by Melissa Bogad, Associate – Winston & Strawn LLP |
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The district court granted summary judgment for alleged infringers on the grounds that their products did not directly infringe because they did not meet certain limitations presented in the asserted claims and that infringement liability was precluded by intervening rights arising from a substantive amendment to the asserted claims after reexamination.
The patents recited a method for controlling the operation of a data storage device that includes a “user interface” that outputs certain “commands” that were “shaped when issued from the processor.” The Federal Circuit found that the district court erred by treating all asserted claims as having the same scope (specifically, that the claim language implicitly required a singular processor associated with the user interface that issues the commands), because that overlooked the differences among the asserted claims. The Federal Circuit reversed the finding of no infringement as to one set of claims that recited “a processor,” because no clear intent was found in the specification or prosecution history to limit “a” to just a single processor in that set of claims.
With regards to intervening rights, the Federal Circuit confirmed that a patentee of a patent that survives reexamination is entitled to infringement damages. Damages can be received for the period between the issuance of the original claims and the date of the reexamined claims and only if the original and reexamined claims are “substantially identical.” The court again emphasized that all amendments made during reexamination do not necessarily mean that the scope of the claims would be substantively changed.
Applying this rule, the court analyzed the original and reexamined claims and found no substantive change. After separately scrutinizing the specification, the prosecution history before reexamination, and the prosecution history of the reexamination, the court found that the addition of the term “seek” to the previously used term of “acoustic noise” did not alter the scope of the claims because the claims were originally limited to seek acoustic noise. Thus, the original and reexamined claims were substantially identical and not changed by the amendment, such that damages were available to the patentee and were not precluded by intervening rights. |
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| Written by Reid Smith, Associate – Winston & Strawn LLP |
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Following the grant of a petition for inter partes review (IPR), the patentee moved for entry of substitute claims. The Patent Trial and Appeal Board (PTAB or Board) denied the motion, because the patentee failed to “persuade the board that the proposed substitute claim is patentable over the prior art of record, and over prior art not of record but known to the patent owner.” The patentee appealed, asserting that the PTAB erroneously shifted the burden of proof. The Federal Circuit affirmed on this issue.
The Federal Circuit previously held that, in light of governing statutes and the U.S. Patent and Trademark Office (PTO) regulations, the PTAB appropriately placed the burden on patent owners to show that their substitute claims are patentable. (See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1306-08 [Fed. Cir. 2015]). However, the patentee argued that the burden allocation could not be reconciled with 35 U.S.C. § 316(e) which governs the evidentiary standards in IPR proceedings. The Federal Circuit found this argument unpersuasive. Section 316(e) “applies to ‘an IPR instituted under this chapter,’” where the burden “is on the petitioner to prove unpatentable those issued claims that were actually challenged in the petition for review and for which the Board instituted review.” It “does not necessarily apply to claims that were not in existence at the time a petition is filed, such as newly offered substitute claims proposed by a patent owner in a motion to amend filed as a part of an already-instituted IPR proceeding.” Thus, Section 316(e) does not preclude “placing the burden on [patent owners] to establish patentability over the prior art of [their] proposed substitute claims.” |
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| Written by Dan Hoang, Associate – Winston & Strawn LLP |
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The patentee claimed infringement of its intraluminal stent technology patent, and the alleged infringer filed a petition for inter partes review (IPR) on the grounds that the patent was invalid as obvious. The resolution of this case hinged on the issue of claim construction. The alleged infringer appealed the Patent Trial and Appeal Board’s (PTAB’s or Board’s) decision on several grounds.
The key issue on appeal was the PTAB’s construction of term “circumferential ridges.” Even though the term was not limited by its terms to “continuously formed” ridges, the PTAB found that the term did not include a series of the stent. The accused infringer appealed the decision on the basis that the broadest reasonable interpretation of the term included “an elevated part of the outer surface” that could be either “continuous or discontinuous.”
First, the alleged infringer appealed the PTAB’s decision to not use a topological or cartographical definition of the word “ridge” in evaluating the “broadest reasonable interpretation” of the term, which would have resulted in a broader definition and more importantly, in a finding of obviousness. The Federal Circuit reiterated that a general dictionary definition that is consistent with both the specification’s teachings and the remaining claim limitation takes precedence over a topological or cartographical definition. The court stated that the “broadest reasonable interpretation standard does not give the Board an unfettered license to interpret the words in a claim without regard for the full claim language and the written description.”
The alleged infringer also argued that the PTAB should have applied the doctrine of prosecution history disclaimer to prohibit a construction of “ridges” that is limited to continuous ridges, as opposed to including both continuous and discontinuous ridges. Specifically, the infringer argued that because the patentee responded to the initial rejection by stating that the patent did not disclose “continuous” ridges, and then introduced an amendment adding the word “continuously” to the claim phrase; and because the patentee did not expressly include the term “continuous” in the final issued claims; prosecution history disclaimer should bar the patentee from arguing for a construction that is limited to “continuous” ridges, which was not claimed in the final issued claims.
The Federal Circuit ruled that the alleged patent infringer failed to meet its burden of demonstrating the existence of a “clear and unmistakable” disclaimer that would have been evident to one skilled in the art. Although the patentee did offer the “continuous” ridges limitation as one of several possible bases for distinguishing the prior art, the examiner never adopted this particular amendment as the reason for allowing the claims over the prior art. Only after a series of subsequent exchanges and interviews showing that the position of the examiner and the patentee changed, did the examiner ultimately allow the claims over the prior art without the proposed amendment. Thus, the examiner was convinced of the patentability of the claimed invention over the prior art by the other amendments made to the relevant claim, without regard to the proposed addition of the word “continuously” to the claims.
Finally, the alleged patent infringer contended that the PTAB’s conclusion of nonobviousness was inconsistent with its findings from its institution decision because the PTAB ruled that the alleged infringer had initially demonstrated a reasonable expectation of success in demonstrating obviousness. However, the Federal Circuit noted that the PTAB is free to change its view of the merits at the trial stage from its initial findings at the institution stage, after further development of the record. |
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| Written by Prachi Mehta, Associate – Winston & Strawn LLP |
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The petitioner filed for inter partes review (IPR) of certain claims of the patentee’s method patent. The petitioner appealed the Patent Trial and Appeal Board’s (PTAB’s) ruling, and the patentee cross-appealed.
The petitioner appealed the final PTAB decision on the grounds that it did not rule on all of the claims raised in the IPR petition, arguing that the statutes governing IPR direct the PTAB to address “every” claim in a petition. The Federal Circuit disagreed, finding that there was no statutory requirement to address claims beyond those for which IPR was granted. It held that 35 U.S.C. § 314(a) authorizes a “claim-by-claim inquiry” into a petition, and thus “strongly implies” that the PTAB has no obligation either to institute IPR or issue a final decision on every claim raised in the petition. The Federal Circuit further found that 35 U.S.C. § 318(a) requires only that the PTAB “issue a final decision with respect to claims on which IPR has been initiated,” rather than all challenged claims.
The patentee separately appealed the PTAB’s denial of the patentee’s motion to substitute certain claims on which IPR had been instituted. The Federal Circuit denied the appeal, citing its prior rulings in Microsoft Corp. v. Proxyconn, Inc. and Prolitec Inc. v. ScentAir Technologies, Inc. to affirm that the PTAB may place the burden of proving patentability of substitute claims on the patentee for the prior art of record in the IPR. |
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| Written by Christopher Wilson, Associate – Winston & Strawn LLP |
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The patentee claimed infringement of several patents concerning processes for manufacturing respirator filters. The alleged infringer sued for declaratory judgment. After a jury trial, the district court held the patents to be invalid and unenforceable due to inequitable conduct, and also awarded the alleged infringer damages based on a Walker Process antitrust claim. The patentee appealed the district court’s judgment on antitrust liability, inequitable conduct, and validity. The Federal Circuit affirmed.
The patentee appealed two aspects of the district court’s judgment on antitrust liability: (1) purported flaws in determining the relevant market; and (2) using attorneys’ fees for the infringement claim to determine antitrust damages.
First, the Federal Circuit reiterated that for antitrust claims “the relevant market is defined by both a product market and a geographic market.” For the product market, the court held that sufficient evidence existed for a reasonable jury to conclude that the specific product identified by the alleged infringer could form a distinct market. For the geographic market, the court held that the patentee erred in arguing that a U.S. market only included U.S. manufacturers. The court noted that the geographic market “is comprised of the area where [seller’s] customers would look to buy such a product” and not the area where the manufacturers reside.
Second, the patentee argued that using the attorneys’ fees for the infringement claim (as opposed to the antitrust claim) as the basis for antitrust damages was improper. The Federal Circuit stated that in the face of the patentee unlawfully bringing suit on fraudulently obtained patents, the alleged infringer’s only options were to cease competition or defend against the suit (the patentee would not license the asserted patents). Because the attorneys’ fees were attributable to the patentee’s unlawful behavior, the court affirmed the district court’s holding that the attorneys’ fees “qualify as an antitrust injury and thus can form the basis of damages under §4.” |
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| Written by Michael Woods, Of Counsel – Winston & Strawn LLP |
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The appeal results from a patent infringement suit and countersuit between Apple and Samsung relating to patents that cover various aspects of the operation of smartphones, including Apple iPhone’s “slide-to-unlock” feature–which allows a user to slide a moving image across the screen of the phone with his/her finger to unlock the phone–and the “autocorrect” feature–which automatically corrects typing errors. After a jury trial, the district court entered a judgment awarding Apple $119,625,000 in damages and ongoing royalties for infringement, while Samsung was awarded $158,400 in damages. Both Apple and Samsung appealed. The Federal Circuit affirmed-in-part and reversed-in-part. The court’s decision voided Apple’s approximately $120 million jury win.
Apple claimed infringement to patent claims requiring an “analyzer server,” which is a data-structure detection process that automatically identifies items within text such as telephone numbers or dates. On the last day of trial, the Federal Circuit issued a decision in another case—Apple Inc. v. Motorola, Inc., 757 F.3d 1286 (Fed. Cir. 2014)—construing the claim term of “analyzer server” to mean “a server routine separate from a client that receives data having structures from the client.” Although Apple recalled its expert to testify on this new construction, the Federal Circuit found that Apple’s position was based on the claim construction that the court ultimately rejected in Motorola—that the “analyzer server need not be a separate piece of software that runs on its own.” Therefore, the court reversed the jury decision.
Further, regarding the slide-to-unlock and auto-correction claims, Samsung argued these claims were invalid as obvious over the prior art. Apple did not contest the relevance of the art but instead opposed the patents’ invalidity by presenting evidence of copying, commercial success, industry praise, and satisfying a long-felt but unresolved need. The Federal Circuit found these secondary conditions too weak to overcome the evidence of obviousness based upon the prior art. In particular, the court found that: (1) Apple’s contention of long-felt but unresolved need was nothing more than an unsupported assertion because no evidence was presented to show that the problem was recognized in the industry; (2) approval by Apple fans during the presentation of the iPhone was not legally sufficient, as fans were not necessarily persons that were skilled in the art; (3) Apple’s contention that Samsung copied the iPhone’s unlock mechanism was not accurate, because what was in fact copied was using fixed starting and ending points for the slide, and that this was not shown in the prior art; and (4) Apple’s contention that customers prefer to purchase a device with a slide-to-unlock or an auto-correct feature did not show a nexus to the claimed device when the evidence did not show that the alternative devices that were reviewed did not have comparative features. |
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| Written by Ryan Dunigan, Associate – Winston & Strawn LLP |
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A potential infringer sued to correct the inventorship on three patents owned exclusively by a competitor. The potential infringer claimed an ownership interest in the three patents by an assignment from an unnamed inventor and sought to correct the inventorship on the patents. The district court dismissed the case for lack of standing, and the potential infringer appealed.
On appeal, the patentee claimed that the unnamed inventor had assigned any interest in the patents as part of a consulting agreement, which included clauses covering any inventive work that might have taken place prior to the effective term of the agreement. After reviewing the consulting agreement, the Federal Circuit disagreed and held that under California law, the agreement could not be read as an assignment of inventive work that occurred prior to the effective date of the agreement. At best, the agreement granted a non-exclusive license to the patentee, and the unnamed inventor was still free to assign his interest in the patents to a third party.
The Federal Circuit reversed and remanded to the district court to resolve the question of whether the alleged inventor’s continuing work after the effective date of the agreement amounted to development or reduction to practice of the actual inventions claimed in the patents. |
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| Written by Anthony Pesce, Associate – Winston & Strawn LLP |
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Winston & Strawn Contacts |
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| David Enzminger |
Co-Chair, Intellectual Property Practice
SV: +1 (650) 858-6580
L.A.: +1 (213) 615-1780
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