Welcome to Winston & Strawn’s Federal Circuit Patent Decision Summaries. This bulletin provides a short summary of, and links 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.

The verdict that the patent was valid and infringed was upheld, after the Federal Circuit found the verdict to be supported by substantial evidence. The District Court’s refusal to enter an injunction was vacated on appeal, because the refusal was premised on a representation—that defendant would cease infringing activities—later shown to be false.

Edwards Lifesciences AG v Corevalve Inc., Nos. 2011-1215, -1257 (Fed. Cir. Nov. 13, 2012).

The patented invention is a prosthetic device called a “transcatheter heart valve.” At trial, the accused infringers challenged validity on the basis that the only working example in the patent specification demonstrated the use of the invention in a pig and therefore the full scope of the invention (including use in humans) was not enabled. The jury found that the accused valve infringed the patent, which remained valid. The district court entered judgment on the verdict of validity and infringement, refused to enhance damages for willful infringement, and declined to issue an injunction. The patentee appealed the denying of enhanced damages for willfulness and an injunction, and the alleged infringer appealed infringement, validity, and damages.

The Federal Circuit upheld the entry of judgment on validity and infringement. The court found that the jury verdict was supported by substantial evidence, including expert testimony on the use of pigs as a standard experimental animal and the nature of the ongoing experimentation. On infringement, the Federal Circuit held that the district court’s construction comports with the patent specification, and that the jury’s finding of infringement was supported by substantial evidence. 

The Federal Circuit also upheld the jury award of damages, rejecting the defendant’s argument that it could have avoided liability by moving its manufacturing overseas. The Federal Circuit also held that the district court’s refusal to enhance damages where issues were close was not an abuse of discretion. However, the Federal Circuit did reverse the district court’s holding that an injunction was unnecessary based on representations that defendant was moving its manufacturing overseas. In part because this representation proved to be false and circumstances had changed, the Federal Circuit vacated the denial of injunction and remanded to the district court. 

Judge Prost filed a concurring opinion. She joined in the majority opinion in all respects except to the extent that the majority implied that there exists a presumption that a successful plaintiff is entitled to an injunction, which presumption must be rebutted by the defendant. 

A copy of the opinion can be found here. 

A direct purchaser has standing to assert a Walker Process antitrust claim even if it does not have standing to challenge the validity of the patent.

Ritz Camera & Image, LLC v. Sandisk Corp., No. 2012-1183 (Fed. Cir. Nov. 20, 2012).

A district court denied the defendant’s motion to dismiss for lack of standing in a suit alleging antitrust violations predicated on the enforcement of a patent known to have been fraudulently procured—i.e., a Walker Process antitrust claim. The Federal Circuit granted the defendant’s request for an interlocutory appeal on the question of “whether direct purchasers who cannot challenge a patent’s validity or enforceability … may nevertheless bring a Walker Process antitrust claim that includes as one of its elements the need to show that the patent was procured through fraud.” 

The Federal Circuit affirmed the district court’s decision. The panel noted that the Supreme Court’s Walker Process opinion rejected an argument similar to the defendant’s that only parties with standing to challenge the validity of a patent have standing to assert the related antitrust claim. If the patent at issue was procured by fraud, then it would not be exempt from the Sherman and Clayton Acts, and therefore would be actionable by a direct purchaser who can otherwise prove antitrust standing. In fact, direct purchasers are preferred plaintiffs in Walker Process claims because they are most directly affected by the alleged fraud. Finally, the Federal Circuit found that the demanding proof requirements of a Walker Process claim would prevent a “flood of litigation” from parties not normally able to challenge a patent’s validity. 

A copy of the opinion can be found here. 

A preliminary injunction enjoining patent infringement involves substantive matters unique to patent law, and therefore, is governed by the law of the Federal Circuit.

Revision Military, Inc. & Revision Military, Ltd. v. Balboa Manufacturing Co., No. 2011-1628 (Fed. Cir. Nov. 27, 2012).

Revision Military, Inc. (“Revision”) and Balboa Manufacturing Co. (“Balboa”) design, manufacture, and sell protective eyewear. Revision alleged that Balboa’s new “Bravo” design protective goggles copied and infringed Revision’s “Bullet Ant” goggles, covered by U.S. Design Patents No. 537,098 and No. 620,039. Revision filed a motion for a preliminary injunction, seeking to enjoin Balboa from making or selling its “Bravo” goggles while the litigation was pending. The district court denied the preliminary injunction, applying the Second Circuit’s heightened standard of “clear” and “substantial” likelihood of success, as established in Doninger v. Niehoff, 527 F.3d 41 (2d Cir. 2008).

The Federal Circuit concluded that the district court erred in applying the Second Circuit’s heightened standard of likelihood of success on the merits, instead of the Federal Circuit’s standard for consideration of whether to impose such relief. As such, the Federal Circuit vacated the decision, and remanded for redetermination under the appropriate standard.

The Federal Circuit explained that the Supreme Court in Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008) stated the general criteria for a preliminary injunction. Within that framework, district courts have developed various elaborations of the standard. The Second Circuit held, in Doninger, that the heightened standard of “clear” or “substantial” likelihood of success on the merits applies when a movant seeks “an injunction that will alter rather than maintain the status quo.” The district court held that the Doninger standard applied in this case. However, “a preliminary injunction enjoining a patent infringement pursuant to 35 U.S.C. § 283 involves substantive matters unique to patent law and, therefore, is governed by the law of this court.” Thus, the estimated likelihood of success in establishing infringement is governed by Federal Circuit law. On remand, the district court must apply the Federal Circuit’s more-likely-than-not standard.

The Federal Circuit continued, explaining that the “ordinary observer” test governs whether a design patent has been infringed. While the district court stated the correct standard, they did not consider the prior art context in which the ordinary observer test is to be applied. On remand, the district court must apply the design-as-a-whole criterion. 

A copy of the opinion can be found here.  

Under Section 102(g), in order to invalidate a patent claim on the ground of prior inventorship, an alleged infringer must prove either that it conceived of the invention first and was diligent in reducing it to practice or that it reduced its invention to practice before the critical date of the patent-at-issue.

The Fox Group, Inc. v. Cree, Inc., No. 2011-1576 (Fed. Cir. Nov. 28, 2012).

The patent at issue is directed to a silicon carbide (“SiC”) wafer comprised of SiC material with specific low defect densities and the patent claims priority from a 1997 patent application. SiC is a semiconductor material that is used in high-temperature and high-power electronics. The alleged infringer sought to invalidate the patent on the basis of prior inventorship, under 35 U.S.C. § 102(g). The district court granted the alleged infringer’s motion for summary judgment on the question of the validity of the patent.

With respect to inventorship, the Federal Circuit determined that in order to demonstrate inventorship, the alleged infringer need only prove either that the inventor conceived of the invention first and was diligent in reducing it to practice or that the inventor reduced its invention to practice before the critical date of the patent-at-issue. Further, in order for an alleged infringer to prove that it reduced the invention to practice before the critical date of the patent-at-issue, it need not prove repeatability, meaning that it need not show that its conception is actually repeatable by those skilled in the art without undue experimentation. Moreover, the prior inventor is not required to establish that it recognized the invention in the same terms as those recited in the patent claim. The Federal Circuit held that the alleged infringer demonstrated reduction to practice by developing a SiC wafer that met all three defect density limitations of all claims of the patent. 

With respect to abandonment, suppression, or concealment, the Federal Circuit determined that only process claims require an enabling disclosure in order to provide an adequate disclosure to the public. Because the patent claimed in this case was directed at a product, not a process, the alleged infringer did not have to disclose how it arrived at its results. The Federal Circuit held that the alleged infringer promptly and publicly made its invention, a SiC material with low defect densities, known to the public through a conference presentation and a published paper.

The Federal Circuit upheld the district court’s finding of invalidity as to two claims of the patent, holding that the alleged infringer produced clear and convincing evidence that it had produced the low density SiC crystal prior to the patentee’s date of invention and that the patentee had not produced sufficient evidence to show or raise genuine issues that the alleged infringer abandoned, suppressed, or concealed the invention. The Federal Circuit vacated the district court’s decision that the entire patent was invalid because the patentee had narrowed the scope of its asserted claims before summary judgment, and, therefore, the district court lacked jurisdiction over the unasserted claims.

One judge concurred in part and dissented in part, agreeing that the alleged infringer reduced its invention to practice but disagreeing that the record supported the conclusion that as a matter of law the alleged infringer neither abandoned, suppressed, nor concealed its invention. The dissent argued that simply disclosing the existence of a product is insufficient to make an invention publicly known.

A copy of the opinion can be found here.