Cochlear Corp. v. Alfred E. Mann Foundation (Supreme Court 2020)

It is always tricky for a defendant to appeal solely on damages.  Here, Mann filed this patent case back in 2007 and finally got to trial in 2014.  The jury answered as follows:

• Infringement: Yes
• Willfulness: Yes
• Invalid: No

The jury form on damages focused on notice-of-infringement; reasonable royalty rates; and also a grand total for damages — $131 million.

Following the verdict, the district court held a bench-trial on indefiniteness and found some of the claims indefinite.  Since some of the infringed-claims were now invalid, the court awarded a new trial on damages issues. In addition, the court granted JMOL of no-willful-infringement. On appeal, the Federal Circuit reversed the willfulness judgment since Halo‘s more flexible test had replaced Seagate by that time.  The new damages trial was also appealed, but the Federal Circuit refused to consider the issue since a new trial order is not a final judgment.

On remand, the district court reconsidered its new trial order — and instead reinstated the verdict.  The court decided that the verdict questions structured to allow damages on “either” of the patents. Since claims in one of the patents were still valid and infringed, the court found the verdict sufficient.  This was supported by the evidence since the damages expert had apparently treated the patents together as a group.  The court also reinstated the jury’s willfulness decision and then doubled the verdict — up to $268 million.  Now the money is getting serious.

Cochlear appealed again and the Federal Circuit affirmed and then denied rehearing.  Now the case is pending before the Supreme Court on petition for writ of certiorari and with three very specific damages questions:

1. Whether the Federal Circuit has misapplied the “book of wisdom” set forth in Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689 (1933), by allowing a reasonable royalty for patent infringement under the Patent Act, 35 U.S.C. § 284, to be determined by evidence arising long after the hypothetical negotiation on which that royalty is based?
2. Whether Maryland v. Baldwin, 112 U.S. 490 (1884), forecloses an award of damages under a general damages verdict where some claims underlying that award are overturned after trial, and if so, whether a party may challenge such a result notwithstanding agreement to a general damages verdict?
3. Whether Garretson v. Clark, 111 U.S. 120 (1884), requires apportionment of patent damages to the inventive contribution of the claimed technology?

[Cochlear Petition].  A group of law professors have filed an amicus brief supporting certiorari of question 2: “to resolve the circuit split on how to treat general jury damages verdicts when the underlying verdict is overturned in part.” [Professor Petition].

The first question focuses on what information should be available during hindsight-focused hypothetical negotiation used to calculate damages.  In Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689 (1933), the Supreme Court indicated that post-infringement evidence offers a “book of wisdom that courts may not neglect.”  Still, the infringer argues that the book should not include evidence arising “long after the hypothetical negotiations” theoretically occurred.

The second question highlights the 1884 Supreme Court decision of Maryland v. Baldwin. Baldwin is an odd case to cite — it is an estates case involving inheritance and common-law marriage.   But, the key of the case is its holding that a general verdict becomes faulty when one of several possible claims is found in error.

The third question asks about apportionment under Garretson v. Clark, 111 U.S. 120 (1884). In that case, the lower court found infringement, but awarded no damages. The Supreme Court affirmed with the following guidance:

Id. The Federal Circuit has recognized that apportionment is important, but is considered as part of the traditional reasonable royalty analysis.

In re Nitro Fluids LLC (Fed. Cir. 2020)

• 2018 — Cameron sued Nitro in S.D. Tex (Houston) where both companies are located.  That case is still pending.
• 2020 — Cameron separately sued Nitro in W.D. Tex (Waco).  The new action accuses the same Nitro products but asserts different (albeit related) patents.  The patents asserted include overlapping patent-families and inventorship.  Cameron also separately sued “Butch’s Rathole & Anchor Service, Inc.” on the patents in W.D. Tex.

Nitro asked the W.D.Tex court (Judge Albright) to transfer its case to S.D.Tex, but Judge Albright refused.

The courts generally follow a first-to-file presumption for situations like this where there are two different cases filed in two different venues that involve the same parties and substantially overlapping issues.  The presumption is that the cases should both be tried in the same venue, and that venue is the one where the first-case was filed.  Wright & Miller explains:

Although the burden generally is on the moving party to establish that there should be a change of venue, when two courts have concurrent jurisdiction over a dispute involving the same parties and issues, as a general proposition, the forum in which the first-filed action is lodged has priority.

Fed. Prac. & Proc. § 3854 Standard in Considering Transfer—Interest of Justice.  I should also note here that the Federal Circuit repeatedly refers to this as the “first-to-file rule” while I think it is more of a presumption.  Their naming of this as a “rule” foreshadows their conclusion — that it must be followed.

Nitro’s motion to transfer was filed under 28 U.S.C. § 1404.  That statute permits change of venue for convenience and in the interest of justice.  Typically this type of transfer analysis considers a balance of public and private factors: interest of justice; judicial economy; court’s familiarity with the law; local interest in deciding the case; convenience of the parties and witnesses; plaintiff’s forum preference; etc.

Here, Judge Albright walked through the traditional § 1404 factors and concluded that the interest-of-justice weighed in favor of keeping the lawsuit in Waco.  In particular, Judge Albright found that his docket was much lighter and faster than those of the Houston judges, and that there were also other parallel cases in W.D. Tex. involving other defendants that could lead to inconsistent verdicts.

On mandamus, the Federal Circuit has given effect to the first-to-file rule — holding that the full Section 1404 analysis was improper.

[Judge Albright’s] determination rested on the legal proposition that the first-to-file rule is only applicable when the balance of factors favors the first-filed court.

That proposition is contrary to law.

Slip Op. (Internal citations eliminated).

To be clear, the court is not saying that the Section 1404 factors are irrelevant. Rather, as a matter of procedure, the first-to-file rule sticks absent “compelling circumstances” to justify an exception. Those compelling circumstances might come from a traditional Section 1404 factor.

The court justified this departure from the ordinary balancing because the second-filer “is insisting on having two substantially overlapping proceedings continue at the same time before two different courts.”

In its mandamus opinion, the court did not order transfer, but rather vacated the original judgment and demanded that on remand the district court consider whether its justification for keeping the case is “compelling.”

TecSec, Inc. v. Adobe Inc.  (Fed. Cir. 2020)

The simple setup in this case:

• 2011: Following claim construction, TecSec stipulated that use of Adobe’s product does not infringe the asserted patents.
• 2013: Claim construction is reversed on appeal, and the infringement case started-up again.

The question on appeal:

• During the 2011-2013 timeline — is it legally possible for Adobe to induce infringement? In other words, could Adobe have the have the requisite intent necessary to induce infringement?

The Answer:

• Yes, intent to cause infringement may still be provable based upon subjective-bad-faith, even if the behavior was “objectively reasonable.”
• The court writes: “As a logical matter, a defendant may have the liability-supporting subjective state of mind even if a person could believe, with objective reasonableness (though wrongly), that the induced conduct was not infringing. To make the point in terms of this case, Adobe may have had the requisite knowledge of infringement if it believed (as we ultimately held in 2013) that the March 3, 2011 claim construction was incorrect, even if that construction was objectively reasonable.”

= = = =

This case has been ongoing since 2010.  Back in 2011, the district court issued a narrowing claim-construction with the result of a stipulated dismissal of non-infringement.  The Federal Circuit reversed that outcome in 2013 with a broader construction — setting up the eventual 2018 trial.

TecSec’s theory focused on both direct and induced infringement.  Just before trial, the district court granted Adobe’s motion in limine to prevent TecSec from presenting any inducement evidence from between the 2011 claim construction and the 2013 reversal.

Defendant Adobe lacked the requisite intent to induce infringement or willfully infringe during the time period where the Court had reasonably, though erroneously, ruled in Adobe’s favor on infringement and TecSec had entered a stipulation of noninfringement.

InLimineOrder.  The trial went on and TecSec was able to convince the jury on the direct infringement claim, but not on inducement. [Verdict.] The Jury also awarded $1.75 million in compensatory damages.  At that point, however, the district court issued a JNOV order (renewed JMOL) that reduced the award down to ZERO DOLLARS — holding that the damages evidence was all tied to the inducement theory.

The record is … devoid of qualified testimony regarding appropriate damages for Adobe’s direct infringement … [T]he jury’s damages award of $1.75 million must be vacated in its entirety as inherently speculative and unsupported by the record.

DCT JMOL Opinion [JMOL Opinion].   

On appeal, the Federal Circuit has reversed — holding that it was not proper to exclude the evidence of 2011-2013 inducement as noted above.

Although this looks like a win for the patentee, on remand I expect that the district court will open the door for a pretrial summary judgment motion regarding whether TecSec can prove subjective-intent to infringe.

The following is simply the text of the Supreme Court’s 1895 decision:

Consol. Electric Light Co v. McKeesport Light Co, 159 U.S. 465 (1895) [16_S.Ct._75]

Consol. Electric Light Co v. McKeesport Light Co, 159 U.S. 465 (1895) 

This was a bill in equity, filed by the Consolidated Electric Light Company against the McKeesport Light Company, to recover damages for the infringement of letters patent No. 317,[6]76, issued May 12, 1885, to the Electro-Dynamic Light Company, assignee of Sawyer and Man, for an electric light. The defendants justified under certain patents to Thomas A. Edison, particularly No. 223,898, issued January 27, 1880; denied the novelty and utility of the complainant’s patent; and averred that the same had been fraudulently and illegally procured. The real defendant was the Edison Electric Light Company, and the case involved a contest between what are known as the Sawyer and Man and the Edison systems of electric lighting. 

In their application, Sawyer and Man stated that their invention related to ‘that class of electric lamps employing an incandescent conductor [e]nclosed in a transparent, hermetically sealed vessel or chamber, from which oxygen is excluded, and … more especially to the incandescing conductor, its substance, its form, and its combination with the other elements composing the lamp. Its object is to secure a cheap and effective apparatus; and our improvement consists, first, of the combination, in a lamp chamber, composed wholly of glass, as described in patent No. 205,144,’ upon which this patent was declared to be an improvement, ‘of an incandescing conductor of carbon made from a vegetable fibrous material, in contradistinction to a similar conductor made from mineral or gas carbon, and also in the form of such conductor so made from such vegetable carbon, and combined in the lighting circuit with the exhausted chamber of the lamp.’

The following drawings exhibit the substance of the invention:

​

The specification further stated that:

‘In the practice of our invention, we have made use of carbonized paper, and also wood carbon. We have also used such conductors or burners of various shapes, such as pieces with their lower ends secured to their respective supports, and having their upper ends united so as to form an inverted V-shaped burner. We have also used conductors of varying contours,—that is, with rectangular bends instead of curvilinear ones; but we prefer the arch shape.’

‘No especial description of making the illuminating carbon conductors, described in this specification, and making the subject-matter of this improvement, is thought necessary, as any of the ordinary methods of forming the material to be carbonized to the desired shape and size, and carbonizing it while confined in retorts in powdered carbon, substantially according to the methods in practice before the date of this improvement, may be adopted in the practice thereof by any one skilled in the arts appertaining to the making of carbons for electric lighting or for other use in the arts.’

‘An important practical advantage which is secured by the arch form of incandescing carbon is that it permits the carbon to expand and contract under the varying temperatures to which it is subjected when the electric current is turned on or off without altering the position of its fixed terminals. Thus, the necessity for a special mechanical device to compensate for the expansion and contraction which has heretofore been necessary is entirely dispensed with, and thus the lamp is materially simplified in its construction. Another advantage of the arch form is that the shadow cast by such burners is less than that produced by other forms of burners when fitted with the necessary devices to support them.’

‘Another important advantage resulting from our construction of the lamp results from the fact that the wall forming the chamber of the lamp through which the electrodes pass to the interior of the lamp is made wholly of glass, by which all danger of oxidation, leakage, or short-circuiting is avoided.’

‘The advantages resulting from the manufacture of the carbon from vegetable fibrous or textile material instead of mineral or gas carbon are many. Among them may be mentioned the convenience afforded for cutting and making the conductor in the desired form and size, the purity and equality of the carbon obtained, its susceptibility to tempering, both as to hardness and resistance, and its toughness and durability. We have used such burners in closed or hermetically sealed transparent chambers, in a vacuum, in nitrogen gas, and in hydrogen gas; but we have obtained the best results in a vacuum, or an attenuated atmosphere of nitrogen gas, the great desideratum being to exclude oxygen or other gases capable of combining with carbon at high temperatures from the incandescing chamber, as is well understood.’

The claims were as follows:

‘(1) An incandescing conductor for an electric lamp, of carbonized fibrous or textile material, and of an arch or horseshoe shape, substantially as hereinbefore set forth.’

‘(2) The combination, substantially as hereinbefore set forth, of an electric circuit and an incandescing conductor of carbonized fibrous material, included in and forming part of said circuit, and a transparent, hermetically sealed chamber, in which the conductor is inclosed.’

‘(3) The incandescing conductor for an electric lamp, formed of carbonized paper, substantially as described.’

‘(4) An incandescing electric lamp consists of the following elements in combination: First, an illuminating chamber made wholly of glass hermetically sealed, and out of which all carbon-consuming gas has been exhausted or driven; second, an electric-circuit conductor passing through the glass wall of said chamber, and hermetically sealed therein, as described; third, an illuminating conductor in said circuit, and forming part thereof within said chamber, consisting of carbon made from a fibrous or textile material, having the form of an arch or loop, substantially as described, for the purpose specified.’

The commercial Edison lamp used by the appellee, and which is illustrated below, is composed of a burner, A, made of carbonized bamboo of a peculiar quality, discovered by Mr. Edison to be highly useful for the purpose, and having a length of about 6 inches, a diameter of about 5/1000 of an inch, and an electrical resistance of upward of 100 ohms. This filament of carbon is bent into the form of a loop, and its ends are secured by good electrical and mechanical connections to two fine platinum wires, B, B. These wires pass through a glass stem, C, the glass being melted and fused upon the platinum wires. A glass globe, D, is fused to the glass stem, C. This glass globe has originally attached to it, at the point d, a glass tube, by means of which a connection is made with highly organized and refined exhausting apparatus, which produces in the globe a high vacuum, whereupon the glass tube is melted off by a flame, and the globe is closed by the fusion of the glass at the point d.

Upon a hearing in the circuit court before Mr. Justice Bradley, upon pleadings and proofs, the court held the patent to be invalid, and dismissed the bill. 40 Fed. 21. Thereupon complainant appealed to this court.

Attorneys: Leonard E. Curtis and Edmund Wetmore, for appellant; F. P. Fish, for appellee.

Opinion: Mr. Justice BROWN, after stating the facts in the foregoing language, delivered the opinion of the court.

In order to obtain a complete understanding of the scope of the Sawyer and Man patent, it is desirable to consider briefly the state of the art at the time the application was originally made, which was in January, 1880.

Two general forms of electric illumination had for many years been the subject of experiments more or less successful, one of which was known as the ‘arc light,’ produced by the passage of a current of electricity between the points of two carbon pencils placed end to end, and slightly separated from each other. In its passage from one point to the other through the air, the electric current took the form of an arc, and gave the name to the light. This form of light had been produced by Sir Humphry Davy as early as 1810, and, by successive improvements in the carbon pencils and in their relative adjustment to each other, had come into general use as a means of lighting streets, halls, and other large spaces; but by reason of its intensity, the uncertain and flickering character of the light, and the rapid consumption of the carbon pencils, it was wholly unfitted for domestic use. The second form of illumination is what is known as the ‘incandescent system,’ and consists generally in the passage of a current of electricity through a continuous strip or piece of refractory material, which is a conductor of electricity, but a poor conductor; in other words, a conductor offering a considerable resistance to the flow of the current through it. It was discovered early in this century that various substances might be heated to a white heat by passing a sufficiently strong current of electricity through them. The production of a light in this way does not in any manner depend upon the consumption or wearing away of the conductor, as it does in the arc light. The third system was a combination of the two others, but it never seems to have come into general use, and is unimportant in giving a history of the art.

For many years prior to 1880, experiments had been made by a large number of persons, in various countries, with a view to the production of an incandescent light which could be made available for domestic purposes, and could compete with gas in the matter of expense. Owing party to a failure to find a proper material, which should burn but not consume, partly to the difficulty of obtaining a perfect vacuum in the globe in which the light was suspended, and partly to a misapprehension of the true principle of incandescent lighting, these experiments had not been attended with success; although it had been demonstrated as early as 1845 that, whatever material was used, the conductor must be inclosed in an art-tight bulb, to prevent it from being consumed by the oxygen in the atmosphere. The chief difficulty was that the carbon burners were subject to a rapid disintegration or evaporation, which electricians assumed was due to the disrupting action of the electric current, and hence the conclusion was reached that carbon contained in itself the elements of its own destruction, and was not a suitable material for the burner of an incandescent lamp.

It is admitted that the lamp described in the Sawyer and Man patent is no longer in use, and was never a commercial success; that it does not embody the principle of high resistance with a small illuminating surface; that it does not have the filament burner of the modern incandescent lamp; that the lamp chamber is defective; and that the lamp manufactured by the complainant, and put upon the market, is substantially the Edison lamp; but it is said that, in the conductor used by Edison (a particular part of the stem of the bamboo, lying directly beneaty the siliceous cuticle, the peculiar fitness for which purpose was undoubtedly discovered by him), he made use of a fibrous or textile material covered by the patent to Sawyer and Man, and is therefore an infringer. It was admitted, however, that the third claim—for a conductor of carbonized paper—was not infringed.

The two main defenses to this patent are (1) that it is defective upon its face, in attempting to monopolize the use of all fibrous and textile materials for the purpose of electric illuminations; and (2) that Sawyer and Man were not in fact the first to discover that these were better adapted than mineral carbons to such purposes.

Is the complainant entitled to a monopoly of all fibrous and textile materials for incandescent conductors? If the patentees had discovered in fibrous and textile substances a quality common to them all, or to them generally, as distinguishing them from other materials, such as minerals, etc., and such quality or characteristic adapted them peculiarly to incandescent conductors, such claim might not be too broad. If, for instance, minerals or porcelains had always been used for a particular purpose, and a person should take out a patent for a similar article of wood, and woods generally were adapted to that purpose, the claim might not be too broad, though defendant used wood of a different kind from that of the patentee. But if woods generally were not adapted to the purpose, and yet the patentee had discovered a wood possessing certain qualities, which gave it a peculiar fitness for such purpose, it would not constitute an infringement for another to discover and use a different kind of wood, which was found to contain similar or superior qualities. The present case is an apt illustration of this principle. Sawyer and Man supposed they had discovered in carbonized paper the best material for an incandescent conductor. Instead of confining themselves to carbonized paper, as they might properly have done, and in fact did in their third claim, they made a broad claim for every fibrous or textile material, when in fact an examination of over 6,000 vegetable growths showed that none of them possessed the peculiar qualities that fitted them for that purpose. Was everybody, then, precluded by this broad claim from making further investigation? We think not.

The injustice of so holding is manifest in view of the experiments made, and continued for several months, by Mr. Edison and his assistants, among the different species of vegetable growth, for the purpose of ascertaining the one best adapted to an incandescent conductor. Of these he found suitable for his purpose only about three species of bamboo, one species of cane from the valley of the Amazon (impossible to be procured in quantities on account of the climate), and one or two species of fibers from the agave family. Of the special bamboo, the walls of which have a thickness of about 3/8 of an inch, he used only about 20/1000 of an inch in thickness. In this portion of the bamboo the fibers are more nearly parallel, the cell walls are apparently smallest, and the pithy matter between the fibers is at its minimum. It seems that carbon filaments cannot be made of wood,—that is, exogenous vegetable growth,—because the fibers are not parallel, and the longitudinal fibers are intercepted by radial fibers. The cells composing the fibers are all so large that the resulting carbon is very porous and friable. Lamps made of this material proved of no commercial value. After trying as many as 30 or 40 different woods of exogenous growth, he gave them up as hopeless. But finally, while experimenting with a bamboo strip which formed the edge of a palm-leaf fan, cut into filaments, he obtained surprising results. After microscopic examination of the material, he dispatched a man to Japan to make arrangements for securing the bamboo in quantities. It seems that the characteristic of the bamboo which makes it particularly suitable is that the fibers run more nearly parallel than in other species of wood. Owing to this, it can be cut up into filaments having parallel fibers, running throughout their length, and producing a homogeneous carbon. There is no generic quality, however, in vegetable fibers, because they are fibrous, which adapts them to the purpose. Indeed, the fibers are rather a disadvantage. If the bamboo grew solid, without fibers, but had its peculiar cellular formation, it would be a perfect material, and incandescent lamps would last at least six times as long as at present. All vegetable fibrous growths do not have a suitable cellular structure. In some the cells are so large that they are valueless for that purpose. No exogenous, and very few endogenous, growths are suitable. The messenger whom he dispatched to different parts of Japan and China sent him about 40 different kinds of bamboo, in such quantities as to enable him to make a number of lamps, and from a test of these different species he ascertained which was best for the purpose. From this it appears very clearly that there is no such quality common to fibrous and textile substances generally as makes them suitable for an incandescent conductor, and that the bamboo which was finally pitched upon, and is now generally used, was not selected because it was of vegetable growth, but because it contained certain peculiarities in its fibrous structure which distinguished it from every other fibrous substance. The question really is whether the imperfectly successful experiments of Sawyer and Man, with carbonized paper and wood carbon, conceding all that is claimed for them, authorize them to put under tribute the results of the brilliant discoveries made by others.

It is required by Rev. St. § 4888, that the application shall contain ‘a written description of the device, and of the manner and process of making constructing, compounding, and using it in such full, clear, concise, and exact terms as to enable any person, skilled in the art or science to which it appertains or with which it is most nearly connected, to make, construct, compound, and use the same.’ The object of this is to apprise the public of what the patentee claims as his own, the courts of what they are called upon to construe, and competing manufacturers and dealers of exactly what they are bound to avoid. Grant v. Raymond, 6 Pet. 218, 247. If the description be so vague and uncertain that no one can tell, except by independent experiments, how to construct the patented device, the patent is void.

It was said by Mr. Chief Justice Taney in Wood v. Underhill, 5 How. 1, 5, with respect to a patented compound for the purpose of making brick or tile, which did not give the relative proportions of the different ingredients: ‘But when the specification of a new composition of matter gives only the names of the substances which are to be mixed together, without stating any relative proportion, undoubtedly it would be the duty of the court to declare the patent void. And the same rule would prevail where it was apparent that the proportions were stated ambiguously and vaguely; for in such cases it would be evident, on the face of the specification, that no one could use the invention without first ascertaining, by experiment, the exact proportion of the different ingredients required to produce the result intended to be obtained. . . . And if, from the nature and character of the ingredients to be used, they are not susceptible of such exact description, the inventor is not entitled to a patent.’

So in Tyler v. Boston, 7 Wall. 327, wherein the plaintiff professed to have discovered a combination of fusel oil with the mineral and earthy oils, constituting a burning fluid, the patentee stated that the exact quantity of fusel oil which is necessary to produce the most desirable compound must be determined by experiment. And the court observed: ‘Where a patent is claimed for such a discovery, it should state the component parts of the new manufacture claimed with clearness and precision, and not leave a person attempting to use the discovery to find it out ‘by experiment.” See, also, Béné v. Jeantet, 129 U. S. 683, 9 Sup. Ct. 428; Howard v. Stove Works, 150 U. S. 164, 167, 14 Sup. Ct. 68; Schneider v. Lovell, 10 Fed. 666; Welling v. Crane, 14 Fed. 571.

Applying this principle to the patent under consideration, how would it be possible for a person to know what fibrous or textile material was adapted to the purpose of an incandescent conductor, except by the most careful and painstaking experimentation? If, as before observed, there were some general quality, running through the whole fibrous and textile kingdom, which distinguished it from every other, and gave it a peculiar fitness for the particular purpose, the man who discovered such quality might justly be entitled to a patent; but that is not the case here. An examination of materials of this class carried on for months revealed nothing that seemed to be adapted to the purpose; and even the carbonized paper and wood carbons specified in the patent, experiments with which first suggested their incorporation therein, were found to be so inferior to the bamboo, afterwards discovered by Edison, that the complainant was forced to abandon its patent in that particular, and take up with the material discovered by its rival. Under these circumstances, to hold that one who had discovered that a certain fibrous or textile material answered the required purpose should obtain the right to exclude everybody from the whole domain of fibrous and textile materials, and thereby shut out any further efforts to discover a better specimen of that class than the patentee had employed, would be an unwarranted extension of his monopoly, and operate rather to discourage than to promote invention. If Sawyer and Man had discovered that a certain carbonized paper would answer the purpose, their claim to all carbonized paper would, perhaps, not be extravagant; but the fact that paper happens to belong to the fibrous kingdom did not invest them with sovereignty over this entire kingdom, and thereby practically limit other experimenters to the domain of minerals.

In fact, such a construction of this patent as would exclude competitors from making use of any fibrous or textile material would probably defeat itself, since, if the patent were infringed by the use of any such material, it would be anticipated by proof of the prior use of any such material. In this connection it would appear, not only that wood charcoal had been constantly used since the days of Sir Humphry Davy for arc lighting, but that in the English patent to Greener and Staite, of 1846, for an incandescent light, ‘charcoal, reduced to a state of powder,’ was one of the materials employed. So also, in the English patent of 1841 to De Moleyns, ‘a finely pulverized boxwood charcoal or plumbago’ was used for an incandescent electric lamp. Indeed, in the experiments of Sir Humphry Davy, early in the century, pieces of well-burned charcoal were heated to a vivid whiteness by the electric current, and other experiments were made which evidently contemplated the use of charcoal heated to the point of incandescence. Mr. Broadnax, the attorney who prepared the application, it seems, was also of opinion that a broad claim for vegetable carbons could not be sustained, because charcoal had been used before in incandescent lighting. There is undoubtedly a good deal of testimony tending to show that, for the past 50 or 60 years, the word ‘charcoal’ has been used in the art, not only to designate carbonized wood, but mineral or hard carbons, such as were commonly employed for the carbon pencils of arc lamps. But we think it quite evident that, in the patents and experiments above referred to, it was used in its ordinary sense of charcoal obtained from wood. The very fact of the use of such word to designate mineral carbons indicates that such carbons were believed to possess peculiar properties required for illumination, that before that had been supposed to belong to wood charcoal.

We have not found it necessary in this connection to consider the amendments that were made to the original specification, upon which so much stress was laid in the opinion of the court below, since we are all agreed that the claims of this patent, with the exception of the third, are too indefinite to be the subject of a valid monopoly.

As these suggestions are of themselves sufficient to dispose of the case adversely to the complainant, a consideration of the question of priority of invention, or rather of the extent and results of the Sawyer and Man experiments, which was so fully argued upon both sides, and passed upon by the court below, becomes unnecessary.

For the reasons above stated, the decree of the circuit court is affirmed.

The video above comes from QUIMBEE.

Gensetix v. Univ. Texas v. Baylor College of Med. (Fed. Cir. 2020)

Here is the three-party setup in this case involving the patentee, licensee, and accused infringers:

• Invent & Patent: Dr. Decker, a UTexas researcher invented a method for generating anti-tumor immune response and UTexas obtained the patents (US8728806; US9333248);
• License: UTexas provided an exclusive license to Mr. Mirrow who later transferred the license to Gensetix;
• Infringe: Dr. Decker later moved his lab to BCM and continued research without license;
• Sue: Gensetix sued BCM & Decker for infringement, but the patent owner UTexas refused to participate in the case.

The usual rule is that a patent infringement lawsuit cannot proceed unless the patentee — i.e., the patent owner — is a plaintiff.  And, in a normal lawsuit being a plaintiff is voluntary business. However, our rules of civil procedure do also call for “involuntary plaintiffs.”

(2) Joinder by Court Order. [A required party] who refuses to join as a plaintiff may be made either a defendant or, in a proper case, an involuntary plaintiff.

Fed. R. Civ. Pro. R. 19(a)(2).  This happens occasionally in patent cases such as this where the patentee has promised to enforce the patent, but then later refuses.  In that situation, the licensee files the lawsuit as plaintiff and joins the patent owner as an involuntary plaintiff.  The problem here — UTexas is part of the State of Texas and claims sovereign immunity in this case.

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State.

U.S. Const., Amendment XI (1795). Although the 11th Amendment offers only a limited amount of State Sovereign immunity, the Supreme Court has repeatedly written that the structure and nature of Federal system includes additional State immunities.

In its appellate decision in the case, the Federal Circuit answered two questions (1) Does sovereign immunity protect TX from being joined as an involuntary plaintiff; (2) If TX cannot be joined as a party, may the case proceed without the patentee? The court then issued three separate opinions with Judge O’Malley’s approach garnering a majority on each issue:

 Thus, in the end, the court found that TX is immune from being joined, but that the case should proceed with the licensee suing BCM for infringement.

BCM subsequently petitioned for en banc review on the following question:

Can a party who is not a patentee “have remedy by civil action for infringement”?

BCM En Banc Petition.  That petition has now been denied — setting up potential Supreme Court review.

The basic framing of the appeal is that there is some tension between the language of R.19 and the Supreme Court decision in Republic of Philippines v. Pimentel, 553 U.S. 851 (2008).

First, R. 19:  The text of the rule expressly allows a court to continue with a lawsuit even though a “required party” cannot be joined. The basic approach is that the court must apply “equity and good conscious” to determine whether to dismiss the case or to proceed.

19(b) When Joinder Is Not Feasible. If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed.

Id. (listing factors to consider).

On the other hand, in Pimentel, the court appeared to endorse a stark limit on continuing suits such as this where the sovereign is absent but will be potentially injured by an adverse decision:

A case may not proceed when a required entity sovereign is not amenable to suit. [Our prior] cases instruct us that where sovereign immunity is asserted, and the claims of the sovereign are not frivolous, dismissal of the action must be ordered where there is a potential for injury to the interests of the absent sovereign.

Republic of Philippines v. Pimentel, 553 U.S. 851 (2008).

The patent act creates a cause-of-action for patent infringement, and the en banc question presented quotes from from the statute:

A patentee shall have remedy by civil action for infringement of his patent.

35 U.S.C. 281. The petition mentions that on remand it will be able to raise this issue and dismiss the case since Gensetix is not a “patentee.” The FedCir has held that exclusive assignees can be considered a patentee if they have “all substantial rights” to the patent. In this case, Gensetix originally argued that it had all substantial rights, but now admits that it does not. Thus on remand this may become a standing issue.

Recent Headlines in the IP World:

• Emilia David: Payments Firm Rocketfuel Blockchain Sues Co-Founder Over Expired Patents (Source: Coin Telegraph)
• Aaron Wininger: China’s National People’s Congress Approves Amended Patent Law (Source: The National Law Review)
• Allana Akhtar: Peloton Hit with a Patent-Infringement Lawsuit by the Maker of NordicTrack Bikes (Source: Business Insider)
• Ben Lovejoy: Apple Patent Application Shows a MagSafe Battery Case that can Charge an iPhone and AirPods (Source: 9to5 Mac)

Source: USPTO

Commentary and Journal Articles:

• Atty. James P. Murphy: Should Your Startup Apply for a Patent? (Source: Built In)
• Prof. Jonas Anderson: Nonexcludable Surgical Method Patents (Source: SSRN)
• Cody Johnson: Intellectual Property and the Law of Fracking Fluid Disclosures: Tensions and Trends (Source: SSRN)

New Job Postings on Patently-O:

• Daly, Crowley, Mofford & Durkee, LLP
• LSI Solutions
• Hanley, Flight & Zimmerman: Patent Associate Attorney
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• Eli Lilly and Company: Patent Research Consultant
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by Dennis Crouch

Although this case comes from an inter partes review, it is one that could be used by patent prosecutors when discussing claim meaning with examiners.  The basic principle here is that the “broadest reasonable interpretation” of a claim must be considered “in light of the specification.”  Here, the claims did not spell-out a sizing limitation for an artificial heart valve, but the size was apparent from the specification. 

St. Jude Medical, LLC v. Snyders Heart Valve LLC (Fed. Cir. 2020)

I feel really bad about this, but whenever I see a Snyders lawsuit, I cant stop thinking back to the late 1990’s when I used to eat Snyder’s mustard flavored pretzels.

This case is not about pretzels, but rather focuses on Snyders artificial heart valve patent US6540782. Eat your heart out?

Snyders sued St. Jude for infringement in D.Minn and St. Jude responded with a pair of inter partes review (IPR) petitions.  The PTAB initiated the IPRs and eventually ruled that some of the claims were anticipated by a prior patent.

• IPR2018-00105: PTAB sided fully with the patentee on obviousness and anticipation challenges based upon Leonhardt
• IPR2018-00106: PTAB sided partially with the challenger — finding claims 1, 2, 6, and 8 anticipated by the Bessler patent, but finding the remaining claims patentable.

Both parties appealed, and the Federal Circuit has fully sided with the patentee Snyders.

The focus of the appeal was on construction of the following claim term

… a flexibly resilient frame sized and shaped for insertion in a position between the upstream region and the downstream region…

Basically, the artificial valve includes a bendable frame that will fit in the natural valve position.  It also includes attachment hooks to hold it in place.

An important aspect of Snyders valve is that it can be inserted into place without removing the native damaged valve.  The key prior art (Bessler) also disclosed a valve insert, but it was sized to fit the valve location after removal of the damaged valve. The problem for Snyders is that the claim language does not make this distinction explicit. Rather, the claim only requires that the frame fit in the position between the upstream and downstream regions (i.e., the original valve location). Thus, the PTAB broadly interpreted the claim language to also cover a frame “sized and shaped” to fit in the location after removal of damaged heart material.

On appeal, the Federal Circuit reversed the claim construction — holding that sized to the native-valve-space should be read into the claim, even when applying the broadest reasonable interpretation:

The claim’s reference to “repairing a damaged heart valve,” without any reference to removal, suggests that the native valve remains. So too does the claim’s reference to the damaged heart valve “having a plurality of cusps,” which appears superfluous if claim 1 is interpreted to include embodiments where the damaged valve and its cusps are removed. . . .

The specification states that “the frame is sized and shaped for insertion between the plurality of cusps C of the damaged heart valve in a position between an upstream region and a downstream region.” . . . Moreover, the specification stresses that the artificial heart valve it discloses can be inserted without removing the native valve and that this is an improvement on the prior art.

Slip Op. The specification actually particularly references Bessler as problematic prior art that requires “removal of the native valve, cardiopulmonary bypass and
backflushing of the coronary arterial tree.” Snyders explains that its approach avoids those major procedures.

Finding of anticipation reversed. Now the case will go back to Minnesota to consider infringement and perhaps other invalidity arguments.

by Dennis Crouch

The Supreme Court has granted Certiorari in Arthrex on the questions of whether Administrative Patent Judges (APJs) were properly appointed under the U.S. Constitution and, if not, what is the proper remedy.

None of the appellants were satisfied with the Federal Circuit’s decision in the case and each petitioned for Supreme Court review. Subsequently, the U.S. Gov’t filed a memorandum walking through what it saw as the three unifying questions presented in the case. The court has granted hearing on only the first two questions.

Questions Presented:

1. Whether, for purposes of the Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2, administrative patent judges of the U.S. Patent and Trademark Office are principal officers who must be appointed by the President with the Senate’s advice and consent, or “inferior Officers” whose appointment Congress has permissibly vested in a department head.

2. Whether, if administrative patent judges are principal officers, the court of appeals properly cured any Appointments Clause defect in the current statutory scheme prospectively by severing the application of 5 U.S.C. 7513(a) to those judges.

3. Whether the court of appeals in Arthrex erred by adjudicating an Appointments Clause challenge that had not been presented to the agency.

July 22 Memorandum of U.S. Gov’t. I have marked-through the third question because the Court is directing its review only to the first two questions.

The case stems from an inter partes review (IPR) conducted by Administrative Patent Judges (APJs) at the Patent Trial & Appeal Board (PTAB).  Arthrex is the owner of U.S. Patent No. 9,179,907 — a patent claiming an assembly for securing soft tissue (such as a tendon) to a bone without requiring the surgeon to tie any knots.  Smith & Nephew successfully challenged the patent via IPR, with the PTAB APJs concluding that the challenged claims were unpatentable as anticipated.  On appeal, Arthrex challenged the decision on constitutional (appointments clause) grounds; Smith & Nephew defended the decision, and the USPTO (U.S. Gov’t) also intervened to support the decision of its PTAB judges.

At the Federal Circuit, the original decision was authored by Judge Moore and joined by Judge Reyna and Chen. The court subsequently denied en banc rehearing.  The denial include five separate opinions, including an additional opinion by Judge Moore defending her original opinion and a concurring opinion by Judge O’Malley. Judge Dyk wrote in dissent as did Judge Hughes and Judge Wallach.  Four of the Judges did not indicate their vote (Chief Judge Prost and Judges Lourie, Taranto, and Stoll). Based upon the result (en banc denial), at least two of them voted to deny rehearing.

This 30 second clip comes from a recent Federal Circuit oral arguments in a case captioned In Re Google Technology Holdings LLC (2019-1828).  The voices you hear are Judge Chen asking a question and Kathryn Kayali representing Google.

Until recently, patent applicants have always been the human inventors.  Now the law allows the patent owner to serve as the applicant.  Thus, rather than identifying Bogdan Carbunar as the inventor, the caption as well as the briefing identify Google as the innovative entity.  The following quote is just one from Google’s briefing:

Google explains here that it (not the inventor) recognized the networking congestion problem and that it was the company (rather than the inventor) who developed a solution.