by Dennis Crouch

I’m going to link-in with Prof. Hricik on this case — it feels wrong to me to “settle” a lawsuit using a secret side-bet about how the court will decide a particular motion and then only reveal the settlement after the motion is decided. However, the court didn’t appear to blink its eye. 

In Diem LLC v. BigCommerce, Inc., the defendant BigCommerce asks the Federal Circuit to reconsider its legal definition of “prevailing party” in order to allow attorney fee shifting:

According to the Supreme Court, the phrase “prevailing party” bears a uniform meaning across fee-shifting statutes. CRST Van Expedited, Inc. v. EEOC, 136 S.Ct. 1642 (2016) (“Congress has included the term ‘prevailing party’ in various fee-shifting statutes, and it has been the Court’s approach to interpret the term in a consistent manner.”).

The Federal Circuit has not respected that mandate. Its “prevailing party” jurisprudence has diverged from most sister circuits in contradiction of Supreme Court law.

[En Banc Petition]. The particular legal issue here is if a patent infringement settlement agreement can create a “prevailing party” that could then result in an attorney fee award.

While this legal question is important, a big issue in the case for me is the cooperation between the parties to get the court to decide an issue after the case had been settled.

In 2018 Diem sued BigCommerce for patent infringement, BigCommerce responded with a motion for summary judgment of non-infringement based upon a joint infringement argument.  The parties “settled” the case prior to the court’s determination of the MSJ.  “Settled” is in quotation-marks because the agreement was not a complete settlement but rather a conditional agreement creating what I call a side-bet.  Under the agreement – If the MSJ is denied and the court finds that a the infringement contentions included a joint infringement claim then BigCommerce gets $30k; otherwise case dismissed with no payment. I put together the following flow-chart for how the settlement agreement works.  Note that the agreement also includes a contractual requirement to for BigCommerce to resubmit its summary judgment motion if the joint infringement contention issue isn’t addressed in court’s first determination.

[Note – my flow chart is slightly simplified from the contract language].

]The following language comes from the settlement agreement:

MSJ Denied: If the MSJ is denied and the Court rules that Joint Infringement [was disclosed in the infringement contentions], then BigCommerce will pay Diem the sum of $30,000.00 (the “Payment”). . . .

Any Other Outcome: If any other outcome occurs, then Diem agrees to the following (collectively, a “BC-Favorable Resolution”): (i) Diem will walkaway and will not appeal or object to any order(s), (ii) the parties will allow the Court to determine the prevailing party and enter a final judgment, and (iii) if the case is not otherwise disposed, the parties will move to dismiss the action with prejudice (with clear language that BigCommerce did not pay Diem to settle this action).

Note here that the settlement agreement was not filed with the district court at that time — rather the parties waited for the court to rule on the summary judgment motion before telling the court that they had settled the case.

When it finally ruled on the motion, the district court granted summary judgment but did not address whether Diem had disclosed joint infringement in its original contentions — explaining that the theory was mooted by amended contentions and the court’s claim construction ruling.  After then being confronted with the settlement agreement, the Court (now a different judge) went ahead and decided the joint infringement disclosure question — holding that joint infringement was not disclosed in the original contention. The result then under the settlement: case-dismissed with no money being paid.

Prevailing Party: The defendant BigCommerce thought that it won — case was dismissed with prejudice in favor of the defendant — and consequently asked for prevailing-party attorney fees under Section 285.  The court quickly shot-down that request — holding that the case had no prevailing party because it was settled.

While the Court granted Defendants’ motion, resulting in BigCommerce not having to pay anything, this precise scenario was contemplated by the parties and accounted for in the Settlement Agreement. Thus, there is no “prevailing party.”

This decision fits to Federal Circuit precedent in Exigent Tech. v. Atrana Solutions, Inc., 442 F.3d 1301, 1312, (Fed. Cir. 2006) (“An award of [attorney fees] was not proper unless Atrana was a prevailing party. Atrana cannot be a prevailing party if the case was resolved by settlement (not incorporated by judicial decree) prior to any relief on the merits.”).  On appeal, the Federal Circuit affirmed the award in a R.36 judgment without opinion.  The major twist here as suggested by the en banc request is that the Supreme Court has – in other contexts – repeatedly held that a prevaling party can be determined based upon a settlement where the question is left for the court to decide. See Maher v. Gagne, 448 U.S. 122 (1980); Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010)

GS CleanTech Corp. and Cantor Colburn LLP v. Adkins Energy LLC (Fed. Cir. 2020) [Fed Cir Decision][DCT Decision]

The district court ruled against the patentee CleanTech — holding the four asserted patents unenforceable due to inequitable conduct during prosecution.  On appeal, the Federal Circuit has affirmed — particularly calling out the Cantor Colburn firm for its role.

The basic issue here is that the bio-oil recovery invention (embodied by at least some of the claims) had been the subject of a pre-filing commercial offer for sale after the invention was ready for patenting.  The pre-filing activity was not disclosed to the PTO in what the district court called a “complete lack of regard for their duty to the PTO.”

As the district court explained things: The inventors made a mistake by offering to sell the invention at that early date but compounded the mistake by taking “affirmative steps to hide that fact from their lawyers, then, later the PTO when they learned that it would prevent them from profiting.”  The district court also found that Cantor Colburn had acted inappropriately — either by purposeful evasion or by failing to seek out relevant information. They “chose advocacy over candor.”

Following Therasense, it is tough to prove inequitable conduct.

The accused infringer must prove by clear and convincing evidence that the patentee: (1) “knew of the reference” or prior commercial sale; (2) “knew that it was material”; and (3) “made a deliberate decision to withhold it.”

See Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011) (en banc).

On appeal here though the Federal Circuit seemed to find this a straightforward case:

The District Court did not abuse its discretion in determining for numerous reasons that CleanTech deliberately withheld material information.

First, the District Court concluded that CleanTech knew the July 2003 Proposal to Agri-Energy threatened its chances of patenting its ethanol oil recovery method. This determination is supported by the
record. . . .

Second, the District Court found that the Inventors and the attorneys at Cantor Colburn withheld evidence of successful testing in 2003 and made false representations by implying that the invention was not reduced to practice until 2004. This finding is supported by the record. . . .

Third, the District Court determined that CleanTech and Cantor Colburn “threatened” Agri-Energy to coerce its support regarding the critical date for the Patents-in-Suit, after the July 2003 Proposal surfaced and during the pendency of the ’516 and ’517 patents. . . . District Court did not abuse its discretion in concluding that these attempts to threaten Agri-Energy spoke to CleanTech’s and Cantor Colburn’s intent to deceive the USPTO.

Fourth, the District Court concluded that the Inventors and Cantor Colburn made a “patently false” statement in the First Cantrell Declaration, by claiming the July 2003 Proposal was delivered to Agri-Energy after the critical date. The District Court’s determination that the declaration was false is supported by the
evidence. . . . This was done notwithstanding the Inventors’ knowledge that Mr. Barlage had practiced the claimed method in June 2003 and they had offered to sell the claimed invention to Agri-Energy in July or early August of 2003. See Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983) (“[T]here is no room to argue that submission of false affidavits is not material.”). . . . The District Court did not abuse its discretion in concluding that the “patently false” statement in the First Cantrell Declaration was material and supported its intent to deceive determination.

Fifth, the District Court explained that the Inventors’ and Cantor Colburn’s failure to correct the false declaration in the ’484 patent prosecution was “strong evidence of intentional deceit[.]”  . . . Based on this evidence, we conclude that the District Court did not abuse its discretion in concluding that, by clear and convincing evidence, the single most reasonable inference to be drawn from the record was that the Inventors and Cantor Colburn intended to deceive the
USPTO.

Affirmed.

The Unified Patent Court was a nice idea. Enforce your European patent with one single patent infringement lawsuit rather than going nation-by-nation. The UK was an integral UPC member — although always with some trepidation about handing power over to a continental court to decide issues of the UK marketplace.  The British Exit (BREXIT) from European Union (EU) raised some concerns regarding the ongoing viability of the UPC. However, UK leaders repeatedly indicated that they would continue participating in the Unified Patent Court.  That resolution has now changed — the UK government has now announced that the UK will no longer participate in the court or its creation.

The UK will not be seeking involvement in the unitary patent/UPC system. Participating in a court that applies EU law and bound by the Court of Justice of the European Union (CJEU) is inconsistent with our aims of becoming an independent self-governing nation.”

[Quote of UK Gov’t Spokesperson via Sarah Morgan @ the World Intellectual Property Review]

by Dennis Crouch

In re JC Hospitality LLC (Fed. Cir. 2020) (nonprecedential)

In its decision, the Federal Circuit has affirmed a TTAB decision refusing to register THE JOINT either for nightclub services (Class 41) or a bar (Class 43).  JC Hospitality owns the Hard Rock Hotel and Casino in Las Vegas, Nevada — location of “the JOINT” which has been in operation since 1995.

The TTAB found “THE JOINT” to be a generic term for a nightclub or bar. I have personally never used that term to refer to a Bar, but I do remember Nathan Detroit using the term in Guys & Dolls (“bookie joint” and “Halleluja joint”).

There is also the “Juke Joint” move from the 1940s that was produced for African American theaters in the US (at the time U.S. movie theaters were segregated by race).

THE JOINT is also a euphemism for prison as well as a cannabis cigarette (or so I’ve heard).

Folks around this joint love surprise inspections.

The Shawshank Redemption (1994).

 I mean, you can’t walk into a restaurant, roll a joint and start puffing away. You’re only supposed to smoke in your home or certain designated places.

Pulp Fiction (1994).

Perhaps folks in Vegas are going for a Turkey — go to THE JOINT where you smoke THE JOINT then get thrown in THE JOINT.

= = = =

The TTAB affirmed the examining attorney’s refusal to register the mark — holding that THE JOINT is generic for a bar/nightclub.  In the alternative, the Board also found that the term is “merely descriptive” of JC Hospitality’s services and that the company had not acquired distinctiveness.

On appeal, the Federal Circuit has affirmed — citing the Oxford Dictionary

JOINT: An establishment of a specified kind, especially one where people meet for eating, drinking, or entertainment.

JC Hospitality argued that its use of JOINT was as a double entendre — suggesting PRISON.  However, the court agreed with the Board that company had not provided a relationship between its operation and prisons.

Regarding acquired distinctiveness, JC Hospitality submitted two declarations showing revenue, advertising, and marketing — including more than $100 million in revenue while operating under the name. The Board, however found those insufficient because of the “highly descriptive” nature of the mark.  On appeal, the Federal Circuit affirmed on this point as well — finding that the Board “correctly determined that a high level of proof was required.”  The court noted that the advertising of THE JOINT in Vegas has always been tied to the well known Hard Rock mark — that constant linkage made it difficult for JC to prove that THE JOINT alone had acquired distinctiveness.

= = = =

Unrelated except for TM law:

In re Lantus Direct Purchaser Antitrust Litig., 18-2086, 2020 WL 728628 (1st Cir. Feb. 13, 2020)

This class-action antitrust decision from the 1st Circuit reversed a lower court dismissal — holding that consumers had alleged sufficient injury based upon Sanofi’s improper listing of patents in the FDA Orange Book (Approved Drug Products with Therapeutic Equivalence Evaluations).

The court explains:

The principal questions posed on this appeal are whether Sanofi improperly submitted a patent for listing in the Orange Book and, if so, whether Sanofi is potentially liable under the antitrust laws to drug purchasers who were allegedly harmed by the effective extension of Sanofi’s monopoly. We answer “yes” to both questions and vacate the dismissal of the plaintiffs’ complaint to the extent that the district court held otherwise.

The FDA statute calls for listing of patents “which claim[ ] the drug for which [an application is submitted] or which claim[ ] a method of using such drug.” 21 U.S.C. § 355(b)(1).

Here, the listed patent at issue is US Patent 8,556,864 which covers the drive mechanism for Sanofi’s SoloSTAR Insulin Pen.  The Orange Book listing is important because it can be used to trigger a 30-month stay of FDA approval of a competitor’s product. The drive mechanism is apparently part of the SoloSTAR pen thus it appears that a generic knock-off competitor would infringe the patent.  But, the appellate panel still held that it was improperly listed in the orange book since the patent does not claim the drug or a method of using the drug. The court writes:

[B]ecause the claims of the ‘864 patent do not mention the drug for which the sNDA was submitted, the patent does not “claim the drug,” and it was improper for Sanofi to have submitted it for listing in the Orange Book as a drug claiming either insulin glargine or the Lantus SoloSTAR. The regulations clearly require a patent not to be submitted if it does not claim the drug for which the application was filed: “For patents that claim a drug product, the applicant must submit information only on those patents that claim the drug product, as is defined in § 314.3, that is described in the pending or approved NDA.” 21 C.F.R. § 314.53(b)(1) (emphasis added).

On remand, the district court will take-up the case again and likely focus on whether the improper listing actually caused harm to consumers.

In a couple of 2019 decisions, the Federal Circuit appeared to expand-out the “merely tangential” exception to prosecution history estoppel. Those cases have now both been petitioned to the Supreme Court for review — with the two cases becoming three petitions:

• Hospira, Inc. v. Eli Lilly and Company, SCT Docket No. 19-1058. [Petition]

Whether a patentee may recapture subject matter via the doctrine of equivalents under the “tangential relation” exception by arguing that it surrendered more than it needed to during prosecution to avoid a prior art rejection, even if a claim could reasonably have been drafted that would literally have encompassed the alleged equivalent.

• Dr. Reddy’s Laboratories, Ltd., v. Eli Lilly and Company, SCT Docket No. 91-1061 [Petition]

[W]hether, under Festo’s “tangential” exception to prosecution history estoppel, patent owners may recapture subject matter they could have claimed in prosecution but did not, by arguing that they surrendered more than they needed to during prosecution to address a rejection by the Patent Office.

• CJ CheilJedang Corp. v. International Trade Commission, SCT Docket No. 19-1062. [Petition]

Whether, to avoid prosecution history estoppel under Festo, “the rationale underlying the amendment” must be the rationale the patentee provided to the public at the time of the amendment.

The doctrine of equivalents [DoE] is fairly complicated by itself because of the element-by-element function-way-result test and the limit on vitiation of claim elements.  DOE is further complicated by the prosecution history estoppel [PHE] that creates a presumption against equivalents associated with narrowing claim amendments made during prosecution for a “substantial reason related to patentability.”  In Festo, the Supreme Court explained that courts should presume estoppel based upon a narrowing amendment. However, the patentee may avoid the estoppel by providing evidence that the “rationale underlying the [narrowing] amendment … bear[s] no more than a tangential relation to the equivalent in
question.” Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 740 (2002) (TAN).  In prior posts, I called this expansion [DoE]; retraction [PHE]; re-expansion [TAN] process DoePHETAN.  The complication comes from the courts who – as I previously explained “wanted to empower patentees with the doctrine of equivalents but then became afraid that they had gone too far” and perhaps given too much power to a jury.

The petitions here are powerful and their parallelism may create interest from the court. Unfortunately, neither call for simplifying this process but rather ask for more detailing — What is the meaning of “tangential?”; At point must the “rationale” be declared?; What is the scope of “recapture” available for DoE?

= = = =

Recent DOE Decisions from the District Courts: Steyr Arms, Inc. v. SIG Sauer, Inc., 17-CV-483-JD, 2020 WL 905534, at *4 (D.N.H. Feb. 25, 2020) (court rejects DoE claim because the accused “pin” was not sufficiently structurally similar to the claimed “bridge”).

Speedfit LLC v. Chapco Inc., 215CV1323PKCRLM, 2020 WL 758824, at *2 (E.D.N.Y. Feb. 14, 2020) (patentee waived DoE claim after failing to include it in its pretrial infringement contentions).

KAIST IP US LLC v. Samsung Elecs. Co., Ltd., 2:16-CV-01314-JRG, 2020 WL 731360, at *7 (E.D. Tex. Feb. 13, 2020) (confirming jury verdict — finding that “the jury had substantial evidence from which to find infringement under the doctrine of equivalents.”).

Epistar Corp. v. Lowes Companies, Inc., LACV1703219JAKKSX, 2020 WL 771096, at *9 (C.D. Cal. Feb. 11, 2020) (unequivocal disclaimer during prosecution will bar DoE).

ViiV Healthcare Co. v. Gilead Scis., Inc., CV 18-224-CFC, 2020 WL 567398, at *3 (D. Del. Feb. 5, 2020) (refusing to apply the disclosure-dedication rule)

In a recent post, I noted the “trap” for patent prosecutors who use the transitional phrase “consisting essentially of.” That phrase has been traditionally interpreted to indicate that an infringing apparatus (or method) would include all of those elements and may also include other elements that “do not materially affect the basic and novel properties of the invention.” The more popular and broader “comprising” transition captures as infringement an apparatus that practices all of the claim elements, regardless of what additional elements are also being practiced by the accused. The courts have also locked-down the meaning of the narrower “closed” transition “consisting of” to only find infringement when the accused apparatus practices the claim limitations and nothing more.

Following my alarmist post, Paul Morgan provided me with “calm down” commentary — writing that he “would suspect” the use of consisting essentially of “is quite small, essentially limited to some chemical composition claims.”

To follow-up with some data, I downloaded all of the utility patents issued so far in in 2020 and parsed through all of the claims.  Paul Morgan was correct — the beast is quite rare. Of the 50,000 utility patents issued thus-far in 2020, only 0.5% include the phrase within their claim sets. (Note – I searched for “consisting essentially of” or “consists essentially of”).   A prime example comes from U.S. Patent 10,525,007:

1. A preserved tea composition, consisting essentially of: green tea leaf; yerba mate leaf; peppermint leaf; honey powder; at least one of monk fruit and monk fruit extract; water; at least one of a Cannabis sativa extract and/or a Cannabis sativa extract having tetrahydrocannabinol and cannabidiol; and wherein the composition is free of nicotine, and wherein the composition is free of tobacco.

Note that some portion of the consisting essentially of limitations are not found in the transitional phrase following the claim introductions but rather in a transition leading to a sub-limitation or modified Markush group. An example of this structure is found in U.S. Patent 10,573,826.

1. An organic light emitting diode device comprising: a first light emitting layer consisting essentially of boron subphthalocyanine that emits substantially orange light; …

Comprising is obviously much more common — 98% of patents in my cohort include “comprising.” 12% of patents recite the phrase “consisting of” however, the vast majority of those are signaling a Markush group rather than an initial transition. (Note – again here, I looked for both the “ing” and “s” form of the terms). These results are shown in the chart below.

Close to 1% of claims do not use one of these three traditional transitions. Of those, it appears that the majority use some other word such as “having,” “containing,” or “including.” A small minority of patents are written without any transitional phrase at all. These typically jump from the introduction directly into wherein clauses. There are also a substantial number of chemical compound claims drafted in the following form: “A compound selected from the group consisting of: …”

by Dennis Crouch

HZNP Finance Limited v. Actavis Laboratories UT, Inc. (Fed. Cir. 2020) [En Banc Order][Original Panel Decision]

In an 8-4 Federal Circuit has denied HZNP’s petition for en banc rehearing over a vigorous dissent from Judge Lourie (joined by Judges Newman, O’Malley, and Stoll).

The focus of the petition is the “reasonable certainty” indefiniteness standard in relation to the un-expressed elements of an invention claimed using the transitional phrase “consisting essentially of.”  In its original October 2019 holding, the Federal Circuit explained that the “consisting essential of” transition indicates that the claim requires the listed elements and is also “open to unlisted ingredients that do not materially affect the basic and novel properties of the invention.”  In that framework, the “basic and novel properties of the invention” become a claim limitation that itself must be definite.

HZNP’s claim at issue here is directed to a pain-treatment ointment “consisting essentially of” 2% diclofenac sodium; 40% DMSO; etc. (Sold as PENNSAID).  The specification indicated that “better drying time” was one of the improvements provided by the invention.  The specification provided two methods of evaluating better drying time.  However, those methods were ruled inconsistent and without a standard for PHOSITA to evaluate drying time.  Since the novel feature was indefinite, the court found that the claim itself was indefinite.

This outcome is clearly problematic for current patent application drafting practice because only a minority of patent applications expressly identify and explain the novel features of the invention.  One reason why those are not explained apriori is that the inventor’s understanding of novelty shifts as the patent application moves through the patenting process (or even later during litigation) and more prior art is unearthed.  Although not entirely clear, it looks to me that the proposed method of claim interpretation uses a more subjective novelty — what did the patent applicant think was the novel feature.

In its en banc petition, HZNP asked the Federal Circuit to hold that the “basic and novel properties” were not claim elements and thus not subject to the “reasonable certainty” requirements of Nautilus and 112(b).  The patentee provided three separate arguments:

1. The plain language of 35 U.S.C. § 112, ¶ 2 restricts application of the definiteness standard to claim limitations;
2. The “basic and novel properties” of the invention are not claim limitations since an infringer need not practice those properties in order to infringe; and
3. Our tradition has never applied the definiteness standard to the “basic and novel properties” of an invention.

Judge Newman dissented in the original panel decision and joined Judge Lourie’s dissent from en banc rehearing.   The basic thrust of the dissents is as following:

Better drying time is not in the claim, and it is the claims that the statute requires be definite.

Dissent.  The dissent also notes that the patentee likely created the problems here by providing two methods of measuring — “one wonders whether, if this patent did not recite the methods by which better drying time was measured, any indefiniteness of the “consisting essentially of” language would have arisen at all.”

The question I would ask is whether we should require disclosure of the basic and novel properties of the invention as part of every patent specification — perhaps as part of the written description requirement.  The dissent appears to assume that these are a requirement of the utility doctrine — but notes that utility is such an easy test that it is not even challenged unless “not credible.”

by Dennis Crouch

Ironworks Patents LLC v. Samsung Elecs. Co., 2020 U.S. App. LEXIS 5269 (Fed. Cir. Feb. 21, 2020) (nonprecedential)

After a narrowing claim construction, the patentee stipulated to a non-infringement and invalidity judgment. On appeal, the Federal Circuit has vacated and remanded — holding that the underlying claim construction was partially erroneous.

The two patents at issue – U.S. Patents 6,427,078 & 5,915,239 – originated with Nokia in the mid-1990’s and are directed to aspects of hand-held personal communication devices.

Role of the Numbers in Drawings: The ‘078 patent requires a “camera unit” that is part of the device.  In construing the claims, the district court interpreted “camera unit” as requiring “a camera,  optics, microprocessor and memory, battery, and interface to external systems” all situated as a component of a personal communication device.  Samsung’s cameras do not have their own battery or external interface.  On appeal, the Federal Circuit looked within the patent document to conclude that those elements should not be read into the claim.

The specification confirms that a “camera unit” is a camera, optics, and an image processing unit. The specification consistently refers to camera unit 14 which includes camera arrangement 14o (comprising camera 14a and optics 14b) and image processing unit 14c (which comprises microprocessor 23 and memory units 24).

Slip Op.  The primary difficulty with this construction comes from the most detailed figure relating to the camera — Figure 5 (below).  Figure 5 shows the camera and includes the battery and interface and the specification states that “the structure of both camera card 15 and camera unit 14 conforms to the block diagram shown in Fig. 5.”

On appeal, the Federal Circuit refused to limit “camera unit” to the design found in the figure. In particular, the Federal Circuit explained that the camera unit is consistently numbered in the fourteens (14, 14a, 14b, 14o, 14c).  The battery and interface have separate numbers — indicating that they are not actually part of the camera unit.

Figure 5 uses the same numbering convention as the rest of the specification, suggesting camera unit 14 is comprised of elements numbered as 14 (i.e., camera arrangement 14o, which comprises camera 14a and optics 14b, and image processing unit 14c). Other elements in Figure 5 are numbered differently, such as battery 21 and interface 22, suggesting they are not part of the camera unit 14.

On remand, that narrowed definition of camera unit will raise the likelihood that Ironworks will win its infringement case.

Means Plus Function: Disputed claim construction in the ‘239 patent centered on two means plus function terms:

• means for interpreting the received voice commands
• means for storing the subidentifiers

Lack of Structure: The first – means for interpreting – led to an invalidity finding by the district court. Basically, the court found no corresponding structure in the specification.  On appeal, the Federal Circuit veered — finding structure:

The specification states that, “voice-control unit 2 comprises advantageously a voice-recognition means 3, a voice pattern memory 4, a controller unit 5, read-only memory 6, random access memory 7, speech synthesizer 8 and a interface 9.” It further discloses structure for the voice-control unit by describing the algorithm performed by the voice-control unit and its components.

Although these structural elements are disclosed at a fairly high level, the Federal Circuit found “sufficient structure.”

An important point here is that this particular step is only about interpreting the meaning of the claims — do we have enough information to be reasonably certain as to the claim scope? When the claims are construed broadly then there may be separate inquiries into whether the breadth implicates the enablement and written description doctrines.

subidentifiers: The second MPF term –  means for storing the subidentifiers – was sufficiently supported.  However, the district court limited the scope to the structure described in the specification — following the textual requirements of 112(f):

(f) Element in Claim for a Combination.— An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

In particular, the district court interpreted the claimed means-for-storing as requiring the particular storage algorithm described in the specification.  Samsung apparently does not use that same algorithm and so the patentee asked for a broader construction.  In this case, Ironworks argued that the means could have been fully supported without the disclosed algorithm and so should not be limited by the algorithm.  On appeal, the district court rejected that argument — holding that the claimed storing function “requires more than merely plugging in a general-purpose computer.” (quoting Ergo Licensing).

Because this subidentifier limitation was in all of the asserted claims in the ‘239 patent — the non-infringement finding will stick. On remand though, the patentee will further pursue its infringement claim under US6,427,078.

Toy’s picture-claim wins the day before the PTAB.

ChoiRock Contents Factory v. Aldric Saucier, Spin Master, Ltd. (Fed. Cir. 2020)

This case centers on Spin Master’s patented transformable toy. U.S. Patent 7,306,504. Korean toymaker ChoiRock petitioned for IPR, but the PTAB sided with the patentee — holding that the challenged claims had not been proven unpatentable.

On appeal, the Federal Circuit issued a split opinion on obviousness with Judges Bryson (Author) and Taranto in the majority affirming patentability and Judge Dyk dissenting (with regard to most of the claims).

Standing to Appeal: Before reacting the merits, the court first considered whether the patent petitioner had standing to appeal. ChoiRock challeged the patent in an IPR that reached final decision and thus has a statutory right to appeal under 35 U.S.C. 319.

A party dissatisfied with the final written decision of the PTAB under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.

In addition to the statutes, Federal Courts also have their own standing requirements based upon the limited jurisdiction offered by the case-and-controversy requirement found in Article III of the U.S. Constitution (as interpreted).  When a patent challenger appeals an adverse ruling from the PTAB it must establish that it sits in conflict with the patent holder regarding the patent in a way that is sufficiently concrete. In Spokeo, the Supreme Court offered a three part requirement of (1) injury in-fact; (2) the injury being fairly traceable to challenged conduct of the other-side; and (3) the injury being redressable by the court. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).

IPR appeals offer an interesting setup because the parties have been vigorously fighting over patent validity at the PTAB and because the statute expressly purports to create a right-to-appeal.  Still, the Federal Circuit requires that the appellant show that the patentee has been wielding the patent in a way that causes injury to the challenger.

Here, Spin Master sent a letter to ChoiRock indicating that the company was infringing several of its patents, including the patent at issue here and, according to the court, ChoiRock “provided evidence establishing that it has concrete plans to begin selling that product line in the United States by early 2020.”  The Federal Circuit does not review this evidence of concrete plans. I pulled-up the briefing and found the unhelpful briefing regarding this evidence:

Obviousness:

The basic argument on obviousness is that the prior art teaches all of the elements.

On appeal, however, the Federal Circuit agreed with the PTAB that the prior art’s “display member” include a “plurality of revealers rotatably connected to [a] movable member[]”.  Rather, only the head was a rotatably connected revealer (one is not a plurality).  This is where Judge Dyk dissented — arguing that the arms and legs were also “revealers.”

by Dennis Crouch

Arctic Cat Inc. v. Bombardier Recreational Prods. Inc. (Fed. Cir. 2020)

This case involves the notice requirement for collecting back-damages in patent cases.  35 U.S.C. 287(a) creates a system for limiting back-damages in instances  where a patentee fails to mark its patented articles as patented.

In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

Id.  The marking requirement only applies to patentees practicing the invention via a “patented article.”  Non-practicing entities have nothing to mark, nor do patentees practicing their unmarkable patented process. In those situations, back damages are available — although still limited to six-years pre-complaint under 35 U.S.C. 286.

In this case, Arctic Cat had stopped manufacturing its patented thrust steering systems by the time the patent had issued — so no marking possible there.  However, Arctic Cat had licensed several of its patents to Honda, including the patents at issue here.  A couple of details regarding the license are important here: (1) The license was agreed-to prior to the issuance of the patents at issue and so did not expressly name them by patent number. However, the license expressly includes later-patents covering Thrust Steering. (2) The license expressly states that Honda has no marking requirements.

Honda made & sold products under the license and did not mark the products with Arctic Cat’s patent numbers.  Although disputed, Honda arguably stopped making covered-products in 2013.  Arctic Cat then sued Bombardier in 2014.   The question then on appeal is how-far back can Arctic Cat collect damages:

1. Damages only go back to the date of the complaint filing since licensed products had been sold and not marked;
2. Damages go back to 2013 — when it was no longer possible to mark the products; or
3. Damages go back the full six years based upon a jury’s holding that the infringement was willful, which implies actual notice of the patent.

Holding: The answer by the court is #1 – Arctic Cat won’t get any pre-filing damages.

#2 (Damages after Cessation) is incorrect because “cessation of sales of unmarked products” alone does not excuse or cure “noncompliance with the notice requirement of § 287.” Rather, “to begin recovering damages after sales of unmarked products have begun, § 287 requires that a patentee either begin marking its products or provide actual notice to an alleged infringer; cessation of sales of unmarked products is not enough.”

#3 (Full Damages) is incorrect because the Federal Circuit has previously held that the back-damages “actual notice” requirement focuses on providing-of-notice.  What we look at is whether the patentee acted to provide notice — it is “irrelevant … whether the defendant knew of the patent or knew of his own infringement.” Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994) (citing Am. Med. Sys., Inc. v. Med. Engr. Corp., 6 F.3d 1523, 1537, N.18 (Fed. Cir. 1993) and quoting Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062 (Fed.Cir.1987) (“Absent notice, [infringer’s] ‘knowledge of the patents’ is irrelevant.”).

Looking back to the statute — the key line calls for “proof that the infringer was notified of the infringement.”  287(a).  The court holds here that “notified of the infringement” requires an action by the patentee to provide actual notice. This outcome is similar to what is required by Fed. R. Civil Procedure R. 4(c) which places the burden on the plaintiff for providing notice of a new complaint being filed. A key difference though is that the rules of civil procedure actually spell out that “the plaintiff is responsible for having the summons and complaint served.” I’ll note here that the “filing” of a lawsuit triggers notice under 287 — service of the complaint and summons is seemingly not required. It is also different outcome than the notice requirement found in property recording statutes, including 35 U.S.C. 261 which asks whether a “subsequent purchaser” was “without notice.”

The language of Section 287 at issue here stems from the Patent Act of 1861. That statute indicated that – absent marking – “no damage shall be recovered by the plaintiff, except on proof that the defendant was duly notified of the infringement, and continued after such notice to make or vend the article patented.”  In an 1894 decision, the Supreme Court found that the “duly notified” statement requires an action by the patentee to provide notice.

The clear meaning of this section is that the patentee or his assignee, if he makes or sells the article patented, cannot recover damages against infringers of the patent, unless he has given notice of his right, either to the whole public, by marking his article ‘Patented,’ or to the particular defendants, by informing them of his patent, and of their infringement of it.

Dunlap v. Schofield, 152 U.S. 244, 247–48 (1894).  In Coupe v. Royer, 155 U.S. 565 (1895), the Supreme Court repeated that the required notice is “an affirmative fact, and is something to be done by him” i.e., done by the patentee.

In an interesting article, Michael McKeon argues that the Federal Circuit’s approach of requiring “an affirmative act” is actually based upon “a specific misquote of a critical word (act instead of fact).” Michael J. McKeon, The Patent Marking and Notice Statute: A Question of “Fact” or “Act”?, 9 Harv. J.L. & Tech. 429, 431 (1996). McKeon argues that Dunlap and Coupe were both about placing a burden of proof on the patentee — the patentee must affirmatively prove the fact that notice occurred — and that the Federal Circuit mistakenly read the cases as requiring an affirmative act of providing notice. McKeon cites to several pre-Federal Circuit cases that find actual notice is sufficient even without affirmative notice from the patentee. See, for instance, Warner v. Tennessee Products Corp., 57 F.2d 642 (6th Cir. 1932) (“Actual notice of the issue and contents of the patent, and of the claims that a practice infringes, is sufficient regardless of the source of such notice.”); Abington Textile Mach. Works v. Carding Specialists (Canada) Ltd., 249 F. Supp. 823, 849 (D.D.C 1965) (defendant’s actual/constructive notice was sufficient even though prior to formal notice from the patentee).