Impossibility of the Doctrine of Equivalents?

Enzo Biochem v. Applera (Federal Circuit 2017) (nonprecedential)

EnzoMoleculeThe Federal Circuit’s decision in this case begins with a statement that “this court now has considered this infringement action on three separate occasions over the course of thirteen years of litigation between these parties. We assume the parties are familiar with the background facts, and we therefore recite only those facts relevant to our decision in this appeal.” Enzo/Yale’s asserted patent claims a marked-nucleotide used in genetic research and testing.  The claimed marker is chemically stable and thus an important replacement for the prior art use of radioactive markers.  U.S. Patent No. 5,449,767.  The claims are directed to a particular chemical structure and include the following disputed language: “wherein [Structure] A comprises at least three carbon atoms and represents at least one component of a signaling moiety capable of producing a detectable signal . . . .” (See structure image above).

In its prior decision, the Federal Circuit ruled that the claims only extend to producing an indirectly detectable signal (by binding a secondary directly detectable chemical agent to the marker) rather than being directly detectable (by detecting the marker itself).  Enzo admits that Applera uses a directly detectable marker that doesn’t infringe (under that claim construction), but argues instead for infringement under the doctrine of equivalents (DOE).

On appeal, the Federal Circuit has rejected Enzo’s Doctrine of Equivalents claim (affirming summary judgment of no equivalents) based upon distinguishing statements in the specification.  In particular, the specification explains that indirect detection is superior to direct detection.  That distinction led to the prior claim construction ruling that the claims only cover indirect detection and here.  Following that line of thought, the court here writes:

In Dolly, we concluded that “the concept of equivalency cannot embrace a structure that is specifically excluded from the scope of the claims.” . . . The same principle applies in this case; the concept of equivalency cannot embrace direct detection because it is “specifically excluded from the scope of the claims,” id., as we found in Enzo II. Including direct detection as an equivalent of indirect detection would render meaningless the claim language on which we based our decision in Enzo II; direct detection cannot be an equivalent of indirect detection in relation to these patent claims.

The problem with the analysis here is that the claims do not – on their face – specifically exclude “direct detection” but instead require that infringing structure “represent at least one component of a signaling moiety capable of producing a detectable signal.”  The exclusion of indirect detection came in Enzo II only after “using the specification to more fully understand what the patentee claimed” and considering expert testimony.  (Reminder here that the district court considered the same evidence and determined that direct detection was covered by the claims).

The Problems: In general, this case highlights the difficulties with DOE Doctrine. By definition, DOE only comes into play when the claim terms literally (expressly?) exclude the accused activity.  At that point, a court is asked to focus in on the function-way-result similarities between the claimed invention and the accused activity — a question that usually goes to a jury.  However, the courts are empowered to short-circuit the process and rule-out DOE if the claims expressly exclude the accused infringing mechanism – seemingly making DOE impossible to ever prove. Sad.


Secrecy in Court; Takings; and A Proposal for Redaction with Replacement

by Dennis Crouch

In-court secrecy continues to thrive – at least in regards to protecting business interests.  Almost all patent infringement lawsuits include secrecy orders negotiated by the parties without much court participation.  Courts often view themselves as arbiters of disputes between the parties – and if the parties agree on a particular issue then there is no dispute.

The right to secrecy in federal courts was upped a bit further with the Defend Trade Secrets Act of 2016 in situations where the parties don’t agree.  The DTSA includes a requirement that a court “may not authorize or direct the disclosure of any information the owner asserts to be a trade secret” without first allowing an under-seal submission of a description of the confidential interest.  18 U.S.C. 1835.  Although not stated, the implication is that the court must then review the submission before requiring disclosure.

The Federal Circuit allows submission of confidential appellate briefs, but requires non-confidential versions to also be submitted with the filings – basically blacking-out the particular confidential information.  Further, Federal Circuit Rule 28(d)(1)(A) requires that a party seeking to mark confidential more than 15 words in its brief must petition the court.  That petition was filed and granted in the case of Georgetown Rail Equipment v. Holland L.P. In granting the motion, the court wrote that:

Georgetown Rail Equipment is seeking additional words to mark portions of its response brief describing confidential pricing information, confidential internal financial information, contractual terms relating to confidential agreements with customers, and confidential information of two non-parties. Those details were designated as confidential in the underlying proceedings. In light of the limited and focused nature of the proposed markings, the court will grant the motion.

[OrderGrantingMotionForExpandedConfidentialBrief]  The

When it comes to issuing an actual opinion, an important question is whether the Federal Circuit (or lower court) is bound by the confidentiality of a submission under seal containing trade secret information.  I.e., may the court publicly disclose a trade secret – and thus destroy the property right; if disclosing a trade secret submitted under seal, must the court first weigh the public interest in open courts against the harm of disclosure; and would an improper disclosure by the court be seen as a taking?

I have talked through some of these issues with Federal Circuit judges who indicated their usual pathway  is to attempt to avoid disclosing the secret information in the opinion – if possible. In Georgetown Rail Equipment v. Holland L.P., however, the court apparently found that approach untenable and instead issued decision on August 1 under seal: Sealed Judgement and Opinion.  At the same time, the court issued an Order to Show Cause as to “why the opinion should not be unsealed.” The court writes:

Because the record in this case contains extensive material marked as confidential, the court has issued its opinion dated August 1, 2017 under seal. The court does not believe, however, that the opinion contains confidential material. The parties are hereby ordered to show cause, by means of a single joint response coordinated among the parties, why the opinion should not be unsealed. The response to this order must specify which words, if any, are proposed to be redacted, and must specifically state the cause for each such requested redaction. If the parties propose redactions, the response to this order must also propose specific words to replace each of the proposed redactions in an unsealed opinion. The joint response shall be filed no later than August 15, 2017.

[Order to Show Cause] [Aside: It will be interesting to see the redacted version of the submission.]

The court is on the right track with this order. However, it is also problematic because it focuses parties on the question of whether “the opinion contains confidential material” as if that is the sole question.    The parties are hereby ordered to show cause, by means of a single joint response coordinated among the parties, why the opinion should not be unsealed.  A proper analysis of the issues will take the next step of explaining why the parties’ private interest in confidentiality in the court proceeding outweighs the storied tradition of open and public courts.

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Redaction with Replacement: The court here also provides an innovative suggestion that could transform the redaction process.  Rather than simply blacking-out information from its opinion, the court here asks the parties to “propose specific words to replace each of the proposed redactions in an unsealed opinion.”  Redaction with replacement is likely the gold-standard approach for judicial opinions and appellate briefs, but we’ll see how it works in this case.

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The patent at issue here is U.S. Patent No. 7,616,329 covering a method for inspecting railroad.  Most of the redactions in the briefs fit in the following pattern:

He testified that, but for Holland’s infringement, Georgetown would have inspected XXXXX miles of track for UP over a XXXXXXX period at a rate of $XXXXX, thereby realizing $XXXXX in revenues.



Patentlyo Bits and Bytes by Anthony McCain

Get a Job doing Patent Law                  

Section 101 Report from the USPTO

The USPTO’s new Section 101 Report [101-Report] is fairly bland, and primarily reports that most of the public input favored a legislative change that would expand patent eligibility to include many of the life-science and software innovations excluded under Mayo/Alice.

On his Director’s Blog, Joseph Matal writes:

Commenters confirmed that the recent Supreme Court cases have significantly changed the standards for determining patent subject matter eligibility. . . . A diverse group of representatives from academia, industry, law firms, and legal associations proposed legislative changes aimed at reversing the recent trend in the law and restoring, in their view, a more appropriate dividing line between eligible and ineligible subject matter. In contrast, a sizable portion of representatives from the software industry argued that the Court’s two-step test provides an appropriate standard for patent subject matter eligibility. This group cautioned against legislative redress and instead recommended that the common law should be allowed to evolve. . . . A healthy patent system that fuels research and development of innovative technologies is a critical component of our nation’s robust system of IP rights. Given the link between a healthy patent system and our nation’s economy, the contours of patent subject matter eligibility are of great concern to the USPTO and the IP community.

Section 101 Report [101-Report].


The Difficulty of Changing Statutes

As we continue to transition to patent prosecution under the AIA, many of us have made misstatements drawn from the substantial rewriting of 35 U.S.C. 102.  Its nice to see we are in good company.

Earlier this summer, the Federal Circuit decided Helsinn v. Teva – its first foray into interpreting the amended prior art definitions found in Section 102.  The case centered on whether the reorganization of the statute implicitly altered the definition of “on sale.”  In particular, the patentee (and the PTO) argued that the AIA focuses exclusively on publicly available prior art – and thus secret offers/sales should not be considered prior art under the statute.  The Federal Circuit rejected that argument and held that “on sale” as now codified in 35 U.S.C. 102(a)(1) continues to mean the same as it did pre-AIA when it was codified in 35 U.S.C. 102(b).

It turns out that in its original opinion, the Federal Circuit erroneously wrote “102(b)” – referring to the old on-sale bar – when intending to actually refer to the new law.  In a one line errata order today, the Federal Circuit corrects its typo: On page 27, change “under § 102(b)” to “under § 102.”  The court’s error here makes me feel a bit better about my several typos on the topic – especially considering that the decision was known to be an important decision and was reviewed by the entire court and numerous law clerks before release.  I will note here however, that this will not excuse similar errors on my Patent Law exam upcoming this Fall.

Important Inequitable Conduct Case: Hybrid Prosecution/Litigation Misconduct

Regeneron Pharmaceuticals, Inc. v. Merus N.V. (Federal Circuit 2017)

In a split decision, the Federal Circuit has affirmed a S.D.N.Y. judgment – finding Regeneron’s U.S. Patent No. 8,502,018 unenforceable based upon inequitable conduct during prosecution.   The inequitable conduct allegation here follows the typical pattern – the patentee failed to submit four relevant prior art references.  The majority opinion was penned by Chief Judge Prost and joined by Judge Wallach.  Judge Newman wrote in dissent.

Although the materiality portion of the discussion is important, the most interesting segment is intent.  No intent to deceive was found – rather the court affirmed the district court’s adverse inference of bad intent as a sanction for litigation misconduct.  The case may be a wake-up-call for some litigators who will read through the list of misconduct and see it as only business-as-usual.

The defense of inequitable conduct is not particularly spelled-out in the Patent Act.  Instead, it is treated as a non-statutory equitable defense intended to punish fraudulent behavior.  In Therasense, the Federal Circuit set-up a two step inquiry into the claim: materiality and intent.

On the materiality side, the district court is asked to determine whether the action (here withholding of prior art references) serve as a “but for” cause of the patent issuing.  Would the patent have issued (in the same form and scope) if the references had been submitted — or would the patent examiner have rejected the claims and required amendments or abandonment.  Because

Intent requires “specific intent to deceive the PTO.” Therasense.  In the withholding-prior-art scenario (nondisclosure), the court has previously required clear and convincing evidence of “a deliberate decision to withhold a known material reference.”

An important kicker with inequitable conduct is that the usual remedy is to hold the patent unenforceable in its entirety and perhaps also find family members unenforceable.

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Mouse-Human Chimera: The subject matter of the case is interesting. Claim 1 is directed to “a genetically modified mouse.”  The claim requires that mouse has “in its germline” a set of “human unrearranged variable region gene segments” that are “inserted at an endogenous mouse immunoglobulin locus.”  The court writes “One practical use of this technology is that users may target and modify specific genes in mice so that the mice develop antibodies that can be used by humans.”  In the complaint, the patentee alleged that “Merus’s sole busines spurpose appears to be directed to a genetically modified mouse that infringes Regeneron’s intellectual property.”  (An approach that now looks successful.)

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The materiality prong here turns on BRI claim construction.  Since the fraud-on-the-patent-office form of inequitable conduct asks “whether the patent application would have been denied,” the court gives claims their broadest-reasonable-interpretation or BRI.  The patentee argued for a narrow construction – that the claim structure of sticking human variable region gene segments into a mouse germline implies that the rest of the mouse germline is “mouse” and not partially human.

The result of this interpretation is that it would have narrowed the claims such that the withheld prior art would not be but-for-material since they relate to further modifications of mice that are already transgenic.

Here, however, the Federal Circuit held that the claim is not so limited. Rather the Broadest Reasonable Interpretation of the claims requires that the germline include human variable region gene segments in a particular location, but the “comprising” transition would allow for human segments (variable or constant) in other regions of the mouse genome.  The result then, is that the withheld prior art was material because it would have impacted prosecution under this broader interpretation.  [The court includes substantial further discussions of its conclusion of materiality of each prior art reference as well as the combination of references.]

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Specific intent to deceive the PTO is typically quite difficult to find.  Most do not have that intent, and those that do can be expected to avoid creating incriminating evidence.  Here, the district court avoided the issue. Instead of deciding the specific intent question, the court sanction the patentee for litigation misconduct “by drawing an adverse inference of specific intent.”

On appeal, the Federal Circuit affirmed this holding as well – finding that the inference of specific intent was an appropriate sanction.

In light of Appellant’s widespread litigation misconduct, including Appellant’s use of sword and shield tactics to protect Drs. Smeland and Murphy’s thoughts regarding disclosure of the Withheld References to the PTO during prosecution of the ’018 patent, we conclude that the district court did not abuse its discretion by drawing an adverse inference of specific intent to deceive the PTO. . . . Thus, the district court did not abuse its discretion in holding the ’018 patent unenforceable due to Regeneron’s inequitable conduct.


This is an important case for both patent prosecutors and patent litigators to consider and probably chart-out.  I will leave a complete discussion of Judge Newman’s dissent and the particular litigation misconduct issues to a later post.

[Read it here]



How PTO Submissions Can Waive Privilege to Future Communications – Even for Trial Counsel and Subsequent Patent Owners

In re OptiumInsight (Federal Circuit 2017)

The Federal Circuit has denied OptumInsight’s petition for writ of mandamus on privilege waiver.

In the underlying litigation, OptumInsight has sued Cave Consulting for infringement of several healthcare analytics patents.  One of the originally asserted patents – U.S. Patent No. 5,835,897 – was developed by Symmetry Health Data Systems who later merged with Optum. (In particular, Optum bought Symmetry as the settlement of Symmetry’s infringement case against Optum).

Antitrust claim: An element of the Cave Consulting defense is an antitrust claim against the patentee for “knowingly asserting a fraudulently procured patent.”  The allegations argue that Symmetry (now part of Optum) lied about the conception date of the ‘897 patent during a prior reexamination.  As the appellate court describes:

Symmetry submitted an Information Disclosure Statement and a supporting affidavit from its patent attorney. The affidavit asserted that the ETG Program was not ready for patenting at the time of [its] RFP response because the inventor did not conceive of all the claimed concepts until August 1994. Symmetry successfully persuaded the patent examiner that the RFP response was not an invalidating offer for sale, and Symmetry thereafter filed additional patent applications that claimed priority to the ’897 patent.

To pursue its antitrust claim, Cave Consulting then demanded discovery of information relating to conception and first-sale of the invention. Optum refused – claiming privilege, but the district court ordered disclosure, including post-merger-communications – finding that the PTO submissions constituted waiver.

Under the Federal Rule of Evidence 502(a), the disclosure of to a federal agency or court waives attorney-client privilege and work-product protection as to information disclosed.  That intentional disclosure also extends to otherwise undisclosed communications if they “concern the same subject matter” and “they aught in fairness to be considered together.”  As the Federal Circuit has explained: “The rule prevents parties from selectively disclosing privileged information as an affirmative legal strategy, but falling back on the privilege to conceal inconsistent information.” See Seagate.

Here, Optum argues that Symmetry’s waiver should not apply to its successor.  In response, the Federal Circuit refused to “adopt such a categorical rule.” Rather, the approach of Section 502 is to extend waiver to the scope deemed fair. Further, the court writes: “Logically, if a successor company can assert privilege over its predecessor’s communications, the flipside of that principle is that a successor company can also be subject to its predecessor’s intentional waiver in certain circumstances.”

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A big caveat here that the court determined was important is that the PTO submission by Symmetry was in a reexamination in the midst of a litigation campaign by Symmetry – asserting the very patent at issue.  Although attorney submissions during patent prosecution will also result in waiver, they are less likely to apply to extend to either (1) later communications with trial counsel or (2) subsequent owners of the patent rights.

Please Define What you Mean by Ordinary Meaning

CallerIDby Dennis Crouch

In NobelBiz v. Global Connect, a jury sided with the patentee-finding that global connect infringed the caller ID modifying patents.[1] On appeal however the Federal Circuit has reversed on claim construction – in a non-precedential opinion.

The claimed invention is associated with telemarketing, and the idea is to “provide a callback number … that may be closer to or local to the target.” (Quoting patent specification).  The claims themselves require an “outbound call,” “replacement telephone number,” and “modif[ing] caller identification data.” Pretrial, the District Court determined that these terms needed no further claim construction but instead should be given their “plain and ordinary meaning.”  However, during the jury trial technical experts from each side provided testimony as to the meaning of these claim terms.

On appeal Federal Circuit’s first holding is that “allowing the experts to make arguments to the jury about claim scope was erroneous.” Rather, claim construction is the responsibility and duty of the judge rather than the jury. The judge must inform the jury of the scope of the claims, enabling the jury to then determine whether those claims are infringed.

Further, the court also erred by failing to construe terms whose scope was disputed. Following its precedent of O2 Micro,[2] it is not enough for the court to simply state that the definition use “well understood” when the parties dispute the scope covered by the claims because that would leave the jury with the responsibility of determining the claim scope.

I will note here that the majority opinion was written by Judge Hughes and joined by Judge Dyk. Judge Newman wrote in dissent citing other Federal Circuit precedent such as Summit 6[3] were the Federal Circuit had approved of the District Court’s refusal to particularly construe common claim terms with clear meaning and no special definition in the art. “Because the plain and ordinary meaning of the disputed claim language is clear, the district court did not err by declining to construe the claim term.”

Judge Newman goes on to highlight the reality that the majority’s approach substantially undermines the fact-finding role of the jury in patent cases. Rather, in this case “[t]he district court declined to decide the question of infringement by way of claim construction.”

An oddity of the majority opinion is its sole focus on claim construction without considering the impact. Majority opinion has no discussion as to whether the minor tweaks that it provides for the meaning of a replacement telephone number would have any impact on the jury’s opinion, or if the jury could have reached the same conclusion of infringement under the modified claim construction. In her dissent judge Newman provides a reason for the majority’s lack of explanation: “We are not told how these corrected definitions could have changed the result at trial.”  Note here – for instance – the majority found that the claim construction should have specified that the claimed “replacement telephone number” must “replace something . . . [such as] an original phone number.”  Ordinarily, a minor tweak would not require vacatur of a jury verdict without first considering whether the change might have some impact on the outcome.  

I would also add some comment here that relates to the majority’s first holding: “Allowing the experts to make arguments to the jury about claim scope was erroneous.” Of course, whether certain testimony is permitted or not is ordinarily well within the discretion of the district court judge.  Here, the court found it reversible error without (1) providing deference to the lower court or (2) considering whether the testimony somehow threw the jury off track in an impermissible way.

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[1] U.S. Patent Nos. 8,135,122 and 8,565,399. Patents claim an invention for modifying the caller ID seen by a call target.

[2] O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1361 (Fed. Cir. 2008).

[3] Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1291 (Fed. Cir. 2015).

Patentlyo Bits and Bytes by Anthony McCain

Get a Job doing Patent Law                  

When is an the inherent, but unexpected result obvious?

Millennium Pharma v. Sandoz (Federal Circuit 2017)

As part of a brand-generic pharma battle, the district court invalidated a set of Millennium’s patent claims covering its Velcade drug used to treat multiple myeloma.[1]  The district court held that the claims (covering the chemical compound active ingredient) were obvious as the inherent result of an obvious process.

In particular, the claims cover a freeze dried (“lyophilized”) version of the compound “D-mannitol N-(2- pyrazine) carbonyl-L-phenylalanine-L-leucine boronate.”  The active portion of the compound is the boronate (bortezomib), which was known to work but was unstable. Researchers tried and failed to create liquid formations and so turned to freeze-drying.  To achieve that end, mannitol was added to the compound in a way formed a chemical bond with the boronate – leading to dramatic improvement in stability.  When a patient ingests the new drug (a “prodrug”), the body breaks-down the compound and allows the active ingredient to work.

The boronate portion was known in the prior art for its medical use and the mannitol portion was a known bulking agent.  The process of freeze-drying was also known.  However:

No reference taught or suggested reacting bortezomib with mannitol, and no reference hinted that … an esterification reaction might occur during lyophilization. No reference taught or suggested that the product of such lyophilization would be a new chemical compound that would solve the problems that had inhibited development of bortezomib in oncology.

In its decision, the district court recognized that the resulting compound was likely unexpected, but focused on the process of getting to that result – holding that the claimed compound was simply the “natural result” inherent to the lyophilized process and that it would have been obvious to try the process on boronate + mannitol.   On appeal, the Federal Circuit has reversed.

The easy part of the decision for the district court focused-in on the motivation to combine boronate and mannitol.  The district court found that an Adams Patent “pointed directly to mannitol” for the combination.  However, according to the Federal Circuit, “the Adams Patent’s fail[s] to mention mannitol.”

In my view, this easy-part is sufficient for the patentee to win, and my preference would be for the court to delete the rest of its muddled opinion – and instead rest its case on the lack of the motivation to combine.  The remainder of the decision is somewhat difficult to follow because it jumps back and forth dancing around but never answering the basic question: If the combination would have been obvious to try, would its natural result also be considered obvious?  At times, the court appears to agree that obviousness would follow, while other sections of the opinion suggest the compound would not have been obvious since its actual structure was so unexpected.

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A patent claim is obvious when, “if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.”[2]  Here the appellate panel focused the question to: “whether a person of ordinary skill, seeking to remedy the known instability and insolubility and to produce an efficacious formulation of bortezomib, would obviously produce the D-mannitol ester of bortezomib, a previously unknown compound.”

On the topic of inherency in particular, the court seems to have simply strung together several loosely related sentences.  Take the following pair as an example:

Sandoz argues that although lyophilization in the presence of mannitol produced an unexpected result, the result was “inevitable” and thus “inherent,” and thus not “inventive.” However, invention is not a matter of what the inventor intended when the experiment was performed; obviousness is measured objectively in light of the prior art, as viewed by a person of ordinary skill in the field of the invention . . .

In the end, the reversal makes sense, but the law created is somewhat of a mess.

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[1] Millennium Pharm., Inc. v. Sandoz Inc., No. 12-1011, 2015 WL 4966438 (D. Del. Aug. 20, 2015); U.S. Patent No. 6,713,446.

[2] 35 U.S.C. 103.

Layering of Law upon the Injunctive Relief Standard.

Genband v. Metaswitch (Federal Circuit 2017)

At the close of trial, a jury found for the patentee Genband-ruling that Metaswitch infringed all of the asserted claims found in the eight asserted VoIP patents.[1] However, the District Court denied the patentee’s request for an injunction to stop the ongoing infringement. In its refusal, the District Court noted the lack of proof of a causal nexus between the ongoing infringement and the patentee’s allegedly irreparable harm of lost sales. Here in particular, focus is not on whether competition resulted in lost sales, but rather whether the inclusion of the infringing features caused the lost sales. As in the Apple and Samsung cases, this is a situation where the patents cover a few components of a multi-component product. The District Court also noted that the patentee’s delays in filing its infringement action also tended to support its conclusion of no irreparable harm.

On appeal, the Federal Circuit has vacated the injunction denial, holding that it is unclear whether the District Court properly applied the nexus requirement outlined by the Federal Circuit in its Apple v. Samsung decisions.[2]

In what the court is calling Apple II, Federal Circuit wrote that the irreparable harm calculus can be met when “a sufficiently strong casual nexus relates the alleged harm to the alleged infringement.” In Apple III and Apple IV, the court further developed its statement, requiring “some causal nexus between [defendant’s] infringing conduct and [patentee’s] alleged harm” and “a causal nexus linking the harm and the infringing acts” respectively. Here however Federal Circuit suggests that the District Court may have applied to stringent of a nexus requirement when it demanded proof that “the patented features drive demand for the product” before finding irreparable harm. In particular, the appellate court suggested that a patentee need not prove its features are “the driver” of demand but instead may rely upon evidence of being “a driver”. The appellate court also re-oriented the focus of inquiry toward ensuring that the allegedly irreparable injury is being caused by use of the infringing features. This is obviously tricky in a multi-component situation.

Regarding the delay in filing of the infringement lawsuit, the court did not truly review that portion of the decision other than to hold that the timing of the lawsuit filing and decision not to request preliminary relief may be relevant to the determination of irreparable harm.

So, to be clear, to obtain an injunction, the patentee must first win its lawsuit – proving infringement and overcoming any validity challenges (both direct and collateral).  At that point, the patentee must then prove the set of equitable “eBay” factors, that include proof that any ongoing infringement would cause irreparable harm. When proving irreparable harm the patentee must take pains to ensure that the claimed irreparable harm is being caused by the infringement rather than some other act by the infringer, and when doing this the appropriate analysis is to consider the extent that the infringing features are driving sales of the infringing device.

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[1] U.S. Patents Nos. 6,772,210; 6,791,971; 6,885,658; 6,934,279; 7,995,589; 7,047,561; 7,184,427; and 7,990,984.

[2] See, Apple, Inc. v. Samsung Electronics Co. (Apple III), 735 F.3d 1352, 1364 (Fed. Cir. 2013); and Apple, Inc. v. Samsung Electronics Co. (Apple IV), 809 F.3d 633, 641–42 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 2522 (2016), petition for cert. filed, 85 U.S.L.W. 3460 (U.S. Mar. 10, 2017) (No. 16-1102).


BRI: Even under BRI Means Plus Function Claims Limited by Structure Recited in Specification

by Dennis Crouch

IPCom v. HTC (Fed. Cir. 2017)

After IPCom sued HTC for infringing its U.S. Patent No. 6,879,830, HTC countered with its PTO request for inter partes reexamination of the asserted claims.  While the AIA Trials (i.e. inter partes reviews) are heard directly by a PTAB panel, reexaminations are first decided by a patent examiner before being appealed to the PTAB.  Here, the examiner initially sided with the patentee – finding the challenged claims patentable.  However, the Board issued a new grounds of rejection for most of the claims.  That obviousness rejection was later sustained (even after a claim amendment).  On appeal, the Federal Circuit has largely affirmed, but reversed a portion of the claim construction — this time the limits of means-plus-function claiming has helped the patentee.

One limitation found in challenged claim 1 requires: an arrangement for reactivating the link with the first base station if the handover is unsuccessful.

Although not written in means-plus-function language, the nonce word “an arrangement for” without further recited structure easily qualifies under 35 U.S.C. 112 p6.

Section 112 p6 (now 112(f)): 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.

It turns out that the Federal Circuit already construed this very phrase as means-plus-function in its 2012 decision involving the same patent. HTC Corp. v. IPCom GmbH & Co., 667 F.3d 1270 (Fed. Cir. 2012).  However, when conducting its broadest reasonable construction of the claim limitation, the PTAB failed to particularly tie the MPF limitation to the structure (here algorithm) recited in the specification.  Rather, for the PTAB apparently any arrangement for achieving the stated function would fall within the claim scope.  On appeal, the Federal Circuit rejected the PTAB approach and instead held that a means plus function claim term is limited by the scope of the structural recitations found in the specification – even under the PTO’s broadest reasonable interpretation.

The decision here is not new law but instead parallels the important MPF case of In re Donaldson Co., 16 F.3d 1189, 1193 (Fed. Cir. 1994) (en banc).  In Donaldson, the PTO argued that the BRI construction of a means-plus-function claim term should encompass “any means capable of performing the recited function.”  On appeal, the en banc Federal Circuit rejected that argument – holding instead that even under BRI, construction of a means-plus-function limitation “must look to the specification and interpret that language in light of the corresponding structure, material, or acts described therein, and equivalents thereof.”

Like Donaldson, the Board here impermissibly treated the means-plus-function limitation in its patentability analysis as if it were a purely functional limitation.

On remand, the PTAB will need to reevaluate the scope of the claims and then determine whether the recited prior art discloses the requisite particulars.



Claim Construction: Sweeping Reasonableness Under the Rug

by Dennis Crouch

Hitachi Metals v. Alliance of Rare-Earth Permanent Magnet Industry (Fed. Cir. 2017) (nonprecedential decision)

Rare-earth magnets are the strongest commercially available permanent magnets.  Hitachi’s U.S. Patent Nos. 6,491,765 and 6,537,385 are directed to important commercial methods of pulverizing an alloy in order to prepare a powder then used to make the magnets.

Hitachi had previously brought a USITC action against a host of industry players to stop importation of infringing magnets into the United States. Those actions settled for undisclosed royalty amounts [EarthMagnetSettlementA], but a group of the ITC-losers then filed for inter partes review (IPR) – after forming the aforementioned “Alliance.”  The Board granted the IPR request (on behalf of the Director) and eventually found the challenged claims obvious over a combination of prior art references (with one claim also anticipated).

In the non-precedential appellate opinion, the Federal Circuit has largely affirmed, but reversed on one particular claim – finding that the court had misconstrued claim 4 of the ’765 patent.

As compared with Claim 1, Claim 4 only adds a limitation within a “pulverization step” that “the alloy is finely pulverized in a high-speed flow of … oxygen.”  The problem though was that although Claim 1 identified two separate pulverization steps (a first and a second) plus sub-steps of pulveration, Claim 4 did not identify which one to associate with high-speed flow of oxygen.  In the appeal, the Federal Circuit dove into the written description – finding that:

We agree with Hitachi that claim 4 requires the use of a high-speed flow of gas comprising oxygen for the first sub-step of claim 1—the fine pulverization—rather than the umbrella “second pulverization step.”

The reasoning for this approach lies in the written description where exemplary processes described the step-by-step process of pulverization.  The change in claim construction meant that the obviousness case was also pulverized.  On remand, the PTAB will get a chance to determine validity under this new construction.

For me, the most interesting aspect of the opinion is its complete lack of discussion of the Broadest Reasonable Interpretation standard for claim construction.  The approach taken by the court here looks more like an in-court analysis looking for the best interpretation of the claims.  However, Federal Circuit precedent requires in this situation application of the broadest reasonable interpretation of the claims.  The lack of specificity in spelling-out which pulverization step is applicable should at least prompt a consideration as to whether the PTAB’s construction was reasonable.

The image above comes from TMNT episode with the Pulverizer.

I’m still posting remotely – this time from the Italian Alps near Molveno.

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Attorney Fee Award: District Court Erred in Not Awarding Fees

In another successful appeal by Prof. Mark Lemley, the Federal Circuit has reversed on fees – finding that the E.D. Texas Court (Judge Gilstrap) erred by not awarding fees to the successful defendant Newegg.

AdjustaCam v. Newegg (Fed. Cir. 2017) [16-1882.Opinion.6-29-2017.1] [regarding U.S. Patent No. 5,855,343]

AdjustaCam dropped its infringement case against Newegg following an adverse claim construction and reexamination. The basic issue on claim construction involved the claimed camera “rotatably attached . . . about a first axis of rotation” as compared with Newegg’s ball-and-socket attachment.  Under the district court’s construction, clearly no infringement.

After the voluntary dismissal, all that remained wasthe extent that AdjustaCam owes in attorney fees (if any).  Under Section 285 of the Patent Act, fees may be awarded in exceptional cases. The district court initially rejected any fee award, but that decision was vacated by the Federal Circuit in 2015 following Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014).  Octane Fitness gave more discretion to district courts in awarding fees, but it also lowered the standards for proving an exceptional case (both eased the elements needed to be proven and the standard of proof required).  By the time remand came around, Judge Davis had retired and the case moved to Judge Gilstrap who again denied the fee award. Now, the appellate court has reversed Gilstrap’s decision – holding that a fee award is required.

The decision here is based upon two grounds:

(1) The remand required a re-evaluation of the evidence based upon the new totality-of-the-circumstance standard and lower-burden required by Octane Fitness.  Judge Gilstrap failed to conduct that review of the evidence and thus erred.

(2) In addition, the appellate panel found  “clearly erroneous findings about the substantive strength of AdjustaCam’s case [sufficient to] independently support reversal.”  Here, the appellate panel wrote that what began with a “weak infringement lawsuit . . . became baseless” after the claim construction order.  Based upon this claim construction, the appellate court found simply “AdjustaCam’s lawsuit was baseless.”

[Under the claim construction] there is no possible way for Newegg’s products to infringe the ’343 patent. No reasonable factfinder could conclude that Newegg’s products infringe; therefore, AdjustaCam’s litigation position was baseless. These are traits of an exceptional case. The district court’s contrary conclusion was based on “a clearly erroneous assessment of the evidence.” Highmark, 134 S. Ct. at 1748 n.2. Fees are warranted.

Note here that the claim construction and post-claim construction activity is an important aspect of the decision. Although not mentioned in the present decision, a difficult aspect of the case for the patentee is that it was not permitted to appeal the claim construction.  Rather, it did appeal the claim construction, but the Federal Circuit refused to hear that portion of the case since it was moot following the dismissal of the merits case.

In addition to the baselessness of the lawsuit, the Federal Circuit also found that the patentee litigated the case in an unreasonable manner as shown through “repeated use of after-the-fact declarations. . . .  [W]e recognize today, the totality of the circumstances demonstrates other dubious behavior that, when considered collectively, warrants fees under § 285.”

Finally, the court addressed the fact that the patentee’s strategy included a large number of low-dollar settlements (lower than the cost of litigation).  The appellate court began by noting that “there is no minimum damages requirement to file a patent infringement case” and a strategy that involves low damages against multiple defendants “does not necessarily make a case ‘exceptional.'”  However, practice further supports a fee award. “The irregularities in AdjustaCam’s damages model and the purported nuisance value of many of its settlements should have played a role in the evaluation of whether this is case exceptional.”



On remand, the district court will now determine the amount of attorney fees to award. Unanswered questions include whether (1) fee award should begin with the filing of the complaint (2) what level of fees is ‘reasonable,’ and (3) whether Lemley’s appellate costs can be included.


Lifting the Bar: Federal Circuit finds that the PTAB improperly allowed Amendments during IPR

US06681897-20040127-D00000Shinn Fu vs. Tire Hanger (Fed. Cir. 2017)

After receiving substantial criticism for refusing to allow claim amendments during Inter Partes Reviews (IPRs), the USPTO began to to relax its standards somewhat.  In this case, however, the Federal Circuit (C.J. Prost) has rejected the PTO’s expanded approach – holding that “the Board did not properly consider the arguments petitioner set forth in its opposition to the patent owner’s motion to amend.”

[16-2250.Opinion.6-29-2017.1][U.S. Patent No. 6,681,897][IPR2015-00208]

Tire Hanger’s patent covers a way of temporarily hanging a wheel that has been removed from a car on a mechanic’s lift.  Upon Shinn Fu’s request, the PTAB (acting on behalf of the Director) instituted the IPR and the patentee subsequently (and successfully) petitioned for an amendment to the claims in order to overcome the prior art.  Eventually, the PTAB agreed with the patentee that that amended claims were patentable — leading to this appeal by Shinn Fu.

In its decisions, the Board did not address Shinn Fu’s particular arguments regarding the reasons-to-combine the references and thus “did not meet its obligation here.”  Although the Board did generally address why it was not combining the references, it failed to particularly explain the problem’s with Shinn Fu’s arguments on that point.

= = = = =

Perhaps the most important portion of the opinion comes in footnote 3.  There, the court writes about Shinn Fu’s reliance on additional references in its opposition – added after the amendment:

Although the Board faulted Shinn Fu for relying on additional references in its opposition, it is not surprising that it pursued this course of action in light of Tire Hanger’s amendments. In particular, those amendments added limitations that necessitate human involvement throughout the process. Indeed, the Board recognized this as the fundamental purpose of the amended claims in its Final Written Decision.

Although not a direct decision, the point from the court here is that an amendment by the patentee should likely open the door to allowing the patent challenger to add further references to its obviousness challenge.



Does the PTO have a Right to Intervene in IPR Appeals?

Knowles Electronics v. Matal (Fed. Cir. 2017)

In an interesting sua sponte order, the Federal Circuit has demanded briefing on whether the USPTO has the right to intervene in an appeal from an inter partes reexamination decision by the Patent Trial and Appeal Board (PTAB).

Analog Devices filed for the inter partes review against Knowles’ U.S. Patent No. 8,018,049 covering a Silicon Condenser Microphone Package.  The PTAB agreed with the challenge and found a substantial number of the claims unpatentable.

The setup here is that the patentee is appealing the PTAB unpatentability decision, but Analog has dropped its case.  As such, the PTO has stepped-in as an intervenor in the case.  The Federal Circuit then asks:

When the prevailing party in an inter partes reexamination proceeding before the USPTO’s Patent Trial and Appeal Board (“Board”) declines to appear before this court to defend the decision below, is the USPTO’s Director required to possess Article III standing in order to intervene?

If yes, does the Director possess such standing in this appeal?

Additionally, if the Director does in fact possess standing; must the Director defend the Board’s decision? Alternatively, what are the ramifications if the Director declines to defend the Board’s decision?

Although the case here focuses on the vestige inter partes reexamination system, it has obvious and direct implications for the replacement inter parties reviews.

[Order: KnowlesOrder]

Paying Attorney Fees on Appeal

Image result for natural born killersWhen the PTO refuses to issue a patent, the applicant can appeal directly to the Court of Appeals for the Federal Circuit or instead file a civil action under 35 U.S.C. 145.  The Section 145 action gives the applicant the opportunity to further develop facts, including live expert testimony and cross-examination.

An oddity of the statute is its statement that “all the expenses of the proceedings shall be paid by the applicant.”  In its 2010 Hyatt decision, the Federal Circuit ruled that the expenses are to be paid by the applicant “regardless of the outcome.”  In the new decision NantKwest v. Matal, the Federal Circuit has ruled that the provision includes attorney fees and thus allows the USPTO to recoup its expert witness fees, attorney fees and other expenses without any showing of exceptional case or even any merits.

[NantKwest v. USPTO]

Here, the majority opinion filed by Judge Prost and Joined by Judge Dyk found that the term “all expenses” was designed to “deter applicants” from choosing the civil action pathway. The dissent filed by Judge Stoll (her first in a patent case?) argues that the term “expenses” is not sufficient to overcome the traditional american rule regarding attorney fees.

The lucky-thing here is that USPTO attorneys are paid government salaries and so the attorney fees added up to only $78k before the district court granted summary judgment against NantKwest.

The patent application in this case is based upon a 2001 filing by Hans Klingemann directed to a method of treating cancer by administering natural killer cells.  Those Natural Born Killers will now be released on the public without the protections offered by the patent system.