Navigating Claim Construction and Broadening Amendments: Lessons from Sisvel v. Sierra Wireless

Patent, ,

by Dennis Crouch

In 2019, Sisvel began asserting its U.S. Patent Nos. 7,433,698 and 8,364,196 against cell phone makers, wireless chip suppliers, and cellular network operators. These patents claim methods and systems for exchanging frequency information between a mobile station and a mobile switching center to facilitate switching a mobile device’s connection point within a cellular network. Several defendants petitioned the Patent Trial and Appeal Board (PTAB) for inter partes review (IPR), arguing that the challenged claims were invalid as anticipated and/or obvious based on prior art references. The PTAB instituted IPR and ultimately issued final written decisions concluding that the claims were unpatentable. See IPR2020-01070, Paper No. 31 (PTAB Nov. 8, 2021); IPR2020-01071, Paper No. 30 (PTAB Nov. 8, 2021).

On appeal to the Federal Circuit, Sisvel challenged the PTAB’s claim construction of the term “connection rejection message” and its denial of Sisvel’s revised motion to amend the ‘698 patent claims. The Federal Circuit, in an opinion authored by Judge Stark and joined by Judges Prost and Reyna, affirmed on both issues. Sisvel International S.A. v. Sierra Wireless, Inc., No. 22-1387 (Fed. Cir. September 1, 2023).

Claim Construction

The claims at issue particularly focus on the use of a “connection rejection message” to confer certain information to a mobile device.  The term is used throughout both the patent specification and the claims.  However, it is not expressly defined. The key dispute was it should be construed broadly to mean simply “a message that rejects a connection” or narrowly limited to “a message from a GSM or UMTS telecommunications network rejecting a connection request from a mobile station.”  As is usual for IPR proceedings, the patentee was asking for the narrow construction in order to avoid the prior art.

The Board and the Federal Circuit both applied the Phillips standard. Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc)  Under Phillips, claims are construed according to their plain and ordinary meaning as understood by a person of ordinary skill in the art, looking at the intrinsic evidence including the claims, specification, and prosecution history. Although the specification provides guidance, limitations found within described embodiments should not be imported into the claims absent a clear intent by the patentee to limit claim scope.  Extrinsic evidence, such as dictionary definitions are less important.

On appeal, the Federal Circuit agreed with the PTAB that the plain and ordinary meaning of “connection rejection message” is “a message that rejects a connection.” It found no persuasive basis in the intrinsic evidence to restrict the term only to GSM or UMTS networks. The patentee’s argument here was that the embodiments found in the specification were all directed to UMTS or GSM networks.  But, the problem is that the specification also states that the invention is could work “in many different cellular telecommunications systems” of which UMTS and GMS are two examples. The specification goes on to state that the system work work in any system that involves sending a rejection message in the manner outlined.  Thus, although the specification only the two networks, the court found that the claims and specification were drafted broadly and did not limit the invention only to GSM/UMTS. The court  ultimately declined to confine the claims only to the disclosed embodiments and instead affirmed the broad construction.

Result — invalidity affirmed.

Motion to Amend

Sisvel also challenged the PTAB’s denial of its revised contingent motion to amend claims of the ‘698 patent. The PTAB found the proposed substitute claims impermissibly broadened the scope of the original claims, specifically by changing “based at least in part on” to merely “using” when referring to information from the connection rejection message.  The AIA explicitly prohibits broadening amendments in IPR proceedings. 35 U.S.C. § 316(d)(3) states that amended claims “may not enlarge the scope of the claims of the patent.” Similarly, 37 C.F.R. § 42.121(a)(2)(ii) provides that a motion to amend may be denied if it seeks to enlarge the scope of the claims.

Sisvel contended that when all limitations were considered together, the substitute claims were narrower overall. On appeal, the Federal Circuit explained that a claim is broadened if it is broader in any respect–even if narrowed in some other respects, if it is broadened in any respect. Here, the change from “based on” to “using” broadened the claims by removing the requirement that the frequency parameter impact the value.

Key Takeaways

In hindsight, this is a situation where the patentee could have drafted the claims in these patents in a way that would have at least avoided the arguments raised here.  Of particular note, it often makes sense to include a dependent claims that narrow aspects of the claim to the same level provided by the embodiments. Here, the court also latched-onto throwaway language in the specification stating that the system could work on any network even though the rest of the specification focused on GSM and UMTS networks.  Still, at the time the statement likely made sense as an attempt to explain why it was proper to allow claim scope that is not limited to those networks.

Mandamus for Improper Venue

Patent

by Dennis Crouch

The U.S. Court of Appeals for the Federal Circuit recently declined to issue a writ of mandamus directing the U.S. District Court for the Eastern District of Texas (Judge Gilstrap) to dismiss a patent infringement lawsuit against Charter Communications based upon improper venue. In re Charter Commc’ns, Inc., No. 2023-136 (Fed. Cir. Sept. 5, 2023). Although non-precedential, the decision highlights a key difference between motions to dismiss for improper venue under 28 U.S.C. § 1406 and motions to transfer venue for convenience under 28 U.S.C. § 1404. It also shows the high bar for obtaining the “extraordinary remedy” of mandamus relief from denial of an improper venue motion.

The usual rule for appeals is that parties must wait until final judgment.  Assuming that it loses on the merits, Charter will have another opportunity to appeal venue once the case is concluded.

Background: Entropic sued Charter for infringing several of its patents, including US10135682.  The patents cover various aspects of cable network management, focusing on Cable Modem Termination Systems (CMTS) that serve multiple cable modems. The CMTS determines various Signal-to-Noise Ratio (SNR) related metrics for these modems and assigns them to different service groups based on these metrics.

Although Charter derives substantial revenue from customers located in the Eastern District of Texas, it still moved to dismiss the case for improper venue under § 1400(b), arguing it lacked a regular and established place of business in that district.  This statute limits the locations where patent infringement lawsuits can be filed.

1400(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

Id.  The Supreme Court has interpreted this statute to limit actions against corporations to either (1) their state of incorporation or (2) a district where the defendant “has a regular and established place of business” and also infringes the patent by making, using or selling the invention.   Charter is a Delaware company and does not operate its own retail stores in the Eastern District.  Still, the district court denied the motion to dismiss, finding venue was proper because Charter ratified retail stores operated by its subsidiaries in the district and those subsidiaries were Charter’s agents.

Improper vs. Inconvenient Venue

There is an important distinction between improper venue under § 1400(b) and inconvenient venue under § 1404(a). Section 1400 applies when venue is “wrong” or “improper” in the chosen district. If venue is improper, the district court must dismiss the case or transfer it to a proper district.  And, if a case goes to conclusion in an improper venue, a losing defendant would have an opportunity to appeal and at least get a new trial in a proper venue.

In contrast, § 1404 allows transfer “[f]or the convenience of parties and witnesses” even when venue is proper. Courts have greater discretion in deciding § 1404 transfer motions based on case-specific factors like convenience and judicial economy.  And, by the end of a trial, it is almost never “convenient” to retry the case in another venue.  Thus, post-trial section 1404 appeals are basically automatic losers.

Thus, even though “wrong venue” sounds like a bigger deal than “inconvenient venue” the Federal Circuit has historically only granted immediate mandamus actions for the latter.  The difference here is that, absent mandamus, the inconvenient venue issue cannot practically be appealed.

Mandamus Standards

The party seeking a writ of mandamus must show (1) no other adequate means to attain relief; (2) a clear and indisputable right to issuance of the writ; and (3) the writ is appropriate under the circumstances. Cheney v. U.S. Dist. Ct. for D.C., 542 U.S. 367 (2004).  In the past, the court has suggested that 1400(b) issues are unlikely to lead to mandamus relief because “post-judgment appeal is an adequate alternative means for attaining relief” if venue is found improper on appeal. In re Monolithic Power Sys., Inc., 50 F.4th 157 (Fed. Cir. 2022).

The Federal Circuit’s Decision

In a short opinion authored by Judge Cunningham, the Federal Circuit denied Charter’s petition for mandamus, finding no justification for immediate review of the district court’s order:

At most, CCI’s arguments present a record-specific dispute: whether CCI exerts control sufficient to impute its subsidiaries’ in-district operations to CCI under Fifth Circuit law. . . . CCI’s petition does not raise the type of broad, fundamental, and recurring legal question or other considerations that might warrant mandamus review.

In re Charter Commc’ns, Inc., (Fed. Cir. Sept. 5, 2023) (internal citations and quotation marks omitted). The court here emphasized that mandamus is an “extraordinary remedy” and Charter had not shown the district court’s decision was clearly wrong or raised a novel legal issue requiring prompt resolution. Rather, Charter seemed to “present[] a record-specific dispute” about imputing its subsidiaries’ activities to Charter for venue purposes. The court also explained that Charter could still challenge venue on direct appeal after final judgment, which provided an adequate alternative remedy.

Conclusions

The court has refused to take the bait and expand mandamus relief to improper venue challenges under § 1400(b). Defendants must generally wait to appeal after final judgment, even if venue may have been erroneous. Note though that mandamus may be still be justified for improper venue decisions implicating unsettled areas of law or where the party can show a major resulting injustice. But disagreements about case-specific facts and analysis are unlikely to clear the high mandamus bar.

 

US Copyright Office Generative AI Inquiry: Where are the Thresholds?

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by Dennis Crouch

Generative Artificial intelligence (GenAI) systems like MidJourney and ChatGPT that can generate creative works have brought a wave of new questions and complexities to copyright law. On the heels of a recent court decision denying registrability of AI created work, the U.S. Copyright Office recently issued a formal notice of inquiry seeking public comments to help analyze AI’s copyright implications and form policy recommendations for both the Office and for Congress. The notice is quite extensive and raises fundamental questions that many have been discussing for several years about copyrightability of AI outputs, use of copyrighted material to train AI systems, infringement liability, labeling AI content, and more. The Copyright Office’s inquiry is an attempt to respond to AI’s rapidly growing impact on creative industries. [Link to the Notice]

The following is a rough overview of three core inquiries that I identified in the notice.  It is also easy to just read it yourself by clicking on the notice above.

A core inquiry is whether original works that would ordinarily be copyrightable should be denied unless a human author is identified. Generative AI models produce outputs like text, art, music, and video that appear highly creative and would certainly meet copyright’s originality standard if created by natural people.  Further, if human contribution is required, the questions shift to the level of human contribution necessary and procedural requirements to claim and prove human authorship. As the notice states, “Although we believe the law is clear that copyright protection in the United States is limited to works of human authorship, questions remain about where and how to draw the line between human creation and AI-generated content.” Factors could be the relative or absolute level of human input, creative control by the human, or even a word count.  With copyright it is helpful to have some bright lines to streamline the process of registration without substantial case-by-case lawyer input for each copyrighted work, but any hard rule might skip over the nuanced. Although the notice focuses on copyrightability, ownership questions will also come into play.

A second important core inquiry focuses on training data that is fundamental to today’s generative AI models. The copyright office seeks input on the legality of training generative models on copyrighted works obtained via the open internet, but without an express license. In particular, the Office seeks information about “the collection and curation of AI datasets, how those datasets are used to train AI models, the sources of materials ingested into training, and whether permission by and/or compensation for copyright owners is or should be required when their works are included.”  Presumably different training models could have different copyright implications.  In particular, an approach that does not store or actually copy the underlying works would be less likely to be be infringing.

In building the training model, we often have copying of works without license, and so the key inquiry under current law appears to be the extent that fair use applies to protect the AI system generators.  In other areas, Congress and the Copyright Office have stepped in with compulsory licensing models, that could possibly work here — a system of providing a few pennies for each web page. Our system also supports approaches to voluntary collective licensing via joint management organizations; perhaps supported by a minimum royalty rate. An issue here is that many of the folks creating training data are doing so secretly and would like to maintain their data and how the model is using the data as trade secret information.  That lack of transparency will raise technical challenges and costs for the underlying copyright holders.

A third core area focuses on infringement liability associated with AI-outputs that result in a copy or improper derivative work.  Who is liable — the AI system developers, model creators, and/or end users? A traditional approach would allow for joint liability.  Again though, the lack of transparency makes things potentially difficult to prove copying, but perhaps availability and likelihood are enough.  On this point, notice also asks about the idea of labeling or watermarking AI content as suggested a recent White House / Industry agreement.  Although I see this issue as outside of copyright law, the inquiry suggests some penalty for failure to label.

Everyone is floundering a bit in terms of how incorporate generative AI into our world view.  I see the Copyright Office AI inquiry as a real attempt to seek creative and potentially transformative solutions. The public is invited to provide input by submitting comments by the October 18, 2023 deadline. There will also be a short response period for reply comments responding to initial submissions that closes on November 15, 2023.

USPTO Downsizes HQ; Building Owner Faces Financial Troubles

Patent

The U.S. Patent and Trademark Office (USPTO) has called their 2.4 million square foot headquarters in Alexandria, Virginia home since 2005. But the agency does not actually own the cutting-edge facility located in the Carlyle neighborhood near the Potomac riverfront. Instead, the USPTO has leased the complex from New York-based real estate owner LCOR.

Several months ago, the USPTO announced it would be downsizing and relinquishing 800,000 square feet of space. The renewed 5-year lease covers 1.6 million square feet.  Still a big footprint, but one reflective of how the USPTO’s workplace and workforce have evolved over the past two decades.

When the agency first moved in, hoteling and work-from-home examiner programs were in place, but not the expectation. Fast forward to today and the USPTO has fully embraced telework along with opening satellite offices nationwide, reducing the need for everyone to be housed at HQ. Despite major examiner corps growth during this time, the footprint no longer needs to be so large.

However, the USPTO’s landlord LCOR now faces its own challenges filling the soon-to-be vacant space. The company continues to struggle finding replacement tenants, as office vacancy rates remain high nationwide.

Most recently, credit rating agency Moody’s downgraded LCOR’s credit outlook to “high risk of default” status. The downgrade reflects Moody’s view that LCOR may have trouble refinancing debt and have insufficient cash flow to cover interest payments unless new paying tenants are found.

I remember first visiting HQ way back then and thinking of the potential benefits of having a patent law office in an adjacent building.  Today, that imagined benefit seems much less so as it is likely that your examiner is sitting at home in another state.

Venue Transfer Games Continue: Rafqa Star v. Google

Patent

by Dennis Crouch

Rafqa Star LLC v. Google LLC, No. 6:22-cv-01207-ADA, 2022 WL 3747666 (W.D. Tex. Aug. 17, 2022).

Google is one of the largest companies in the US with extensive ties not just to every state, but virtually every household in the entire country.  Still, the company regularly argues that it would be too unfair and inconvenient to litigate patent cases in states such as Texas. In a recent decision, Judge Alan Albright (W.D.Tex.) denied Google’s motion to transfer venue. In his 40-page order, Judge Albright provided an in-depth analysis of the private and public interest factors that, based upon prior precedent, govern transfer under 28 U.S.C. § 1404(a).  The relevant statute reads as follows:

For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.

Id.  Before analyzing this case, I want to step back and recognize that the current legal test for patent venue transfer has departed significantly from the statutory language declaring the goals of convenience and justice. The public and private factor analysis mandated by current precedent does not actually focus on real inconvenience to parties or witnesses. For instance, the location of documents and witnesses gets weight when almost everything is cloud based. And the 100-mile rule makes little sense in an age of national air travel and remote work.  This is especially true for patent cases that will have nationwide impact. (more…)

“Intent Engine” Claims Fail 101 for Lack of Technological Inventive Concept

Patent

by Dennis Crouch

USC IP P’ship, L.P. v. Meta Platforms (Facebook), 22-1397 (Fed. Cir. August 30, 2023)

In a non-precedential opinion authored by Judge Pauline Newman, the Federal Circuit has affirmed USC IP Partnership’s asserted patent claims are all invalid.  Back in 2020, USC IP sued Facebook for infringing its U.S. Patent No. 8,645,300.  The arguably pro-patentee Judge Alan Albright served as the district court judge.  Like Judge Newman, he had also found the claims invalid as unduly directed to an abstract idea. USC IP P’ship, L.P. v. Facebook, Inc., 576 F. Supp. 3d 446 (W.D. Tex. 2021) (granting summary judgment of ineligibility).

(more…)

Taylor v. Hunton Andrews Kurth LLP: A Cautionary Tale for Inventors and Startups

Patent

The Harris County Texas appellate court recently affirmed summary judgment favoring the Hunton Andrews Kurth law firm and its attorneys. Taylor v. Hunton Andrews Kurth, LLP, 14-22-00410-CV (Tex. App.–Hous. [14th Dist.] July 13, 2023).  Taylor and his companies WPEM and W2W had sued the firm for legal malpractice after first losing its infringement lawsuit and being stuck with the defendants attorney fees. The case offers a few key takeaways for entrepreneurs delving into the patent system. (more…)

Double Patenting and Patent Term Adjustment

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by Dennis Crouch

The Federal Circuit recently issued an important decision in In re: Cellect, LLC (Fed. Cir. Aug. 28, 2023) regarding how Patent Term Adjustment (PTA) interacts with terminal disclaimers and obviousness-type double patenting (ODP). This case establishes binding precedent that a terminal disclaimer cuts off any extended patent term granted through PTA.

This holding contrasts with the court’s prior rulings regarding Patent Term Extension (PTE), where the extended term is calculated from the disclaimed expiration date, not the original expiration date. Thus, PTE extends beyond a disclaimed term, while PTA does not.

This result was expected by many patent experts, although some in the pharmaceutical industry had pushed for PTA to extend beyond disclaimed terms similarly to PTE. In the end, the statutory language expressly addressing disclaimers in the context of PTA proved decisive. This precedent will apply to all patents already in-force as well as those issued in the future.  Thus, applicants will want to carefully consider PTA and terminal disclaimer strategy for patent families.

If I were the judge, I would (more…)

9th Circuit Revives False Claims Act Action for Fraud on the Patent Office

Patent,

by Dennis Crouch

The U.S. Court of Appeals for the Ninth Circuit recently issued a pair of decisions in the qui tam case Silbersher v. Valeant Pharmaceuticals concerning the False Claims Act’s (FCA) public disclosure bar.  The case sets significant precedent in linking FCA claims to patent prosecution and fraud upon the patent office.  The case can be contrasted with Silbersher v. Allergan, Inc., 21-15420, — F.4th — (9th Cir. Aug. 25, 2022) [21-15420], that Silbersher lost.

(more…)

“Bald Girls Do Lunch” Unable to Sway the Federal Circuit in Case Involving Deuterated Drug for Alopecia Areata

Patent,

By Chris Holman

Sun Pharmaceutical v. Incyte, 2023 WL 5370639, Not Reported in Fed. Rptr. (Fed. Cir. Aug. 22, 2023)

Bald Girls Do Lunch (“BDGL”) is a nonprofit organization dedicated to improving the quality of life for females living with alopecia areata (“AA”).  AA has been described as “an autoimmune skin disease resulting in partial to complete hair loss on all hair-bearing areas of the body, including, for example, on the face, resulting in loss of eyebrows and eyelashes.” According to BDGL, “AA is not a simple cosmetic problem—it is a chronic, often devastating condition that has substantial and wideranging implications, affecting patient’s physical, mental, and emotional health.  Indeed, in severe cases, AA can lead to chronic depression.” (more…)

Third Circuit Allows Deduction of Generic Hatch-Waxman Defense Costs

Patent

by Dennis Crouch

Mylan v. IRS, No. 22-1193, — F.4th — (3d Cir. July 27, 2023)

In a recent tax appeal, the Third Circuit court of appeals afformed that legal expenses incurred by generic drug makers to defend against patent infringement suits brought under the Hatch-Waxman Act are deductible as ordinary and necessary business expenses. This aligns with longstanding precedent treating patent litigation defense costs as deductible for the alleged infringer. (more…)

PTAB Captains Take Notice: Carefully Weigh Secondary Considerations

Patent,

By Dennis Crouch

The nexus requirement serves as a threshold that must be met before secondary indicia will be even considered as relevant to the obviousness inquiry.  In its recent Volva Penta decision, the Federal Circuit found that the PTAB had  (1) created too high of a burden to prove nexus and (2) been unduly dismissive of the patentee’s evidence of commercial success and copying.  The case reinforces the notion that patentees should attempt to include some claims that are largely coexistive with its product line, especially in today’s world of likely copying. The case also serves as a reminder that product copying still caries significant weight in the obviousness analysis. Volvo Penta of the Americas, LLC v. Brunswick Corp., 22-1765, — F.4th — (Fed. Cir. August 24, 2022). (more…)

Guest Post: Why Do Women Face Challenges in the Patent Process?

Patent

By: Abhay Aneja, Assistant Professor of Law, University of California, Berkeley, Diversity Pilots Initiative Researcher, Gauri Subramani, Assistant Professor in the Department of Management, College of Business, Lehigh University and Diversity Pilots Initiative Researcher, and Oren Reshef, Assistant Professor of Strategy, Washington University in St. Louis.  This post is part of a series by the Diversity Pilots Initiative, which advances inclusive innovation through rigorous research. The first blog in the series is here, and resources from the first conference of the initiative are available here. (more…)

Aseptic Patent Law: Which Side of Literal do you Favor?

Patent

by Dennis Crouch

Steuben Food recently lost its infringement case against Shibuya Hoppmann with the district court holding (1) the doctrine of equivalents (DOE) cannot extend to cover the accused aseptic bottle filling technique and further (2) the reverse doctrine of equivalents shields the defendant against charges of literal infringement.  Steuben Foods, Inc. v. Shibuya Hoppmann Corp., No. 1:19-cv-02181-CFC, 2023 WL 2498810 (D. Del. Mar. 14, 2023) (U.S. Patent Nos. 6,209,591; 6,536,188; and 6,702,985) (Chief Judge Connolly). The case is now pending on appeal at the Federal Circuit with the successful defendant’s responsive brief due in mid-September. (more…)

Looking Back: Graver Tank after 70 years

Patent

by Dennis Crouch

The Supreme Court’s landmark 1950 decision in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950) is one of the court’s most cited patent cases.  The decision established important guideposts for applying the doctrine of equivalents (“DOE”), including consideration of the prior art and a focus on the substantiality of differences. While courts today emphasize evaluating equivalence on an element-by-element basis, Graver Tank‘s substantive analysis remains highly influential. (more…)

Size Matters: Element-by-Element Analysis in Obviousness

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by Dennis Crouch

In re Universal Electronics, Inc., No. 2022-1716 (Fed. Cir. Aug. 15, 2023) (non-precedential)

This was a consolidated appeal from two Patent Trial and Appeal Board (PTAB) decisions affirming the rejection of claims from Universal Electronics, Inc.’s (UEI) U.S. Patent Application Nos. 12/645,037 and 16/279,095 as obvious under 35 U.S.C. § 103.  On appeal, the Federal Circuit has affirmed. (more…)