CAFC Outlines Difference Between Vacating and Reversing

Patent, Patent Cases 2007

E-Pass v. 3Com (Fed. Cir. 2007)

E-Pass filed its original complaint in 2000 and has been through one round of appeal. The earlier appeal focused on claim construction.  In this appeal, E-Pass argued that the lower court didn’t properly follow the CAFC’s directions.

Once a case has been decided on appeal, the rule adopted is to be applied, right or wrong, absent exceptional circumstances.

The CAFC had vacated the lower court’s summary judgment and remanded for further proceedings.  On remand, the lower court considered the new claim construction handed down, but once again concluded that summary judgment against E-Pass was proper.

On appeal, the CAFC agreed with the lower court — finding that its earlier decision was not a reversal.  Rather, by vacating the decision the court implied that summary judgment may be proper after further consideration of the facts.

By vacating, we signaled that, although the district court’s prior decision rested upon erroneous grounds, a proper claim construction might support a judgment (summary or otherwise) in favor of either party.

Affirmed.

Why Microsoft Wants Patent Reform

Patent, Patent Cases 2007

Parker v. Microsoft (Fed. Cir. 2006).

Opinion in full [citations removed]:

Charles W. Parker (“Parker”) appeals a final judgment of the [DC District Court] dismissing his patent infringement action against Microsoft as frivolous. We review a district court’s frivolousness determination for an abuse of discretion. Parker’s allegations that he has patented the “elemental atom” and that Microsoft has infringed his rights by using and improperly claiming inventorship of such an invention are “fanciful,” “fantastic,” and “delusional” contentions supporting the district court’s determination. On appeal, Parker provides us with no persuasive basis to conclude that the district court abused its discretion in dismissing the action. We affirm.

“Right-to-Sue” Clause Does Not Give Licensee a Right to Sue

Patent, Patent Cases 2007

Propat v. RPost (Fed. Cir. 2006).

Standing: Only a "patentee" has standing to sue for patent infringement.  In order to qualify as a "patentee" the plaintiff must possess "all substantial rights in the patent."

Propat sued RPost for patent infringement.  The district court, however, dismissed the case for lack of standing — finding that Propat was merely a licensee and not in possession of sufficient patent. Propat appealed.

By its plain terms, the Propat’s license gives the company rights to initiate and enforce license agreements and to sue infringers.  Prior to any lawsuits, however, Propat must "consult and obtain prior approval" from the superior interest-holder.  The license can also be terminated for breach or other reasons. In addition, the license forbids transfer of Propat’s rights.

Based on the license agreement, the appellate panel agreed that Propat did not have sufficient rights to bring suit. The court pointed to several elements of the license in its decision:

  • An express provision retaining ownership in the superior interest-holder;
  • Superior party was required to pay any maintenance fees;
  • Superior party continued to enjoy some control over the use of the patent; and
  • Superior party held a right to terminate the license under certain circumstances.

In addition, the court reaffirmed that a "right to sue" clause in a license does not actually entitle the licensee to sue.