In an order yesterday, the Federal Circuit has agreed to consider the scope of evidence to be considered in an action filed under 35 U.S.C. § 145 to obtain review of a decision of the Board of Patent Appeals and Interferences.  The case is Hyatt v. Kappos.  Specifically, the court ordered briefing on the following issues:

(a) Are there any limitations on the admissibility of evidence in section 145 proceedings? In particular—

(i) Does the Administrative Procedure Act require review on the agency record in proceedings pursuant to section 145?

(ii) Does section 145 provide for a de novo proceeding in the district court?

(iii) If section 145 does not provide for a de novo proceeding in the district court, what limitations exist on the presentation of new evidence before the district court?

(b) Did the district court properly exclude the Hyatt declaration?

In the original panel decision, the court affirmed the district court's exclusion of evidence that "should have been" raised before the Board but was not, specifically evidence relating to enablement.  Judge Moore dissented, contending Hyatt was entitled to introduce new evidence in a § 145 proceeding. 

No oral argument date has yet been set.  To read the full order granting en banc review, click here.

After the Fifth Circuit's Volkswagen and the Federal Circuit's TS Tech decisions, potential patent plaintiffs should be getting the message:  Don't file in the Eastern District of Texas unless there are actually some sources of proof there.  The Federal Circuit has again granted mandamus ordering the district court to transfer another case out of the district.

In this case, there were no witnesses within the court's subpoena power.  The allegedly infringing product was designed, manufactured, and tested elsewhere.  The plaintiff had no offices in the district.  While 75,000 pages of relevant documents were in the district, they were electronically transferred to the plaintiff's counsel there, apparently for purposes of providing an "anchor" to the district.  The district court held the case was "decentralized," and transfer would only adjust which witnesses would be inconvenienced. 

The Federal Circuit was having none of it, however.  The court observed that the Eastern District of North Carolina had subpoena power over four (of eighteen) non-party witnesses and was also the site of all documentation regarding the development of the accused product.  The court was particularly unimpressed with the presence of the 75,000 pages of documents, stating the notion that these documents were "Texas" documents was "a fiction which appears to have been created to manipulate the propriety of venue."  Because of the utter lack of connection to Texas, the court ordered the district court to transfer the case to North Carolina.

More detail of In re Hoffman-La Roche Inc. after the jump.

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In a recent decision, the Federal Circuit held it was not an abuse of discretion for a district court to retain an independent expert pursuant to Rule 706 to assist the jury in understanding the technology relating to a complicated electrical patent.  The district court was frustrated with the technology, and observed "the notion that a jury is going to understand [the technical details], to me, is foolishness."  The district court judge was concerned the jury would make a decision for reasons other than the scientific merits, and invoked Rule 706 to have a neutral expert testify at trial.  The judge also informed the jury that the expert had been retained by neither party, but further stated they should give him no additional weight because of this.  The jury held two claims infringed under the doctrine of equivalents, but all asserted claims invalid as obvious.

The Federal Circuit affirmed.  The court held the appointment of an independent expert and the disclosure of his independence was not an abuse of discretion.  This was based in part on the fact that the jury's findings did not exactly track the independent expert's testimony:  the jury held more claims infringed and more claims obvious compared to the expert's testimony.  While the court did state the disclosure of the expert's neutrality to the jury "trouble[d] this court to some extent," in the Ninth Circuit district courts have "wide latitude" to make such appointments.

On the merits, the court held substantial evidence supported the jury's implicit factual finding underlying its obviousness determination, namely all elements of the asserted claims were present in the prior art, based on the testimony of the defendant's expert and the neutral expert.

More detail of Monolithic Power Sys., Inc. v. O2 Micro Int'l Ltd. after the jump.

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In a recent decision, the Federal Circuit affirmed-in-part and reversed-in-part a district court's ruling sanctioning the plaintiffs and their attorney in a case both monetarily and by striking the plaintiffs' pleadings.  The sanctionable conduct was the withholding of certain test results of the allegedly infringing product that arguably showed the product did not infringe.  The test results were disclosed to the plaintiffs' expert witness, but never disclosed to the defendants.  When asked to explain their conduct, the plaintiffs and their lawyer testified they believed (mistakenly) the results were either irrelevant or subject to work product protection, although it was never listed on a privilege log.  As a result of this, the district court struck the plaintiffs' complaint and answer to counterclaims, and also ordered the plaintiffs to pay over $121,000 in attorney fees under Rule 37, nearly $1 million in fees and expenses under the court's inherent authority, over $1.6 million in fees under § 285, and nearly $50,000 in costs under § 1920.

The Federal Circuit agreed with the district court's finding that the conduct was sanctionable, but reversed-in-part the actual sanctions applied.  Specifically, the court held striking the pleadings was too drastic a sanction.  As a result, the awards under § 285 and § 1920 were also reversed, as they have a prevailing party requirement.  The court also reversed the award under the court's inherent powers, noting that under Supreme Court jurisprudence, when a Rule provides adequate sanctioning power, a court should ordinarily rely upon the Rule rather than its inherent authority.

More detail of ClearValue, Inc. v. Pearl River Polymers, Inc. after the jump.

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In a recent decision, the Federal Circuit granted a petition for a writ of mandamus after a district court denied transfer of the case.  The defendants/petitioners had been denied transfer of a patent case from the Eastern District of Texas (a venue perceived to be plaintiff-friendly in patent cases) to the Southern District of Ohio, where two of the three defendants were located.  The district court gave essentially controlling weight to the plaintiff's choice of venue, even though none of the parties, witnesses, or evidence was located in the district.  The only connection to the Eastern District of Texas was the fact that there had been sales of the allegedly infringing product there.

The Federal Circuit, applying the recent en banc Fifth Circuit decision in In re Volkswagen of America, Inc., granted the petitioners' request for mandamus.  The court held the case was factually indistinguishable from Volkswagen, where the Fifth Circuit en banc granted mandamus ordering transfer.  As a result, the court sent the case back with orders to transfer it to Ohio.

More detail of In re TS Tech USA Corp. after the jump.

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The Federal Circuit recently reversed a district court's post-verdict grant of judgment as a matter of law of nonobviousness, applying the KSR obviousness standard and addressing the requirements for expert testimony for legal conclusions of obviousness. The Federal Circuit clearly set forth that patent attorneys without specific skill and training in the area of the technology involved in the patent-in-suit are not qualified to testify as experts regarding infringement and invalidity.

Specifically in this case, the Federal Circuit held it was an abuse of discretion to allow a patent attorney to testify as an expert regarding infringement or invalidity because he lacked experience in the field of the patent, here segmented tarpaulin systems.  As a result, his testimony did not meet the standard of admissibility of evidence under Rule 702.

This fact notwithstanding, the court still held there was sufficient evidence in the record to conclude the asserted claim was obvious.  The court characterized this case as much like KSR, where all elements of the claim were in the prior art and, in combination, their respective functions remained the same, producing no unexpected results.

More on Sundance, Inc. v. DeMonte Fabricating Ltd. after the jump.

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In a recent decision, the Federal Circuit found that a district court's grant of a stay pending inter partes reexamination without considering the patentee's pending motion for a preliminary injunction was an abuse of discretion. The Federal Circuit held the grant of the stay effectively denied the preliminary injunction motion, thereby making the stay order appealable. The court then held the district court should have considered the preliminary injunction motion and, after considering the four preliminary injunction factors, made a determination regarding the injunction before staying the proceedings for the reexamination.

More detail on Procter & Gamble Co. v. Kraft Foods Global, Inc. after the jump.

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In a recent decision, the Federal Circuit affirmed a distirct court's vacatur of a decision of the Board of Patent Appeals and Interferences.  In an appeal of rejections in twelve different applications involving approximately 2,400 claims, the Board only addressed the rejection of 21 "represntative" claims pursuant to 37 C.F.R. § 1.192(c)(7) [now 37 C.F.R. § 41.37(c)(vii)].  The Board took this position that each of the claims in the groupings were rejected under the same statutory provision, even though the rejections were not necessarily based on the same limitations.

The district court held this was improper.  Specifically, the district court held the Board could only group claims if the basis for the rejection was the same, which requires both the same statutory provision and the same underlying basis for the rejection.  Here, because the rejections at issue were predominantly under the written description requirement, the district court held claims could only properly be grouped if the limitation that was allegedly not described was present in each of the grouped claims.

The Federal Circuit affirmed, agreeing with the district court's analysis.

More detail of Hyatt v. Dudas after the jump.

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In a decision yesterday, the Federal Circuit affirmed a district court's construction of a patent claim in an infringement case. However, the court vacated the district court's grant of summary judgment of noninfringement and remanded.

The Federal Circuit held that a prior interpretation of the claim in a suit against a different alleged infringer required the claim construction adopted by the district court. The court declined to address a second issue of claim construction, namely whether the claim preambles were limiting, instead letting the district court address it in the first instance.

The court further held it was error for the district court to deny the plaintiff's 56(f) motion, as the plaintiff had not had sufficient initial opportunity for discovery.  The court also held that a direct conflict in the declarations in the summary judgment record was sufficient to produce a material fact dispute, making summary judgment inappropriate.

More concerning Metro. Life Ins. Co. v. Bancorp Servs., L.L.C. after the jump.

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In a decision today, the Federal Circuit affirmed a district court's decision finding two claims of a patent anticipated.  The district court, adopting a magistrate judge's Report and Recommendation, held that the claims were invalid and granted summary judgment.  After retaining new counsel for the appeal, the patentee argued the prior art did not anticipate the claims based on a claim element not argued before the district court, either to the magistrate judge or when the magistrate judge's report was challenged before the district judge.

The Federal Circuit affirmed. The court refused to consider the patentee's new argument on appeal because it had not raised it below.  New arguments are typically not considered on appeal, and none of the narrow exceptions to that rule applied to this case.  Simply retaining new counsel for appeal was insufficient.  As a result, because the patentee had abandoned the arguments it made before the district court regarding anticipation, the court affirmed without addressing the merits of the patentee's arguments.

More concerning Golden Bridge Tech. v. Lucent Tech. after the jump.

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