In an order Friday, the Federal Circuit granted en banc review of its second case in the past three weeks and its third over the past three months.  This time it's a case involving Tivo relating to the contempt proceedings against Echostar relating to Tivo's DVR patents.  After Echostar was found to infringe Tivo's patent and was permanently enjoined from infringement, it redesigned its DVR software.  Tivo asked the district court to hold Echostar in contempt for violating the injunction.  The district court agreed with Tivo, and the Federal Circuit affirmed.

That opinion has now been vacated, and the Federal Circuit has granted en banc review to address whether and in what circumstances a contempt proceeding is appropriate to address alleged infringement of a newly accused device.  Specifically, the questions presented are:

1. Following a finding of infringement by an accused device at trial, under what circumstances is it proper for a district court to determine infringement by a newly accused device through contempt proceedings rather than through new infringement proceedings? What burden of proof is required to establish that a contempt proceeding is proper?
2. How does “fair ground of doubt as to the wrongfulness of the defendant’s conduct” compare with the “more than colorable differences” or “substantial open issues of infringement” tests in evaluating the newly accused device against the adjudged infringing device? See Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618 (1885); KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed. Cir. 1985).
3. Where a contempt proceeding is proper, (1) what burden of proof is on the patentee to show that the newly accused device infringes (see KSM, 776 F.2d at 1524) and (2) what weight should be given to the infringer’s efforts to design around the patent and its reasonable and good faith belief of noninfringement by the new device, for a finding of contempt?
4. Is it proper for a district court to hold an enjoined party in contempt where there is a substantial question as to whether the injunction is ambiguous in scope? 

Consistent with its typical practice in en banc cases, the Federal Circuit is permitting amicus briefs on these issues.

To read the full order granting en banc review in Tivo, Inc. v. Echostar Corp., click here.

To read our post regarding the original appeal, click here.

In an order today, the Federal Circuit granted rehearing en banc in Therasense, Inc. v. Becton, Dickinson & Co.  The order indicates the court will be reconsidering its precedent on virtually the entire gamut of issues relating to inequitable conduct. Specifically, the questions presented are:

1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?
2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?
3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office's rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?
4. Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).
5. Should the balancing inquiry (balancing materiality and intent) be abandoned?
6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.
   

The court explicitly allows for the filing of amicus briefs without leave of court, and also specifically invites the USPTO to file such a brief.

For the order granting rehearing en banc, click here.

For the original panel opinion (affirming the district court's finding of inequitable conduct), click here.

More detail of the original panel opinion after the jump.

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Monday the Federal Circuit  released its en banc opinion in Ariad Pharmaceuticals, Inc. v. Eli Lily & Co., where the court addressed whether 35 U.S.C. § 112  has a written description requirement separate and apart from the enablement requirement.  A substantial majority of the court (10 judges) joined in the majority opinion, with two judges dissenting.  As summarized by the court:

We . . . read the statute to give effect to its language that the specification "shall contain a written description of the invention" and hold that § 112, first paragraph, contains two separate description requirements: a "written description [i] of the invention, and [ii] of the manner and process of making and using [the invention]."

The Federal Circuit analyzed several old Supreme Court cases, and concluded that the Supreme Court, while not specifically calling this requirement a "written description" requirement, has consistently held that an inventor must do more than simply enable one in the art to make and use the invention claimed, but also must describe what the invention is. 

This decision is not unexpected, and leaves intact the Federal Circuit's jurisprudence on the subject. In fact, one of the grounds for retaining the requirement is that forty years of case law has held such a requirement exists, and inventors have relied upon the requirement over the course of that time.  The court was reluctant to upset the settled expectations of the patent community.  The court also declined to set forth a rule where original claims always meet the written description requirement, noting:

Although many original claims will satisfy the written description requirement, certain claims may not. For example, a generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. 

More detail of the en banc decision after the jump.  Click here for our post regarding the original panel decision, which has much of the factual background of the invention at issue.  Click here for a discussion of court's decision to grant en banc review, including the questions presented.

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In Forest Group v. Bon Tool Co., the Federal Circuit held that the false marking statute applies on a per article basis, rather than on a per decision to mark basis.  The Federal Circuit reversed the district court, which had imposed a fine of $500 for a single decision to falsely mark a shipment of stilts as patented when they were not patented, and instructed the district court to recalculate the fine based on the total number of stilts that were falsely marked.

More details of Forest Group v. Bon Tool Co. after the jump.

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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.

The Federal Circuit has clarified the relevant timeframe for purposes of determining whether two claimed inventions are patentably distinct or would result in impermissible double patenting.  The court held "the relevant time frame for determining whether a product and process are 'patentably distinct' should be at the filing date of the secondary application."

Here, the product application was filed over a decade before the process application.  The district court originally granted summary judgment of no double patenting based on evidence of developments that came after both applications were filed.  It was unclear whether any of the alternative methods were available before the second application was filed, so the court remanded the case for resolution of that issue.

More detail of Takeda Pharm. Co. v. Doll after the jump.

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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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According to the Federal Circuit, the answer to this question appears to be "yes."  The court reversed a district court's dismissal of a declaratory judgment action against a patent holding company (or non-practicing entity (NPE), sometimes pejoratively referred to as a patent troll).  The DJ action was predicated on three letters, the first from the NPE to the DJ plaintiff, the second in reply, and the third from the NPE in reply to the second.  The court held there was a sufficient "implied assertion of its rights" under the patent to support DJ jurisdiction.

Of particular note are some statements the court made regarding different rules when NPEs contact potential licensees for their patents.  These include:

[T]he receipt of such correspondence from a non-competitor patent holding company . . . may invoke a different reaction than would a meet-and-discuss inquiry by a competitor, presumably with intellectual property of its own to place on the bargaining table. Under the totality of the circumstances, therefore, it was not unreasonable for [the DJ plaintiff] to interpret [the NPE's] letters as implicitly asserting its rights under the patent.

. . .

[The NPE] is solely a licensing entity, and without enforcement it receives no benefits from its patents. This adds significance to the fact that [the NPE] refused [the DJ plaintiff's] request for a mutual standstill . . . .

Even the court observed it was changing the rules, noting "our decision in this case undoubtedly marks a shift from past declaratory judgment cases."  Based on this decision, it appears very difficult for a NPE to even contact a potential licensee without exposing itself to the potential for a declaratory judgment action.

More detail of Hewlett-Packard Co. v. Acceleron LLC after the jump.

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If anyone needed further proof that patents are more easily held obvious after KSR, look no further.  The Federal Circuit held that a patent directed to a method of email marketing with improved efficiency was obvious based on the "common sense" of one in the art. 

The claimed method had four steps, the fourth of which was (as described by the court) repeating the first three steps until a minimum threshold of emails were successfully received.  It was undisputed that the first three steps were known in the art and that the final step was not in the prior art. The district court held the addition of the final step "would be obvious to virtually anyone."

The Federal Circuit agreed.  After citing the relevant passages from KSR regarding common sense, the court observed:

[W]hile an analysis of obviousness always depends on evidence that supports the required Graham factual findings, it also may include recourse to logic, judgment, and common sense available to the person of ordinary skill that do not necessarily require explication in any reference or expert opinion.

The court did reiterate that the analysis underlying the application of common sense "must be made explicit" in order to facilitate review, but held the district court had done so here.  The court observed that if the relevant technology were complex, expert opinions may be required.  However, in this case the level of ordinary skill in the art was a high school education and limited experience.  Of course, the court also held that even if the expert witness testimony was considered, it also confirmed the conclusion of obviousness.  Accordingly, the Federal Circuit affirmed the district court's grant of summary judgment.

More detail of Perfect Web Techs., Inc. v. InfoUSA, Inc. after the jump.

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The Federal Circuit has agreed to hear en banc an interesting issue with regard to the potential for patent misuse in licensing.  The case is Princo Corp. v. ITC.  At issue is the patent pool related to the technology used for CD-R and CD-RW discs.  The alleged infringer, Princo, admitted infringement before the ITC, but asserted the patents unenforceable due to patent misuse.  The ITC originally rejected this defense, but a divided panel of the Federal Circuit held additional factual determinations were necessary to assess the defense.  

Currently-available CD-R and CD-RW discs use analog technology to assist the recording device in determining where on the disc the recording laser is located at any given time.  Another potential alternative (that has not been implemented in the marketplace) is using digital technology to make this determination.  According to the defendant, the digital alternative was never commercialized because of an agreement between Sony and Philips (two of the owners of patents in the relevant patent pool) not to license a Sony patent covering this digital alternative for this purpose.  According to the defendant, this amounted to a type of horizontal price fixing, and was therefore patent misuse.  The ITC disagreed, and held no misuse occurred.

A divided panel of the Federal Circuit disagreed, and remanded the case to the ITC for further factual development.  The court stated the precompetitive benefits sometimes seen in the context of patent pools are completely absent in the context of an agreement not to license patents covering a potentially competing technology.  The panel majority held this was at least potentially an antitrust violation under the rule of reason.

The en banc Federal Circuit has now agreed to address this issue, with the briefing cycle to be completed shortly after the new year.  Oral argument is not yet set (update, see below), but the case has the potential to provide some clarity on when an arguably anticompetitive licensing practice crosses over into patent misuse.

Click here for the order granting rehearing en banc.

Update (10/29):  The Federal Circuit has set oral argument in the case for March 3 at 2:00 PM.

Click below for a full summary of the panel decision in Princo Corp. v. Int'l Trade Comm'n.

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