En banc Federal Circuit to address potential patent misuse issues in license practices

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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Close but no cigar: ITC gets 4 of 5 claim constructions correct, but must reconsider 2 issues

In a recent decision, the Federal Circuit addressed a variety of claim construction, infringement, and validity issues in an appeal from the International Trade Commission.  After construing five disputed claim terms, the ITC held one of four representative products infringed, the remaining three did not infringe, and one claim invalid as anticipated.  Both parties appealed.

The Federal Circuit affirmed in part, reversed in part, and remanded.  The court affirmed the ITC's construction of 4 of the 5 disputed terms.  However, the modification of one term resulted in the court vacating the ITC's determination of invalidity of one claim, as well as infringement of two of the four devices.  The Federal Circuit affirmed the finding of noninfringement of the other two devices, and remanded for reconsideration of the various issues in light of the revised construction.

More detail of Linear Tech. Corp. v. Int'l Trade Comm'n after the jump.

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ITC cannot enter limited exclusion order against non-parties

In a decision last week, the Federal Circuit vacated a limited exclusion order issued by the International Trade Commission in the most recent dispute between Qualcomm and Broadcom.  The case involved alleged infringement of one of Broadcom's patents relating to chips for wireless communication, specifically directed toward power saving technology.  Although Qualcomm was the only respondent in the proceeding, the ITC issued a limited exclusion order ("LEO") prohibiting downstream products from being imported if they contained the accused technology. 

On appeal, the Federal Circuit affirmed various findings of the ITC, including the finding that the patent was not invalid and that Qualcomm did not directly infringe the patent.  However, the court vacated and remanded on the issue of induced infringement because the ITC applied the pre-DSU Medical standard for induced infringement.  Also, the Federal Circuit held that the ITC exceeded its authority in issuing an LEO for downstream products against parties who are not brought as respondents in this case.

More on Kyocera Wireless Corp. v. Int'l Trade Comm'n after the jump.

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Inducement not shown when accused product can work in an infringing way but doesn't have to

In a recent decision, the Federal Circuit affirmed the International Trade Commission's finding of noninfringement with respect to one patent but reversed and remanded on another.  At issue was whether the defendant had imported chipsets that infringed five of the plaintiff's patents in violation of 19 U.S.C. § 1337.  The action was dismissed with regard to two of the patents, as any action related to those two patents must occur in Federal Court in California due to a forum selection clause.  Another patent is the subject of a separate appeal after an exclusion order was entered.  The Commission adopted an administrative law judge's determination of noninfringement with respect to the remaining two asserted patents.  

The Federal Circuit affirmed the determination of noninfringement for one patent, holding the patentee had presented insufficient evidence to show the accused devices necessarily infringed, and the patentee did not provide evidence of specific instances of direct infringement.  The court disagreed with the ALJ's claim construction with respect to the second patent.  The administrative law judge misinterpreted expert testimony on whether a control signal was required to be changeable and accordingly the court vacated the noninfringement finding with regard to one of the eight accused chips, but affirmed the finding of noninfringement with regard to the other seven even under the revised construction.

More on Broadcom Corp. v. Int'l Trade Comm'n after the jump.

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When exclusion order based on multiple patents, failure to appeal under each may render appeal moot

In a decision last week, the Federal Circuit affirmed the United States International Trade Commission's finding of infringement and validity. 

The claims were brought under three patents that all claimed priority to a common parent application, and thus would ordinarily all expire on the same day.  However, one of the three patents was subject to a 108 day term extension under 35 U.S.C. § 154(b).  The final determination was only appealed as to two patents, one of which was the one subject to the extension.  As the exclusion order was supportable for the full term of both the non-extended patents based on infringement of the non-appealed patent, the determination regarding the non-extended patent was moot, given it would have no effect on the exclusion order.  The extended patent, however, would extend the order beyond the expiration of the non-appealed patent, making the appeal as to that patent not moot.

Turning to the merits, the court affirmed the ITC's finding that the patents were not invalid under the written description requirement of § 112.  The patentee substituted the generic word "clearance" for other terms in the claims, but the court held this insufficient to show lack of possession of the invention as of the parent application's filing date.

More detail on Yingbin-Nature Wood Indus. Co. v. Int'l Trade Comm'n after the jump.

 

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Hybrid vehicle patent not infringed; invalidity issues need not be reached on appeal from ITC

In an appeal from the International Trade Commission, the Federal Circuit affirmed the Commission's determination of noninfringement of a patent.  The court, however, did not consider the ITC's finding of nonenablement on appeal.  While in the context of a district court case a counterclaim for invalidity is not mooted by a finding of noninfringement, the court held that because invalidity can only be raised at the ITC as an affirmative defense, the court was not required to consider the issue of indefiniteness on appeal once it had affirmed the finding of noninfringement.  Accordingly, the court sidestepped the issue of enablement with regard to the asserted patent, instead affirming on the grounds of noninfringement alone.

More concerning Solomon Techs., Inc. v. Int'l Trade Comm'n after the jump.

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§ 271(e) safe harbor applies to both product and method claims in ITC proceedings

In a ruling today, the Federal Circuit affirmed in part a decision by the International Trade Commission (ITC) concerning the application of 19 U.S.C. § 1337 and 35 U.S.C. § 271(e)(1) to imported products and products imported produced via a patented process.  

The main issue before the court was whether the safe harbor against infringement provided by § 271(e) applies in proceedings under § 1337 relating to method patents.  The court determined that applying the safe harbor exemption would further congressional policy of removing patent-based barriers to federal regulatory approval of medical products, and therefore the safe harbor applied.

In a partial dissent, Judge Linn agreed that the policies of § 271(e) would be furthered by its application to § 1337 proceedings, but that the plain text of the statute precluded that result.  In his words:

I see no basis for concluding that Congress did not intend what it said.  I do not disagree with the majority's policy judgment that § 1337 and § 271 should be brought into synchrony.  But that is not a decision for a court to make, particularly in light of the legislative history.

The court also determined that jurisdiction was appropriate as the ITC's assignment is to prevent and remedy unfair acts flowing from infringement.  The ITC's jurisdiction under § 1337, according to the court, is broad, and it therefore erred in holding that it lacked jurisdiction absent an actual sale or contract for sale of the imported product.

More detail of Amgen, Inc. v. Int'l Trade Comm'n after the jump,

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ITC's claim construction reversed, revised construction leads to Section 337 violation

In a decision yesterday, the Federal Circuit reversed a decision of the U.S. International Trade Commission that a violation of § 337 of the 1930 Tarriff Act had not occurred.  The court reversed the ITC's claim construction, and based on the revised claim construction, found the accused products infringed.  This modified claim construction also resulted in the plaintiff's U.S. product falling within the scope of the claims, thereby meeting the "domestic industry" requirement of § 337.  As a result, the court held a § 337 violation was made out, and remanded the case to the ITC for further proceedings.

More detail of Osram GmbH v. Int'l Trade Comm'n after the jump.

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