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.

The Federal Circuit Wednesday affirmed a district court's denial of preliminary injunction to the plaintiffs (a patentee and its licensee with a right to enforce the patent) in a design patent case. The district court held there was a substantial question regarding the validity of the patent that was not shown to lack substantial merit, and therefore the plaintiffs were not likely to succeed on the merits.

On appeal, the Federal Circuit took the opportunity to clarity how district courts should assess likelihood of success in patent cases, particularly when invalidity is raised in response to the motion for preliminary injunction. Specifically, the court observed:

[W]hen analyzing the likelihood of success factor, the trial court, after considering all the evidence available at this early stage of the litigation, must determine whether it is more likely than not that the challenger will be able to prove at trial, by clear and convincing evidence, that the patent is invalid. We reiterate that the "clear and convincing" standard regarding the challenger's evidence applies only at trial on the merits, not at the preliminary injunction stage. The fact that, at trial on the merits, the proof of invalidity will require clear and convincing evidence is a consideration for the judge to take into account in assessing the challenger's case at the preliminary injunction stage; it is not an evidentiary burden to be met preliminarily by the challenger.

If the trial court is persuaded, then it follows that the patentee by definition has not been able to show a likelihood of success at trial on the merits of the validity issue, at least not at this stage. This decision process, which requires the court to assess the potential of a "clear and convincing" showing in the future, but in terms of what is "more likely than not" presently, rests initially in the capable hands and sound judgment of the trial court.

Applying this standard, the Federal Circuit determined the district court did not abuse its discretion in denying the injunction.

More detail of Titan Tire Corp. v. Case New Holland, Inc. 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 decision Tuesday, the Federal Circuit affirmed a district court's grant of a permanent injunction.  The district had previously granted a permanent injunction after a jury found willful infringement.  In a previous appeal, the Federal Circuit affirmed the finding of willful infringement, but vacated the permanent injunction because the district court did not consider the four-factor test mandated by the Supreme Court's decision in eBay v. MercExchange (which was decided while the appeal was pending).

On remand, the district court again granted a permanent injunction.  The Federal Circuit affirmed, holding there was no abuse of discretion, although it was a "close case."  The patentee had previously licensed the patent to two other parties (one as the result of settlement of a previous infringement suit), but the court held the existence of previous licenses did not mean an injunction could not issue.  Instead, it was one factor to consider among others when considering whether there is irreparable harm, including "the identity of the past licensees, the experience in the market since the licenses were granted, and the identity of the new infringer."  Finding no abuse of discretion by the lower court, on this or the other three factors, the Federal Circuit affirmed the injunction.

More detail of Acumed LLC v. Stryker Corp after the jump.

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In a decision Thursday, the Federal Circuit affirmed a district court's denial of a preliminary injunction, and held it did not have jurisdiction over the remainder of the appeal because there was no final judgment.  It was undisputed there was no infringement under the district court's claim construction of the single element at issue.  After denying the requested preliminary injunction and granting the defendant's motion for summary judgment of noninfringement, the district court entered an order that stated, among other things, that the "action" was "dismissed with prejudice," and that it was "final and appealable."  However, the defendant had asserted counterclaims that were not mentioned in any of the briefing.  

The Federal Circuit agreed with the district court's claim construction, and affirmed the denial of the preliminary injunction.  However, the court held it did not have jurisdiction over the remainder of the appeal, because the defendant's counterclaims were still pending, making the judgment nonfinal.  The court did have some advice for the plaintiff and the district court on remand in two footnotes, stating:

While we do not address the district court's grant of summary judgment of noninfringement, we note that the claim construction we affirm herein was the basis for that decision, there being no dispute over infringement of claim 26 under that claim construction.

Because we exercise jurisdiction only over the matters discussed above, we do not address the district court's sua sponte dismissal of [the plaintiff's] remaining claims in this appeal. Nevertheless, we suggest that the district court may wish to reconsider that determination in light of the Sixth Circuit's prohibition against sua sponte dismissals except in limited circumstances.

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In a recent decision, the Federal Circuit affirmed a district court's grant of a preliminary injunction concerning the manufacture of an extended release formulation of an antibiotic. In a lengthy opinion, the Federal Circuit applied the Supreme Court's obvious-to-try logic from KSR to pharmaceutical patents. Notably, the court used the unpredictability of the pharmaceutical arts to find that, despite a prior art reference listing twelve different approaches in creating an extended release formula, the claimed formulation was (at least at the preliminary injunction stage) more than the predictable use of prior art elements according to their established functions.

The Federal Circuit also addressed the issue of inequitable conduct, reinforcing its holding in Kingsdown Medical that materiality alone does not automatically establish the bad faith necessary for a finding of inequitable conduct.

The panel majority, after an extensive review of case law regarding injunctive relief, held when determining likelihood of success, the court must examine the question with the ultimate issue in mind, namely whether the party will likely prevail on the issue.  Judge Gajarsa's dissent, on the other hand, took the panel majority to task for diverging from the Federal Circuit's precedent on the issue, and would have held a substantial question of validity and enforceability was raised, making the preliminary injunction improper.

More on Abbot Labs. v. Sandoz, Inc. after the jump.

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In a recent decision, the Federal Circuit affirmed a district court's finding of inequitable conduct for one patent but reversed on a second, affirmed a finding of no invalidity of the second patent, but vacated the finding of infringement after modifying the district court's claim construction of a claim term.  The court also reversed the finding of indefiniteness of a third patent.

The court continued its recent discussions of when (if ever) an inference of intent to deceive is permissible to support an inequitable conduct finding where there is no independent evidence of such intent.  Here, the majority affirmed the district court's inference of intent based on high materiality, proof of knowledge of the withheld art, and a lack of credible explanation for the nondisclosure.  Judge Lourie dissented, arguing the majority conflated intent with materiality.  Given the apparent disagreement  on this issue, a case presenting the issue of when (or whether) such an inference is permissible seems to be a candidate for en banc review.

More detail of Praxair, Inc. v. ATMI, Inc. after the jump.

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In a recent decision, the Federal Circuit affirmed a jury's finding of infringement of two patents and the related injunction, but reversed the district court's claim construction and the concomitant finding of infringement regarding a third patent.  The court affirmed the district court's injunction despite the fact that the patentee licensed, rather than manufactured, the claimed inventions.  The injunction was affirmed largely due to the "structural nature of a design win market" typified in nascent technology designs where there are multiple standards competing for market domination, and the fact that the injunction did not take effect for 20 months after the jury verdict to permit time to develop and implement a design-around.  

In addition, the Federal Circuit rejected the defendant's contention that In re Seagate changed the evidentiary burden for proving intent in the context of inducing infringement.  The defendant argued that after Seagate, opinion of counsel evidence was no longer relevant to the question of intent for inducing or contributory infringement.  The court held the intent necessary for an inducement finding may still be inferred from "all the circumstances."  This has two requirements, as described in DSU Medical:  (1) the defendant intended to cause the acts that constitute direct infringement, and (2) the defendant knew or should have known its action would cause the direct infringement.  The court observed opinion of counsel evidence may reflect what the accused infringer knew or should have known, it remains relevant to the second prong of this analysis.  Further, the court stated it would be "unfair to allow opinion-of-counsel evidence to serve an exculpatory function . . . and not yet permit patentees to indentify failures to procure such advice as circumstantial evidence of intent to infringe."  

Here, the accused infringer obtained an invalidity opinion, but declined to waive privilege.  The Federal Circuit held it was not error for the district court to instruct the jury that the lack of an opinion could be relevant to the issue of intent.  The court also instructed the jury, consistent with Knorr-Bremse, that the lack of opinion was not grounds to assume the opinion would be unfavorable.  As such, the instructions as a whole comported with Federal Circuit precedent, and the instructions were proper.

More detail of Broadcom Corp. v. Qualcomm Inc. after the jump.

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In a decision Monday, the Federal Circuit addressed a range of issues and ultimately affirmed a district court's denial of injunctive relief and, in light of the intervening Seagate decision, vacated and remanded the case for reconsideration regarding willfulness. The court also affirmed the district court's finding of no invalidity and the infringement of some claims under the doctrine of equivalents.

Regarding the denial of an injunction, the Federal Circuit agreed with the district court that because the only irreparable harm alleged was to the plaintiff's exclusive licensee, rather than the plaintiff, there was no pertinent evidence of irreparable harm to support granting an injunction. Regarding willfulness, the court determined that the district court's jury instruction (based on the Underwater Devices affirmative duty of care standard) was not correct under the Seagate "objective recklessness" standard. The court held that the improper instruction was not harmless error and remanded the issue to the district court for further consideration as to whether the defendant's conduct was sufficiently reckless to be considered willful.

More on Voda v. Cordis Corp. after the jump.

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In a lengthy decision last week, the First Circuit held a district court erred in finding the term "duck tour" nongeneric in the context of sightseeing tours on amphibious vehicles.  The district court, based largely on the nongenericness of this aspect of the parties' marks, found the plaintiff was likely to succeed in its infringement claims, and entered a preliminary injunction.  The defendant appealed.

The First Circuit vacated the injunction.  The district court's erroneous holding regarding the generic nature of "duck tour" caused the district court to give too much weight to those terms in the composite marks in its likelihood of confusion analysis.  As a result, the district court also erred in finding both a likelihood of confusion and a likelihood of success on the merits for both the word marks and design marks at issue.  Therefore, the court vacated the district court's preliminary injunction.

More concerning Boston Duck Tours, LP v. Super Duck Tours, LLC after the jump.

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