MVS Filewrapper® Blog: New and Useful - April 23, 2013

·         In K-Tech Telecoms v. Time Warner Cable, the Federal Circuit confirmed that the standard for evaluating the adequacy of complaints alleging direct patent infringement remains Form 18 of the Appendix of Forms to the Federal Rules of Civil Procedure ("Form 18").  K-Tech filed separate complaints against Direct TV and Time Warner Cable (“TWC”) on the same day, alleging infringement of four patents.  Direct TV and TWC each moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), asserting the complaint, as filed, lacked sufficient factual specificity to state a cause of action for direct patent infringement.  K-Tech sought, and was grated, leave to amend the complaints.  After K-Tech filed its amended complaints, TWC and Direct TV again moved to dismiss under 12(b)(6).  The district court granted the motions to dismiss, stating that the amended complaints failed to cure the defects with the original complaint, namely that the complaints did not explain why K-Tech believed the defendants were utilizing the methods and products protected by the asserted patents, rather than using other noninfringing methods and products, and therefore failed to meet the standards articulated in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009).  K-Tech appealed the dismissal two weeks before the Federal Circuit issued its decision in R+L Carriers, Inc. v. DriverTech LLC (In re Bill of Lading Transmission & Processing System Patent Litigation), 681 F.3d 1323 (Fed. Cir. 2012). The Federal Circuit consolidated the appeals.

On appeal, K-Tech argued that the amended complaints complied with Form 18 and that the district court applied the incorrect standard.  The defendants argued that sufficiency with respect to Form 18 must be interpreted in light of Twombly and Iqbal, and Ninth Circuit law, and that the amended complaints failed to meet either the plain language of Form 18 or the requirements of Twombly and Iqbal.  The court relied on its recent decision in R+L Carriers in reasserting the sufficiency of Form 18 for pleading patent infringement, and that to the extent any conflict exists between Form 18 and Twombly/Iqbal, the form controls.  Because Form 18 does not include any indication that a patent holder must explain why it believes that a defendant is utilizing the methods and products protected by the asserted patents, rather than using other noninfringing methods and products, such assertions are not required to survive a motion to dismiss.  Further, the court held that the failure of K-Tech to identify a particular allegedly infringing device or devices—by name, model number, or otherwise—did not bar K-Tech from filing a complaint in accordance with Form 18, stating, “A defendant cannot shield itself from a complaint for direct infringement by operating in such secrecy that the filing of a complaint itself is impossible. Nor is a defendant immune from a direct infringement claim because he does not make a ‘device’ but, rather, infringes through a system or method.” 

·         In Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., the Federal Circuit reversed a decision by the U.S. District Court for the Southern District of New York granting summary judgment of invalidity of two claims of a patent owned by Lazare Kaplan (“LK”), and asserted against  Photoscribe Technologies, Inc. and the Gemological Institute of America (collectively “Photoscribe”).  The Federal Circuit also reversed the district court’s granting of a motion under Federal Rule of Civil Procedure 60(b) filed by Photoscribe that vacated the district court’s prior judgment finding the same claims not invalid.  LK sued Photoscribe alleging infringement of Lazare Kaplan’s patent covering systems and methods for microinscribing gemstones.  In the ensuing trial, the asserted claims of the LK patent were adjudged not invalid and not infringed, either literally or under the doctrine of equivalents.  LK appealed the judgment of noninfringement, but Photoscribe did not appeal the judgment that the asserted claims were not invalid.  On appeal, the Federal Circuit vacated the judgment as based on erroneous claim construction and remanded the case.  On remand, the district court retried both the invalidity and infringement issues, and granted Photoscribe’s motions for summary judgment of invalidity and for relief from the prior judgment under Rule 60(b) while denying LK’s motion for summary judgment of infringement.  LK again appealed the district court’s ruling.

The Federal Circuit, in the second appeal, reversed the grant of relief under Rule 60(b) and vacated the finding of invalidity, with instructions to the district court to reinstate the original judgment of non-invalidity.  The court concluded that the district court erred by allowing Photoscribe to address validity on remand despite its failure to file a cross-appeal from the adverse final judgment on validity in the original trial.  The court also concluded that under Second Circuit precedent, Rule 60(b) could not provide the relief granted by the district court.  The court then remanded the case again, with instructions for the district court to assess infringement under the construction the Federal Circuit had set forth in the prior appeal. 


Judge Dyk dissented in the opinion, arguing that the inconsistency of allowing the patentee to assert infringement based on a broad claim construction while defending against invalidity based on a narrower claim construction should be alleviated by Rule 60(b), notwithstanding the fact that Photoscribe did not appeal the original judgment that the asserted claims were not invalid. 



·         In Aspex Eyewear, Inc. v. Zenni Optical LLC, the Federal Circuit affirmed a decision by the US District Court for the Southern District of Florida holding that Aspex was collaterally estopped from pursuing the suit against Zenni based on earlier litigation between Aspex and Altair Eyewear, Inc. for infringement of the same patents.  The previous Altair litigation involved the same three patents, U.S. Patents No. 5,737,054 (the ’054 patent), No. 6,012,811 (the ’811 patent), and No. 6,092,896 (the ’896 patent), with many of the same claims asserted.  The district court in the Altair litigation held that the ’811 and ’896 patents were not infringed, and the asserted claim of the ’054 patent was invalid for obviousness.  The district court’s rulings were affirmed by the Federal Circuit. 

The district court applied the Altair rulings to the issues in the suit against Zenni, holding that the accused products were materially indistinguishable and the previous decisions settled the question of whether the accused Zenni product could infringe the asserted patents, and Aspex was therefore collaterally estopped from bringing suit against Zenni.  Aspex appealed the district court’s decision, arguing that the issues at stake were not identical because the claim terms that were construed and applied in the Altair litigation were not the same as the claim terms requiring construction in the Zenni suit. The Federal Circuit concluded that every claim asserted against Zenni contained the same limitation, in the same context, that was previously determined to be dispositive of non-infringement.  As a result, even though some of the claims asserted against Zenni were not construed of applied, this did not create a new issue to defeat preclusion.  The court further determined that Aspex had a full and fair opportunity to litigate the asserted patents, and the selection of additional claims for litigation and additional terms for construction could not override the holding of non-infringement.

MVS Filewrapper® Blog: New and Useful - March 15, 2013

  • In Brilliant Instruments, Inc. v. GuideTech, LLC, the Federal Circuit reversed a district court’s order granting summary judgment of non-infringement of three related patents.  The three asserted patents relate to circuits that measure the timing errors of digital signals in high-speed microprocessors.  The inventor of the three patents left employment with the plaintiff, GuideTech, and founded the defendant Brilliant Instruments.  Plaintiff alleged that two of Brilliant’s products infringed its patents.  The district court granted summary judgment of non-infringement GuideTech argued that the district court erred in concluding no genuine issue of material fact existed with respect to infringement of the three patents, particularly in light of GuideTech’s expert reports describing the defendant’s products and delineating a theory of literal infringement and infringement under the doctrine of equivalents.  Ultimately, the Federal Circuit concluded that the evidence, particularly the expert reports, provided a sufficient basis for a genuine issue of material fact.
  •           In Move, Inc. v. Real Estate Alliance, Ltd., the Federal Circuit vacated the district court’s grant of summary judgment of non-infringement.  Plaintiff owns a patent directed to methods for locating available real estate properties using a zoom-enabled map on a computer.  Defendant operates and maintains multiple interactive real estate websites.  In granting summary judgment of non-infringement the district court held that the “search by map” and “search by zip code” functions on the defendant’s websites did not meet the “selecting” steps required by the asserted claim.  The Federal Circuit agreed that there was no genuine issue of material fact regarding literal infringement; however, the Court faulted the district court for not analyzing induced infringement under 35 U.S.C. § 271(b).  The Federal Circuit highlighted its precedent in Akamai noting that a lone defendant can still be liable for induced infringement.

  • In Radio Sys. Corp. v. Lalor, the Federal Circuit affirmed in-part and reversed in-part a district court’s order granting summary judgment of non-infringement.  The plaintiff is the owner of two patents directed to improvements on electronic animal collars—the ’014 patent and ’082 patent.  Based on the claim construction, the district court awarded summary judgment of non-infringement of the ’014 patent.  The Federal Circuit agreed with the claim construction and affirmed the non-infringement based on the claim construction.  The Federal Circuit also affirmed the district court’s holding that the plaintiff was equitably estopped from asserting ’014 patent, due to the fact that the plaintiff had previously sent the defendant a cease and desist letter based on the ’014 patent and then remained silent for some years.  The Federal Circuit, however, disagreed with the district court’s finding that the plaintiff was equitably estopped from asserting the ’082 patent, which had not issued at the time the first cease and desist letter was sent.  Thus, the Federal Circuit held that the elements of equitable estoppel had not been met with respect to the ’082 patent

Another Billion Dollar Patent Verdict

Another billion dollar verdict has been handed out in a patent case.  Read the verdict in Carnegie Mellon University v. Marvell Technology Group, LTD. here.  This latest case continues a string of billion dollar verdicts highlighted by Jonathan Kennedy in the latest edition of MVS Briefs. 

Carnegie Mellon brought suit alleging infringement of two of its patents, Patent No. 6,201,839 and Patent No. 6,438,180, relating to integrated circuits for computer memory systems.  Marvell asserted that it did not infringe the patents, and in the alternative, the patents were invalid because they were anticipated or rendered obvious by the prior art.

The jury in the case found for Carnegie Mellon on all counts of infringement—including indirect infringement—and invalidity.  In addition to the large damages award, the jury determined that Marvell had engaged in willful infringement of two patents held by Carnegie Mellon because Marvell knew of the asserted patents before the lawsuit, had no reasonable defense for its actions, and knew or should have known that its actions would infringe the asserted patents.  The determination of willfulness by the jury could allow the presiding judge, U.S. District Judge Norra Barry Fischer, to triple the damages award. 

 A final judgment in the case is expected in May 2013, pending post-trial motions from both sides.  Marvell has already announced its intent to appeal the verdict should its post-trial motions prove unsuccessful. 

Compliance with industry standards can be used to show patent infringement

In Fujitsu et al v. Netgear, the Federal Circuit held compliance with an industry standard can be sufficient evidence to establish patent infringement.  However, this rule only applies when the only way to adhere to the industry standard is to infringe the asserted patent, such that any product that complies with the standard infringes.  In this case, the court determined that a party could comply with the standards at issue without infringing the patents; therefore, direct comparison of the products with the claims was necessary.

More detail after the jump.


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.


Estoppel applies to all added limitations in claims, including when present in unamended claims

In a decision Friday, the Federal Circuit affirmed a district court's grant of summary of no literal infringement and that prosecution history estoppel barred application of the doctrine of equivalents.  During prosecution of the patent, a total of three limitations from two different dependent claims were added to the asserted claim in separate amendments, although only two of the limitations were addressed by the applicant and examiner.  The district court held the third element was not literally present in the accused product, and, based on the amendment, could not be present under the doctrine of equivalents.

The Federal Circuit agreed.  The court held it was immaterial that the first amendment (with the "extra" limitation at issue) did not result in allowance; the estoppel applied to each of the added limitations.  Importantly, the court also observed that this presumption of estoppel applied to all claims of the patent containing the limitation, whether or not they were amended:

Thus, in this case, the cancellation of original independent claim 1 coupled with the rewriting of original dependent claim 7 as independent claim 14 gave rise to a presumption of surrender applicable to all limitations, found in any of the claims of the '625 patent, that correspond to the limitations of claim 7.

The court also held that even though the third limitation was not specifically argued, its addition was not tangential to the rationale underlying the amendment, thereby preventing application of prosecution history estoppel.  Specifically, the amendment stated one of the two limitations was not present in the prior art, but added the limitation was not present "in combination with the other structure" of the claims.  This additional language brought the additional limitation into the argument, making it not tangential.  Further, the court held the absence of explanation why the additional limitation was added meant it could not be tangential, because whether an amendment is tangential must be determined from the prosecution record.  Accordingly, the court affirmed the district court's grant of summary judgment of noninfringement.

More detail of Felix v. Am. Honda Motor Co. after the jump.


Summary judgment of validity reversed; predictable variation of prior art obvious as a matter of law

In a decision last month, the Federal Circuit reversed a district court's summary judgment to the plaintiff.  The district court had awarded damages after granting summary judgment of "validity" and infringement.

While the Federal Circuit agreed with the district court's construction of a disputed claim term, the court held the asserted claims were obvious as a matter of law.  Specifically, it was undisputed that all elements of the claim were present in two prior art references—the only dispute was whether sufficient motivation to combine the prior art existed.  The court, quoting KSR, observed "if a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability.  That is clearly the situation here."  The combination of the features of the two references, according to the Federal Circuit, would produce results that were "entirely predictable and grounded in common sense."

More regarding Ball Aerosol & Specialty Container, Inc. v. Limited Brands, Inc. after the jump.


Failure to raise KSR post-trial but pre-judgment results in waiver

In a recent decision, the Federal Circuit affirmed a jury's verdict of infringement, no obviousness, and no inequitable conduct.  On appeal, the defendant for the first time argued the jury's verdict should be reversed in light of KSR

The Federal Circuit held the argument had been waived.  The jury reached its verdict on December 8, 2006.  Post-trial motions were fully briefed on February 20, 2007, and KSR was decided on April 30, 2007.  However, the district court did not rule on the post-trial motions until August 23, 2007, and final judgment was not entered until August 24.  Given the four month gap between the decision in KSR and the rulings on the post-trial motions, the Federal Circuit held the defendant was required to raise the issue before the district court.  As a result, the court considered the argument waived.

The Federal Circuit also rejected the defendant's arguments regarding noninfringement and inequitable conduct.

More detail of Rentrop v. Spectranetics Corp. after the jump.


Advice of counsel evidence still relevant to intent to induce infringement

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.


Expert's internally inconsistent testimony could not support jury's infringement verdict

In a decision last week, the Federal Circuit reversed a district court's denial of judgment as a matter of law after a jury returned a verdict of infringement.  The Federal Circuit held the jury's verdict was not supported by substantial evidence, and that the plaintiffs' expert's opinions contradicted his factual testimony, and was thus incapable of supporting the jury's verdict of infringement.

Judge Newman dissented.  In her opinion, there was substantial evidence to support the verdict, and the district court properly denied the defendant's motion for judgment as a matter of law, and the majority improperly substituted its interpretation of the evidence for the jury's interpretation.

More detail of Johns Hopkins Univ. v. Datascope Corp. after the jump.


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