Federal Circuit Patent Updates - May 2018

Federal Circuit Patent Updates - May 2018

Publication

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Berkheimer v. HP Inc. (No. 2017-1437, 5/31/18) and Aatrix Software, Inc. v. Green Shades Software, Inc. (No. 2017-1452, 5/31/2018) (Per Curiam)

Moore, J. Concurring in the denial of rehearing en banc. Berkheimer and Aatrix hold that the issue of whether a claim element is “conventional” for purposes of determining patent eligibility under 35 U.S.C. § 101 is an underlying fact question, and that such fact questions must be answered under the normal procedural standards for motions to dismiss or summary judgment. Judge Moore was joined by Judges Dyk, O’Malley, Taranto, and Stoll.

Lourie, J., concurred and was joined by Judge Newman.

Reyna, J., dissented.

A full version of the text is available here and here.

Ericsson Inc. v. Intellectual Ventures I LLC (No. 2016-1671, 5/29/18) (Prost, Newman, Wallach)

Newman, J. Reversing the PTAB’s determination that one of the challenged patent claims was not invalid for anticipation or obviousness, concluding that the PTAB’s determination was not supported by substantial evidence. Specifically, the Court held that the PTAB’s determination was based on an unsupported expert declaration that was contradicted by the cited prior art reference. The Court vacated the PTAB’s determination with respect to certain dependent claims and remanded for further consideration of those claims.

Wallach, J., dissented.

A full version of the text is available in PDF form.

XY, LLC v. Trans Ova Genetics, L.C. (No. 2016-2054, -2136, 5/23/18) (Newman, Dyk, Chen)

Chen, J. Affirming the district court’s judgment regarding antitrust and contract issues, affirming-in-part and dismissing-in part regarding patent validity issues, and vacating and remanding the district court’s ongoing royalty rate. First, the Court affirmed the district court’s summary judgment ruling that the defendant’s antitrust counterclaims were barred under the Sherman Act’s four-year statute of limitations (see 15 U.S.C. § 15b). The defendant argued that its antitrust counterclaims were not barred under the “continuing conspiracy” exception to the statute of limitations. The Court, however, held that the defendant had not met its burden of showing a “new and accumulating injury,” which is required to meet the continuing conspiracy exception. Second, the Court affirmed the district court’s determination that a reasonable jury could have found that the defendant materially breached the parties’ contract. Third, the Court dismissed as moot the defendant’s invalidity arguments for one of the plaintiff’s patents, based on the Court’s affirmance that same day of a PTAB decision that the patent was invalid. The Court affirmed the judgment that the plaintiff’s remaining asserted patents were not invalid. Finally, the Court vacated and remanded regarding the district court’s ongoing royalty rate because (1) it was lower than jury’s royalty rate for pre-verdict damages and (2) the district court did not identify any post-verdict circumstances that supported a lower royalty rate.

Newman, J., concurred-in-part and dissented-in-part.

A full version of the text is available in PDF form.

UCB, Inc. v. Accord Healthcare, Inc. (No. 2016-2610, -2683, -2685, -2698, -2710, 2017-1001, 5/23/18) (Prost, Bryson, Stoll)

Stoll, J. Affirming the district court’s judgment that asserted patent claims were not invalid for obviousness-type double patenting, obviousness, or anticipation. Regarding obviousness-type double patenting, the Court explained that “the focus of the double patenting analysis entails determining the differences between the compounds claimed in the reference and asserted patents and then ‘determin[ing] whether those differences render the claims patentably distinct.’” The Court held that “the district court did not err by focusing its double patenting analysis on the claims’ differences, as well as the claims as a whole.” The Court also held that there was no clear error in the district court’s determinations that claimed chemical compounds were not anticipated or obvious.

Prost, C.J., dissented.

A full version of the text is available in PDF form.

D Three Enterprises, LLC v. Sunmodo Corporation (No. 2017-1909, -1910, 5/21/18) (Reyna, Clevenger, Wallach)

Wallach, J. Affirming summary judgment of invalidity of patent related to roof mounting because patent owner could not claim priority to earlier filed application. There was no Rule 56(f) violation because patent owner was on notice that it needed to submit evidence to show that its claims were supported by the prior application and it had opportunities to do so. “[A]dequate written description does not ask what is permissible, rather, it asks what is disclosed. [citation omitted.] The lack of any disclosure of an assembly with a washer below the flashing, or statement on the flexibility of the position of the washer, is fatal to [patent owner’s] argument.”

A full version of the text is available in PDF form.

Praxair Distribution, Inc. v. Mallinckrodt Hospital Products (No. 2016-2016, -2656, 5/16/18) (Prost, Newman, Lourie)

Lourie, J. Reversing Board decision in IPR and finding invalid a claim relating to distributing nitric oxide gas cylinders for pharmaceutical applications. Also affirming Board decision as to remaining claims that they are invalid too. “The printed matter doctrine thus raises an issue where the § 101 patent-eligibility inquiry and the § 102 and § 103 novelty and nonobviousness inquiries overlap. Because claim limitations directed to mental steps may attempt to capture informational content, they may be considered printed matter lacking patentable weight in an obviousness analysis. Accordingly, a limitation that merely claims information by incorporating that information into a mental step will receive patentable weight only if the limitation is functionally related to the substrate… But adding an ineligible mental process to ineligible information still leaves the claim limitation directed to printed matter. To hold otherwise would make the printed matter doctrine a dead letter, requiring no more than a ‘think about it’ step to give patentable weight to a claim limitation directed to information content.” Also, regarding the preamble term “pharmaceutically acceptable,” the Court agreed “with the Board that the ordinary meaning of ‘pharmaceutically acceptable’ here only refers to the physical condition of the gas, not prescribing information that may accompany it.” Newman, J. concurred.

A full version of the text is available in PDF form.

In Re BigCommerce, Inc. (No. 2018-122, 5/15/18) (Reyna, Linn, Hughes)

Linn, J. Granting petition for mandamus, vacating order denying motion to transfer and remanding. “[W]e hold that for purposes of determining venue under § 1400(b) in a state having multiple judicial districts, a corporate defendant shall be considered to ‘reside’ only in the single judicial district within that state where it maintains a principal place of business, or, failing that, the judicial district in which its registered office is located.”

A full version of the text is available in PDF form.

SAP America, Inc. v. Investpic LLC (No. 2017-2081, 5/15/18) (Lourie, O'Malley, Taranto)

Taranto, J. Affirming judgement on the pleadings that claims related to statistical analyses of investment information are invalid under § 101. “The claims here are ineligible because their innovation is an innovation in ineligible subject matter. Their subject is nothing but a series of mathematical calculations based on selected information and the presentation of the results of those calculations (in the plot of a probability distribution function). No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the nonabstract application realm. An advance of that nature is ineligible for patenting.” Also, regarding claim limitations directed to computers, “we think it fair to say that an invocation of already-available computers that are not themselves plausibly asserted to be an advance, for use in carrying out improved mathematical calculations, amounts to a recitation of what is ‘well-understood, routine, [and] conventional.’”

A full version of the text is available in PDF form.

Anacor Pharmaceuticals, Inc. v. Iancu (No. 2017-1947, 5/14/18) (Reyna, Bryson, Stoll)

Bryson, J. Affirming Board finding in IPR that claims related to treatment for fungal infections were obvious. “Where the patent is directed to a new treatment using a known compound, it is reasonable to assume that similar compounds that share certain common properties are apt to share other related properties as well.” The Court also rejected patent owner’s argument “that the Board improperly relied on new evidence to which [patent owner] did not have an opportunity to respond. [Patent owner] argues that the Board improperly cited two references—Mertin and Segal—that were not cited in the petition. There is, however, no blanket prohibition against the introduction of new evidence during an inter partes review proceeding… It was not improper for the Board to cite Segal and Mertin (along with Nimura) as evidence of the knowledge that a skilled artisan would bring to bear in reading Austin and Brehove, even though those references were not cited in the petition.”

A full version of the text is available in PDF form.

M-I Drilling Fluids UK LTD. v. Dynamic Air LTDA. (No. 2016-1772, 5/14/18) (Reyna, Hughes, Stoll)

Hughes, J. Reversing dismissal for lack of personal jurisdiction and remanding. “The district court erroneously focused on the contract between [a customer] and [defendant]. Even if the contract directed where the accused systems were installed and operated, [defendant] controlled the specifics of its own continued performance under the contract. There is no evidence, for instance, that [the customer] contractually required [defendant] to use allegedly infringing components when the latter fabricated the [accused systems] on U.S.-flagged ships.” Reyna, J. concurred.

A full version of the text is available in PDF form.

In Re ZTE (USA) Inc. (No. 2018-113, 5/14/18) (Reyna, Linn, Hughes)

Linn, J. Granting petition for mandamus “to the extent of vacating the order denying the motion to dismiss and remanding the motion for reconsideration.” The Court held that “Federal Circuit law governs the placement of the burden of persuasion on the propriety of venue under § 1400(b).” The Court also held that “upon motion by the Defendant challenging venue in a patent case, the Plaintiff bears the burden of establishing proper venue.”

A full version of the text is available in PDF form.

Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc. (No. 2017-1487, 5/11/18) (O'Malley, Schall, Wallach)

Wallach, J. Reversing PTAB decision of non-obviousness in a post-grant review proceeding and remanding. The Court found that petitioner had standing to pursue the appeal. “Although we do not decide whether [the estoppel effect of the post-grant review] is sufficient independently to establish standing, the estoppel effect in this case further support’s [petitioner’s] claimed injury in fact.” Also, the PTAB abused its discretion by refusing to consider petitioner’s reply evidence. The petitioner’s initial filing included a declaration explaining test results that allegedly invalidate the challenged claims. The patent owner response then challenged the declarant’s qualifications. The petitioner then filed a reply declaration explaining the declarant’s qualifications. The PTAB erred by according no weight to the declarations and finding that the declarant had not been timely qualified as an expert. “To the extent the PTAB was concerned about [patent owner’s] ability to respond to the extensive qualifications set forth in the [second declaration], the PTAB could have permitted patent owner to file a surreply.” Schall, J. dissented regarding standing.

A full version of the text is available in PDF form.

Aids Healthcare Foundation v. Gilead Sciences, Inc. (No. 2016-2475, 5/11/18) (Newman, Dyk, Stoll)

Newman, J. Affirming dismissal of declaratory judgment action. Declaratory judgement plaintiff’s actions encouraging others to provide an infringing product in the future fell short of the declaratory judgment requirements for immediacy and reality.

A full version of the text is available in PDF form.

In Re HTC Corporation (No. 2018-130, 5/9/18) (Prost, Wallach, Taranto)

Prost, J. Denying petition for mandamus regarding improper venue.

A full version of the text is available in PDF form.

WesternGeco LLC v. Ion Geophysical Corporation (No. 2016-2099, -2100, -2101, -2332, -2333, -2334, 5/7/18) (Wallach, Chen, Hughes)

Chen, J. Affirming PTAB decision finding IPRs not time-barred and holding claims directed to seismic survey systems anticipated or obvious. Petitioner was not in privity with party that had been earlier sued and filed IPRs where it did not control previous IPRs or litigation, was a distinct and unrelated corporate entity represented by separate counsel and notwithstanding various business and indemnity relationships between the parties.

A full version of the text is available in PDF form.

Energy Heating, LLC v. Heat On-the-Fly, LLC (No. 2016-1559, -1893, -1894, 5/4/18) (Moore, Hughes, Stoll)

Stoll, J. Affirming judgment of inequitable conduct while vacating denial of attorneys' fees where patentee failed to disclose evidence of prior public uses, which the patentee claimed were experimental. Also affirming tortious interference based on threats of patent litigation. The failure to award attorneys' fees was vacated because the district court inadequately explained its reasoning.

A full version of the text is available in PDF form.

General Hospital Corporation v. Sienna Biopharmaceuticals (No. 2017-1012, 5/4/18) (Moore, Reyna, Taranto)

Moore, J. Affirming Board's finding in interference that claims to range of particle sizes lacked written description support. However, the Board erred in not allowing a contingent claim amendment on the grounds that the proponent failed to carry its burden of showing the claim was patentable.

A full version of the text is available in PDF form.

In Re Verhoef (No. 2017-1976, 5/3/18) (Newman, Mayer, Lourie)

Lourie, J.  Affirming Board's rejection of claims where inventor was not sole inventor of subject matter of patent.

A full version of the text is available in PDF form.

Disc Disease Solutions, Inc. v. VGH Solutions, Inc. (No. 2017-1483, 5/1/18) (Reyna, Wallach, Stoll)

Reyna, J. Reversing district court's dismissal of complaint for failure to state a claim. Allegation that defendants products met each and every element of at least one claim was adequate pleading where technology was simple, only four independent claims were involved and specific accused products were identified.

A full version of the text is available in PDF form.

Texas Advanced Optoelectronic v. Renesas Electronics America (No. 2016-2121, -2208, -2235, 5/1/18) (Dyk, Bryson, Taranto)

Taranto, J. Affirming trade secret misappropriation and patent infringement but vacating monetary awards. Although only one of three trade secret misappropriation claims was supported by the evidence, the submission of the other two theories was harmless error. The Court also held that there was no 7th amendment right to a jury on disgorgement of profits. The patent damages award was vacated as a double recovery in light of the trade secret award. Also affirming a summary judgment ruling that most of the accused products were not sold "within the United States," vacating a denial of a permanent injunction.

A full version of the text is available in PDF form.

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