CAFC Finds Proof of Damages Inadequate

Scott Daniels | March 31, 2015

Warsaw Orthopedic v. NuVasive

March 2, 2015

Before Dyk, Lourie & Renya.  Opinion by Dyk.

Procedural History

After a trial, the jury issued a verdict finding the patents valid and infringed, and awarded damages to the patentee Warsaw ($101,196,000 identified as total damages) to be paid by the infringer NuVasive.  The trial judge sustained the verdict and issued a judgment in favor of the patentee.  On appeal, the CAFC affirmed the judgment in favor the patentee, with respect to the validity and infringement issues.  On the question of damages, however, the CAFC vacated the judgment and sent the case back to the trial judge for a new trial on reasonable royalty.


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A Computer Implemented Method Is Found Obvious – (But Likely Would Have Been Challenged As Patent-Ineligible Post-Alice)

Stephen G. Adrian | March 20, 2015

In Re Thomas C. Chuang

February 10, 2015

Before Reyna, Mayer, and Chen, per curiam.

Thomas Chuang had experienced some early success in ex parte prosecution by seeking appeals before the Board of Patent Appeals and Interferences (now the Patent Trial and Appeal Board). In response to an initial appeal[1], the Examiner reopened prosecution by rejecting claims as obvious under §103 and rejecting certain claims under §101 as non-statutory. Mr. Chuang appealed again, and was successful in having the Board reverse the rejection under §101 (without the benefit of the later decided Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2358 (2014)), but the Board maintained the rejection under §103. Mr. Chuang appealed the rejection under §103 to the Federal Circuit, in which the review was confined to the obviousness rejection under §103.

Independent claim 1 of Chuang’s application is directed to a computer implemented method as follows:

A computer implemented method for managing rented downloaded content comprising:

[a] presenting a user with a content descriptor associated with a downloadable content downloadable to the user available to rent at a rental price and purchase at an initial purchase price;

[b] receiving a user rental request to rent the downloadable content at the rental price;

[c] initiating downloading of the downloadable content to the user at a user computer responsive to receiving the user rental request, the downloadable content including a use limitation comprising an expiration date;

[d] generating a user data structure comprising:

[i] one or more content descriptors associated with previously downloaded content rented by the user; and

[ii] a status identifier for each content descriptor, the status identifier comprising the expiration date;

[e] maintaining a database of user data structures corresponding to a plurality of users;

[f] generating a previously downloaded content purchase price for a content descriptor associated with a previously downloaded content rented by the user;

[g] providing the previously downloaded content purchase price to the user;

[h] receiving a user purchase request to purchase the previously downloaded content rented by the user and residing on the user computer; and

[i] transmitting an update of the use limitation following receipt of the user purchase request, the update comprising a file update eliminating the expiration date included in the downloadable content.

The Examiner had rejected the claims as obvious over a combination of three references, Lenk, Hastings and Sherr. All three references were found to disclose online video or video game rental services and described business strategies that were old and well known in the art. As stated in the Examiner’s Answer dated Apr. 6, 2011 (Answer), combining Lenk and Hastings would predictably provide “a more versatile media” as well as “providing a more streamlined process of allowing user’s [sic] to purchase media that they already have in their possession.” Id. at 12-13. The Examiner also concluded that it would have been obvious to combine aspects of Sherr even though Sherr discloses a different payment model, because that model was simply “an alternate business strategy that is old and well known in the art.” Id. at 28. Ultimately, the nature of the problem to be solved— renting media to users—as well as the need to do so in an efficient and user-friendly way, would have led one of ordinary skill in the art to choose appropriate features from each reference to arrive at the claimed invention.

Mr. Chuang contended that the Board erred in affirming the Examiner’s conclusion that Lenk discloses the claimed “rental price” in clause (a) of claim 1. In particular, the Examiner found that the prior art has “an associated rental fee for renting media online.” Under the broadest reasonable interpretation, the Federal Circuit was not persuaded that this could not mean “an associated rental fee for renting media online.” The Federal Circuit also noted that Chuang’s proposed construction would be inconsistent with parts of the specification that disclose a DVD rental embodiment where users pay a monthly fee to rent as many DVDs as desired. As such, there would be no dispute that Lenk’s monthly fee for renting media would disclose the claimed “rental price.”

Mr. Chuang also contended that Lenk would not be properly combinable with Sherr to teach the “expiration date” limitations in clauses (c) and (d) of claim 1 because Lenk teaches that members can rent games for any length of time and emphasizes the absence of due dates. In response to this argument, the Federal Circuit stated:

We disagree. There is substantial evidence to support the Board’s finding that Lenk does not teach away from the claimed invention. The fact that the two references teach different payment models for how to rent videos does not mean that a person of ordinary skill in the art would have been discouraged from combining different features from the two disclosures, including the well-known aspect of using expiration dates on rental media. “[I]t is not necessary that the inventions of the references be physically combinable to render obvious the invention under review.” In re Sneed, 710 F.2d 1544, 1550 (Fed. Cir. 1983); see also In re Fulton, 391 F.3d 1195, 1201 (Fed. Cir. 2004) (“The prior art’s mere disclosure of more than one alternative does not constitute a teaching away from any of these alternatives because such disclosure does not criticize, discredit, or otherwise discourage the [claimed] solution . . . .”). Rather, the relevant inquiry is “what the combined teachings of the references would have suggested to those of ordinary skill in the art.” In re Keller, 642 F.2d 413, 425 (C.C.P.A. 1981).

The Federal Circuit concluded that the Board reasonably found that the references are directed to the same field of endeavor, and that the combination of the references “was no more than a combination of familiar elements in a known way to yield predictable results.” In addition, Chuang failed “to point to any passage in Lenk that criticizes or otherwise discourages the use of expiration dates in a rental system using a subscription payment model.”

Takeaways

Always keep in mind that Examiners examine claims based upon the broadest reasonable interpretation. Although the applicant may consider the invention very different from the prior art, the claim language must clearly set forth that difference.

If you wish to argue that a prior art reference teaches away from the invention, evidence must be presented in the prior art reference that criticizes, discredits or otherwise discourages what the applicant has claimed.

Had Mr. Chuang been successful in overcoming the obviousness rejection, it is likely that the Examiner would have re-opened prosecution with another rejection based upon Alice Corp. v. CLS Bank Int’l.

[1] The nature of the initial appeal is not known or discussed in the opinion. In addition, it appears that a non-publication request was filed, as there is no corresponding publication and no access through the Patent Application Information Retrieval (PAIR) system of the USPTO.

Full Opinion

Claim Construction

Bill Schertler | March 18, 2015

Fenner Investments, LTD., v. Cellco Partnership (doing business as Verizon Wireless)

February 12, 2015

Before: Newman, Schall and Hughes. Opinion by Newman.

Summary

Fenner owns US Patent No. 5,561,706 (the ‘706 patent) directed to a personal communications services (PCS) system that permits users to access a communications network from different locations.  The US District Court for the Eastern District of Texas granted summary judgment that Cellco does not infringe claim 1 of the ‘706 patent.  Fenner appealed to the CAFC arguing that the district court erred in construing the term “personal identification number” in claim 1.  The CAFC affirmed the summary judgment of noninfringement.


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A Refined Standard for Appellate Review of Patent Claim Construction: “de novo” on Ultimate Claim Construction with “Clear Error” on Subsidiary Factfindings

John M. Wang | March 10, 2015

Teva Pharmaceuticals USA, Inc., Et Al. v. Sandoz, Inc., et al.

January 20, 2015

Justice Breyer delivered the majority opinion; Justices Thomas and Alito dissented.

Summary

The Supreme Court of the United States held that when reviewing a District Court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim, the Federal Circuit must apply a “clear error,” not a “de novo”, standard of review.

总结
美国最高法院裁定:在审查地方法院的裁定专利权利要求解释时使用的附属事实,美国联邦巡回法院必须使用“明确错误”,而不是“从头”,审查标准。


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