A guide for the international patent attorney: how to read the recent CAFC en banc decision on laches–a viable defense against patent infringement, for the time being
| October 19, 2015
SCA Hygiene Products Aktiebolag v. First Quality Products, LLC
September 18, 2015
Introductory note from the author of this review: When I read this decision, it struck me that the legal analysis is based on concepts and distinctions which may not be clearly appreciated by someone not familiar with the “common law” tradition, the co-existence of remedies “at law” and remedies in “equity”, and the underlying principle of “separation of powers” in the federal government in the U.S. This en banc decision is very important, so there have been already numerous reports on the decision. I hope to contribute, in the form of the interspersed “notes” below, background information which may shed more light on the decision for our international colleagues. Le-Nhung McLeland
En banc decision: Opinion for court by Prost, joined by Newman, Lourie, Dyk, O’Malley, and Reyna. Opinion concurring-in-part, dissenting-in-part by Hughes, joined by Moore, Wallach, Taranto, and Chen. Judge Stoll did not participate in decision.
Note: Twenty three “amicus curiae” briefs were received in this case, which is a measure of its importance. The briefs were submitted on behalf of patent professional associations, as well as a broad range of corporations including Hewlett-Packard, Intel Corporation, Xerox Corporation, Johnson & Johnson, AT&T Mobility II LLC, T-Mobile USA, Roche Molecular Systems, Harley-Davidson Motor Company, and Rockwell Automation, Inc. The en banc majority refers to some of these briefs, in the body of the opinion or in footnotes.
Board’s Jurisdiction Over Examiner’s Decision Of Not Finding Substantial New Question Made As To Claims Added Or Amended After Institution Of Reexamination
| September 30, 2015
Airbus S.A.S. v. Firepass Corp.
July 17, 2015
Before: Lourie, Dyk and Moore. Opinion by Laurie
Summary:
In response to a patent infringement litigation brought by Firepass, Airbus requested inter partes reexamination with proposed anticipation rejections based on three prior arts. The PTO instituted reexamination based on one prior art but did not find substantial new question as to other two prior arts. During reexamination, Firepass added claims 91-94. In response, Airbus proposed obviousness rejections to claims 91-94 over the previously submitted three prior arts. Examiner did not find substantial new question of patentability. Airbus appealed but the Board dismissed because the Board did not have jurisdiction over the issue of lack of substantial new question of patentability. CAFC reversed because the Board applied incorrect rule which is only applicable before institution of reexamination. Newly added or amended claims during reexamination should be controlled by different rule (37 C.F.R. §1.948(a)(2)).
Firepass 社によって提起された特許侵害訴訟に対抗して、Airbus社は当事者系のリイグザミネーションを請求した。特許の無効理由は、3件の先行技術に基づく新規性であった。米国特許庁は、そのうち1件の先行技術による新たな特許性の疑義(substantial new question of patentability)を認めてリイグザミネーションを開始したものの、他の2件の先行技術については無効理由として不十分と判断した。リイグザミネーションの途中でFirepass社はクレーム91−94を追加した。これに対して、Airbus社は、先の3件の先行技術に基づく自明性の拒絶を提案した。審査官は、Airbus社の提案に新たな特許性の疑義を認めなかったため、Airbus社はアピールをした。米国特許庁審判部は、新たな特許性の疑義の問題は管轄外であるとしてAirbus社の請求を却下した。CAFCは、「いったんリイグザミネーションが開始された場合、その後に追加されたあるいは補正されたクレームに対して提出できる先行技術の問題は、規則1.948(a)(2)によって判断されるべきであり、特許庁審判部は適用すべきルールを誤った。」と判断し、Airbus社の提案した自明性の拒絶によってクレーム91～94が拒絶されるか否か検討するよう事件を差し戻した。 コメント：リイグザミネーションの請求時に無効理由が見つからず採用されなかった弱い引例であっても、他の引例でリイグザミネーションが開始された後に新しいクレームが追加されたり、あるいはクレームが補正された場合には、リイグザミネーションの請求者は、当該採用されなかった引例を再度使用して、それらの追加・補正クレームに対する拒絶理由を主張できる。
Intent of Amendment is Irrelevant for Determining Intervening Rights
| September 29, 2015
R+L Carriers, Inc. v. Qualcomm, Inc.
September 17, 2015
Before: Newman, O’Malley and Wallach. Opinion by O’Malley.
Summary:
R+L Carriers (“R+L”) sued Qualcomm for patent infringement and subsequently filed an ex parte reexamination for the patent based on prior art identified by a third party. R+L amended the claims in the patent and argued that the amendment was merely a clarifying amendment that did not change the scope with respect to whether a step in the process is done manually or by computer. Qualcomm argued that the prior art disclosed performing the step manually, and thus, the claim must now be narrowed such that the step is performed only by computer. The CAFC held that reasons for an amendment in a reexamination are irrelevant with regard to intervening rights. The inquiry is strictly with regard to whether the claim scope of the amended claim is narrower than the original claim regardless of reasons for an amendment.
Details:
Legal Principles:
1. Intervening rights are described in 35 U.S.C. § 252 for reissued patents and § 252 is applicable to reexamined patents under § 307(b). A patentee of a patent that survives reexamination is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of issuance of the reexamined claims if the original and the reexamined claims are “substantially identical.”
2. “Identical” in § 252 does not mean verbatim. The determination is made by considering “whether the scope of the claims are identical, not merely whether different words are used.” The determination of whether an amended claim is narrower is whether there is any product or process that would infringe the original claims, but not infringe the amended claim.
Case details
R+L Carriers (“R+L”) sued Qualcomm for infringement of U.S. Patent No. 6,401,078 (“the ‘078 patent”). While the case was pending, R+L requested ex parte reexamination of the ‘078 patent based on prior art identified by a third party. The ‘078 patent is to an improved method of consolidating freight into trailers to optimize delivery efficiencies for the loads in each trailer. The patent describes two methods for getting the load planning information from the transmission and preparing loading manifests: (1) a computerized system automatically interpreting the data; and (2) a data entry clerk manually reviewing the information.
In the reexam, claim 1 was amended after being rejected as anticipated by a prior art reference from N&M Transfer company (“N&M”). N&M teaches a method for transferring shipping documentation data for a package from a transporting vehicle to a remote processing center. Claim 1 was amended as follows:
1. A method for transferring shipping documentation data for a package from a transporting vehicle to a remote processing center comprising the steps of:
placing a package on the transporting vehicle;
using a portable document scanner to scan an image of the documentation data for the package, said image including shipping details of the package;
providing a portable image processor capable of wirelessly transferring the image from the transporting vehicle;
wirelessly sending the image to a remote processing center;
receiving the image at said remote processing center; and
prior to the package being removed from the transporting vehicle, utilizing said documentation data at said remote processing center to prepare [a] an advance loading manifest document for another transporting vehicle which includes said package for further transport of the package on another transporting vehicle.
The PTO allowed the claim because the prior art reference only discussed a “manifest for the current shipping vehicle and not an advance loading manifest document for another transporting vehicle.”
The district court found that the amendment to the claims of R+L’s patent “substantively narrowed” the claim precluding recovery of damages for infringement prior to issuance of the reexam certificate. The district court stated that the ‘078 patent discloses both manual and computerized extraction of information and preparation of loading manifests, and the N&M prior art reference only discloses manual entry. The district court reasoned that the amendment adding the word “advance” was added to get around the N&M reference, and thus, claim 1 must include only computerized processing.
R+L argued that “loading manifests” in claim 1 was always limited to computerized processing. R+L stated that they only amended claim 1 to overcome the N&M reference by clarifying that the loading manifest must be a document for another transporting vehicle, rather than the current vehicle, and thus, the narrowing on which the district court relied for its judgment actually never occurred.
The CAFC held that claim 1 was substantively changed. However, it was not substantively changed due to a change to only computerized processing as argued by Qualcomm. Original claim 1 and amended claim 1 are broad enough to encompass both manual and computerized processing. The term “advance” was added to the claims for reasons unrelated to the format for preparing the loading manifests. Furthermore, speculation about what R+L was attempting to accomplish with regard to the N&M reference is irrelevant.
The CAFC held that the claim was substantively changed in a different way. In the reasons for allowance, the Examiner highlighted the claim 1 limitation reciting that the manifest is for another transporting vehicle as opposed to the current shipping vehicle as in the prior art. The Examiner did not comment on whether computerized processing was used. The CAFC stated that the Examiner’s commentary regarding why the claim was allowed reveals a method that would be covered by original claim 1 but not amended claim 1, i.e., the process of preparing a loading manifest “for the current shipping vehicle.”
For further support, the CAFC noted that during the reexamination, R+L stated in their interview summary that addition of “loading manifest document for another transportation vehicle” resulted in an agreement that the amendment would overcome the prior art. Thus, even if the amendment was added merely for “clarity” as argued by R+L, they understood that they were limiting the scope of their claim to get around the prior art. Therefore, the CAFC concluded that amended claim 1 is not “substantially identical” to original claim 1 and R+L is not entitled to infringement damages prior to issuance of the reexamination certificate.
Comments:
In a reexamination or other post-grant review, a patent owner should be careful with amending claims and should limit discussion on the amendment as much as possible to preserve a possible damages award for the period prior to the reexamination certificate.
An accused infringer should consider requesting an ex parte reexamination or other post-grant review. Even if an accused infringer is not successful in invalidating a patent in a reexam or other post-grant proceeding, if the patent owner is forced to amend claims, damages may be reduced or eliminated. In addition, an amendment to the claims may make the accused product, device method, etc., no longer infringing.
Patentee Likely (Con)vexed After The Court of Appeals Fails To See Through The Same Lens as them…
| September 17, 2015
Dome Patent L.P., vs. Michelle K. Lee, Director, U.S. PTO.
September 3, 2015
Before: Reyna, Schall and Hughes. Opinion by Hughes.
Summary:
The CAFC affirmed the decision of the District Court of the District of Columbia in U.S. Patent No. 4,306,042 (the ‘042 Patent) in which the District Court held that claim 1 would have been obvious to one of ordinary skill in the art since a single reference that teaches away will not prevent a finding of obviousness, if motivation can be found elsewhere.
The CAFC held that the district court did not err by only requiring the Patent Office to show that claim 1 of the ‘042 patent is obvious by a preponderance of evidence, since in re-examination there is no presumption of validity.
Patent claims, previously definite pre-Nautilus, are now indefinite post-Nautilus
| September 17, 2015
The Dow Chemical Co. v. Nova Chemicals Corp. (Precedential)
August 28, 2015
Before: Prost, Dyk (author), Wallach
Summary:
This decision dispels any doubt that the Supreme Court changed the law of definiteness in its decision Nautilus Inv. v. Biosig Instruments, Inc. (2014).
In 2012, under the pre-Nautilus standard (patent claim is indefinite if “not amenable to construction” or “insolubly ambiguous”), the Federal Circuit had affirmed a jury verdict of infringement and no invalidity, including no indefiniteness.
This time, under the Nautilus standard (patent claim is indefinite if “fail[ing] to inform, with reasonable certainty, those skilled in the art about the scope of the invention”), the Federal Circuit reverses an award of supplemental damages in the same case, because the same patent claims are now held indefinite.
Federal Circuit Finds Claimed Invention Obvious, Reversing Trial Judge & Jury
| August 27, 2015
ABT Systems v. Emerson Electric
August 19, 2015
Before: Prost, Clevenger & Schall, opinion by Schall
Summary:
A jury found the ‘017 patent (U.S. Patent No. 5,547,017) to be valid and infringed, and awarded reasonable royalty to the patentee as damages. The trial judge subsequently denied the accused infringer’s motion for JMOL that the patent was invalid as obvious. On appeal, the Federal Circuit concluded that the claimed invention was obvious and that the trial judge should have granted the JMOL motion. The Federal Circuit therefore remanded the case to the trial judge with instructions to enter judgment in favor of the accused infringer.
The USPTO Appeals Board Must Adequately Explain Its Reasoning
| August 27, 2015
Power Integrations v. Lee
August 12, 2015
Before: Moore, Mayer, Linn, opinion by Mayer
Summary
Power Integrations challenged a decision of the Board of Patent Appeals and Interferences (“board”) affirming the rejection of claims 1, 17, 18 and 19 of US Patent No. 6,249,876 (the ‘876 patent) as anticipated under 35 U.S.C. §102(b). The board’s construction of the claim term “coupled” was not adequately explained. The court vacated and remanded the board’s decision, holding only that the board on remand should carefully and fully assess whether the disputed claims of the ’876 patent are anticipated by the prior art, setting out its reasoning in sufficient detail to permit meaningful appellate review.
35 U.S.C. δ271(a) and the meaning of “within the United States”
| August 12, 2015
Carnegie Mellow University v. Marvell Technology Group, Ltd., Marvell Semiconductor, Inc.
August 4, 2015
Before: Wallach, Taranto and Chen, Circuit Judges.
Summary
Carnegie Mellon University (“CMU”) sued Marvell Technology Group, Ltd. and Marvell Semiconductor, Inc. (collectively “Marvell”) for infringing two patents related to hard-disk drives.
A jury found for CMU on infringement and validity, and it awarded roughly $1.17 billion as a reasonable royalty for the infringing acts, using a rate of 50 cents for each of certain semiconductor chips sold by Marvell for use in hard-disk drives. The district court then used that rate to extend the award to the date of judgment, awarded a 23-percent enhancement of the past damages award based on Marvell’s willfulness (found by the jury and the district court), and entered a judgment of roughly $1.54 billion for past infringement and a continuing royalty at 50 cents per Marvell-sold chip.
Marvell appealed.
The Court affirmed the judgment of infringement and affirmed the validity of the patents.
The Court affirmed the rejection of Marvell’s laches defense.
The Court reversed the grant of enhanced damages under the governing willfulness standard.
Marvell’s challenge to the royalty (past and continuing) was rejected by the Court with one exception. The exception is a partial new trial is needed to determine the location, or perhaps locations, of the “sale” of the chips not made in or imported into the United States.
Details
The ’839 patent and the ’180 patent claim methods, devices and systems for improved accuracy in detection of recorded data. Inventors were Aleksandar Kavcic and José Moura.
Claim 4 of the ’839 patent is representative of the asserted claims:
4. A method of determining branch metric values for branches of a trellis for a Viterbi-like detector, comprising:
selecting a branch metric function for each of the branches at a certain time index from a set of signal-dependent branch metric functions; and
applying each of said selected functions to a plurality of signal samples to determine the metric value corresponding to the branch for which the applied branch metric function was selected, wherein each sample corresponds to a different sampling time instant.
Marvel engineers, as they were designing chips in the competition for the next generation of read heads, built a simulator to use as a “gold standard” for testing their chip designs, and they paid tribute to their source in dubbing the simulator “Kavcic Viterbi.” Marvell engineers later designed what they considered a “sub-optimal” version of the Kavcic Viterbi for use in a new generation of Marvell chips, and they again acknowledged Dr. Kavcic’s work as a source, internally naming their design the “KavcicPP” (“PP” for “post-processor”). Still later, Marvell created a detector that its engineers recognized “turn[ed] out to be the original structure that Kavcic proposed in his paper.”
The jury found that Marvell, both directly and indirectly, infringed the two method claims at issue by developing, testing, and selling to its customers—notably, some of the world’s leading makers of hard-disk drives—products that practice the claimed methods.
The Court rejected Marvell’s challenges, concluding that the jury had substantial evidence to support its verdict.
Laches
The district court also determined that Marvell suffered some evidentiary prejudice as a result of the delays, but rejected Marvell’s contention that it had suffered economic prejudice, finding that Marvell, for its own economic reasons, would have gone ahead with its infringement regardless, accepting the risk of liability.
“A court must look at all of the particular facts and circumstances of each case and weigh the equities of the parties.” Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1032 (Fed. Cir. 1992) (en banc).
Here, the district court weighed the equities and concluded that Marvell was not entitled to a laches defense to pre-suit damages. The Court affirmed.
The district court considered the entirety of the circumstances and concluded that “the equities clearly favor CMU rather than Marvell, which copied CMU’s patents consciously and deliberately for an entire decade.
In this case, the district court went beyond the mere conclusion of conscious copying. It considered the extent and egregiousness of Marvell’s copying, the culpability on the part of CMU in delaying suit, and the ramifications for public policy of allowing a laches claim. The Court held the district court did not abuse its discretion in concluding that the equities favored CMU and defeated Marvell’s defense.
Enhancement of Damages
Enhancement is not asserted to rest on the infringer’s actual knowledge that it was infringing. The district court may enhance damages only upon proof of willfulness, which the Court has held to require “clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and “this objectively defined risk . . . was either known or so obvious that it should have been known.”
The jury verdict rejecting the invalidity defense must be upheld, but that Marvell’s position on invalidity was substantial enough that the enhancement standard is not met.
The Court concluded that a jury could properly reject Marvell’s invalidity defenses based on [prior art] and that there was enough uncertainty about what [the prior art] discloses and what CMU’s claims require that the Court cannot say that the defenses were objectively unreasonable.
Place of sale
Marvell contends that the district court “erred in denying JMOL (and new trial or remittitur) striking the portion of the damages award that rested on sales of foreign chips that were manufactured, sold, and used abroad without ever entering the United States.”
The royalty rate is applied to chips that do enter the United States. However, the Court found that there is a “potential problem” with including the chips made and delivered abroad, and never imported into the United States, unless those chips can fairly be said to have been sold here. The Court indicates that that question requires a remand.
Patent law is to be understood against a background presumption against territorial reach. What constitutes a territorial connection that brings an action within the reach of a United States statute must ultimately be determined by examining the “‘focus’ of congressional concern” in the particular statute.
For the present context, the Court thinks that § 271(a) provides the basis for drawing the needed line. It states a clear definition of what conduct Congress intended to reach—making or using or selling in the United States or importing into the United States, even if one or more of those activities also occur abroad.
The Court considers that the presumption against extraterritoriality, to be given its due, requires something similar in the present royalty setting.
There is no extraterritoriality bar to include within the royalty base those chips which were imported into the United States for use in the United States.
The standards for determining where a sale may be said to occur do not pinpoint a single, universally applicable fact that determines the answer, and it is not even settled whether a sale can have more than one location. See Halo, 769 F.3d at 1378–79 (collecting cases; relying in part on N. Am. Philips Corp. v. Am. Vending Sales, Inc., 35 F.3d 1576, 1579 (Fed. Cir. 1994)). Places of seeming relevance include a place of inking the legal commitment to buy and sell and a place of delivery, see id.; Transocean, 617 F.3d at 1311; cf. Norfolk & W. Ry. Co. v. Sims, 191 U.S. 441, 447 (1903), and perhaps also a place where other “substantial activities of the sales transactions” occurred, Halo, 769 F.3d 1379 & n.1 (focusing on where “substantial activities of the sales transactions” occurred, but declining to decide whether the location of contract formation on the facts of that case would have established a sales location). At this point, we do not settle on a legal definition or even to say whether any sale has a unique location.
Designers could take years to obtain the design (a “design win”).
The designs are specifically tailored for incorporating into customers’ products. Marvell’s facilities are in northern California, and CMU’s industry expert, Dr. Bajorek, showed that “with the exception of the chip making . . . all the activities related to designing, simulating, testing, evaluating, qualifying the chips by Marvell as well as by its customers occur[ ] in the United States.” J.A. 42,159; see also J.A. 35,075–77 (charts showing relevant activity and where it occurred); J.A. 43,650–55 (parties’ joint stipulation). He also used Marvell’s records to show that Marvell, from California, provided potential customers with samples and simulations incorporating its designs. E.g., J.A. 42,147–48; J.A. 53,570, 53,572, 53,612, 53,613. Marvell itself stipulated that “[d]uring [its] sales cycle, [its] engineers assist [its] customers in implementing [its] solutions into their product.” J.A. 43,654. And there was some evidence suggesting that specific contractual commitments for specific volumes of chips were made in the United States. Carnegie Mellon, 986 F. Supp. 2d at 645 (referencing testimony that sales were “signed off on” in California); J.A. 42,162 (similar testimony by CMU’s industry expert).
On this record, we cannot say that a jury could not find the chips to have been sold in the United States (perhaps not only in the United States). The parties’ chip stipulation, cited above, suggests a substantial level of sales activity by Marvell within the United States, even for chips manufactured, delivered, and used entirely abroad. That evidence is strengthened by the record details regarding Marvell’s contracting process, and Marvell has not pointed us to significant evidence that would block an inference that sales commitments occurred in the United States. (Moving the burden to the defendant to prove no sale in U.S.?)
“To the extent, however, that Marvell achieved sales resulting from Marvell’s alleged infringing use during the sales cycle, you may consider them in determining the value of the infringing use.” J.A. 45,456. Marvell challenges that instruction on the ground that it “includ[ed] sales of chips manufactured and sold abroad without entering the United States.” Marvell Opening Br. 58.
Conclusion
This court is pushing the envelope for interpreting 35 U.S.C. § 271(a) as to the meaning of “makes, uses, offers to sell, or sells within the United States.”
Takeaway
Chip design may be moved to foreign countries
Alice Issues (Footnote 3)
Marvell states that if the claims reached its simulations they would “cover an abstract idea not otherwise subject to patenting.” Marvell Opening Br. 44. The fleeting reference to “abstract idea” is not enough to raise an issue of subject-matter ineligibility, and Marvell’s actual argument following the reference rests on case law that does not address that issue.
Marvell neither cites nor discusses either 35 U.S.C. § 101 or any case law under it, much less any authority finding ineligibility of an unconventional method, like CMU’s, for improving a physical process by overcoming limitations in physical devices—discerning more accurately what is on a physical recording medium from what a read head has sensed. See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (“[A]n invention is not rendered ineligible for patent simply because it involves an abstract concept. ‘[A]pplication[s]’ of such concepts ‘to a new and useful end,’ we have said, remain eligible for patent protection.”
Tags: § 271(a) > makes > offers to sell > or sells; within the United States.” > uses
NON-ANALOGOUS ART
| August 5, 2015
THE FEDERAL CIRCUIT REITERATES THAT PRIOR ART MUST LOGICALLY COMMEND ITSELF TO AN INVENTOR’S ATTENTION
CIRCUIT CHECK INC. v. QXQ INC.
July 28, 2015
Before: Lourie, Dyk, and Moore
Summary:
The Federal Circuit reiterates that prior art must logically commend itself to an inventor’s attention. The parties disputed whether certain references could be considered analogous prior art. Merely being within the common knowledge does not mean that a reference is analogous art.
A “revolutionary” prenatal care patent is invalidated under the Mayo test
| July 30, 2015
Ariosa Diagnostics, Inc., Et Al. v. Sequenom, Inc., Et Al.
June 12, 2015
Before: Reyna (Opinion author), Linn (Concurring), and Wallach
Summary
The Federal Circuit held that the method claims of the asserted patent are invalid as patent-ineligible under 35 U.S.C.S. § 101 because the method claims are directed to naturally occurring phenomena, and do not contain an inventive concept sufficient to “transform” the claimed naturally occurring phenomenon into a patent-eligible application.
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Tags: maternal serum or blood > Mayo test > patent eligibility > prenatal diagnosis
