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
CAFC’s majority says that a PTO’ decision to institute IPR is not appealable even after a final decision and a broadest reasonable interpretation rule applies in IPR
| July 22, 2015
In Re Cuozzo Speed Technologies, LLC
July 8, 2015
Before: Newman, Clevenger, and DYK. Opinion by DYK. Dissenting opinion by Newman.
Summary
Garmin filed in the PTO a petition to institute an inter partes review (IPR) on patented claims owned by Cuozzo. The PTO granted the petition to institute the IPR and concluded that the claims at issue were obvious over prior art. Cuozzo appealed to CAFC, arguing: (1) the petition was defective as failing to identify prior art references for each claim; and (2) a broadest reasonable interpretation (BRI) standard should not be applied in the obviousness determination. CAFC held: (1) the statute prohibits a review on the PTO’s decision to institute the IPR even the final decision was on appeal; and (2) the BRI standard applies in IPR.
Japanese Summary
本判決は、（１）第三者の請求に基づく特許付与後レビュー（inter partes review; IPR）においてその請求書の内容に問題があった場合にそれをCAFCが審査できるか否か、および（２）クレーム解釈の基準として、最大限に広い合理的な解釈（a broadest reasonable interpretation: BRI）をIPRの審査に使用してよいか否かという争点に関するものである。
IPRは2段階の手続きであり、まず特許庁は第三者が提示した請求内容がIPRでの審査を開始するための要件を満足しているかを決定し、レビューを開始すると決定した場合、特許クレームが無効であるか否かを決定する。本件では、文献の引用が一部欠落しているクレームに対して特許庁がレビューを開始し、無効の結論を出した。特許権者はレビュー開始の決定が違法であるとして控訴したが、CAFCは、特許庁がレビューを開始するという決定は控訴可能な対象ではなく、特許庁が正しい引用例で結論を出したので問題ではないと判断した。
またIPRではクレーム補正の機会は制限され、従前の再審査よりも司法手続きに近い制度である。特許権者は、補正制限等のあるIPRでは、クレーム解釈の基準として、最大限に広く合理的な解釈（BRI）を使用すべきではないと主張した。CAFCは、IPRを含めて特許庁における付与後見直しにBRIの基準を使用することは長年の運用で認められており、法律上も問題ないと判断した。
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Tags: BRI > broadest reasonable interpretation > institution > inter partes review > IPR
Indefiniteness kills patent, as expert testimony cannot compensate for the failure of intrinsic evidence to provide a “reasonably certain” meaning to claim term.
| July 15, 2015
Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.
June 18, 2015
Before: Moore, Mayer, Wallach. Opinion by Moore. Dissent by Mayer.
Summary
The validity of Teva Pharmceuticals’ patent hinged on the definiteness of the term “molecular weight”. Under a the old “insolubly ambiguous” standard, the Federal Circuit had determined once before that the term was indefinite. The Supreme Court vacated this indefiniteness determination in Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015) (Briefed by John Wang ). The Federal Circuit was found to have erred by not giving proper deference to the lower court’s factual findings in construing the term “molecular weight”. Teva Pharmaceuticals’ short-lived victory lasted until the Federal Circuit once again reached the same conclusion that the term “molecular weight” was indefinite, this time under the new “reasonably certain” standard of Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014).
Inventive concept standing alone is not patent eligible
| July 10, 2015
Internet Patents Corp. v. Active Network, Inc.,
June 23, 2015
Before: Newman (Opinion author), Moore and Reyna.
Summary
Claims to a method which allows the use of a conventional web browser Back and Forward button functions without loss of data were not patent eligible under 35 U.S.C. 101 because the inventive concept recited in the claim was not limited to any mechanism and thus remained abstract.
Tags: 35 U.S.C. § 101 > abstract ideas > inventive concept > patent eligible subject matter > significantly more
CAFC says reissued patent can’t sail into safe harbor
| July 8, 2015
G.D. Searle LLC et al. v. Lupin Pharmaceuticals, Inc., et al.
June 23, 2015
Before: Prost, Bryson, and Hughes. Opinion by Bryson
Summary
The CAFC strictly construes the “safe harbor” provision of 35 USC § 121 and casts doubt on whether there are any circumstances in which reissue can be used to correct failure to file a divisional application.
“Strong Presumption” Not So Strong After all
| June 25, 2015
Williamson v. Citrix
June 16, 2015
Opinion by Linn (joined by nine other Judges), Dissenting Opinion by Newman-Decided.
Summary:
En banc CAFC expressly overrules the “strong” presumption that a limitation lacking the word “means” is not subject to § 112, para. 6 and applies the presumptions prior to Lighting World, which do not require any heightened evidentiary showing. CAFC also overrules the strict requirement of “a showing that the limitation essentially is devoid of anything that can be construed as structure.”
When a claim term does not recite the word “means,” the presumption can be overcome and § 112, para. 6 will apply if one demonstrates that the claim term fails to “recite sufficiently definite structure” or recites “function without reciting sufficient structure for performing that function.” That is, the standard is “whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure.”
Tags: 112 6th paragraph > 112(f) > en banc > functional claiming > Means for > means plus function > strong presumption
CBM Petitions – Second Chances Can Be Tough
| June 17, 2015
Travelocity.com L.P., Priceline.com Inc., and Expedia, Inc. v. Cronos Technologies, LLC (Case CBM2015-00047)
June 15, 2015
Before: Jennifer S. Bisk, James B. Arpin, and Lynne E. Pettigrew, Administrative Patent Judges. Opinion by Arpin.
Summary
The Patent Trial & Appeal Board (“PTAB”) decided not to institute a covered business method patent review (“CBM”) of any challenged claim of U.S. Pat. No. 5,664,110 (“the ‘110 patent”). Travelocity, Priceline, and Expedia’s (“Petitioner”) joint request was denied because the Petition included “substantially similar arguments presented and the same references applied” in CBM2014-00082, an earlier Petition filed by Petitioner that was denied by the PTAB.
The PTAB expressly cautioned against taking a “second bite at the apple” and remarked that “a decision on a petition for covered business method review is not simply part of a feedback loop by which a petitioner may perfect its challenges through subsequent filings.”
Reissue cannot modify Claim Construction determined for repeated Original Patent Claims
| June 3, 2015
ArcelorMittal France v. AK Steel Corp. et al.
May 12, 2015
Before: Dyk, Wallach and Hughes. Opinion by Hughes.
Summary
ArcelorMittal had filed suit on the ‘805 patent against the appellees. However, the construction of a key term “very high mechanical resistance” was unfavorable to ArcelorMittal and a jury subsequently found the claims of the ‘805 patent not infringed and invalid. During appeal of the decision ArcelorMittal filed a Reissue application at the USPTO which included a new dependent claim with a broader construction of “very high mechanical resistance” than that construed during the judicial action. The CAFC affirmed the District Court’s claim construction but remanded the case on other grounds.
ArcelorMittal filed new suits based on the Reissue patent, but the District Court granted Summary Judgment invalidating the claims on the basis that the term “very high mechanical resistance” was earlier construed during the ‘805 litigation narrower than the subsequent claims of the Reissue patent. The CAFC affirmed the District Court asserting that under the law-of-the-case-doctrine and mandate rule, ArcelorMittal could not use the Reissue process at the PTO to broaden construction after the decision on the ‘805 patent.
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