About bwheelock

Education J.D., Washington University in St. Louis B.S.E. in Mechanical Engineering, Duke University

Federal Circuit gives a Master Class in Claim Construction

In E.I. du Pont de Nemours & Co., v. Unifrax I LLC, [2017-2575] (April 17, 2019), the Federal Circuit affirmed the district court’s determination that the claims of U.S. Patent No. 8,607,926 on a Composite Flame Barrier Laminate for a Thermal and Acoustic Insulation Blanket, were not invalid and were infringed.

The ’926 patent claims composite laminates that are incorporated into thermal-acoustic blankets installed on the interior of the fuselage in aircraft to shield passengers from flames and reduce noise. At issued was the term “100% by weight” in the claims. Unifrax argued that the “100% by weight” term does not allow for any amount of organic additives in the refractory layer. According to Unifrax, “‘100%’ means one hundred percent.” The Federal Circuit considered whether the context of the entire patent and other intrinsic evidence supports such an interpretation, and concluded it did not.

The Federal Circuit began with the language of the claims, which it noted recited: a residual moisture content of up to “[10%] by weight” in addition to “100% by weight” platelets in the refractory layer undercuts Unifrax’s plain meaning argument that “‘100%’ means one hundred percent.” The Federal Circuit said:

That claim 1 recites a residual moisture content of up to “[10%] by weight” in addition to “100% by weight” platelets in the refractory layer undercuts Unifrax’s plain meaning argument that “‘100%’ means one hundred percent.” Unifrax’s position would require that the term “100% by weight” be considered alone, without reference to the surrounding claim language. The claim’s reference to both “100% by weight” platelets and 10% residual moisture, however, supports the conclusion that “100% by weight” is relative to carrier material. It would be nonsensical if the total percentage of components comprising the inorganic refractory layer exceeded 100%

The Federal Circuit then turned to the specification, which described: “preferably at least 85% of the layer comprises platelets” with the remainder being “some residual dispersant.” The Federal Circuit found that this language supports the district court’s conclusion that the disclosed embodiments, including the 100% platelet embodiment, all allow for some amount of residual dispersant.

Unifax argued that all 24 of the examples had 100% by weight inorganic platelets with no residual dispersant, but the Federal Circuit noted that the specification also listed other “suitable materials” that contain a residual dispersant, and thus, less than 100% inorganic material, for the refractory layer.

The Federal Circuit also rejected Unifax’s argument that it was improper to use the specification of the patent’s parent in construing the claims in the C-I-P patent at issue, noting that the subject matter in the parent was common to the continuation-in-part application.

Finally the Federal Circuit rejected the argument that the patent owner limited the scope of the claims during prosecution. During prosecution the patentees amended the claims to add the 100% limitation to distinguish prior art with a 70% concentration. The Federal Circuit found that in making the amendment, the patent owner did not disclaim the presence of non-carrier materials such as dispersants.

Based upon the claim language it self, the specification, and the specification of related cases, and a careful examination of the prosecution history, the Federal Circuit concluded that the district court’s interpretation of “100% by weight” was not erroneous.

Having affirmed the district court’s claim construction, the Federal Circuit went on to affirm the finding of infringement.

The case was a tutorial in claim construction, giving a practical example of how claim terms are construed in light of the surrounding language, how the entire specification and not just the examples are used in determining the meaning of claim terms; how the specifications of related applications are used in determining the the meaning of claims terms; and even how the prosecution history is used in determining the meaning of claim terms.

Federal Circuit holds PTO to “Reasonably Continuous” Diligence rather than “Continuous Reasonable” Diligence Standard

In ATI Technologies ULC v. Iancu, [2016-2222, 2016-2406, 2016-2608] (April 11, 2019), the Federal Circuit reversed the PTAB’s decisions of invalidity of all but one of the claims challenged in three IPRs, finding that the PTAB erred in its application of the law of diligence, and that on the correct law, diligence was shown, thereby antedating the relevant references.

ATI’s U.S. Patent Nos. 7,742,053, 6,897,871, and 7,327,369 were challenged in three separate IPRs. ATI defended on the grounds that the inventions in these three pre-AIA patents were made before the effective date if the asserted prior art. The Board agreed that conception was established before the primary reference dates, and that constructive reduction to practice occurred on the filing date of each patent. However, the PTAB held that ATI had not established actual reduction to practice and had not established diligence to constructive reduction to practice, for all three patents, and invalidated all but one of the challenged claims.

On the issue of diligence, the Federal Circuit noted that a patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence. The Federal Circuit said that under this standard, an inventor is not required to work on reducing his invention to practice every day during the critical period, and that periods of inactivity within the critical period do not automatically vanquish a patent owner’s claim of reasonable diligence.

The Federal Circuit said that the PTAB applied an incorrect definition of diligence, and Petitioner conceded as much before it withdrew from the appeal. The Federal Circuit rejected the Director’s attempts to characterize the PTAB’s erroneous definition as “boilerplate,” because the PTAB appeared to find a dispositive difference between “continuous reasonable diligence” and “reasonably continuous diligence,” when if found a lack of diligence despite the documentary evidence of activity by ATI on “every business day.” The Federal Circuit concluded that the PTAB applied the wrong legal standard for diligence.

The Federal Circuit expressly rejected the Board’s position that developing and testing of alternative and optional features negated diligence, stating that diligence is not negated if the inventor works on improvements and evaluates alternatives while developing an invention.

Although the significance of diligence to patent law continues to wane ten years after the AIA, because the majority of applications are governed by the AIA and not the pre-AIA law where diligence was required to antedate a reference, the Federal Circuit continues to enforce an element of reasonableness to the determination of this issue (and hopefully others).

When There is a Dispute Regarding the Proper Scope of the Claims, the Court must Resolve that Dispute

In Omega Patents, LLC v. Calamp Corp., [2018-1309] (April 8, 2019), the Federal Circuit affirm the judgment of no invalidity, affirm-in-part, reverse-in-part, vacate-in-part, and remand the judgment as to direct infringement, and vacated the remainder of the judgment and remanded for a new trial on indirect infringement, compensatory damages, willful infringement, enhanced damages, and attorney’s fees, in a case involving U.S. Patent Nos. 6,346,876, 6,756,885, 7,671,727, and 8,032,278 on multi-vehicle compatible systems that can remotely control various vehicle functions such as remote vehicle starting.

After a trial, a jury found all asserted claims to be not invalid and infringed, and the jury also found that CalAmp willfully infringed a valid patent, and awarded Omega $2.98 million in compensatory damages, which the district court trebled for willfulness, awarded attorney’s fees to Omega, added damages for post-verdict sales and pre-judgment interest, for a total of $15 million, with an on-going royalty rate of $12.76 per unit.

Although CalAmp appealed the construction of several claim terms, the Federal Circuit found that these terms had no impact on the prior art actually introduced at trial, and CalAmp had failed to identify to the district court any other prior art that would be impacted by the claim construction ruling. Thus, the Federal Circuit declined CalAmp’s invitation to speculate as to how additional prior art may have been rendered irrelevant under the court’s claim construction. While CalAmp’s challenge to the district court’s claim construction was preserved under Federal Rule of Civil Procedure 51 for purposes of challenging the jury instructions, CalAmp failed to satisfy the requirements of Federal Rule of Civil Procedure 46 by not seeking admission into evidence of, or at least specifically identifying, the additional prior art.

On the issue of direct infringement, several of the claims required “a transmitter and a receiver for receiving signals from said transmitter.” However the Federal Circuit found that the evidence at trial only showed that the “transmitter” transmits signals to a “receiver” on a cell tower, which can then relay that information to CalAmp’s servers, and the “receiver” receives signals from a “transmitter” on the cell tower. The Federal Circuit agreed that CalAmp did not provide all of the elements of the system, as was entitled to JMOL on direct infringement of these claims.

On the issue of induced infringement, the Omega argued that CalAmp’s customers directly infringed when they used CalAmp’s products. The Federal Circuit noted that for purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it, and said there was evidence from which the jury could infer that customers controlled and used the system and received the required benefits. Based on the record, the Federal Circuit conclude that this theory does not warrant setting aside the jury verdict.

The induced infringement of some of the claims depending on the construction of “vehicle device,” which the district court refused to construe, defaulting to the ordinary meaning. The Federal Circuit said that when the parties raise an actual dispute regarding the proper scope of the claims, the court, not the jury, must resolve that dispute. The Federal Circuit added that the court is not absolved of this duty to construe the actually disputed terms just because the specification of the patent defines the term. Even if the parties had agreed to the construction, the Federal Circuit said that the district court was still obligated to give that construction to the jury in its instructions. The Federal Circuit said: in the absence of guidance in the form of proper claim construction, the jury lacked a yardstick by which to measure the arguments and evidence on this issue and assess whether Omega’s infringement theory was a valid one. In particular the Federal Circuit could not discern if the jury found infringement of the claims at issue based upon a theory of infringement inconsistent with the proper construction. Therefore, the Federal Circuit set aside aside the jury’s verdict of infringement, and ordered a new trial.

On the issue of induced infringement, CalAmp argued that the jury’s verdict could not be sustained because the verdict form given to the jury (proposed by CalAmp) did not provide written questions on the issue of inducement. CalAmp argued that the absence of such questions on induced infringement precluded the jury from awarding damages on that basis, but the Federal Circuit said that one cannot use the answers to special questions as weapons for destroying the general verdict. The Federal Circuit concluded that induced infringement was properly before the jury, and, thus, CalAmp was not entitled to JMOL of no induced infringement on that basis.

However CalAmp also complained about the district court’s exclusion of testimony as to CalAmp’s state of mind substantially prejudiced CalAmp’s ability to present its defense for indirect infringement. The Federal Circuit found that this exclusion deprived CalAmp of the opportunity to support its defense that there was no inducement because it reasonably believed it did not infringe the patents at the time CalAmp launched the products at issue. The Federal Circuit vacated the jury’s findings as to indirect infringement and remand for a new trial.

On the issue of damages, the Federal Circuit found that although the infringement of the one claim that was sustained, this was not enough to support a damage award based upon all of the products, and thus the Federal Circuit vacated the compensatory damage award.

On the issue of enhanced damages for willful infringement, the jury was asked whether it had found CalAmp willfully “infringed a valid patent,” without specifying which patent or patents or which claim or claims were willfully infringed. Based on the vacation of several findings of infringement the Federal Circuit could not determine which patents or claims, so the finding of willfulness had to be vacated as did the resulting enhanced damages and attorney’s fees award by the district court, both of which were explicitly based on the willful infringement finding.

Many lessons form this case, including insisting on a claim construction of disputed terms, and being extremely careful drafting jury verdict forms.

District Court Read Mandate Too Broadly and Improperly Limited Validity Challenge

In Tek Global, S.R.L. v. Sealant Systems International, Inc., [2017-2507](March 29, 2019), the Federal Circuit vacated the district court’s final judgment as to validity and reversed the denial of a partial new trial on validity, finding that the district court improperly restricted SSI’s efforts to present the jury with relevant evidence of invalidity.

SSI argued that had the district court allowed it to present to the jury its obviousness theory based on Eriksen in view of Bridgestone, the jury would have found the asserted claims invalid. But the district court instructed the jury that it was not permitted to conclude that Bridgestone or Eriksen, alone or in combination with one another, discloses all the requirements of the claim at issue.

The Federal Circuit found that the district erred in interpreting its prior mandate to foreclose all obviousness theories based on Eriksen in view of Bridgestone. It was the only obviousness theory at issue in the prior appeal that was foreclosed, and the district court should not have barred SSI from presenting to the jury other preserved obviousness theories based on the combination of Eriksen and Bridgestone that were not before this court in the prior appeal.

Great Expectations: An Expectation of Success is Needed to Make Invention Obvious

In Gruenthal GmbH v Alkem Laboratories Limited, [2017-1153, 2017-2048, 2017-2049, 2017-2050] (March 28, 2019), the Federal Circuit affirmed the district court’s judgment that U.S. Patent No. 7,994,364 is not invalid for obviousness or lack of utility, and that U.S. Patent No. 8,536,130 is not infringed.

With respect to infringement, because neither Hikma’s nor Actavis’s proposed label is indicated to treat polyneuropathic pain, and the case made by Grünenthal and Depomed for indirect infringement depended on the proposed label indications, the Federal Circuit agreed with the trial court that Hikma and Actavis do not induce infringement of or contributorily infringe claims 1 and 2 of the ’130 patent. The Federal Circuit said that the pertinent question is whether the proposed label instructs users to perform the patented method, and the Federal Circuit agreed that it did not.

On the obviousness question, the Federal Circuit found that defendants failed to show a reasonable expectation of success. The Federal Circuit said that the court did not clearly err in finding that a POSA would not have had a reasonable expectation of successfully producing Form A, as claimed in the ’364 patent, by using the methods outlined in Byrn on the compound disclosed in the ’737 patent (Form B). The Federal Circuit noted that because the record indicates that there was (1) no known or expected polymorphism of tapentadol; (2) no evidence that the synthesis of Example 25 results in any Form A; and (3) no guidance as to what particular solvents, temperatures, agitation rates, etc., were likely to result in Form A, Alkem failed to prove that a POSA would have reasonably expected a polymorph screening of the Form B disclosed in the ’737 patent to result in Form A.

The Federal Circuit also rejected the “obvious to try” arguments, noting that the patent owner identified many variables for screening, i.e., a “huge number of possible choices,” as opposed to a “finite number,” contemplated in KSR. The Federal Circuit reiterated that a conclusion of obviousness does not follow from merely varying all parameters or trying each of numerous possible choices until one possibly arrived at a successful result, where the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful.

Finally, on the issue of utility, the Federal Circuit noted that a patent must have specific and substantial utility. The substantial requirement, also known as “practical utility,” is satisfied when the claimed invention has a significant and presently available benefit to the public. The specific requirement is satisfied when the invention is shown to provide a well-defined and particular benefit to the public. In other words, the Federal Circuit said, a patent has utility if the alleged invention is capable of providing some identifiable benefit presently available to the public.

For pharmaceutical patents, practical utility may be shown by evidence of “any pharmacological activity.” The Federal Circuit found the disclosure sufficient. The patent stated that the crystalline Form A according to the invention is used for the treatment of pain or the treatment of urinary incontinence. This was confirmed by the prior art and by expert testimony. The Federal Circuit concluded that the ’364 patent concretely discloses the practical benefit of Form A of tapentadol hydrochloride as an analgesic.

The Federal Circuit also rejected the argument that substantial utility must be shown by test results. While test results often support claims of utility in patents concerning pharmacological arts, such testing is not always required. All that is required is that the tests be reasonably indicative of the desired pharmacological response. The Federal Circuit said that the patent owner need not prove that Form A has superior stability over Form B for purposes of determining utility — the patent statute does not require that a patentable invention be superior to all prior devices, it is sufficient that Form A is shown to be stable at room temperature and useful for pain relief.

Networking Charging Stations is an Abstract Idea; Even an Apparatus Can be Abstract

In Chargepoint, Inc. v. Semaconnect, Inc., [2018-1739] (March 28, 2019), the Federal Circuit affirmed the 12(b)(6) dismissal of a claim of infringement of U.S. Patent Nos. 8,138,715; 8,432,131, 8,450,967, and 7,956,570 because the claims charging stations for electric vehicles were ineligible for patenting.

ChargePoint contended that its inventors created improved charging stations that address the various needs inherent in electric vehicle charging by creating networked charging stations.

At step one of the Mayo/Alice inquiry, the court must first determine whether the claims at issue are directed to a patent-ineligible concept. Because at some level, all inventions embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas, it is not enough to merely identify a patent-ineligible concept underlying the claim; the court must determine whether that patent-ineligible concept is what the claim is “directed to.”

With respect to claims 1 and 2 of the ‘715 patent, the Federal Circuit found that looking at the problem identified in the patent, as well as the way the patent describes the invention, the specification suggests that the invention of the patent is nothing more than the abstract idea of communication over a network for interacting with a device, applied to the context of electric vehicle charging stations. In short, the inventors here had the good idea to add networking capabilities to existing charging stations to facilitate various business interactions, but that is where they stopped, and that is all they patented. The Federal Circuit thus concluded that the claims were directed to an abstract idea.

With respect to claims 1 and 8 of the ‘131 patent. The Federal Circuit noted that claim 1 of the ‘131 patent was similar to claim 1 of the ‘715 patent. ChargePoint argued that the electricity flow is modified based on demand response principles, but the Federal Circuit found that this does nothing to make this claim directed to something other than the abstract idea. The Court noted that demand response is itself an abstract concept—a familiar business choice to alter terms of dealing to help match supply and demand. The Federal Circuit said that adding one abstract idea to another abstract idea does not render the claim non-abstract. Thus the Federal Circuit concluded that claims were also directed to the abstract idea of communicating over a network.

Claims 1 and 2 of the ‘967 patent are method claims that are similar to the apparatus claims the Federal Circuit had already analyzed. ChargePoint focused its arguments on the ability to modify an electric vehicle charging station’s operation based on a demand response business policy, but the Federal Circuit pointed out that the patent never discusses any technical details regarding how to modify electricity flow, and the fact that any modifications are made in response to a demand response policy merely adds one abstract concept to another. The Federal Circuit concluded that We thus conclude that claims 1 and 2 of the ʼ967 patent are directed to the abstract idea of communicating over a network.

Lastly, with respect to claims 31 and 32 of the ‘570 patent, while the Federal Circuit noted that these claims were in a different form than claim 1 of the ʼ715 patent, it found the analysis of that claim applicable. The Federal Circuit said that the only improvement alleged is use of the concept of network communication to interact with the particular devices. This remains the focus of these two claims, thus making both directed to an abstract idea.

The Federal Circuit concluded that while the eight claims on appeal vary in some respects, they are all directed to the abstract idea of communicating over a network for device interaction. The Court said that communication over a network for that purpose has been and continues to be a “building block of the modern economy.”

At Step II of the Alice inquiry, the Federal Circuit noted that the alleged “inventive concept” that solves problems identified in the field is that the charging stations are network-controlled. But network control is the abstract idea itself, and a claimed invention’s use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention ‘significantly more’ than that ineligible concept. The Federal Circuit analyzed the asserted technical improvements of each claim, but concluded that they were insufficient to make the claimed inventions not abstract.

Posted in 101

Precedent Leaves No Room for Different Outcome; Method of Treating Specific Disease is Patent Eligible

In Endo Pharmaceuticals Inc., v. Teva Pharmaceuticals USA, Inc., [ 2017-1240, 2017-1455, 2017-1887](March 28, 2019), the Federal Circuit reversed the district court’s determination that the claims of U.S. Patent No. 8,808,737 ineligible under 35 U.S.C. § 101.

The ’737 patent, entitled “Method of treating pain utilizing controlled release oxymorphone pharmaceutical compositions and instruction on dosing for renal impairment” covers a method of using oxymorphone to treat pain in patients with impaired kidney function. The method adjusted the level of oxymorphone administered based upon the severity of the renal impairment.

The magistrate judge first analyzed step 1 of the Alice/Mayo test, reasoning that the claims are directed to the natural law that the bioavailability of oxymorphone is increased in people with severe renal impairment. The district court adopted the magistrate judge’s recommendation, finding the patent claims ineligible.

At step one of the Alice/Mayo, the Federal Circuit said “it is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is ‘directed to.’” Applying this law, the Federal Circuit concluded that the asserted claims are not directed to patent-ineligible subject matter. On the contrary, the Federal Circuit found that the claims were directed to a patent-eligible method of using oxymorphone or a pharmaceutically acceptable salt thereof to treat pain in a renally impaired patient. This conclusion was supported by the claim language itself and confirmed by the specification, the claims, the abstract, patent title, and summary of the invention all describe the invention as a “method of treating pain” in patients with renal impairment.

The claims at issue here are legally indistinguishable from the representative claim in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd, 887 F.3d 1117 (Fed. Cir. 2018). Both claims recite a method for treating a patient. The Vanda patent claims recite the steps of carrying out a dosage regimen based on the results of genetic testing, while in the instant case the claims similarly recite the steps of carrying out a dosage regimen, though the steps are based on the results of kidney function testing. Additionally, the claims in both cases require specific treatment steps.

The Federal Circuit distinguished Mayo in part because the claims as a whole were not directed to the application of a drug to treat a particular disease. The Federal Circuit noted that the inventor here recognized the relationship between oxymorphone and patients with renal impairment, but that is not what he claimed. Rather, he claimed an application of that relationship—specifically, a method of treatment including specific steps to adjust or lower the oxymorphone dose for patients with renal impairment. The claims are thus directed to more than just reciting the natural relationship.

The Federal Circuit concluded that the ’737 patent claims are like those in Vanda. They are eligible because they are “directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome.” Finding “[o]ur precedent leaves no room for a different outcome.”

Posted in 101

Inventor Diligence Removed 102(e) Prior Art

In Arctic Cat Inc. v. GEP Power Products, Inc., [2018-1520, 2018-1521] (March 26, 2019), the Federal Circuit affirmed the PTAB’s invalidity determination as to U.S. Patent No. 7,420,822, but reversed as to U.S. Patent No. 7,072,188 because the Board improperly considered Boyd, U.S. Patent No. 6,850,421 as prior art.

The Board concluded that Boyd, whose filing date of April 1, 2002, is about seven months before the October 2002 filing date of the ’188 patent, was prior art to the ‘188 patent under 35 U.S.C. § 102(e). The Board rejected Arctic Cat’s argument of prior conception and diligence in reduction to practice. The Board also rejected the argument that the allegedly anticipatory portions of Boyd are not actually “by another,” as required by 35 U.S.C. § 102(e), even though the only named inventor on Boyd is Mr. Boyd himself, not Mr. Janisch, the inventor of the ‘188 patent.

The Federal Circuit agreed that Janisch had shown prior invention, in particular that the record established that Mr. Janisch was reasonably diligent during the critical period so as not to have abandoned his invention or unreasonably delayed its reduction to practice. While the Board concluded that the evidence did not establish diligence throughout the period from April 1, 2002, to October 29, 2002, the Board’s analysis rested on too rigid a standard, and the record establishes diligence under the correct standard.

The Federal Circuit found that the gaps in activity relied upon by the Board could be explained by third party testing activity and that lack of diligence cannot be inferred from putting the invention into someone else’s hands for needed testing and awaiting test results for a short period commensurate with the testing need, at least where oversight was diligent. That course of action, as a way of reducing an invention to practice, does not give rise to an inference of unreasonable delay or abandonment of the invention.

Infringement Prior to Notice of Patent Could Not be Willful

In SRI International, Inc., v. Cisco Systems, Inc., [2017-2223] (March 20, 2019), the Federal Circuit affirmed the district court’s denial of summary judgment of ineligibility, adopt its construction of “network traffic data,” and affirmed its summary judgment of no anticipation. The Federal Circuit vacated and remanded the district court’s denial of judgment as a matter of law of no willful infringement, and therefore vacate the district court’s enhancement of damages. The Federal Circuit also vacated the district court’s award of attorneys’ fees and remanded for recalculation. Finally, the Federal Circuit affirmed the district court’s award of ongoing royalties on postverdict sales of products that were actually found to infringe or are not colorably different.

The litigation involved U.S. Patent Nos. 6,484,203 and 6,711,615 directed to network intrusion detection. The Federal Circuit rejected Cisco’s assertion that the claims are just directed to analyzing data from multiple sources to detect suspicious activity. The Federal Circuit found that instead, the claims are directed to an improvement in computer network technology. The focus of the claims is on the specific asserted improvement in computer capabilities—that is, providing a network defense system that monitors network traffic in real-time to automatically detect large-scale attacks. The Federal Circuit concluded that the claims are not directed to an abstract idea under step one of the Alice analysis, and thus did not reach step two.

On claim construction, the Federal Circuit held that SRI’s statements in the prosecution history do not invoke a clear and unmistakable surrender of all preprocessing, including decryption, decoding, and parsing. Accordingly, the Federal Circuit agreed with the district court’s construction of “network traffic data” to mean “data obtained from direct examination of network packets.”

On the issue of anticipation, the Federal Circuit held that SRI’s statements in the prosecution history did not invoke a clear and unmistakable surrender of all preprocessing, including decryption, decoding, and parsing. Accordingly, the Federal Circuit agreed with the district court’s construction of “network traffic data” to mean “data obtained from direct examination of network packets.” On this record, the Federal Circuit concluded that summary judgment was appropriate. The prior art did not expressly disclose directly examining network packets as required by the claims—especially not to obtain data about network connection requests.

On the denial of JMOL on the issue of willfulness, the Federal Circuit agreed that the jury’s finding that Cisco willfully infringed the patents-in-suit prior to receiving notice thereof is not supported by substantial evidence and therefore vacated and remanded them. Among other things, SRI argued that Cisco employeees did not read the patent before their depositions, but the Federal Circuit noted that it is undisputed that these Cisco employees were engineers without legal training. Given Cisco’s size and resources, the Federal Circuit said it was unremarkable that the engineers—as opposed to Cisco’s in-house or outside counsel—did not analyze the patents-in-suit themselves. The Federal Circuit also noted that it was undisputed that Cisco did not know of SRI’s patent until SRI sent its notice letter to Cisco, and that this notice letter was sent years after Cisco independently developed the accused systems and first sold them. Under these circumstances the Federal Circuit vacated the finding of willfulness prior to the Notice letter, and remanded for the district court to determine whether the finding of willfulness after the Notice letter was supported by substantial evidence. The Federal Circuit also vacated the award of enhanced damages and remanded for further consideration along with willfulness.

The Federal Circuit vacated the district court’s award of attorneys’ fees under § 285, remanding solely for recalculation. The Federal Circuit found no error in the district court’s determination that the case was exceptional, agreeing that Cisto had “crossed the line in several regards.” However, there were several entries included by mistake, and the Federal Circuit remanded only for removal of attorney hours clearly included by mistake and consequent recalculation of reasonable attorneys’ fees.

Finally, on the issue of on-going royalty, the Federal Circuit found that the district court did not abuse its discretion in awarding a 3.5% compulsory license for all post-verdict sales. Cisco complained that the court was obligated to consider its design-arounds. The Federal Circuit agreed that Cisco was untimely, finding Cisco did not redesign its products until after trial, and Cisco did not file its motion to supplement until after completion of post-trial briefing.

Products and Methods Employing Naturally Occurring Substances are not Necessarily Ineligible

In Natural Alternatives International, Inc. v. Creative Compounds, LLC, [2018-1295](March 15, 2019), the Federal Circuit reversed and remanded judgment on the pleadings that the asserted claims of U.S. Patent Nos. 5,965,596, 7,825,084, 7,504,376, 8,993,610, 8,470,865, and RE45,947
relating to dietary supplements containing beta-alanine, are not patent eligible.

The district purported accepted Natural Alternatives’ proposed claim constructions, in finding that the subject matter ineligible. However, the Federal Circuit found that the proposed claim constructions, we hold that the complaint’s factual allegations, together with all reasonable inferences, plausibly establish the eligibility of the representative claims. While the Method Claims have similarities to the claims found ineligible in Mayo, as they utilize an underlying natural law, this is not sufficient to establish that they are directed to that law. Under Natural Alternatives’ constructions, the Method Claims require specific steps be taken in order to bring about a change in a subject, altering the subject’s natural state.

The Federal Circuit said that like the claims in Vanda, the Method Claims contain specific elements that clearly establish they are doing more than simply reciting a natural law. Like the Vanda claims, which specify a patient population to be treated, the Method Claims specify particular results to be obtained by practicing the method. The Federal Circuit also noted that while beta-alanine may exist in nature, Natural Alternatives has argued that the quantities being administered do not, and that the claimed consumption greatly exceeds natural levels.

The Federal Circuit concluded that the Method Claims at issue are treatment claims. They cover using a natural product in unnatural quantities to alter a patient’s natural state, to treat a patient with specific dosages outlined in the patents. The Federal Circuit held that the Method Claims are not directed to ineligible subject matter.

The Federal Circuit further noted that at step two, factual impediments exist to resolving the case at this stage.

As to the product claims, the Federal Circuit noted that although beta-alanine is a natural product, the Product Claims are not directed to beta-alanine. The Federal Circuit said that a claim to a manufacture or composition of matter made from a natural product is not directed to the natural product where it has different characteristics and “the potential for significant utility.” At this stage in the litigation, the Federal Circuit found that it has been sufficiently alleged that these characteristics provide significant utility, as the claimed dosage forms can be used to increase athletic performance in a way that naturally occurring beta-alanine cannot. Accordingly, neither claim is directed to ineligible subject matter.

Posted in 101