In Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc., [2016-2121, 2016-2208, 2016-2235] (July 9, 2018), the Federal Circuit, after a petition for rehearing, reissued its opinion affirming liability for trade secret misappropriation and patent infringement, but vacating the monetary awards, and remanding for further proceedings. The reissued opinion only differs from the early opinion in the fifth paragraph of Section III.A.
In Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., [2016-2691, 2017-1875] (July 3, 2018), the Federal Circuit affirm the district court’s judgments of infringement of U.S. Patent Nos. 6,212,079 and 6,538,908, but concluded that the entire market value rule cannot be used here to calculate damages and vacated the
damages award and remanded for further proceedings.
The patents in suit related to power supply controller chips used in power
supplies, such as chargers for electronic devices. While the case was pending in the district court, the Federal Circuit in VirnetX, Inc. v. Cisco Systems, Inc.,explained that simply identifying the smallest salable unit is not necessarily sufficient to satisfy a patentee’s obligation to apportion for multi-component products with significant unpatented features. Because Power Integrations’ royalty calculation in the first trial did not apportion beyond the “smallest salable unit” and Power Integrations had disclaimed reliance on the entire market value rule, the district court granted a new trial on the
issue of damages. The district court excluded Power Integrations’ expert testimony based on apportionment, but allowed its expert to present testimony based on the entire market value rule. The jury awarded $139.8 million in damages, based on damages
testimony that relied solely on the entire market value rule The district court denied Fairchild’s motion for judgment as a matter of law, or in the alternative for a new trial.
The Federal Circuit affirmed infringement of U.S. Patent No. 6,212,079 finding the verdict supported by substantial evidence, noting that the jury could have properly concluded that the claim terms “fixed frequency” and “non-varying” left open the
possibility for minor frequency variations due to operating conditions.
The Federal Circuit also affirmed infringement of U.S. Patent No. 6,538,908 under the doctrine of equivalents, agreeing that adjusting a voltage limit of a power switch was an infringing equivalent of adjusting a current limit of a power switch. The Federal noted that Circuit Power Integrations’ expert testified that a value of voltage qualifies as a “value of current” because under Ohm’s Law, current is equal to voltage divided by
resistance. The Federal Circuit also affirmed that equivalence was not precluded by prosecution history, and in particular to arguments distinguishing current and voltage in another application sharing the same specification. The Federal Circuit said that the claim language on its face is different than the language of the claims to which the prosecution argument was directed, and concluded that Fairchild failed to establish that the prosecution history is sufficiently clear as to create an estoppel.
On the issue of damages, the Federal Circuit agreed with Fairchild that the district court should have granted the new trial motion. The Federal Circuit said that a patentee is only entitled to a reasonable royalty attributable to the infringing features, and must
in every case give evidence tending to separate or apportion the defendant’s profits and the patentee’s damages between the patented feature and the unpatented features. In the context of a utility patent, it is only the patented technology that is taken from the owner, so the value to be determined is only the value that the infringing features contribute to the value of an accused product.
Where multicomponent products are accused of infringement, the royalty base should not be larger than the smallest salable unit embodying the patented invention. Use of the entire market value of a multi-component product that includes a patented
component cannot help but skew the damages horizon for the jury, regardless of the contribution of the patented component to this revenue. The Federal Circuit said that Admission of evidence of the entire market value only serves to make a patentee’s proffered damages amount appear modest by comparison, and to artificially inflate the jury’s damages calculation beyond that which is adequate to compensate for the infringement.
The Federal Circuit noted that the entire market value rule allows for the recovery of damages based on the value of an entire apparatus containing several features, when the feature patented constitutes the basis for consumer demand. However if the product has other valuable features that also contribute to driving consumer demand—patented or unpatented—then the damages for patent infringement must be apportioned to reflect only the value of the patented feature.
In the present case, both parties agreed that the accused products contained other valuable features as well, yet Power Integrations presented no evidence about the
effect of those features on consumer demand or the extent to which those features were responsible for the products’ value.
The Federal Circuit said that the entire market value rule is appropriate only when the
patented feature is the sole driver of customer demand or substantially creates the value of the component parts. It is not enough to merely show that the patented feature is viewed as essential, that a product would not be commercially viable without the patented feature, or that consumers would not purchase the product without the
patented feature. The Federal Circuit said that when the product contains
other valuable features, the patentee must prove that those other features did not influence purchasing decisions.
Because the evidence presented by Power Integrations was insufficient as a matter of law to invoke the entire market value rule, the Federal Circuit vacated the award of damages and remand for a new trial.
In Sirona Dental Systems GmbH v. Institut Straumann AG, [2017-1341, 2017-1403](June 19, 2018), the Federal Circuit affirmed-in-part, vacated-in-part, and remanded-in-part, the PTAB’s determination that claims 1-8 of U.S. Patent No. 6,319,006 were unpatentable, while claims 9-10 were patentable.
The patent related to a drill template, to precisely place a pilot hole for a tooth implant. The parties each provided their own translation of the primary references, and based upon these different translations disputed whether the reference digitally inputs structures of the mouth or movements of the mouth into the simulation. Sirona focused on the references disclosure of a “recording bow,” which only measures movement of the jaw joint, not surface structures. However, the Federal Circuit agreed with the district court that this was not dispositive in light of the reference’s other disclosures.
In addition to agreeing with the Board about the content of the prior art, the Federal Circuit also found substantial evidence also supported the Board’s finding that a person of ordinary skill in the art would have been motivated to combine the references, and affirmed the determination that claims 1-8 would have been obvious.
Sirona also complained that the Board violated the APA when it determined that Sirona’s recording bow argument was not relevant and put together its own obviousness theory based on Bannuscher’s input of “geometry data,” which
does not appear in the petition. While the Federal Circuit agreed that it would not be proper for the Board to deviate from the grounds in the petition and raise its own obviousness theory, it held that the Board’s unpatentability determination did not
deviate from the grounds alleged in the petition. The Federal Circuit noted that the Board cited the same portions of the reference as the Petition, and said the Board “did not change theories simply because the petition did not use the exact words.” The Federal Circuit also noted that Sirona spent much of its response addressing the very argument that it complained was new.
Sirona also challenged the denial of its contingent motion to amend. On this point, the Federal Circuit agreed. The final written decision, which issued prior to Aqua Products,
improperly placed the burden on Sirona to demonstrate that the proposed substitute claims were patentable. The Federal Circuit vacated the Board’s denial of Sirona’s contingent motion to amend and remand for the Board to reconsider in light of Aqua Products.
On the cross appeal, the Federal Circuit affirmed the finding that claims 9 and 10 were patentable, noting that there was no error in the Board’s decision not to decide grounds of unpatentability not raised in the petition.
Americans are proud of our flag, and the records of the U.S. Patent and Trademark Office, document a wide array of creative ways we Americans have found to display the flag, including on decorative displays (U.S. Patent No. 89,270): on parking meters (U.S. Patent No. 2,686,029):on our SUV’s (U.S. Patent No. 6,860,047):
on our mailboxes (U.S. Patent No. 6,929,173):
on our beverages (U.S. Patent No. D695626):
and even on our bandages (U.S. Patent No. D516730):
Salute the flag, where ever you find it!
In Medtronic, Inc. v. Barry, [2017-1169, 2017-1170] (June 11, 2018) the Federal Circuit affirmed-in-part and vacated-in-part two PTAB Decisions finding that the Board erroneously concluded that asserted videos and slides were were not prior art because
the Board did not fully consider all the factors for determining whether the video and slides were publicly accessible.
The patents in suit, U.S. Patent Nos. 7,670,358 and 7,776,072 are directed to methods and systems for ameliorating aberrant spinal column deviation conditions. After being sued for infringement, Medtronic instituted two IPRs relying in part on a video demonstration and a related slide presentation to spinal surgeons at various industry meetings and conferences in 2003. The Board found that the video and slides, although presented at three different meetings in 2003, were not publicly accessible and therefore were not “printed publications,” in accordance with 35 U.S.C. § 102.
The determination of whether a document is a “printed publication” under 35 U.S.C. § 102(b) “involves a case-by-case inquiry into the facts and circumstances surrounding
the reference’s disclosure to members of the public. There are many ways in which a reference may be disseminated to the interested public, so public accessibility is the touchstone in determining whether a reference constitutes a ‘printed publication’
bar under 35 U.S.C. § 102(b). A reference will be considered publicly accessible if it was ‘disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence could locate it.
The Federal Circuit noted that the distribution of certain materials to groups of people at one or more meetings presents a slightly different question than references stored in libraries, and that in the former, the publication need not be easily searchable after publication if it was sufficiently disseminated at the time of its publication. The Federal Circuit identified several relevant factors from the case law, including (1) whether the copies were freely distributed to interested members of the public; (2) any expectations of confidentiality; (3) the length of time the display was exhibited, (4) the expertise of the target audience (to determine how easily those who viewed the material could
retain the information), (5) the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied,” and (6) “the simplicity or ease with
which the material displayed could have been copied.”
The Federal Circuit said the record does not show that the Board fully considered
all of the relevant factors, including effect of the differences in the various disclosures. The Federal Circuit said that the nature of those meetings, as well as any restrictions on
public disclosures, expectations of confidentiality, or, alternatively, expectations of sharing the information gained, can bear important weight in the overall inquiry. For these reasons, the Federal Circuit vacated the Board’s finding that the video and slides are not printed publications and remand for further proceedings.
In FastShip, LLC v. U.S., [2017-2248, 2017-2249] (June 5, 2018), held that the U.S. Government did not infringe U.S. Patent Nos.
5,080,032 and 5,231,946 because the Freedom-class
Littoral Combat Ship allegedly covered by the claims was not “manufactured” by or for the Government before the patents expired.
A patent owner cannot sue the U.S. government or its suppliers for patent infringement. Instead 28 U.S.C. § 1498(a) gives the patent owner a cause of action for the use of the patent.
A representative claim from plaintiff’s patent requires:
A vessel comprising:
a hull having a non-stepped profile which produces a high pressure area at the bottom of the hull in a stern section of the hull which intersects a transom to form an angle having a vertex at the intersection and hydrodynamic lifting of the stern section
at a threshold speed without the hull planing across the water at a maximum velocity determined by a Froude Number, the hull having a length in excess of 200 feet, a displacement in excess of 2000 tons, a Froude Number in between about 0.42 and 0.90, and a length-to-beam ratio between about 5.0 and 7.0;
at least one inlet located within the high pressure area;
at least one waterjet coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel;
a power source coupled to the at least one waterjet for propelling water from the at least one inlet through the waterjet to propel the vessel and to discharge the water from an outlet of the waterjet; and
wherein acceleration of water into the at least one inlet and from the at least one waterjet produces hydrodynamic lift at the at least
one inlet which is additional to the lifting produced by the bottom of the hull in the high pressure area which increases efficiency
of the hull and reduces drag.
On May 18, 2010, when the patents-in-suit expired, one ship (the LCS-1) was completed and in use by the Navy, but a second ship (the LCS-3) was still under construction. The Court of Federal Claims awarded plaintiff $6,449,585.82 in damages for LCS-1, but no damages for LCS-3, and plaintiff appealed.
The Federal Circuit affirmed, finding that the undisputed facts demonstrate that LCS-3 was not “manufactured” when the patents-in-suit expired in May 2010. The Federal Circuit said that the asserted claims disclose a vessel comprising “at least one waterjet coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel,” while the record demonstrates that all four waterjets and impeller shafts were installed in July 2010. Moreover, the claims also required a hull, which was not completed until the erection of the bow module . during August 2010,” at the earliest.
The Federal Circuit affirmed the denial of an award for LCS-3 ship, and upped the award for LCS-1 to $7,117,271.82.
In Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP Ltd., [2016-2616, 2016-2656](May 16, 2018), the Federal Circuit affirmed the PTAB decision that claims 1–8 and 10–11 of U.S. Patent 8,846,112 directed to methods of distributing nitric oxide gas cylinders for pharmaceutical applications were unpatentable as obvious, and reversed the decision that claim 9 was not unpatentable.
In construing the claims, the Board applied the printed matter doctrine. The Board interpreted the providing information, evaluating, and recommendation claim limitations to be either printed matter or purely
mental steps not entitled to patentable weight, as those limitations lacked a functional relationship to the other claim limitations except in claim 9. With respect to claim 9, however, the Board interpreted “in accordance with” to mean “based on, or as a result of” the recommendation to discontinue nitric oxide treatment from claim 7,
thereby establishing a functional relationship to the recommendation limitation. The Board found that the cited prior art collectively taught each limitation of claims 1–8 and 10–19 that did have patentable weight, and held they were obvious.
The Federal Circuit began with the printed matter doctrine, applied by the PTAB. The Federal Circuit explained that claim limitations directed to printed matter are not entitled to patentable weight unless the printed matter is functionally related to the substrate on which the printed
matter is applied. However the printed matter doctrine is not limited to printed materials, and applies if the claims are directed to the content of information.
If a claim limitation is directed to printed matter, then the next step is to ascertain whether the printed matter is functionally related to its “substrate.” Printed matter that is functionally related to its substrate is given patentable weight, while where the printed matter is not functionally related to the substrate, the printed matter will not distinguish the
invention from the prior art in terms of patentability. In in Ngai, there was no functional relationship between claimed instructions and a diagnostic kit, as the instructions “in no way depended on the kit, and the kit did not dependon the” instructions. However, Ngai distinguished Gulack, where
there was a functional relationship between printed digits on a circular band because “the printed matter and the circularity of the band were interrelated, so as to produce a new product useful for educational and recreational mathematical purposes.”
The Federal Circuit agreed that the Board properly addressed the printed matter doctrine during claim construction. The Federal Circuit rejected Mallinckrodt’s argument that the printed matter/mental steps doctrines only apply to patent eligibility, noted that the printed matter doctrine raises an issue where the § 101 patent-eligibility inquiry and the
§ 102 and § 103 novelty and nonobviousness inquiries overlap. The Federal Circuit explained because claim limitations directed to mental steps may attempt to capture informational content, they may be considered printed matter lacking patentable weight in an obviousness
analysis. Accordingly, a limitation that merely claims information by incorporating that information into a mental step will receive patentable weight only if the limitation is functionally related to the substrate.
The Federal Circuit noted that claim 3’s requirement that the medical provider weigh “the potential benefit of treating the [neonatal patient]
with 20 ppm inhaled nitric oxide vs. the potential risk that inhaled nitric oxide could cause an increase in PCWP” merely requires a medical provider to think about the information claimed in the providing information limitation of claim 1. The Federal Circuit said that adding an ineligible mental process to ineligible information still leaves the claim limitation directed to printed matter. To hold otherwise would make
the printed matter doctrine a dead letter, requiring no more than a “think about it” step to give patentable weight to a claim limitation directed to information content.
The Federal Circuit found that the reference to “pharmaceutically acceptable” referred to the nature of the nitric acid gas, not the prescribing information that may accompany it, and thus there was no functional relationship between the information and methods of providing and potentially administering the drug. Since no other functional relationship was asserted, the Federal Circuit held that the printed matter in claims 1–8 and 10 lacks a functional relationship to its substrate, and thus cannot be the basis of patentability.
The Federal Circuit then turned to claim 9, which survived the IPR, summarizing it as: (1) determining that a neonatal patient has preexisting LVD; (2) treating that neonate with nitric oxide, whereupon
the neonate experiences pulmonary edema; (3) providing information and a recommendation to the medical provider to discontinue nitric oxide treatment for a patient with preexisting LVD who experiences a pulmonary edema; and (4) “based on” the recommendation, discontinuing nitric oxide treatment due to the pulmonary edema. The Federal Circuit noted that claim 9 requires a medical provider to take a specific action, discontinuing treatment, as a result of the recommendation limitation, and agreed that this creates the required functional relationship with the rest of the claim. However the Federal Circuit disagreed with the Board that claim 9 as a whole would not have been obvious.
The Federal Circuit found the Board improperly construed claim 9 as requiring the exclusion of persons from the treatment, rather than discontinuing persons from treatment if edema occurs, and thus the prior art teaching of treatment with monitoring made the claimed invention obvious.
In Gilead Sciences, Inc. v. Merck & Co., [2016-2302, 2016-2615] (April 25, 2018), the Federal Circuit affirmed the district court’s determination that the claims the jury found to be valid and infringed were unenforceable because of pre-litigation business misconduct and litigation misconduct attributable to Merck.
The Federal Circuit looked the the Supreme Court’s decision in Keystone Driller Co. v. General Excavator Co., for an explanation of unclean hands — there the Court held that a determination of unclean hands may be reached when “misconduct” of a party seeking relief “has immediate and necessary relation to the equity that he seeks in respect of the matter in litigation,” i.e., “for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court.” The Federal Circuit noted that Merck argued that the connection between the misconduct and the litigation must be “material,” but failed to make clear to the Federal Circuit had that requirement affected the case. The Federal Circuit noted that in the present case which involves clear misconduct in breaching commitments to a third party and clear misconduct in litigation, the “immediate and necessary relation” standard, in its natural meaning, is met if the conduct normally would enhance the claimant’s position regarding legal rights that are important to the litigation if the impropriety is not discovered and corrected. The Federal Circuit found that considering the conduct as a whole the district court’s determination of unclean hands was adequately supported.
Specifically, the district court found that Merck violated the “firewall” understanding between Merck and Pharmasset, when at least one person involved in a conference call with Pharmasset was involved, and continued to be involved in Merck related patent prosecution, which the Federal Circuit characterized as “serious misconduct,
violating clear standards of probity in the circumstances.” The improperly acquired knowledge influenced Merck’s filing of narrowed claims, a filing that held the potential for expediting patent issuance and for lowering certain invalidity risks.
The district court also found litigation misconduct, first in giving knowing false deposition testimony (presumably to hide the business misconduct) and false trial testimony. The Federal Circuit agreed with the district court that Merck’s litigation misconduct infects
the entire lawsuit, including the enforceability of the other patents in the suit.
Because the district court did not abuse its discretion in applying the doctrine of unclean hands, the Federal Circuit affirmed.
In Apto Miitors APS v. Kamstrup, [2017-1681] (April 17, 2018) the Federal Circuit affirmed the Board’s determination that U.S. Patent No. 8,893,559 was anticipated by Nielsen, U.S. Patent App. Pub. No. 2012/0006127, finding substantial evidence supported the Board’s finding that Apator failed to sufficiently corroborate the
inventor testimony of earlier conception.
An inventor can swear behind a reference by proving he conceived his invention before the effective filing date of the reference and was diligent in reducing his invention to practice after that date. However, that when a party seeks to prove conception
through an inventor’s testimony the party must proffer evidence corroborating the inventor’s testimony. The sufficiency of the proffered corroboration is determined
by a “rule of reason” analysis in which all pertinent evidence is examined, but even under the rule of reason analysis, the evidence of corroboration must not depend solely on the inventor himself.
The evidence of prior conception included emails sent by the inventor transmitting drawings and presentations, but the only identification of the attachments was by the inventor. The Federal Circuit noted the catch-22 of corroboration: Apator attempts to corroborate the inventor’s testimony with the emails and the drawings, but the emails and drawings can only provide that corroboration with help from the inventor’s
The Federal Circuit concluded that a reasonable mind could conclude that Apator
failed to proffer evidence corroborating the inventor’s testimony regarding conception, and accordingly held that substantial evidence supports the Board’s finding
that Apator has not established prior conception.
In Knowles Electronics. v. Iancu, [2016-1954] (April 6, 2018), the Federal Circuit affirmed the PTAB’s affirmance of the Examiner’s determination that claims 1–2, 5–6, 9, 11–12, 15–16, and 19 of U.S. Patent No. 8,018,049 were anticipated, and claims 21–23 and 25–26 would have been obvious.
The claims were directed to a silicon condenser microphone and manufacturing method. Knowles argued that the PTAB erred by improperly construing “package,” including by failing to consider the Federal Circuit construction of package in a related patent, and by improperly relying on a new ground of rejection to sustain the Examiner’s obviousness findings.
The Federal Circuit noted that it has held that, in some circumstances, previous
judicial interpretations of a disputed claim term may be relevant to the PTAB’s later construction of that same disputed term. While the PTAB is not generally bound by a previous judicial interpretation of a disputed claim term does not mean that it has no obligation to acknowledge that interpretation or to assess whether it is consistent with the BRI. The Federal Circuit found that the PTAB considered a previous interpretation of the term and properly determined its claim construction was consistent with the term’s BRI, and the PTAB adequately explained its adoption a claim construction
relative to the prior construction.
On the question of whether the Board relied upon a new ground of rejection, the Federal Circuit said that the PTAB is not limited to reciting and agreeing with the examiner’s rejection in haec verba, and can further explain the examiner’s rejection and thoroughly respond to an applicant’s argument. Knowles argued that the the PTAB’s finding regarding the motivation to combine, based upon the principles of operation of the references, does not appear anywhere in the Examiner’s decision. However, after examining the decisions of the Examiner and the Board, the Federal Circuit found taht the PTAB’s rejection relied on the same reasons provided by the Examiner, albeit using slightly different verbiage. The Federal Circuit noted that Knowles was given, and actually used its opportunity to respond to the theory of unpatentability before the Board.