You Can Ignore Claim Language As Long As it is Before the Colon

In Georgetown Rail Equipment Company v. Holland L.P., [2016-2297] (August 1, 2017), the Federal Circuit affirmed judgment of infringement and the award of lost profits and enhanced damages for infringement of U.S. Patent No. 7,616,329 on a system and method for inspecting railroad tracks.

Holland challenged the district court’s conclusion that the claim language “mounted on a vehicle for movement along the railroad track” was not a claim limitation.  The Federal Circuit noted that whether to treat a preamble as a limitation is a determination resolved only on review of the entire patent to gain an understanding of what the inventors actually invented and intended to encompass by the claim, add that there is no simple test for understanding the import of the preamble.

Generally the preamble does not limit the claims, however, a
preamble may be limiting if:

  • it recites essential structure or steps;
  • claims depend on a particular disputed preamble phrase for antecedent basis.
  • the preamble is essential to understand limitations or terms in the claim body.
  • the preamble recites additional structure or steps underscored as important by the specification.
  • there was clear reliance on the preamble during prosecution to distinguish the claimed invention from the prior art.

On the other hand a preamble is not a claim limitation if the claim body defines a structurally complete invention and uses the preamble only to state a purpose or intended use for the invention.

The Federal Circuit agreed with the district court that the preamble was not a limitation, noting In the context of the entire patent, it is apparent that the term “mounted on a vehicle for movement along the railroad track” is meant to describe the principal intended use of the invention but not to import a structural limitation or to exclude from the reach of the claims an assembly that does not include a vehicle mount.

Holland argued that it did not infringement the patent  because some of the processing of the acquired data was performed by a third party.  However, the Federal Circuit none-the-less found that Holland used the claim system despite the fact that third parties operated parts of the system.

With respect to damages, the Federal Circuit found that there was a legally sufficient evidentiary basis in the record from which a reasonable
jury could have found that Georgetown would have received business from Union Pacific for data collection services if Holland’s infringing product was not in the market, supporting an award of lost profits.

Finally with respect to enhanced damages, the Federal Circuit  found substantial evidence supports the jury’s finding that subjective recklessness led to willful infringement.  While Holland disputed many of the facts, the Federal Circuit said that the jury was free to decide whose evidence it found more compelling on the question of willfulness and found in Georgetown’s favor.

While the Federal Circuit has long held that in many if not most cases, the preamble of a claim is a not limitation, the reason to ignore words that the inventor selected to describe the invention has never been clear.   Given the strictness with which other words in the claim are construed, giving a fee pass for some words simply because they appear before the colon seems inconsistent.

 

Celebrity Endorsement Provokes Patent Infringement Claim

Snap Light LLC has sued Kim Kardashian, though her company Kimsaprincess, Inc., and her collaborator Urban Outfitters, Inc., for patent infringement.  As improbable as that sounds, it is illuminating U.S. Patent No. 8,428,644 covers a phone case with a light source for taking improved selfies.

It seems Snap Light’s real complaint is the candle power of Kim Kardashian’s endorsement, rather than the LuMee product that Kim is endorsing.  Snap Light’s comparison of the  patent with the LuMee device shows at least one significant difference between the claims and the accused device:

The patent claims require an “integrated right of Light Emitting Diode (LED) lights,” while the LuMee case has two parallel rows of lights (like a conventional make-up mirror.”  Another issue the patent owner may have to address is whether the claim mixes a method step (“provide”) in a apparatus claim.

The complaint seems more focused on Kim Kardashian’s marketing activities than whether the product infringes.

 

Don’t Exalt Slogans over Real Meaning; Find the Claim Construction that Naturally Aligns with the Specification and Prosecution History

In The Medicines Company v. Mylan, Inc., [2015-1113, 2015-1151, 2015-1181] (April 6, 2017), the Federal Circuit affirmed summary judgment of non-infringement of U.S. Patent No. 7,598,343, and reversed a bench trial determination of infringement of U.S. Patent No. 7,582,727.

The district court reasoned that the accused product did not infringe the ‘343 patent because this patent required “efficient mixing,” and concluded that the accused product infringed the ‘727 patent because the claims did not include the “efficient mixing” requirement.  The Federal Circuit found that the claims of both patents include a “batches” limitation, which according to the patents requires efficient mixing, thus both patents require “efficient mixing.”

The Federal Circuit noted that both patents included the “batches” limitation, that set a maximum impurity level for the product.  The Federal Circuit said that the claims could not be construed to cover any batch that met the impurity level, because it would cover the prior art, rendering the claim invalid.  Rather, properly construed, what the batches limitation requires is the use of a process that achieves batch
consistency.  The Federal Circuit noted that the patent owner agreed that Medicines agrees that batch consistency is the result of following the patents in suit and is what distinguishes them from the prior art.

The Federal Circuit found a claim construction that covered any process that achieved the impurity standard and was not limited to the disclosed “efficient mixing” was unworkable, because an infringer would not know whether it infringed until all of the batches were completed, and thus would not provide reasonable certainty regarding the claim scope.  This reasoning seems faulty because if the infringer used a process which, like the disclosed process, reliably achieved the claimed impurity level, there would be no uncertainty.

The Federal Circuit also noted that during prosecution the applicant characterized the invention as being the process: “[i]n the
present invention, various embodiments relate to a less
subjective and more consistent process.”  The applicant also took care to distinguish its post-critical date sales from its pre-critical date sales because they were “prepared by the new process of the present invention.”

Finally the Federal Circuit noted that the patent owner distiguished the invention to the district court based upon the process disclosed in the specification, telling the court that it was readily apparent that the definition of pharmaceutical batches refers to the compounding processes described in the patents-in-suit.

After a detailed review of the language of the specification, the Federal Circuit found that the specification teaches efficient mixing as a necessary and sufficient condition for achieving batch consistency, and the prosecution history confirms that achieving batch consistency requires efficient mixing. The Federal Circuit concluded that to attribute to the claims a meaning broader than any indicated in the patents and their prosecution history would be to ignore the totality of the facts of the case and exalt slogans over real meaning.

The Federal Circuit went on to find that the required “efficient mixing” was not met by the accused products, and reversed the district court’s finding of infringement.

 

 

 

Internal Fight Over Role of Appellate Court Reveals Substantial Difference of Opinion over Substantial Evidence at Federal Circuit

In Apple, Inc., v. Samsung Electronics Co., Inc., [2015-1171, 2015-1195, 2015-1994] (October 7, 2016), the en banc Federal Circuit completely undid the panel decision with respect to three patents, with the three original panel judges dissenting.

The district court granted summary judgment that Samsung infringed U.S. Patent No. 8,074,172, and jury found that the claims were not invalid.  The jury found that Samsung infringed U.S. Patent No. 5,946,647 and U.S. Patent No. 8,046,721, and that these patents were not invalid.  The district court denied Samsung’s motions for JMOL.  A panel of the Federal Circuit reversed.  On Apple’s petition for en banc review, the Federal Circuit granted the petition “to affirm our understanding of the appellate function as limited to deciding the issues raised on appeal by the parties, deciding these issues only on the basis of the record made below, and as requiring appropriate deference be applied to the review of fact findings.”

The ’647 Patent

The jury found that Samsung infringed the ‘647 patent and awarded Apple $98,690,625. Because there was substantial evidence to support the jury’s verdict, the en banc Federal Circuit affirmed.  The Court found that the panel used extra-record extrinsic evidence to modify the agreed upon and unappealed construction.  The Court pointed out that the claim construction was not appealed, and it did not agree with the Panel that that Apple agreed to the panel’s change to the construction.  Samsung did not appeal the validity of the ‘647 patent

The ’721 Patent

The jury found that the ‘721 patent was infringed and would not have been obvious. Because there was substantial evidence to support the jury’s underlying fact findings, and that these fact findings supported the conclusion that Samsung failed to establish by clear and convincing evidence that the claims of the ‘721 patent would have been obvious.  The Court noted its restricted role on appeal:

Our job is not to review whether Samsung’s losing position was also supported by substantial evidence or to weigh the relative strength of Samsung’s evidence against Apple’s evidence. We are limited to determining whether there was substantial evidence for the jury’s findings, on the entirety of the record.

The ‘172 Patent

The district court granted summary judgment of infringement of the ‘172 patent, and the jury found the patent not invalid, and awarded $17,943,750 in damages.  Samsung appealed the denial of its JMOL.  The Federal Circuit found substantial evidence supporting the jury verdict, and affirmed.  The Court further commented on its role as an appellate court:

Even in cases in which a court concludes that a reasonable jury could have found some facts differently, the verdict must be sustained if it is supported by substantial evidence on the record that was before the jury. But as an appellate court, it is beyond our role to reweigh the evidence or consider what the record might have supported, or investigate potential arguments that were not meaningfully raised.  Our review is limited to whether fact findings made and challenged on appeal are supported by substantial evidence in the record, and if so, whether those fact findings support the legal conclusion of obviousness.

The Federal Circuit affirmed and reinstated the district court judgment as
to the ’647, ’721, and ’172 patents, and well as the portions of the panel decision pertaining to four other patents.

 

 

Sale and Offer for Sale Determined by Where “Substantial Activities of the Sales Transactions” Occur

In Halo Electronics, Inc. v. Pulse Electronics, Inc., [2013-1472, 2013-1656](August 5, 2016), on remand from the Supreme Court, which held that 35 USC 284 gives district courts the discretion to award enhanced damages in egregious cases of misconduct beyond typical infringement, the Federal Circuit vacated the district court’s unenhanced damages award with respect to products that were delivered in the United States, and remand for further proceedings consistent with the Supreme Court’s opinion on enhanced damages. The Federal Circuit otherwise adopted its prior opinion on all other issues in the appeal.

In particular the Federal Circuit again agreed that the district court did not err in granting summary judgment of no direct infringement with respect to those products that Pulse manufactured, shipped, and delivered outside the United States because those products were neither sold nor offered for sale by Pulse within the United States.

The Federal Circuit said that although the place of contracting may be one of several possible locations of a sale to confer personal jurisdiction, it has not deemed a sale to have occurred within the United States for purposes of liability under §271(a) based solely on negotiation and contracting activities in the United States when the vast majority of activities underlying the sales transaction
occurred wholly outside the United States. For such a sale, one must examine whether the activities in the United States are sufficient to constitute a “sale” under §271(a), recognizing that a strong policy against extraterritorial
liability exists in the patent law.

The Federal Circuit noted that the patent statute does not define “sale” for purposes of §271(a).  The Federal Circuit pointed out that the ordinary meaning of a sale includes the concept of a transfer or title or property, and that Article 2 of the Uniform Commercial Code, which is recognized as persuasive authority on the sale of goods, provides that a sale consists in the passing of title from the seller to the buyer for a price.

The Federal Circuit found that substantial activities of the sales transactions at issue, in addition to manufacturing and delivery, occurred outside the United States. While Halo did present evidence that pricing negotiations and certain contracting and marketing activities took place in the United States, which
purportedly resulted in the purchase orders and sales overseas, such pricing and contracting negotiations alone are insufficient to constitute a “sale” within the United States.  Any doubt as to whether Pulse’s contracting activities in the United States constituted a sale within the United States under § 271(a) was resolved by the presumption against extraterritorial application of United States laws.

The Federal Circuit also affirmed there was no offer for sale, noting that in order for an offer to sell to constitute infringement, the offer must be to sell a patented
invention within the United States.

 

An Infringement, Divided, May Stand After All

In Mankes v. Vivid Seats Ltd., [2015-1500, 2015-1501, 2015-1909] (April 22, 2016), the Federal Circuit vacated judgment on the pleadings against Mankes, and remanded for further proceedings in light of Akamai IV.

The case involved U.S. Patent No. 6,477,503 on methods for managing a reservation system that divides inventory between a local server and a remote Internet server.  It was stipulated that no none person performed all of the steps of any single claim of the patent.  However, the defendants; arguments of non-infringement, and the district court’s determination were before the most rececent version of Akamai (Akamai IV).  The Federal Circuit said that:

“We need not say how much broadening occurred in Akamai IV. In the present cases, the district court’s rulings and the arguments of Fandango and Vivid Seats to the district court were squarely based on the earlier, narrower standard.”

The Federal Circuit vacated and remanded the case, and rejected defendants’ appeal of the denial of attorneys fees for good measure.

 

 

 

Belief in Invalidity Does Not Prevent Liability for Inducement, Lack of Infringement Does

In Commil USA, LLC v. Cisco Systems, Inc., [2012-1042] (December 28, 2015), the Federal Circuit considered the case after the Supreme Court held that belief that the patent is invalid does not negate intent to induce infringement.  Because it reversed and was remanding the case for a new trial on damages, the Federal Circuit chose not to address Cisco’s arguments that U.S. Patent No. 6,430,395 was not infringed.  Because the Supreme Court decision eliminated the need for a new trial, the Federal Circuit address Cisco’s non-infringement argument, finding them persuasive.

The district court construed the claims as requiring “for each connection of a mobile unit with a Base Station, running at the Base Station a copy of the low-level protocol supportingonly that connection and running at the Switch a corresponding separate copy of the high level protocol supporting only that connection.  The Federal Circuit was persuaded that Cisco’s system employs a single copy of the protocol to support all the connected devices. In view of this, the Federal Circuit found that a reasonable jury could not have found that Cisco’s devices run a separate copy of the protocol for each connected device, precluding liability under either direct or inducement theories.

While Cisco’s belief that the patent was invalid did not save it from liability for inducement, the fact that it was not infringing in the first place, did.

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