Subsidiary Facts Underlying a District Court’s Claim Construction are Reviewed for Clear Error, but De Novo Review Survives for Most Cases

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In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. No. 13-854, (January 20, 2015), the Supreme Court held that while the ultimate question of claim construction remains a legal question subject to de novo review, the district court’s subsidiary fact determinations are no different than any other factual determinations which under F.R.C.P. 52(a)(6) are reviewed for clear error.  Teva and Sandoz disputed the meaning of the claim requirement “a molecular weight of 5 to 9 kilodaltons.”  The “molecular weight” could be determined by at least three different methods, and the patent did not explicitly state which method should be used.  Sandoz argued that this made the claims fatally indefinite, but after considering conflicting expert testimony from the parties, the district court concluded that the claim was sufficiently definite, and thus valid.  The Federal Circuit reviewed the entire question of claim construction stating “[o]n de novo review of the district court’s indefiniteness holding, we conclude that [Teva’s expert’s] testimony does not save Group I claims from indefiniteness.”

The Supreme Court saw no reason to treat subsidiary factual findings relating to an issue of law any different from any other factual findings subject to review for clear error under F.R.C.P. 52(a)(6).  The Supreme Court found that when the Federal Circuit did not accept Teva’s expert’s explanation as to how a skilled artisan would interpret the curves in the patent specification, it failed to make a determination that the district court’s finding was clearly erroneous.  The Supreme Court said that the Federal Circuit should have accepted the district court’s finding unless it was “clearly erroneous.”

The most significant aspect of Teva v. Sandoz is that it confirmed that claim construction is a question of law that is reviewed de novo, affirming Cybor Corp. v. FAS Technologies Inc., 46 USPQ2d 1169 (Fed. Cir. 1998).  While it modified the review of claim constructions where there are underlying factual determinations, the Supreme Court made it clear that when the claim is construed from the intrinsic evidence alone, no deference is due: “when a district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history) the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo.”

Of course in those cases where there are underlying factual findings, we are back to pre-Cybor days, when those factual findings were entitled to deference.  In Cybor, the Federal Circuit noted in some cases, it had applied a clearly erroneous standard to findings considered to be factual in nature that are incident to the judge’s construction of patent claims, citing Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114 F.3d 1547, 1555-56, 42 USPQ2d 1737, 1742 (Fed.Cir. 1997); Serrano v. Telular Corp., 111 F.3d at 1586, 42 USPQ2d at 1544, (Mayer, J., concurring); Wiener v. NEC Elecs. Inc., 102 F.3d 534, 539, 41 USPQ2d 1023, 1026 (Fed.Cir. 1996); Metaullics Sys. Co. v. Cooper, 100 F.3d 938, 939, 40 USPQ2d 1798, 1799 (Fed.Cir. 1996).  As Judge Mayer observed in Serrano:

According to the Supreme Court, claim construction is a matter for the judge, and not the jury. . . . As such, if the claim construction does not require the resolution of disputed material facts, it may be treated as a matter of law and so reviewed by this court. However, where material facts are disputed, claim construction requires resolution of both questions of fact and questions of law . . . and this court may be required to give due deference to the trial court’s factual findings.

One might wonder how often this comes up, and it turns out that there are three other Petitions for Certiorari where the review of factual findings were in dispute: Lighting Ballast v. Universal Lighting; Gevo v. Butamax, and Shire v. Watson Pharma.  In the wake of Teva v. Sandoz the Supreme granted certiorari in all three cases, and remanded them for further proceedings consistent with Teva v. Sandoz.

Complaint for Infringement of A Computer-Related Patent Fails to State a Claim for Relief

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Content Extraction and Transmission, LLC v. Wells Fargo Bank, NA, [2013-1588, -1589, 2014-1112, -1687] (Fed. Cir. December 23, 2014) the Federal Circuit affirmed the dismissal under FRCP 12(b)(6) of plaintiff’s action for patent infringement claims, on the grounds that the patent claims did not define patentable subject matter.

The Federal Circuit applied the two-step process established by the Supreme Court in Mayo and Alice. In determining whether the claims were directed to a patent-ineligible abstract idea, the Federal Circuit observed that claims directed to the mere formation and manipulation of economic relations may involve an abstract idea. The Federal Circuit agreed with the district court that the claims are drawn to the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory.

The Federal Circuit then moved on to the second step, determining whether the limitations present in the claims represent a patent-eligible application of the abstract idea. The Federal Circuit sad that for the role of a computer in a computer implemented invention to be deemed meaningful, it must involve more than performance of well-understood, routine, and conventional activities previously known to the industry. The Federal Circuit added “the mere recitation of a generic computer cannot transform a patent ineligible abstract idea into a patent-eligible invention.” The Federal Circuit agreed with the district court that the asserted patents contain no limitations — either individually or as an ordered combination — that transform the claims into a patent-eligible application. The Federal Circuit noted that CET conceded at oral argument that the use of a scanner or other digitizing device to extract data from a document was well-known at the time of filing, as was the ability of computers to translate the shapes on a physical page into typeface characters. The Federal Circuit concluded that At most, CET’s claims attempt to limit the abstract idea of recognizing and storing information from hard copy documents using a scanner and a computer to a particular technological environment. Such a limitation has been held insufficient to save a claim in this context.

The Federal Circuit concluded that we conclude that even when construed in a manner most favorable to CET, none of CET’s claims amount to “significantly more” than the abstract idea of extracting and storing data from hard copy documents using generic scanning and processing technology. It therefore found that the district court’s resolution of PNC’s motion to dismiss at the pleading stage was proper.

In another aspect of the case, the Federal Circuit affirmed the dismissal of defendant’s tortious interference claims arising from the patent owner’s suing defendant’s customers, finding such action protected by the Noerr-Pennington doctrine. The Federal Circuit said that a person’s act of petitioning the government is presumptively shielded from liability by the First Amendment against certain types of claims. To overcome this presumptive immunity, a plaintiff must establish that the defendant’s instigation of litigation was merely a “sham.” This requires the plaintiff to show not only that the litigation was objectively baseless, but also that the defendant subjectively intended to harm the plaintiff through the abuse of a governmental process itself, as opposed to harms flowing from the outcome of that process.

While the Federal Circuit agreed with the result that the district court reached, it disagreed with the district court’s finding that the customer lawsuits were objectively baseless. The Federal Circuit pointed out that “the state of the law of § 101 was deeply uncertain at the time CET filed its complaints” and concluded that “[u]nder these circumstances, we cannot conclude that as a matter of law, no reasonable litigant in 2012 could have expected success on at least one of CET’s claims.”

Art That Did Not Invalidate Can Still Be Material

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In American Calcar, Inc. v. American Honda Motor Co., Inc., 2013-1061 (Fed. Cir. 2014), the Federal Circuit affirmed a finding of inequitable conduct for failing a disclose a reference, even though the patent was found valid over that reference.  The Federal Circuit explained that district courts and the PTO employ different evidentiary standards and rules for claim construction. Therefore, “even if a district court does not invalidate a claim based on a deliberately withheld reference, the reference may be material if it would have blocked patent issuance under the PTO’s different evidentiary standards.” citing Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).  Thus the Federal Circuit concluded that the jury’s verdict finding the patents at issue non-obvious thus does not weigh on the determination of materiality for inequitable conduct.”

No Mulligan for Plaintiff; Design Patent Case Decided on the Pleadings

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In Young v. Ann Stone, Inc., 1:13-cv-04920 (N.D. Ill. 2014) the district court granted judgment on the pleadings that defendant’s design for a golf practice target:

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does not infringe U.S. Patent No. D442,661:

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“because the two devices are so obviously dissimilar as to warrant a finding of non-infringement as a matter of law”.

In the words of the court, “[o]ne of the most obvious differences between the products is that top of the lower disk on defendant’s product is noticeably inclined, directing the ball upward to the center where it is held in place. Plaintiff’s design features a flat lower base with what appears to be a washer around the center column that holds the ball. This difference is readily apparent upon even a casual view of the two products.”  The court said that the spaced discs were functional and could not serve as the basis for a determination that its product infringes on the patented design, noting that “all of the prior art shares this feature” and finding that it is “the unique mechanisms among the products that contribute to the overall differences in appearance”.  In the context of the prior art such as U.S. Patent Nos. 1,297,055 and 2,899,207 , the district court’s decision makes even more sense:

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Of note to design practitioners, is that the defendant’s arguments about the cap on the flag pole and the placement of the flag contributed to court’s finding that the designs were different:

Defendant argues that the rounded cap on plaintiff’s flagpole is substantially different from the tapered insert on defendant’s flagpole. The flag of the alleged infringer’s product also covers the top of the flagpole, while the suggested flag on the patented product (which is not a part of the patented design) appears to attach to the pole well below the cap in question, leaving the top of the flagpole visible. When the products are viewed as a whole, this difference adds to the impression that the two products are plainly dissimilar.

Most of the art of design patent drafting is deciding what to show and what not to show, and of what is shown, what is in solid and what is in dashed lines.  The court’s discussion of such details is a reminder to the careful prosecutor to pay attention.

What Do You Want, Good Grammar or Good Claims?

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In Mformation Technologies, Inc, v. Research in Motion Limited, [2012-1679, 2013-1123] (Fed. Cir. 2014), the Federal Circuit commented on the role of grammar in claim cosntruction, citing Credle v. Bond, 25 F.3d 1566, 1571 (Fed. Cir. 1994) (stating that “grammatical structure and syntax” of the claim can be important evidence for claim construction). In Credle the Federal Circuit was left with construing this count:

The method of producing collapsed bags having spouts with evacuation form unit inserts connected therein which comprises, for each bag, providing an insert with an elongated form upon which the bag can collapse as it is evacuated which has at least one continuous longitudinal open passage along its length and has an inner open end, joining two opposed webs of material to produce opposed walls of the bag, and before joining the webs applying a spout to one of the webs extending outwardly therefrom and with its inner end open and flexibly securing the form, with its inner end in liquid communication with the spout and extending transversely therefrom to lie flat between said opposed webs so that as each completed bag is filled with liquid the form will swing into the liquid and the bag will collapse around it as it is evacuated. (Emphasis added).

The Federal Circuit said “it is clear from the structure of the clause that the phrases ‘extending outwardly therefrom,’ ‘with its inner end open,’ and ‘flexibly securing the form’ all modify and describe the spout.  This is both logically and grammatically required by the presence of the emphasized “and.”.”  Thus the Federal Circuit rejected the constrution that “flexibly securing the form” was a separate step, and not a modifier of the word spout.

In Mformation the isssue was whether one step (establishing a connection) had to be completed before another step (transmitting).  The Federal Circuit found that wording chosen by the patentee indicated that the connection had to be established, not merely initiated.

Despite the irony that grammar and syntax are critical in a field dominated by drafters who are engineers and scientists, gopd grammar and good claims are not alternatives.  Claim drafters have to chose their words carefully, and the form of the word and the punctuation chosen can significantly change how the claim is construed.

About: about

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About is one of the great weasel words of patent claim drafting.  Few things look as dangerous to a patent drafter as the sharp edge of a numerical limitation without the blunting influence of “about.”  “About” has been used in the claims of about 22% of utility patents issuing since 1976.  While it is frequently employed by drafters, often not much care is taken in properly defining its boundaries.  In Ferring B.V. v. Watson Laboratories, Inc. – Florida, [2014-1377] (Fed. Cir. 2014), the determination of infringement turned on the meaning of “about” in the phrase “less than about 70%”.  Ferring argued that about meant +/- 10%, based upon some language in a test referenced in the claim language, so that less than about 70% actually meant less than 63% to 77%.  Apotex meanwhile argued that it meant +/- 5%, so that about 70% actually meant less than 66.5 to 73.5%, which did not encompass the less than 75% of Apotex’s product.  In the absence of any defintion in the patent, the Federal Circuit declined to place a numerical limitation on “about,” instead giving about its ordianry meaning:

“About” is not defined either explicitly or by implication by the specification. We think that the district court did not err in giving the term “about” its ordinary meaning and in refusing to give it a more specific construction. See also Merck & Co., Inc. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1369–70 (Fed. Cir. 2005) (the term “about” should be given its ordinary and accepted meaning of “approximately” unless the patentee clearly redefines “about” in the specification). We affirm the district court’s construction of “about” to mean “approximately,” as well as its refusal to construe “about” to represent a particular numerical error rate.

“About” is a often used and time honored weasel word, but to be used to best effect, some standard should be provided for determining its effect on the so-modified claim element.
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Out of Order: The Order of Steps in a Method Claim

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In Mformation Technologies, Inc. v, Research in Motion Limited, [2012-1679, 2013-1123] (Fed. Cir. 2014), the Federal Circuit affirmed the grant of JMOL because it agreed that the order of the steps was important to infringement.  The Federal Circuit noted the general rule that “[u]nless the steps of a method [claim] actually recite an order, the steps are not ordinarily construed to require one.” Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1342 (Fed. Cir. 2001) (citation omitted).  However, the Federal Circuit went on to explained that a claim “requires an ordering of steps when the claim language, as a matter of logic or grammar, requires that the steps be performed in the order written, or the specification directly or implicitly requires” an order of steps. TALtech Ltd. v. Esquel Apparel, Inc., 279 F. App’x 974, 978 (Fed. Cir. 2008); see also Function Media, LLC v. Google, Inc., 708 F.3d 1310, 1320 (Fed. Cir. 2013) (concluding that a claim that recites “processing” an “electronic advertisement” necessarily indicates that “the creation of the ad must happen before the processing begins”).

The order of the steps in a method claim is in the control of the claim drafter:  if the order of steps is not important, then the draft should make sure the words chosen don’t imply an order as a matter of “logic or grammar.”  Numbering or lettering the steps can also imply an order, and should be used judiciously.

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Fraud is Alive and Well after Therasense

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Although the stringent “but for” test of materiality of Therasense has made it difficult to show inequitable conduct, in Apotex, Inc. v. UCB, Inc., 2013-1674 (Fed. Cir. 2014) the Federal Circuit affirmed a finding of inequitable conduct.  After finding materilaity, i.e., that thepatent would not have been allowed but for misconduct, the Federal Circuit went out of its way to point out that there is no duty to disclose suspicions or beliefs regarding the prior art.  The Federal Circuit said that there is nothing wrong with advocating, in good faith, a reasonable interpretation of the teachings of the prior art.  However the Federal Circuit found that the misconduct at issue, however, goes beyond failing to disclose a personal belief or alternative interpretations of the prior art; but consisted of affirmatively and knowingly misrepresenting material facts regarding the prior art.  In fact, the Federal Circuit found that the case comes close to the type of affirmative misconduct that in Therasense we held could justify finding inequitable conduct without showing but-for materiality.  The Federal Circuit found the conduct conduct evidences a pattern of lack of candor, and agreed with the district court that deceptive intent was the single most reasonable inference that can be drawn from the evidence.

Clear and Unmistakeable Disavowal Found in an IDS

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In Golden Bridge Tech v. Apple, [2013-1496] (Fed. Cir. 2014), the Federal Circuit affirmed the district court’s grant of summary judgment that Apple does not infringe the asserted claims of U.S.Patent Nos. 6,574,267 and 7,359,427.

The Federal Circuit concluded that the patent owners submissions during prosecution of its stipulated construction for the term preamble constituted a disclaimer. The Federal Circuit said that while it generally construes terms according to their plain and ordinary meanings to one of ordinary skill in the art, it departs from that meaning where there is disclaimer.  As parts of an Information Disclosure Statement filed in a reexamination and in patent application, the patent owner submitted a stipulation from prior a litigation as to the meaning of the claim term “preface.”

The patent owner argued that the mere submission of an IDS did not work a disclaimer, by the Federal Circuit disagreed, noting that the patent owner submitted the information with a request that the PTO “expressly consider” it.

TIPAn Information Disclosure Statement should perhaps include a statement that the submission of the information does not effect any express or implied disclaimer.  It may also be a good practice of included a statement in all continuations and divisionals rescinding express or implied disclaimer made in any parent or related application.

 

Any [Tangible] Thing Under the Sun Made by Man

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In Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., [2013-1600](Fed. Cir. 2014), the Federal Circuit held that to qualify as a manufacture, the invention must be a tangible article that is given a new form, quality, property, or combination through man-made or artificial means.  The Federal Circuit affirmed the district court’s determination that a device profile (essentially a data set] for describing properties of a device was not patentable subject matter under 35 U.S.C. §101, saying “[d]ata in its ethereal, non-physical form is simply information that does not fall under any of the categories of eligible subject matter under section 101.”