Patent’s Description Was Inconsistent with Patentee’s Claim Construction

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In BTG International Limited v. Amneal Pharmaceuticals LLC, [2019-1147, 2019-1148, 2019-1323, 2019-1324, 2019-1325] (May 14, 2019), in consolidated appeals from the District of New Jersey and the PTAB involving U.S. Patent No. 8,822,438, the Federal Circuit affirmed the PTAB’s Final Written Decision in one one of the IPRs, mooting the other appeals.

The ‘438 Patent is directed to methods and compositions for treating cancer. Appellants asserted that the PTAB erred by improperly construing the term “treatment” by not requiring prednisone to have an anti-cancer effect, and then relying on that incorrect construction to find that the asserted claims would have been obvious.

The Federal Circuit agreed with the PTAB’s construction, noting that the claims, specification, and prosecution history teach that treatment includes both anti-cancer effects and palliation or reduction in side effects. The claim required “a therapeutically effective amount,” which was defined in the specification as an amount “effective for treating a disease or disorder . . . such as cancer.” The specification further stated that a “therapeutic agent” may be either “an anti-cancer agent or a steroid.” The Federal Circuit pointed out that the use of “or” in between “anti-cancer agent” and “steroid” suggests that a steroid is not necessarily the same thing as an anti-cancer agent. The Federal Circuit added that if the patentee intended to limit “treating” and “therapeutic agents” to anti-cancer agents, the patentee neither would have identified steroids separately as an agent for reducing adverse side effects, nor described prednisone repeatedly in the specification as a steroid without mentioning any anti-cancer effect.

The Federal Circuit found that the PTAB correctly concluded that the Asserted Claims cover a therapy in which abiraterone has an anticancer effect, while prednisone either has its own anti-cancer effect or has a palliative/side-effect reduction effect.

Based upon this construction, the Federal Circuit found substantial evidence supported the PTAB’s determination of obviousness.

Because the specification is the single best guide to the meaning of claim terms, it is important that the use of the terms in the specification be consistent with the claim construction the patent owner wants.

Lack of Reasonable Expectation of Success Meant Claims Weren’t Obvious

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In Novartis Pharmaceuticals Corp. v. West-Ward Pharmaceuticals Int’l Ltd., [2018-1434] (May 13, 2019), the Federal Circuit affirmed the district court’s determination that claims 1–3 of U.S. Patent No. 8,410,131 for treating treat advanced renal cell carcinoma would not have been obvious in view of the prior art.

The Federal Circuit held that the district court erred in finding no motivation to combine the prior art references, but found no clear error in the district court’s finding that a person of ordinary skill would not have reasonably expected success, and thus agreed with the district court’s ultimate determination that the challenged claims would not have been obvious.

As to motivation to combine, the Federal Circuit noted that its case law does not require that a particular combination must be the preferred, or the most desirable, combination described in the prior art in order to provide motivation for the current invention. Thus it was improper to have required defendants to prove that a person of ordinary skill would have selected the claimed compound over the other prior art treatment methods in the reference.

However on the issue of reasonable expectation of success, the Federal Circuit agreed with the district court. In particular the district court relied upon on the prior art and expert testimony to support subsidiary findings that (1) the phase I data for a related compound had diminished weight, (2) the claimed compound had different pharmacological properties than the prior art compound, and (3) the molecular biology of advanced RCC was not completely understood. The Federal Circuit affirm the district court’s conclusion that claims 1–3 of the ’131 patent would not have been obvious in view of the asserted prior art

Another IPR Petitioner Had No Standing to Appeal; Does Estoppel Apply to Such Petitioners?

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In AVX Corp. v. Presidio Components, Inc., [2018-1106] (May 13, 2019), the Federal Circuit dismissed the appeal of a PTAB Final Written Decision because the Petitioner/Appellant lacked judicial standing to appeal.

The Federal Circuit noted that because the Constitution limits its grant of the “judicial power” to “Cases” or “Controversies,” U.S. Const., Art. III, § 2, any party that appeals to it must have standing under Article III before it can consider the merits of the case. Thus in IPR appeals, an appellant must . supply the requisite proof of an injury in fact when it seeks review of a Final Written Decision.

AVX argued that it is injured by the Board’s rejection of its obviousness challenges to the upheld claims because of the statutory estoppel provision, 35 U.S.C. § 315(e). The Federal Circuit rejected this argument because it has previously estoppel as a sufficient basis for standing, and because it has yet to decide whether estoppel applies to Petitioners who lack Article III standing to appeal.

AVX also argued that it was injured by the decision because it reduces its ability to compete with the patent owner, citing decisions that, in nonpatent contexts, have found “competitor standing” to challenge certain government actions. . The Federal Circuit noted that in all the cases in which standing rested on competitive harm, the challenged government action non-speculatively threatened economic injury to the challenger by the ordinary operation of economic forces. The Federal Circuit found the government action in an IPR was quite different. The Federal Circuit said that government action in an IPR is the upholding of specific patent claims, which does not address prices or introduce new competitors, but rather give exclusivity rights over precisely defined product features.

The Federal Circuit said a patent claim could have a harmful competitive effect on a would-be challenger if the challenger was currently using the claimed features or nonspeculatively planning to do so in competition, i.e., if the claim would block the challenger’s own current or nonspeculative actions in the rivalry for sales. However taking all of AVX’s allegations as true, the Federal Circuit concluded that AVX has not shown that it is engaging in, or has nonspeculative plans to engage in, conduct even arguably covered by the upheld claims of the ʼ639 patent.

The Federal Circuit dismissed the appeal. However the Federal Circuit’s suggestion that estoppel might not apply to IPR’s where the petitioner lacks standing to appeal causes one pause. If this turns out to be the case, a patent challenger might be better off concealing its plans to make a competitive product, so that it can take a “free swing” at the patent before the PTAB, without incurring the cost of estoppel from an adverse decision.

Prior User Defense Protects Trade Secret Owners Whose Secret is Patented by Another.

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The inventor of new technology has two choices for protection: patents or trade secrets.  They are generally mutually exclusive, because the disclosure requirements to obtain a valid patent, or inconsistent with the secrecy needed to have a protectable trade secret.  For most inventions, the choice is easy.  Because trade secrets only last while the invention is secret, they are not good protection for inventions that are revealed to the public when the invention is commercialized.  However, for inventions that are not disclosed by commercialization — typically inventions related to the manufacture of the product like recipes, manufacturing processes, and manufacturing equipment – trade secret protection may be a reasonable choice.  It is hard to detect infringement of a patent these types of patents inventions, so keeping the inventions out of the hands of competitors by keeping them secret may offer the best protection.

However, trade secrets have a critical weakness – the loss of secrecy destroys them.  Thus while trade secrets have a potentially infinite life, their life can also be disappointingly brief if the secrecy is lost  or if the it is independently developed.  But independent creation has another possible consequence – the second inventor might decide to patent the invention, and enforce it against the first inventor who decided to keep it a trade secret.

The first inventor could be vulnerable, as its activities may not constitute “prior art” that can be used to challenge the second inventor’s patent.  However the AIA created a prior user defense in 35 USC 273, which was tailor-made for this circumstance.  The defense applies to a patent on a process, or a machine, manufacture, or composition of matter used in manufacturing or other commercial process.  The defense requires that the prior user, (1) acting in good faith, (2) commercially used in the invention, (3) in the United States, (4) either in connection with an internal commercial use or a sale or transfer, (5) at least one year before the earlier of the patent filing date or first public disclosure.

The first inventor has the burden of proof, and thus should keep records sufficient to be able to established the defense.  The defense is also personal, and can only be asserted by the person who performed or directed the performance of the commercial use, or by an entity that controls, is controlled by, or is under common control with such person.  The defense can be transferred, but only ancillary and subordinate part of a good-faith assignment or transfer for other reasons of the entire enterprise or line of business to which the defense relates.  Moreover, when transferred, the defense is limited to the uses at sides where the invention was used before the later of the effective filing date of the claimed invention or the date of the assignment or transfer of such enterprise or line of business.

Of course asserting the prior user defense takes fortitude, be it is basically conceding infringement, and depending on the circumstances, willful infringement if the defense does not succeed.  Further, there are a number of limitations that make the prior use defense unreliable:

  • It only applies to  patents issued on applications filed after September 16, 2011, and does not apply to patents on inventions made, owned or subject to an obligation of assignment to either an institution of higher education or a technology transfer organization (35 USC 273(e)(5)). It must be proven by clear and convincing evidence. 35 USC 273(b).
  • The prior use must be continuous.  35 USC 273(e)(4).
  • The case will be deemed exception for purposes of an award of attorneys’ fees if the defense is asserted without a reasonable basis. 35 USC 273(f).
  • The defense is not a general license, but is limited to the prior commercial use, and improvements not covered by the claims. 35 USC 273(e)(3). The defense does not invalidate the patent.  35 USC 273(g).
  • The defense does not invalidate the patent.  35 USC 273(g).

For these reasons, a prior inventor who decides to rely on trade secret protection for an invention may wish to set up a invalidity defense should a second inventor come along and get a patent.  The first inventor might do so by making a public disclosure of just enough information to make the invention unpatentable without revealing the trade secret itself.  This disclosure might prevent a third party patent from issuing, or if it did issue, could be used to invalidate it. Such a strategy is fraught with uncertainty in striking the balance of invalidating subsequent patents while not disclosing enough to destroy the trade secret.

Another strategy might be to leverage the Supreme Court decision in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc., and arrange for a non-disclosing sale of the invention.  Since it should not make a difference who is the buyer and who is the seller, the first inventor could contract to buy the invention from a vendor bound by a confidentiality agreement.  Should a patent issue to a third party, this non-disclosing sale would be prior art as long as it occurred before the third party filed its patent application.  (Note that none of the exceptions in 102(b) appear to apply to a non-disclosing sale.).

It’s amusing to contemplate even more devious ways to hide prior art in plain sight, maintaining relative confidentiality while setting up a prior art road block to third party patents. Although such gamesmanship may not guarantee the desired result.  For example, in In re Wyer, 655 F.2d 221 (C.C.P.A. 1981), a patent application was filed with the Australian Patent Office, resulting in the publication of a printed abstract of the application, and microfilm copies being retained by the Australian Patent Office, available for the public to view and copy.  As a result, the application was found to be a prior art printed publication by the Federal Circuit’s predecessor, the CCPA.

In In re Hall, 781 F.2d 897 (Fed. Cir. 1986), a dissertation was submitted to the Department of Chemistry and Pharmacy at Freiburg University in Germany, indexed in a special dissertations catalog which was part of the general users’ catalog, and stored in the stacks in a special dissertation section.  As a result, the dissertation was found to be a prior art printed publication by the Federal Circuit.

In Mazzari v. Rogan, 323 F.3d 1000 (Fed. Cir. 2003) , a report was indexed, cataloged, and available to the public at the Ontario Power Generation Resource Center.  Another report was written in German, but also available at a library.  The court simply held, with respect to the German reference, that a publication printed in a foreign country can act as a statutory bar.  As a result, the report was found to be a prior art printed publication by the Federal Circuit.

In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004), a fourteen-slide presentation was printed and pasted onto poster boards and displayed continuously for two and a half days at an American Association of Cereal Chemists meeting, and then put on display for less than a day at an Agriculture Experiment Station at Kansas State University. As a result, the presentation was found to be a prior art printed publication by the Federal Circuit.

Finally, in Bruckelmyer v. Ground Heaters, Inc., 445 F.3d 1374 (Fed. Cir. 2006), a Canadian patent application included two figures that were cancelled during prosecution and not included in the patent that issued from the application.  The application, including the two cancelled drawings, was found to be a prior art printed publication by the Federal Circuit.

Conclusion

Deciding to treat an invention, particularly one relating to the manufacture of a product, as a trade secret, rather than patenting it, is often a good decision.  This is particularly true, if infringements would be hard to detect. However, the inventor should consider the ability to keep the invention secret, and the likelihood that a third party might subsequently make the same invention.  The inventor should also consider the likelihood that the third party might obtain a patent, and if the prior user defense should fail, what the inventor can do to be prepared to invalidate that patent.

FDA Skepticism Supported Non-obviousness

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In Neptune Generics, LLC v. Eli Lilly & Company, [2018-1257, 2018-1258](April 26, 2019), the Federal Circuit affirmed PTAB’s Final Written Decisions in multiple inter partes reviews holding Petitioners did not establish that claims 1–22 of U.S. Patent No. 7,772,209 are unpatentable for obviousness.

The Board found that it was known in the prior art that pretreatment with folic acid reduces the toxicity associated with administration of an antifolate, like pemetrexed, but there was not a reason to pretreat with vitamin B12 along with folic acid found that it was known in the prior art that pretreatment with folic acid reduces the toxicity associated with admin-istration of an antifolate, like pemetrexed, but there was not a reason to pretreat with vitamin B12 along with folic. The Board further found that skepticism of others, particularly the FDA, supported a conclusion of nonobviousness.

Although there was a reference that taught administration of folic acid and B12, it was not for the purpose of reducing toxicity of premetrexed, and the record including expert testimony persuasively established that one of skill in the art would not have understood that there was no observed correlation between vitamin B12 deficiency and pemetrexed-induced toxicity.

Petitioners argued that Lilly told the FDA that the FDA that the prior art suggested that pretreating with folic acid and B12 was a no-risk, predictable way to lower pemetrexed-induced fatalities by lowering pretreatment homocysteine levels. However, since these statements were all made post-critical date, the views Lilly expressed about the prior art references in its communications are made through the lens of what they had invented.

As to secondary considerations, the Board found that evidence of skepticism of others, particularly the FDA, supported a conclusion of nonobviousness. When during FDA trials Lilly recommended supplementation with folic acid and vitamin B12. The FDA responded that the “medical officer does not sup-port adding vitamins to the ongoing . . . trial,” and that in other communications with Lilly the FDA stated that the information provided to it “does not appear to support the addition of vitamins,” and that “the addition of vitamins . . . is risky.” Petitioners argued that skepticism must be premised on whether it is “technically infeasible,” “unworkable,” or “impossible” that the claimed subject matter would work for its intended purpose, but the Federal Circuit disagreed, point out that its caselaw recognizes a range of third-party opinion that can constitute skepticism. The Federal Circuit noted that while evidence that third parties thought the invention was impossible might be entitled to more weight, that does not mean the Board erred in giving weight to the skepticism evidence here.

While evidences of teaching away must specifically discourage the inventive course, the Federal Circuit reminds us in Neptune Generics that evidence that third parties were “worried” or “surprised” is sufficient to establish skepticism.

3 CBMs Hit Their Targets

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In Trading Technologies International, Inc. v. IBG LLC, [2017-2257] (April 18, 2019), the Federal Circuit affirmed the determination of the Board that the challenged claims in U.S. Patent Nos. 7,533,056, 7,212,999, and 7,904,374 in meet the criteria to be eligible for CBM review and the claims are ineligible under 35 U.S.C. § 101. The Board additionally held that the claims of the ’056 patent would have been obvious.

With respect to the ‘999 patent, the Board determined that the claims were directed to “the abstract idea of graphing (or displaying) bids and offers to assist a trader to make an order.” The Federal Circuit agreed, noting it has treated collecting information, including when limited to particular content (which does not change its character as information), as within the realm of abstract ideas. The Federal Circuit also agreed that placing an order based on displayed market information is a fundamental economic practice, and the fact that the claims add a degree of particularity as to how an order is placed does not change the analysis. The Federal Circuit said that the fact that this is a “computer-based method” did not not render the claims non-abstract, the specification indicating that the claimed GUI is displayed on any computing device. The collection, organization, and display of two sets of information on a generic display device is abstract. At step II, the Federal Circuit agreed with the Board that the claims do not contain an inventive concept, either individually or as an ordered combination.

With respect to the ‘056 Patent, the Board found the claims were directed to the abstract idea of graphing (or displaying) bids and offers to assist a trader to make an order. The Federal Circuit found no meaningful difference between ‘056 patents and the ‘999 patent. At Step II, the Board held the elements, both individually and as an ordered combination, do not recite an inventive concept. The Federal Circuit rejected the argument that the invention improves computer functionality, noting that the invention helps the trader process information more quickly, but this is not an improvement to computer functionality.

With respect to the ‘374 patent, the Board held that the claims of the ’374 pa-tent were directed to the abstract idea of receiving user input to send a trade order. This may be because the claims were drafted too broadly. The Board noted that while the claims require “displaying . . . graphical locations along an axis” they did not require the graphical locations to display the price levels that are mapped to them. At Step II, the Board held the elements of the claims, individually or as an ordered combination, do not add an inventive concept. The Board noted that the specification discloses that the invention can be implemented “on any existing or future terminal or device” and describes the programming as insignificant. The Federal Circuit agreed, adding that the claims do not solve any purported technological problem.

When the Federal Circuit concedes that even meritorious inventions are sometimes patent ineligible, one can start to believe that overcoming Section 101 is hopeless. However Trading Technologies teaches a few things: (1) Make sure that the technical details actually make it into the claims; (2) Identify a technological problem that is solved; and (3) Avoid sweeping statements that the invention can be implemented conventional equipment. Good luck.

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Federal Circuit gives a Master Class in Claim Construction

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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

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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

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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.