Celebrity Endorsement Provokes Patent Infringement Claim

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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.

 

Karma’s a ^$#*! – Sanction for Litigation Misconduct Results in Finding of Intent to Deceive the USPTO

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In Regeneron Pharmaceuticals, Inc. v. Merus N.V., [2016-1346] (July 27, 2017), the Federal Circuit affirmed final judgment that  U.S. Patent No. 8,502,018 (which related to using large DNA vectors to target and modify endogenous genes and chromosomal loci in eukaryotic cells) unenforceable because of Regeneron’s inequitable conduct during prosecution.

Merus argued that Regeneron’s patent prosecutors withheld four references from the USPTO during prosecution.  The references were cited in a third-party submission in related U.S. patent prosecution and in
European opposition briefs, were but-for material, and were withheld by Regeneron with the specific intent to deceive the PTO.  Regeneron argues, however, that the references were not but-for material, that they were cumulative of references the PTO actually relied on during prosecution, and that Regeneron did not have any specific intent to deceive the PTO.

During prosecution, Regeneron asserted that it had developed a commercial embodiment of the claimed mouse with surprising
results.  However, it was undisputed that that assertion was false; Regeneron had not developed any such mouse at the time.  Regeneron’s application was allowed.  However, just before allowance, a third party made a submission of prior art in the parent case. This prior art was not disclosed in the ‘018 patent, but once the ’018 patent had been allowed, the art was disclosed in every related application having the same specification and similar claims.

The Federal Circuit acknowledged that the materiality required to establish inequitable conduct is but-for materiality, and said that In determining the materiality of a reference, the court applies the preponderance of the evidence standard and gives claims their broadest reasonable construction.  The Federal Circuit added that a reference is not but-for material, however, if it is merely cumulative, i.e., when it “teaches no more than what a reasonable examiner would consider to be taught by the prior art already before the PTO.”

In addition to proving the materiality of the withheld references, a challenger must prove that the patentee acted with the specific intent to deceive the PTO.  Evidence of intent to deceive should be weighed independently of the materiality analysis. Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive, rather clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference.

Direct evidence of intent is not required, and an inference of intent to deceive can be made where the applicant engages in “a pattern of lack of candor,” such as repeatedly makes factual representations “contrary to the true information he had in his possession.”

Applying the broadest reasonable interpretation to the claims, the Federal Circuit concluded that the district court properly found that the withheld references were but-for material separately and in combination.  As to specific intent to withhold, the Federal Circuit approved the district court’s drawing an adverse inference of specific intent from Regeneron’s litigation conduct, which the Federal Circuit described as “beset with troubling misconduct.”  This misconduct included:

  • Failure to provide adequate infringement contentions
  • Failure to product conception and reduction to practice documents in discovery
  • Taking the position that no claim terms required construction
  • Arguing that a disclosure of a memo from outside counsel did not work a waiver of attorney-client privilege and failure to identify relevant documents for the Court’s in camera review
  • Failure to recall in a deposition communications with the patent examiner
  • Maintaining claims of privilege regarding the knowledge and thoughts about the withheld references.

The Federal Circuit was careful to point out that this was not a case of punishing a party’s post prosecution misconduct by declaring the patent unenforceable, because Regeneron was accused of misconduct during prosecution as well.  Regeneron’s litigation misconduct, however, obfuscated its prosecution misconduct.

The Federal Circuit concluded that In light of Regeneron’s widespread litigation misconduct, including the use of sword and shield tactics
to protect its deliberations over the disclosure of the withheld references to the PTO, that the district court did not abuse its discretion by drawing an adverse inference of specific intent to deceive the PTO.

 

 

 

Reasonable Expectation of Success, Not Absolute Predictability, is All that is Required for Obviousness

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In Soft Gel Techs., Inc. v. Jarrow Formulas, Inc., [16-1814](July 26, 2017), the Federal Circuit affirmed the PTAB decision review inter partes reexamination, that claims in U.S. Patent Nos. 8,124,072, 8,105,583, and 8,147,826, directed to CoQ10 in solvents known as monoterpenes, were invalid for obviousness.

In trying to resurrect its claims, Soft Gel pointed to a later article reflecting follow up research, the necessity of which, it argued showed that earlier references did not make the claimed invention obvious.  The Federal Circuit called Soft Gel out, stating that  that it argued showed that Soft Gel was applying an incorrect legal standard for obviousness, requiring “absolute predictability” rather than simply “a reasonable expectation of
success.”  The Federal Circuit said:

A supplemental study does not imply lack of awareness of the likely result; rather, studies are frequently conducted to confirm what is suspected to be true. An incentive to conduct a confirmatory study frequently exists even when one has every reason to expect success.

 

Unexpected Results of an Obvious Process are Non-obvious

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In Millennium Pharmaceuticals, Inc., v. Sandoz Inc., [2015-2066, 2016-1008, 2016-1009, 2016-1010, 2016-1109, 2016-1110, 2016-1283, 2016-1762] (July 17, 2017), the Federal Circuit reversed the district court, finding that invalidity was not established.

 At issue was the validity of U.S. Patent No. 6,713,446 for treatment
of oncology disease, sold under the name Velcade®.    The district court held that the claims were obvious because they were the inherent result of an allegedly obvious process, namely lyophilizing bortezomib in the presence of the bulking agent mannitol, even though nothing the prior art
taught or suggested that the claimed new compound would be formed, or taught or suggested making the claimed new compound by any method, or taught or suggested that this new compound would have the properties of stability, solubility, and dissociability that it exhibited.

The Federal Circuit framed the issue as “whether a person of ordinary skill, seeking to remedy the known instability and insolubility
and to produce an efficacious formulation of bortezomib,
would obviously produce the D-mannitol ester of bortezomib,
a previously unknown compound.”  Finding that the prior art contains no teaching or suggestion of this new compound, or that it would form during lyophilization, the Federal Circuit concluded that the invention was not obvious.

While conceding the truth of Sandoz’ argument that (1) lyophilization was generally known in formulating pharmaceutical products; (2) bulking agents were known for use in lyophilization; and (3) that mannitol was a known bulking agent, the Federal Circuit nonetheless found that the prior art does not teach or suggest that lyophilization of bortezomib in the presence of mannitol  would produce a chemical reaction and form a new chemical compound, or provide a reason to make this specific
new chemical compound, or that this new compound would solve the previously intractable problems of bortezomib formulation.

In the end, this is a triumph of “unexpected results” over what it technically obvious, or at least what is the inherent result of what is technically obvious.  The Federal Circuit suggested otherwise, noting that “[a] result is obvious when it is ‘the natural result flowing from the operation as taught,’ or a ‘property that is necessarily present’ when applying a process disclosed in the prior art,” and finding that Sandoz “failed to show that it was obvious to use mannitol to make an ester during lyophilization, or that the ester would solve the problems experienced with bortezomib.  The Federal Circuit’s analysis seems to put more weight on the obviousness of the unexpected results, than the obviousness of the process that resulted in unexpected results.

While it seems right to reward someone who solves a “previously intractable problem,”  it throws a kink into the obvious analysis to evaluate the obviousness of the unexpected results of an obvious process (which by definition are not obvious), rather than the obviousness of the process itself.

 

Hey Boo-Boo, Defining Terms in the Specification is a Pic-i-nic

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A definition in the patent’s specification can be critical in defining the scope of the claims.  According to the patent statute, the claims and specification are directed to a person of ordinary skill in the art, but it is important to remember that the person construing the patent’s claims — typically a Patent Examiner or a Federal District Judge — is usually not a person of ordinary skill in the art. Thus a readily understood, non-technical definition may better serve the inventor’s purposes.  Moreover, a simple example may more clearly define the term than any definition.  Such is the case in the Yogi Bear inspired examples of the definitions of “or” and “and” in U.S. Patent No. 9,607,066:

These examples make the meaning of the terms clear, in language that can be readily understood by anyone.

 

 

BRI-Proof Your Claims

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There are many benefits to employing means + function claiming under 35 USC §112(f) and the Federal Circuit recently pointed out a new one: protecting your claims from the application by the Broadest Reasonable Interpretation (BRI) claim construction paradigm employed by USPTO in reexaminations. reissues, PGRs, IPRs and CBMRs. In IPCOM GmbH & Co. v. HRC Corp., [2016-1474] (July 7, 2017), previously discussed here, the Federal Circuit said that the PTO may not disregard the structure disclosed in the specification corresponding to means + function elements when rendering a patentability determination.

Thus including some means + function claims in a claim set may prevent the Patent Office from using BRI to stretch an otherwise valid claim to the point of invalidity.  Of course there are other benefits from means + function claiming, including:

  • It allows “gerrymandering” of claim scope through selectively  including or excluding corresponding structures in the specification.
  • It helps avoid problems with the disclosure/dedication doctrine, where disclosed but unclaimed subject matter cannot be covered by the doctrine of equivalents, and is dedicated to the public.
  • When claims are amended using means + function elements, statutory equivalents under §112(f) are available, even if prosecution history estoppel bars the doctrine of equivalents.

All of which suggest that means + function elements can be a valuable tool for getting the maximum claim scope.

 

 

 

 

 

Patents Don’t Sue People, People Sue People

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On July 13, 2017, The Subcommittee on Courts, Intellectual Property and the Internet of the House Judiciary Committee held a hearing on The Impact of Bad Patents on American Businesses.  Such a loaded topic should strike fear in the hearts of the many of us who work diligently to protect our clients’ legitimate inventions. However, the statement of former Chief Judge of the Federal Circuit Paul R. Michel was a bright spot.  As Judge Michel correctly observed, “[p]atents are neither bad nor good.”

Judge Michel extended his long history of service to the patent community, detailing a recent sharp decline in the value of U.S. patents, which he attributes to, among other things, the failure of the three Branches of Government to adequately coordinate their interventions to improve performance of the system.  Judge Michel calls out the USPTO for implementing AIA reviews with procedures that, in certain respects, departed from Congressional intent.  He called out the Supreme Court for revolutionizing the law of patent eligibility, while providing wholly inadequate
guidance for those who must apply the new standards.  Finally he calls out Congress for focusing more on the relatively minor problem of frivolous assertion, rather than addressing the more significant issue of patent eligibility.

Judge Michel concludes that:

In view of all the developments of the past few years, to pile on still more patent “reform” at this juncture when the system is still reeling from the destabilizing and degrading effects of recent interventions by all three Branches seems inappropriate.

Hopefully, Congress will follow his very wise counsel.

 

 

Lack of Clarity for Reason for Denying Permanent Injunction Results in Remand

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In Genband US LLC v. Metaswitch Networks Corp., [2017-1148] (July 1-, 2017), the Federal Circuit vacated the denial of a permanent injunction, and remanded for reconsideration.

The jury found U.S. Patent Nos. 6,772,210; 6,791,971; 6,885,658; 6,934,279; 7,995,589; 7,047,561; 7,184,427; and 7,990,984 not invalid and infringed, and awarded $8,168,400 in damages, but the district court denied a permanent injunction.  The district court rested its denial entirely on the determination that Genband failed to show that it would suffer irreparable harm from continued infringement.  The court declared that Genband had to prove that “the patented features drive demand for the product.],” but the Federal Circuit could not be sure that the district court applied the proper nexus, i.e. whether the district court required that the patented feature be “the driver” or simply “a driver.”  The Federal Circuit said it is sufficient that the record established that the patented features  influence consumers’ perceptions of and desire for these products.  Based upon the district court’s opinion, the Federal Circuit had no basis for inferring that the district court actually used the correct standard, rather than an unduly stringent test, to interpret and apply the “drive demand” standard.

The Federal Circuit said that a patentee may be able to make the causal connection between infringement and the relevant lost sales through evidence of various kinds, e.g., that the infringing features significantly
increased the product’s desirability, that soundly supports an inference of causation of a significant number of purchasers’ decisions.

The Federal Circuit determined that remand was needed for the district court to clarify its how Genband’s evidence was not sufficient.

PTO Erred by Not Identifying Algorithm Corresponding to §112, ¶ 6 Element Before Invalidating Claims

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In IPCOM GmbH & Co. v. HRC Corp., [2016-1474] (July 7, 2017) the Federal Circuit found that the Board failed to conduct a proper claim construction of the “arrangement for reactivating the link” claim limitation, and we vacate and remand the obviousness rejections based on that limitation.

The IPR challenged U.S. Patent No. 6,879,830 (’830 patent), which describes and claims a method and system for handing over a mobile phone call from one base station to another base station.  The Federal Circuit noted that while the Board correctly identified  “arrangement for reactivating the link” was a means plus function element, it failed to properly construe that limitation. The Board rejected IPCom’s proposed three-step algorithm allegedly disclosed in the ’830 specification for performing the “arrangement for reactivating the link” function, but the Board failed to identify what it believed to be the correct algorithm from the specification; that omission led to an incomplete construction of the claim limitation and is incompatible In re Donaldson.  §112, ¶ 6 [now 112(f)] applies regardless of the context in which the interpretation of means-plus-function language arises, i.e., whether as part of a patentability determination in the PTO or as part of a validity or infringement determination in a court.  The Federal Circuit said that the PTO may not disregard the structure disclosed in the specification corresponding to such language when rendering a patentability determination.

The Federal Circuit vacated the Board’s claim construction of the “arrangement for reactivating the link” limitation, and remanded for the Board to identify the corresponding algorithm (if any) in the specification in the first instance.  The Federal Circuit further vacated the determination of obviousness because the Board never identified any algorithm for the “arrangement for reactivating the link” limitation, the Board further erred by failing to evaluate whether the prior art disclosed that algorithm (or its equivalents).

 

Weak Infringement Position Makes Troll-like Behavior Exceptional

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In Adjustacam LLC v. Newegg, Inc., [2016-1882] (July 5, 2017) the Federal Circuit reversed the district courts decision not to award attorneys’ fees to defendant after plaintiff voluntarily dismissing its complaint after a Markman hearing.

AdjustaCam sued a large number of defendants for patent infringement, voluntarily dismissing most defendants early in the litigation.  The case against Newegg went through a Markman order and extended expert discovery.  However just before summary judgment briefing, AdjustaCam
voluntarily dismissed its infringement claims against
Newegg with prejudice. Newegg then filed a motion for
attorneys’ fees. The district court initially denied Newegg’s motion,
and Newegg appealed to Federal Circuit, which remanded in view of Octane Fitness.  On remand the district court again denied attorneys fees.

A district court abuses its discretion when its ruling rests on an erroneous legal conclusion or on a clearly erroneous assessment of the evidence.  The Federal Circuit held that the district court abused its discretion
by not awarding fees to Newegg for two independent reasons: (1) it failed to follow the Federal Circuit’s mandate on remand; and (2) its decision was based on “a clearly erroneous assessment of the evidence.”

As to the first reason, the Federal Circuit said that the district court erred by ignoring our mandate “to evaluate whether this case is ‘exceptional’ under the totality of the circumstances and a lower burden of proof”
in the first instance.  Instead of engaging in an independent analysis, the
district court adopted the previous judge’s factual findings wholesale, the Federal Circuit noting that the entirety of the court’s analysis based on those adopted fact-findings consists of three sentences. This wholesale reliance on the previous judge’s fact finding was
an abuse of discretion.

As to the second reason, the Federal Circuit found that the record developed over the past five years points to this case as standing out from others with respect to the substantive strength of AdjustaCam’s litigating position.  While the infringement claim may have been weak at the time of filing, after the district court’s Markman order, the lawsuit was baseless.  The Federal Circuit found that no reasonable factfinder could conclude that Newegg’s products infringe; therefore, AdjustaCam’s litigation position was baseless, and the district court’s conclusion otherwise was clearly erroneous.  The Federal Circuit further found that AdjustaCam litigated the case in an “unreasonable manner.”  The Federal Circuit also noted that AdjustaCam relied upon a supplemental declaration making new infringement arguments executed two years after the initial fees determination, although the Federal Circuit did not appear to consider that the standard for award of fees changed in the intervening two years.

The Federal Circuit concluded that the totality of the circumstances demonstrates other dubious behavior that, when considered collectively, warrants fees under § 285.

The Federal Circuit specifically commented on AdjustaCam’s damages model.  While asserting seemingly low damages against multiple defendants—or settling with defendants for less than the cost of litigation—does not necessarily make a case “exceptional” under § 285, asserting nuisance-value damages against many defendants, settled with them for widely varied royalty rates, and continuing to press baseless infringement
contentions well past an adverse Markman order and expert discovery as enough to tip the balance in favor of exceptionality.