In FastShip, LLC v. U.S., [2017-2248, 2017-2249] (June 5, 2018), held that the U.S. Government did not infringe U.S. Patent Nos.
5,080,032 and 5,231,946 because the Freedom-class
Littoral Combat Ship allegedly covered by the claims was not “manufactured” by or for the Government before the patents expired.

A patent owner cannot sue the U.S. government or its suppliers for patent infringement.  Instead  28 U.S.C. § 1498(a) gives the patent owner a cause of action for the use of the patent.

A representative claim from plaintiff’s patent requires:

A vessel comprising:
a hull having a non-stepped profile which produces a high pressure area at the bottom of the hull in a stern section of the hull which intersects a transom to form an angle having a vertex at the intersection and hydrodynamic lifting of the stern section
at a threshold speed without the hull planing across the water at a maximum velocity determined by a Froude Number, the hull having a length in excess of 200 feet, a displacement in excess of 2000 tons, a Froude Number in between about 0.42 and 0.90, and a length-to-beam ratio between about 5.0 and 7.0;
at least one inlet located within the high pressure area;
at least one waterjet coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel;
a power source coupled to the at least one waterjet for propelling water from the at least one inlet through the waterjet to propel the vessel and to discharge the water from an outlet of the waterjet; and
wherein acceleration of water into the at least one inlet and from the at least one waterjet produces hydrodynamic lift at the at least
one inlet which is additional to the lifting produced by the bottom of the hull in the high pressure area which increases efficiency
of the hull and reduces drag.

On May 18, 2010, when the patents-in-suit expired, one ship (the LCS-1) was completed and in use by the Navy, but a second ship (the LCS-3) was still under construction.  The Court of Federal Claims awarded plaintiff $6,449,585.82 in damages for LCS-1, but no damages for LCS-3, and plaintiff appealed.

The Federal Circuit affirmed, finding that the undisputed facts demonstrate that LCS-3 was not “manufactured” when the patents-in-suit expired in May 2010. The Federal Circuit said that the asserted claims disclose a vessel comprising “at least one waterjet coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel,” while the record demonstrates that all four waterjets and impeller shafts were installed  in July 2010.  Moreover, the claims also required a hull, which was not completed until the erection of the bow module  . during August 2010,” at the earliest.

The Federal Circuit affirmed the denial of an award for LCS-3 ship, and upped the award for LCS-1 to $7,117,271.82.

In Gilead Sciences, Inc. v. Merck & Co., [2016-2302, 2016-2615] (April 25, 2018), the Federal Circuit affirmed the district court’s determination that the claims the jury found to be valid and infringed were unenforceable because of pre-litigation business misconduct and litigation misconduct attributable to Merck.

The Federal Circuit looked the the Supreme Court’s decision in Keystone Driller Co. v. General Excavator Co., for an explanation of unclean hands — there the Court held that a determination of unclean hands may be reached when “misconduct” of a party seeking relief “has immediate and necessary relation to the equity that he seeks in respect of the matter in litigation,” i.e., “for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court.”  The Federal Circuit noted that Merck argued that the connection between the misconduct and the litigation must be “material,” but failed to make clear to the Federal Circuit had that requirement affected the case.  The Federal Circuit noted that in the present case which involves clear misconduct in breaching commitments to a third party and clear misconduct in litigation, the “immediate and necessary relation” standard, in its natural meaning, is met if the conduct normally would enhance the claimant’s position regarding legal rights that are important to the litigation if the impropriety is not discovered and corrected.  The Federal Circuit found that considering the conduct as a whole the district court’s determination of unclean hands was adequately supported.

Specifically, the district court found that Merck violated the “firewall” understanding between Merck and Pharmasset, when at least one person involved in a conference call with Pharmasset was involved, and continued to be involved in Merck related patent prosecution, which the Federal Circuit characterized as “serious misconduct,
violating clear standards of probity in the circumstances.”  The improperly acquired knowledge influenced Merck’s filing of narrowed claims, a filing that held the potential for expediting patent issuance and for lowering certain invalidity risks.

The district court also found litigation misconduct, first in giving knowing false deposition testimony (presumably to hide the business misconduct) and false trial testimony. The Federal Circuit agreed with the district court that Merck’s litigation misconduct infects
the entire lawsuit, including the enforceability of the other patents in the suit.

Because the district court did not abuse its discretion in applying the doctrine of unclean hands, the Federal Circuit affirmed.

In Apto Miitors APS v. Kamstrup, [2017-1681] (April 17, 2018) the Federal Circuit affirmed the Board’s determination that U.S. Patent No. 8,893,559 was anticipated by Nielsen, U.S. Patent App. Pub. No. 2012/0006127, finding substantial evidence supported the Board’s finding that Apator failed to sufficiently corroborate the
inventor testimony of earlier conception.

An inventor can swear behind a reference by proving he conceived his invention before the effective filing date of the reference and was diligent in reducing his invention to practice after that date.  However, that when a party seeks to prove conception
through an inventor’s testimony the party must proffer evidence corroborating the inventor’s testimony.  The sufficiency of the proffered corroboration is determined
by a “rule of reason” analysis in which all pertinent evidence is examined, but even under the rule of reason analysis, the evidence of corroboration must not depend solely on the inventor himself.

The evidence of prior conception included emails sent by the inventor transmitting drawings and presentations, but the only identification of the attachments was by the inventor.  The Federal Circuit noted the catch-22 of corroboration: Apator attempts to corroborate the inventor’s testimony with the emails and the drawings, but the emails and drawings can only provide that corroboration with help from the inventor’s
testimony.

The Federal Circuit concluded that a reasonable mind could conclude that Apator
failed to proffer evidence corroborating the inventor’s testimony regarding conception, and accordingly held that substantial evidence supports the Board’s finding
that Apator has not established prior conception.

In Knowles Electronics. v. Iancu, [2016-1954] (April 6, 2018), the Federal Circuit affirmed the PTAB’s affirmance of the Examiner’s determination that claims 1–2, 5–6, 9, 11–12, 15–16, and 19 of U.S. Patent No. 8,018,049 were anticipated, and claims 21–23 and 25–26 would have been obvious.

The claims were directed to a silicon condenser microphone and manufacturing method.  Knowles argued that the PTAB erred by improperly construing “package,” including by failing to consider the Federal Circuit construction of package in a related patent, and by improperly relying on a new ground of rejection to sustain the Examiner’s obviousness findings.

The Federal Circuit noted that it has held that, in some circumstances, previous
judicial interpretations of a disputed claim term may be relevant to the PTAB’s later construction of that same disputed term. While the PTAB is not generally bound by a previous judicial interpretation of a disputed claim term does not mean that it has no obligation to acknowledge that interpretation or to assess whether it is consistent with the BRI.  The Federal Circuit found that the PTAB considered a previous interpretation of the term and properly determined its claim construction was consistent with the term’s BRI, and the PTAB adequately explained its adoption a claim construction
relative to the prior construction.

On the question of whether the Board relied upon a new ground of rejection, the Federal Circuit said that the PTAB is not limited to reciting and agreeing with the examiner’s rejection in haec verba, and can further explain the examiner’s rejection and thoroughly respond to an applicant’s argument. Knowles argued that the the PTAB’s finding regarding the motivation to combine, based upon the principles of operation of the references, does not appear anywhere in the Examiner’s decision.  However, after examining the decisions of the Examiner and the Board, the Federal Circuit found taht the PTAB’s rejection relied on the same reasons provided by the Examiner, albeit using slightly different verbiage.  The Federal Circuit noted that Knowles was given, and actually used its opportunity to respond to the theory of unpatentability before the Board.

In Exmark Manufacturing Company Inc. v. Briggs & Stratton Power Products Group, LLC., [2016-2197](January 12, 2018) the Federal Circuit vacated summary judgment that claim 1 of U.S. Patent No. 5,987,863 is not anticipated or obvious, affirmed summary judgment that claim 1 was not indefinite, reversed the denial of a new trial on damages and several evidentiary rulings related to damages, vacated the finding of willfulness; and affirmed the denial of Briggs’ laches defense.

Regarding the denial of summary judgment of invalidity, the Federal Circuit found that the district court denied the motion because “examined four times by the PTO, and each time the PTO held the claims of the ’863 patent to be patentable.”  While facially logical, this is not legally correct, the Federal Circuit held that

a reexamination confirming patentability of a patent claim alone is not determinative of whether a genuine issue of fact precludes summary judgment of no invalidity.  Surviving a reexamination does not warrant ipso facto summary judgment that a patent is not invalid. Holding otherwise would improperly give complete deference  and preclusive effect to the PTO’s patentability determination, foreclosing challenges to patent validity in district court based on the same prior art.

This holding is supported by Federal Circuit precedent that that a district court is never bound by an examiner’s finding in an ex parte patent application proceeding.  To the extent that an ex parte reexamination is entitled to deference, it comes from the presumption of validity of an issued patent.

The Federal Circuit found that the district court’s denial of summary judgment went beyond giving substantial weight to the reexamination proceedings.  The Federal Circuit found that the district court’s summary judgment was based solely on the fact that the patentability of claim 1
was confirmed following multiple reexaminations — the district court made no other findings regarding the elements of anticipation or obviousness to determine whether a genuine issue of material fact precluded summary judgment.

The Federal Circuit said that is must be furnished with sufficient findings and reasoning to permit meaningful appellate scrutiny.  These were lacking so the Federal Circuit vacated the district court’s summary
judgment of no invalidity and remanded with instruction for the district court to consider the entire record and reach its own independent conclusion on validity.

On the issue of definiteness, Briggs complained that Briggs contends that the patent does not explain how to objectively determine whether a
baffle portion is straight enough or long enough to be “elongated and substantially straight” as required by the claim.  The Federal Circuit disagreed, holding no numerical precision is required when using such terms of degree.  All that is required is some standard for measuring the term of degree.

The Federal Circuit also found that the function of the elongated and substantially straight baffle portions provided further guidance regarding
the scope of the claim language. The Federal Circuit noted that functional language can promote definiteness because it helps bound the scope of the claims by specifying the operations that the claimed invention must undertake.

With respect to damages, Briggs complained first that Exmark improperly determined a royalty rate without properly identifying a royalty base to apportion the value of the patentee’s invention in comparison to the value of the whole, and second that at Exmark’s expert did not adequately explain how she arrived at her proposed 5% royalty rate.  The Federal disagreed that the Exmark needed to apportion the value of the baffle from the other features of the mower through the royalty base rather than the royalty rate, noting that apportionment can be achieved, by careful selection of the royalty base to reflect the value added by the patented feature; by adjustment of the royalty rate so as to discount the value of a product’s non-patented features; or by a combination thereof.  The essential requirement is that the ultimate reasonable royalty award must be based on the incremental value that the patented invention adds to the end product.

While the Federal Circuit agreed with Exmark on the apportionment question, and agreed with Briggs that Exmark’s damages expert’s opinion was inadmissible as it failed to adequately tie the expert’s proposed reasonable royalty rate to the facts of this case. Exmark’s expert concluded with little explanation the parties would have agreed to a 5% reasonable royalty rate; nowhere in her report, however, did she tie the relevant Georgia-Pacific factors to the 5% royalty rate or explain
how she calculated a 5% royalty rate using these factors.  The Federal Circuit vacated the damages award and remand for a new trial on
damages.

The Federal Circuit held that the district court abused its discretion by holding that prior art is relevant to damages only to the extent that the prior art was commercialized, stating that the fact that some prior art mowers were not commercialized does not make them immaterial to determining the extent to which the claimed subject matter provides utility and advantages over the prior art.  but affirmed the district court’s exclusion of other types of mower, and of Exmark’s delay in bringing suit.

On the award of damages for willful infringement,  the Federal Circuit found that the District Court’s precluding Briggs from presenting any evidence regarding the validity of the claim or how closely the prior art tracked the claim was error.  The Federal Circuit said that to the extent that decision excluded evidence relevant to Briggs’ state of mind at the time of the accused infringement,  however, it does not comport with the standard articulated in Halo, which mandates that willfulness is an issue for the jury, not the district court.  The Federal Circuit vacated the jury’s finding of willful infringement, vacated the district court’s enhanced damages award, and remanded for the district court to determine whether a new trial on willfulness is necessary.

Finally, on this issue of laches, the Federal Circuit agreed with the district court that in light of SCA Hygiene Products Briggs cannot assert laches as a defense.

In Microsoft Corp v. Biscotti, Inc., [2016-2080, 2016-2082, 2016-2083] (December 28, 2017), the Federal Circuit affirmed the Board’s determination in the IPR’s that Microsoft failed to show by a  preponderance of the evidence that the challenged claims of U.S. Patent No. 8,144,182 were anticipated or obvious.

The challenged patent related to “tools and techniques for providing video calling solutions” and relates to real-time video conferencing where two or more users communicate, over a network, in a conference that includes video and audio of each participant.

Microsoft appeared to challenge the standard of review of anticipation, so the Federal Circuit began by reiterating that anticipation is a question of fact subject to substantial evidence review.  Noting that the Board correctly articulated the anticipation standard, the Federal Cricuit considered whether the Board properly applied that standard. ,   anticipate the claimed invention, a prior art reference must disclose all elements of the claim within the four corners of the document, and it
must disclose those elements arranged as in the claim, the Federal Circuit.  Noting that the Board may have used wording such as  “identically” more liberally than it should have because an anticipation analysis indisputably allows for some flexibility, the Federal Circuit found that the Board’s analysis did not suffer from a misapplication of the anticipation standard.  The Federal Circuit found that the Board therefore did not require word-for-word similarity or perfection, and explicitly considered whether a POSA would “at once envisage” the combination of the claimed invention given the disconnected teachings of the reference.

However even though the Board articulated the correct standard, and applied the correct standard, this did not mean that the Board’s analysis was correct.  Microsoft argued that the Board read the prior art too narrowly, limiting certain disclosures to particular embodiments, and not applying them to all disclosed embodiments.  The Federal Circuit said although Microsoft’s arguments were not unreasonable, it does not review this question de novo; anticipation is a question of fact, reviewed for substantial evidence.  In light of this deference, the Federal Circuit affirmed the Board’s decision.

The Federal Circuit found that Microsoft’s brief on appeal with respect to one claim was more detailed and contained substantial new arguments regarding anticipation, and rejected them because they were not presented in the Petition.