Back when crossing an ocean to an unknown destination in a 62 foot  boat was something worthy of praise, the life and travels of Christopher Columbus were celebrated, including in this patented badge and plaque.

In Jang v. Boston Scientific Corp., [2016-1275, 2016-1575](September 29, 2017), the Federal Circuit affirmed the district court’s denial of Jang’s motion for JMOL, its vacatur of the jury verdict of infringement under the doctrine of equivalents, and its entry of judgment of non-infringement.

At issue was U.S. Patent No. 5,922,021 on coronary stents, which the jury found not literally infringed, but infringed under the Doctrine of Equivalents.  The Federal Circuit noted that the district court must uphold a jury’s verdict if it is supported by substantial evidence, which is evidence adequate to support the jury’s conclusion, even if it is also possible to draw a contrary conclusion, and in the Ninth Circuit reverses the denial only if the record lacks any evidence supporting the verdict or if the district court made a mistake of law.   The Federal Circuit noted that Jang failed to persuade the district court that BSC’s non-infringement arguments were legally erroneous, and that it was similarly unpersuaded.

On the Doctrine of Equivalents, the Federal Circuit noted that a doctrine of equivalents theory cannot be asserted if it will encompass or “ensnare” the prior art.  This is true even if a jury has found equivalence as to each claim element.  The Federal Circuit explained that a hypothetical claim analysis is a practical method to determine whether an equivalent would impermissibly ensnare the prior art. The Federal Circuit agreed with the district court that Jang’s hypothetical claims were improper because they both expaneded and narrowed the scope of the actual claims, and such narrowing is not permitted.  While use of a hypothetical claim may
permit a minor extension of a claim to cover subject matter that is substantially equivalent to that literally claimed, one cannot, in the course of litigation and outside of the PTO, cut and trim, expanding here, and narrowing there, to arrive at a claim that encompasses an accused
device, but avoids the prior art.

The Federal Circuit explained that when utilizing the hypothetical
claim tool, that burden starts with proposing a proper hypothetical claim that only broadens the issued asserted claims, and said that Jang cannot  transfer the responsibility of defining the range of equivalents to which he is entitled to the district court.  Jang failed to meet this burden, and thus the district court thus correctly vacated the jury verdict of infringement under the doctrine of equivalents.

In First Data Corp. v. Inselberg, [2016-2677, 2016-2696] (September 15, 2017), the Federal Circuit affirmed the district court’s dismissal of plaintiff’s declaratory judgment and defendant’s counterclaims.

The ownership dispute regarding Inselberg’s patent portfolio stemmed from a $500,000 loan that Interactive received from Bisignano, which  Inselberg personally guaranteed, and for which Interactive granted Bisignano a security interest in the portfolio of patents it owned at the time.  Inselberg and Interactive defaulted on the loan from Bisignano, and Inselberg and Bisignano entered into an agreement that purported to
convey Interactive’s patent portfolio to Bisignano.

Inselberg claimed that the assignment to Bisignano was invalid, and that Bisignano and First Data were infringers.  Bisignano and First Data brought a declaratory judgment action of non-infringement in Federal Court, and Inselberg brought an action in state court attacking the assignment to Bisignano, which Bisignano removed to Federal Court.  However the district court found that the rights at issue in the case were ownership rights turning on questions of state law, and remanded the case to state court, finding that there was no federal cause of action unless and until Inselberg recovers the patents.

The Federal Circuit agreed with the district court, and further found that the case was not ripe for adjudication Inselberg’s claim rests upon a contingent future event, that may not occur as anticipated or may not occur at all.  The Federal Circuit further found that the decision to remand was based on 28 U.S.C. § 1447(c), and thus Section 1447(d) precluded it from reviewing the district court’s remand order.

In Waymo LLC v. Uber Technologies, Inc., [2017-2235, 2017-2253] (September 13, 2017), the Federal Circuit denied intervenor  Levandowski’s petition for a writ of mandamus.  Waymo alleges
that its former employee, Levandowski, improperly downloaded thousands of documents related to Waymo’s driverless vehicle technology and then left Waymo to found Ottomotto, which Uber subsequently acquired.  Before the acquisition closed, counsel for Ottomotto and Uber (but not counsel for Mr. Levandowski) jointly retained a law firm to investigate  Ottomotto employees previously employed by Waymo, including Mr. Levandowski.  Waymo sought to obtain the report, which the court permitted, and Levandowski unsuccessfully attempted to block with a write of mandamus.  The Federal Circuit said that a petitioner has to show three things to be entitled to the writ:

First, the party seeking issuance of the writ must have no other adequate means to attain the relief he desires—a condition designed to ensure that the writ will not be used as a substitute for the regular appeals process. Second, the petitioner must satisfy the burden of showing that his right to issuance of the writ is clear and indisputable. Third, even if the first two prerequisites have been met, the issuing court, in the exercise of its discretion, must be satisfied that the writ is appropriate
under the circumstances.

The Federal Circuit found that Levandowski failed the first test — establishing he had no other adequate remedy.  While Levandowski argued that an appeal after the disclosure was in effect no remedy, the Federal Circuit concluded that a post-judgment appeal by either Uber or Levandowski would suffice to protect the rights of Levandowski and ensure the vitality of attorney-client privilege.  The Federal Circuit went on to find that Levandowski failed to show that his right to issuance of the writ was clear and indisputable.  Finally, the Federal Circuit said that  Levandowski had not persuaded it to exercise its discretion here and overrule the District Court.

In Southwire Co. v. Cerro Wire LLC, [2016-2287](September 8, 2017), the Federal Circuit affirmed the PTAB’s decision in an inter partes reexamination that the claims of U.S. Patent No. 7,557,301 on a method of making cable are unpatentable under 35 USC 103.

The invention related to the inclusion of lubricant in the plastic jacket of electrical cable that will migrate to the exterior of the sheath and lubricate the surface during installation.  The Board affirmed the Examiner’s rejection of the claims over prior art that included a fiber optic cable that can include a friction reducing additive that migrates to the surface of the cable jacket.  Although the prior art did not specifically teach some of the details, such as a 30% reduction in pulling force, the Board held that where the claimed and prior art products are produced by identical or substantially identical processes, a prima facie case of either anticipation
or obviousness has been established, and thus the claimed details were inherent.

The Federal Circuit found that the Board erred in relying on inherency in making its obviousness determination. The use of inherency in the
context of obviousness must be carefully circumscribed because that which may be inherent is not necessarily known and that which is unknown cannot be obvious.  While the Federal Circuit has recognized that inherency may supply a missing claim limitation in an obviousness
analysis, the limitation at issue necessarily must be present in order to be inherently disclosed by the reference.  The Federal Circuit noted that the Board cited no evidence that the claimed 30% reduction in the pulling force would necessarily result from the claimed process, which contains no steps that ensure such reduction.

Thus the Federal Circuit found that the Board erred in relying on inherency without finding that Summers necessarily would achieve the claimed 30% reduction in pulling force, but rather finding that it
merely renders that limitation obvious. However, the Federal Circuit concluded that the Board’s error was harmless because it did not need to invoke inherency.

The Federal Circuit said that none of the patented steps differs in any material way from the process disclosed in the prior art, and there was no evidence that the claimed 30% reduction in pulling force would have been unexpected or unattainable.  In fact, the Federal Circuit said there was no evidence that the process disclosed in the prior art the at least 30% reduction.  Simply because the prior art never quantified the reduction in pulling force achieved by its disclosed embodiments
does not preclude the possibility, or even likelihood, that its process achieved the claimed at least a 30% reduction, especially since its stated purpose was the same.  The Federal Circuit concluded that In the
absence of any evidence that the claimed 30% reduction would have been unexpected in light of the prior art, there is no indication that the limitation is anything other than mere quantification of the results of
a known process.

as that

In Mentor Graphics Corp. v. EVE-USA, Inc. [2015-1470, 2015-1554, 2015-1556](September 1, 2017), the Federal Circuit denied rehearing and rehearing en banc of  panel decision discussed here.

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.

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.

The Supreme Court in Impression Products, Inc. v. Lexmark International, Inc., has once again reversed the Federal Circuit, holding that a sale of a patented product by (or on behalf of) the patent owner, whether in the U.S. or outside the U.S. exhausts the patent owner’s rights, allowing any subsequent purchase to use the patented patented product without infringing the patent.  The Supreme Court allowed that the first purchaser might be bound by contractual restrictions imposed by the patent owner, but said that these restrictions do not apply to subsequent purchasers, in effect allowing the first purchaser to sell more that the first purchaser acquired.

Since its the Supreme Court — the decision must be correct, but the Court did appear to get one thing wrong.  In his opinion, Chief Justice Roberts said “extending the patent rights beyond the first sale would clog the channels of commerce, with little benefit form the extra control that the patentees retain.”  While it may not have made a difference, the Court did not really examine the benefits of post sale restrictions.

In the case before it, post sale restrictions allowed Lexmark to make its products robust enough to be reused without fear that its own recycled products would be used against it.  While there are a number of strategies that Lexmark might employ post Impression Products, one would certainly be to redesign their products so that can only be used once.  This may clog the landfills, but it allows Lexmark to capture the value of its innovation.

Another example of the benefits of post sale restriction is in the pricing patented products for the local market.  A pharmaceutical manufacturer that sells a life saving daily medication for $2 in the U.S., might sell the same medication in a poorer country for less — this maximizes manufacturer’s revenue, and it makes the therapy more available.  However in a world with patent exhaustion, the manufacturer has to consider the effect of the potential reimportation of the drug, and may have to deny access to the therapy at a locally affordable price.

One can imagine a number of similar scenarios where post-sale patent restrictions not only benefit the patent owner, but the public at large.  While it might “clog the channels of commerce” if the patent owner imposed restrictions that were not apparent from the product, it seems a minor burden if the product is prominently labeled with the restrictions, and contrary to the Supreme Court’s assessment, such restrictions can provide more than a “little benefit.”

In the wake of Impression Products, there are certainly strategies that patent owners can follow to avoid the negative effects of exhaustion.  Prominent placement of trademarks on products is one strategy: If Lexmark’s cartridges had an embossed message: “Genuine Lexmark Toner Inside.”  Could a third party refill the cartridges and sell them? It may be possible to avoid the effects of foreign exhaustion through the use of separate entities, although this may require that manufacturing be moved off-shore, so that the U.S. Patent owner imports the products for the U.S. market, but does not otherwise participate in the manufacture and sale.

Congress should consider acting to restrict patent exhaustion, at least in the case of products that are prominently marked, and it should also consider restricting patent exhaustion for foreign sales.  These sales are often made in territories where the U.S. patent holder has no protection, and may even be facing competitive price pressure.  Finding the importation into the U.S. of a product sold abroad is an infringement, is no greater burden on commerce than finding the importation into the U.S. of a third party product is an infringement.  It is already an expectation that moving a product across a border can be an act of infringement.

The Supreme Court’s decision in Impression Products makes it harder for patentees to wring the full value of their innovations from their commercialization.  However, there still are strategies that patentees can take to address the more aggressive application of exhaustion, and Congress should reweigh the burden on commerce versus the benefits of allowing patentees to retain some control over the patented inventions.