In High Point SARL v. Sprint Nextel Corporation, [2015-1298] (April 5, 2016), the Federal Circuit affirmed summary judgment that equitable estoppel and laches preclude prosecution of High Point’s claims for infringement of United States Patent Nos. 5,195,090, 5,195,091, 5,305,308, and 5,184,347.  High Point is an NPE that acquired the patents from successors of AT&T and Lucent.

The Federal Circuit held that the district court did not abuse its discretion
in determining that equitable estoppel precludes High Point from bringing this case against Defendants.  The Court said that three elements must be established for equitable estoppel to bar a patentee’s suit:

1. the patentee, through misleading conduct (or
   silence), leads the alleged infringer to reasonably
   infer that the patentee does not intend to enforce
   its patent against the alleged infringer;
2. the alleged infringer relies on that conduct; and
3. the alleged infringer will be materially prejudiced if
   the patentee is allowed to proceed with its claim.

The Federal Circuit concluded that High Point’s predecessors’ misleading course of conduct caused Sprint to reasonably infer that they would not assert the patents-in-suit while Sprint purchased unlicensed infrastructure to build its network. The Court said that misleading conduct occurs when the alleged infringer is aware of the patentee or its patents, and knows or can reasonably infer that the patentee has own of the allegedly infringing activities for some time.  The Federal Circuit said that the evidence showed both silence and active conduct.

The Federal Circuit also agreed with the district court that Sprint detrimentally relied upon the inaction of High Point’s predecessors.

Finally, the Federal Circuit agreed with the district court that Sprint were prejudiced by the delay, both economically because of continued investment in the accused technology, and through loss of evidence over time.

The effect of equitable estoppel is “a license to use the invention that extends throughout the life of the patent.”

In Cardpool, Inc. v. Plastic Jungle, Inc., [2014-1562] (April 5, 2016) the Federal Circuit affirmed the district court’s denial of vacatur, because the denial was within the district court’s discretion and also because the premise of the motion was both speculative and inaccurate.

The parties’ jointly requested vacatur was that all of the Cardpool patent claims had been replaced on reexamination, and that Plastic Jungle was no longer conducting the accused infringing activities.

The Federal Circuit, applying Ninth Circuit law, said that a district court’s denial of a Rule 60(b) motion is reviewed for abuse of discretion, and found that it was not an abuse of discretion to preserve its original decision, which was limited to the claims and grounds that existed at the time.  The Federal Circuit further found that the premise of the motion was both speculative and inaccurate: the district court’s final judgment as to an original group of claims does not automatically render that judgment res judicata as to new claims granted upon reexamination.  The Federal Circuit distinguished Aspex, noting that for res judicata to apply, it is necessary that the claim either was asserted, or could have been asserted, in the prior action. If the claim did not exist at the time of the
earlier action, it could not have been asserted in that action and is not barred by res judicata.  A prior judgment cannot be given the effect of extinguishing claims which
did not even then exist and which could not possibly have been sued upon in the previous case.  The Federal Circuit said that the issue of validity of the reexamined claims remains to be addressed in any future proceeding, and found that the district court did not abuse its discretion refusing to vacate the judgment as to the original claims.

In Mag Aerospace Industries, Inc. v, B/E Aerospace, Inc., [2015-1370, 1426] (March 23, 2016), the Federal Circuit affirmed summary judgment of non-infringement, and the district court’s ruling that the doctrine of assignor estoppel barred B/E from challenging the validity of the patents.

One of the inventors of the patents-in-suit, Pondelick, now works for B/E..but Pondelick assigned the patents to his former employer, who in turn assigned them to MAG. The district court concluded that Pondelick was in privity with B/E and thus that assignor estoppel applied to bar B/E from attacking the validity of the patents.

The district court analyzed a number of factors identified in Shamrock Technologies to determine whether a finding of privity was appropriate:

1. the assignor’s leadership role at the new employer;
2. the assignor’s ownership stake in the defendant company;
3. whether the defendant company changed course from manufacturing non-infringing goods to infringing activity after the inventor was hired;
4. the assignor’s role in the infringing activities;
5. whether the inventor was hired to start the infringing operations;
6. whether the decision to manufacture the infringing product was made partly by the inventor;
7. whether the defendant company began manufacturing the accused product shortly after hiring the assignor; and
8. whether the inventor was in charge of the infringing operation.

The district court acknowledged B/E’s arguments but found on balance that assignor estoppel was appropriate. The Federal Circuit found that the district court’s conclusion was not clearly erroneous, agreeing that many of the Shamrock factors weigh in favor of finding privity.

Of course the PTAB does not apply Assignor Estoppel, so patent challengers should raise their challenges there, and patent assignees should consider language in their assignments to forestall such challenges.

In Luminara Worldwide, LLC v, Liown Electronics Co., Ltd., [2015-1671] (February 29, 2016), the Federal Circuit vacated a preliminary injunction on U.S. Patent Nos. 7,837,355; 8,070,319; and 8,534,869, directed to flickering artificial candles.  The Federal Circuit rejected the accused infringer’s challenge that plaintiff did not have sufficient rights to enforce the patents, but agreed that there were substantial questions about the patent’s validity,

In the Trustee of Columbia University in the City of New York v, Symantec Corporation, [2015-1146] (February 2, 2016) the Federal Circuit affirmed the district court’s claim construction order and subsequent partial final judgment of non-infringement and invalidity with respect to U.S. Patent Nos. 7,487,544, 7,979,907, 7,448,084, 7,913,306, but reversed the claim construction of U.S. Patent Nos. 8,074,115, and 8,601,322, and remanded for further proceedings.

At issue was the meaning of “byte sequence feature,” which the district court found was limited machine code instructions, but the patent owner argued included other information.  The Federal Circuit first rejected the patent owner’s argument that the presumption of plain and ordinary meaning can be overcome when the patentee has expressly defined a term or disavowed the full scope of the claim in the specification and the prosecution history, pointing out that terms can be defined, or scope disclaimed without an explicit statement, and that is what the Federal Circuit found.

The Federal Circuit noted that twice in the specification, the patentee states that the “byte sequence feature” is useful and informative “because it represents the machine code in an executable.” These, according to the Federal Circuit, were not simply descriptions of the preferred embodiment, but statements defining “byte sequence feature.”  The Federal Circuit also relied upon a more explicit definition in the provisional application, pointing out that provisional applications incorporated by reference are “effectively part of the” specification as though it was “explicitly contained therein.”

The patentee pointed to at least one instance in the specification where “byte sequence feature” included more than machine code instructions, but the Federal Circuit said that this single sentence in the specification cannot overcome the overwhelming evidence in other parts of the specification and the provisional application demonstrating that the intended definition of this term does not include information other than machine code instructions.

Regarding the indefiniteness of the claims, the Federal Circuit noted that some of the claims  “byte sequence feature,” which is a feature extracted from machine code instructions, with the extraction of “resource information,” which is not a machine code instruction.  However rather than finding that this broadened the meaning of “byte sequence feature,” the Federal Circuit found that this was non-sensical, thus making the claims indefinite.

Regarding the claim term “probabilistic model of normal computer system usage” the Federal Circuit again found this term implicitly defined by consistent statements in the specification, the absence of embodiments inconsistent with the implicit definition, and statements in the provisional application, which was incorporated by reference, and arguments made in the prosecution history to distinguish some prior art.  The patent owner pointed to applications incorporated by reference, but the Federal Circuit said that fleeting references cannot overcome the overwhelming evidence in the specification and the prosecution history, especially given the specification did not “even refer with any detailed particularity” to the passages the patent owner now argues support its construction.

Lastly, with regard to the term “anomalous” in the ‘115 and ‘322 patents.  The Federal Circuit first observed that there was no reason why terms in the ”115 and ‘322 should be the same is the other patents in suit.  Where multiple patents derive from the same parent application and share many common terms,  one must interpret the claims consistently across all asserted patents.  However, the Federal Circuit noted that patents resulted from two separate families, and these two families of patents claim two different inventions, list only one inventor in common, were filed years apart, and do not result from the same patent application. The Federal Circuit found affirmative reasons to construe the terms in the claims different, noting difference in the claims including claim differentiation,  Finally the Federal Circuit noted that the description in the provisional application on which the patents were based supported the different construction.