Monthly Archives: September 2016

Federal Circuit Remands Issue of Enhanced Damages for Determination Whether This was an Egregious Case of Misconduct Beyond Typical Infringement

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In WesternGeco LLC v. Ion Geophysical Corp., [2013-1527, 2014-1121, 2014-1526] (September 21, 2016), the Federal Circuit, on remand from the Supreme Court after Halo Electronics, Inc. v. Pulse Electronics, Inc., vacated the district court’s judgment with respect to enhanced damages, but reinstated its earlier opinion and judgment in all other respects.

The district court found that WesternGeco prevailed on the subjective prong of the two-part In re Seagate test, but not the objective prong, and denied enhanced damages for willful infringement.  The Supreme Court removed the objective prong in Halo, so the Federal Circuit vacated and remanded the case for the district court to address enhanced damages under the new standard set forth in Halo, giving district courts greater discretion in awarding enhanced damages in cases where the defendant’s infringement was egregious, cases “typified by willful misconduct.”

The Federal Circuit said that the principal problem the Supreme Court had with with
Seagate’s two-part test was that it requires a finding of objective recklessness in every case before district courts may award enhanced damages: “The subjective willfulness
of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.”

If willfulness is established, the question of enhanced damages must be left to the district court’s discretion.  However, nothing says that enhanced damages must follow a finding of egregious misconduct. As with any exercise of discretion, courts should continue to take into account the particular circumstances of each case in deciding whether to award damages, and in what amount. Section 284 permits district courts to exercise their discretion in a manner free from the inelastic constraints of the Seagate test.

The Federal Circuit said that after Halo, the objective reasonableness of the accused
infringer’s positions can still be relevant for the district court to consider when exercising its discretion.  The Federal Circuit noted that the Supreme Court itself has said that district courts should exercise their discretion, taking into account the particular circumstances of each case,” and consider all relevant factors in determining whether to award enhanced damages.

The Federal Circuit said that on remand the district court must review the sufficiency of the evidence of willfulness as a predicate to any award of enhanced damages, mindful of Halo’s replacement of Seagate’s clear-and-convincing evidence standard with the “preponderance of the evidence standard.”  Then the district court must consider whether enhanced damages should be awarded, and specifically whether the infringement constituted an egregious case of misconduct beyond typical infringement meriting enhanced damages under § 284 and, if so, the appropriate extent of the enhancement.

 

Inherent Disclosure is Sufficient to Support a Priority Claim

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In Yeda Research v. Abbott GmbH. [2015-1662] (September 20, 2016), the Federal Circuit affirmed the district court’s decision that U.S. Patent No. 5,344,915 was entitled to priority of its parent application, and thus was not invalid.

The issue before the Federal Circuit was the legal standard for written description support. The Federal Circuit said that in order for the claims of the patent to benefit from the parent application’s filing date, the claimed invention must be disclosed by the parent application in a way that clearly allows a person of ordinary skill to recognize that the inventor invented what is claimed and possessed the claimed subject matter at the date of filing.  The Federal Circuit turned to the doctrine of inherent disclosure: Under the doctrine of inherent disclosure, when a specification describes an invention that has certain undisclosed yet inherent properties, that specification serves as adequate written description to support a subsequent patent application that explicitly recites the
invention’s inherent properties.

It was undisputed that the later-claimed protein with the same partial N-terminus sequence and additional traits disclosed in the parent application.  The Federal Circuit concluded that the application inherently discloses the remaining amino acids in the N-terminus sequence of TBP-II and serves as adequate written description support for the patent claiming TBP-II. The Federal Circuit said that it is not necessary for an application to disclose a protein’s complete N-terminus sequence in order to provide an adequate written description.

 

Backgrounds — The Less Said the Better

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Prosecutors are repeatedly being told by the Federal Circuit, and we are gradually learning, that the less said on the Background the better.  Whether it is by admitted prior art, criticisms of the prior art that work a disclaimer, or objects of the invention that limit the scope of the claims, backgrounds can do more harm than good.  Usually the less said the better.

The Background of U.S. Patent No. 8,007,204 is one that might be improved by brevity, although its problem — irony — is not as fatal as those listed above.  The ‘204 Patent is directed to a Floating Structure for Support of Mixed Use Facilities.  One of the problems of the prior art identified in the background are the restrictions of intellectual property laws:

8007204

The solution is a floating structure in the middle of the ocean, protected, of course, by patent issued by a land-based society.

8007204-2

 

Substantial Evidence Supported Infringement of Limitations That Did Not Need Construction

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In Lifenet Health v. Lifecell Corporation, [2015-1549](September 16, 2016) the Federal Circuit affirmed the district court’s judgment that the claims of U.S. Patent No. 6,569,200 on plasticized soft tissue grafts suitable for transplantation into humans were not invalid and were infringed.

At issue was the claim language that the “one or more plasticizers are not removed
from said internal matrix of said plasticized soft tissue graft prior to transplantation into a human.”  This language was added during prosecution to distinguish over prior art where the introduced plasticizers were removed before implantation.  The accused product instructed users to soak the grafts in saline which would remove as much as 50% of the plasticizers.

The district court found that no further claim construction was needed.  Lifecell argued that the district court failed to resolve a legal dispute regarding the scope of the claim, however the Federal Circuit found that Lifecell did not properly raise the issue.  Lifecell wanted the jury to be instructed that removal of any plasticizer from any part of the graft was enough to avoid infringement, which the Federal Circuit found was not only an argument about degree of removal, but also an argument about from where the pasticizer is not to be removed.  Regarding degree, Lifecell did get the interpretation  and instruction it wanted.  Regarding location, Lifecell failed to properly raise an issue of what “internal matrix” meant .

Examining the record, the Federal Circuit found that there was substantial evidence to support the jury’s determination that plasticizer is not removed “from the internal matrix” of the accused tissue grafts before transplantation.

The Federal Circuit went on to reject Lifecell’s arguments based on joint infringement, finding that the limitations were not steps that needed to be performed, but limitations on the structure.  Similarly, the Federal Circuit rejected the argument that the claim contained mixed method and apparatus limitations.

PTAB Decision to Institute Despite An Alleged § 315 Time Bar is Not Reviewable

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In Wi-Fi One, LLC v. Broadcom Corporation, [2015-1944] (September 16, 2016), the Federal Circuit affirmed the PTAB’d decision in IPR2013-00601 that the claims of U.S. Patent No. 6,772,215 were anticipated.

Wi-Fi argued that Broadcom was barred from petitioning for inter partes review under 35 U.S.C. § 315(b)  because it was in privity with a time-barred district court litigant.  To determine whether a petitioner is in privity with a time-barred district court litigant, the Board conducts a flexible analysis that “seeks to determine whether the relationship between the purported ‘privy’ and the relevant other party is sufficiently close such that
both should be bound by the trial outcome and related estoppels.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012).

The Federal Circuit also rejected Wi-Fi’s substantive challenges

In Achates the Federal Circuit held that 35 USC 314(d) “prohibits this court from reviewing the Board’s determination to initiate IPR proceedings based on its assessment of the time-bar of § 315(b), even if such assessment is reconsidered
during the merits phase of proceedings and restated as part of the Board’s final written decision.”  Wi-Fi argued that the Supreme Court’s recent decision in Cuozzo Speed Technologies,LLC v. Lee, implicitly overruled Achates.  Also the Supreme Court held that institution decisions were generally unreviewable, the court emphasized that:

our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review. This means that we need not, and do not, decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.”  Thus, contrary to the dissent’s suggestion, we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under § 112” in inter partes review. Such “shenanigans” may be properly reviewable in the context of § 319 and under the Administrative Procedure Act, which enables reviewing courts to “set aside agency action” that is “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.”

However, the Federal Circuit saw nothing in Cuozzo that overruled Achates.  The Federal Circuit found that §315 was precisely the kind of statute “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review” that the Supreme Court said was unreviewable.

 

The Federal Circuit also rejected the patent owner’s substantive arguments, finding no error in the PTAB’s determination that the challenged claims were anticipated.

Read Our Lips: Not Everything is Abstract

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In MCRO, Inc. v. Bandai Namco Games America, Inc., [2015-1080] (September 13, 2016), the Federal Circuit reversed judgment on the pleadings that U.S. Patent Nos. 6,307,576 and 6,611,278 on the automated synchronization of animations with sound was invalid as directed to an abstract idea.

The Federal Circuit began by noting that one cannot assume that claims are directed to patent ineligile subject matter because all inventions, at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.  Instead, the claims must be considered as a whole to ascertain whether their character as a whiole is directed to excluded subject matter.  If the claims are not directed to an an abstract idea, then the inquiry ends, otherwise the analysis proceeds to Step II of the Alice frameword to determine whether the claims contain an inventive concept sufficient to transform the claim into a patent-eligible application.  one way of deciding Step II in computer implemented inventions is to consider whether there is an improvement to the underlying technological process, and not simply implementing the method on a computer.

The Federal Circuit disagreed that the claims were drawn to an abstract idea, saying that it has previously cautioned that court must be careful to avoid oversimplifying claims by looking at them generally and failing to account for their specific requirements.

The Federal Circuit noted that the claims at issue were limited to rules with specific characteristics.  The claims were directed to animation methods that previously could only be performed by humans.  While the defendants did not dispute that such inventions were patent eligible if properly claimed, but argued that the claims were improper because they did not claim the specific rules.  The Federal Circuit found that the claims were limited to rules with certain characteristics, former a proper genus.  The key issue was whether the claims focus on a “specific means or method” that improves the relevant technology, or whether the are directed to the result or effect.

In the end the Federal Circuit found that it was the incorporation of the claimed rules, and not the mere use of a computer, that improved the existing technological process,  Interestingly the Federal Circuit found that it made no difference that the result was not tangible, as there is no requirement that the invention be tied to a machine or transform an article to be patentable.

The Federal Circuit noted that the claims did not preempt all processes for achieving automated lip-synching of 3-D characters, although the absence of preemption does not always indicate patent eligibility.  The Federal Circuit noted that the claims were limited to a specific kind of rules, thereby preventing broad preemption of all automated methods of lip-synching.  The defendants arguedd that all methods of animation must use the same specific kind of rules, but there was no such evidence in the record.

The Federal Circuit concluded that the claims were not directed to an abstract idea, and ended the Alice inquire at Step I.

 

 

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Keeping Track of the Commissioner

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The Commissioner exercises supervisory authority over the Patent and Trademark Office, and decides a variety of kinds of petitions.  These decisions are collected on the USPTO website: