Hypothetical Claim in Doctrine of Equivalents Analysis Cannot Narrow Claim Scope

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.





Broadest Reasonable Construction is Not One Not Precluded by the Specification, but is One Consistent with the Specification

In re: Smith International, Inc., [2016-2303] (September 26, 2017), the Federal Circuit reversed the PTAB’s affirmance of the Examiner’s rejections of claims in an ex parte reexamination of U.S. Patent 6,732,817 directed to a downhole drilling tool for oil and gas operations.

The Board affirmed the examiner’s interpretation of the term “body” as a broad term that may encompass other components such as “mandrel” and “cam sleeve,” reasoning that only the term “body” is recited in the
claims without further limiting features and that the specification neither defines the term “body” nor prohibits the examiner’s broad reading of it.  The Federal Circuit concluded that the Board’s construction of “body”
was unreasonably broad. Even when giving claim terms their broadest reasonable interpretation, the Board cannot construe the claims “so broadly that its constructions are unreasonable under general claim construction principles.”

The Federal Circuit noted that some of the claims at issue recite a
broad term “body” without further elaboration on what the term “body” encompasses. However the Federal Circuit noted that the remainder of the specification does not use the term as a generic body. There is no dispute that the patent specification consistently describes and refers to the body as a component distinct from others, such as the mandrel, piston, and drive ring.

On this record, the Board concluded that the Examiner’s broad construction was not precluded.  However the Federal Circuit  found that the correct inquiry in giving a claim term its broadest reasonable interpretation in light of the specification is not whether the specification proscribes or precludes some broad reading of the claim term adopted by the Examiner.  Nor is it simply an interpretation that is not inconsistent
with the specification. It is an interpretation that corresponds with what and how the inventor describes his invention in the specification, i.e., an interpretation that is “consistent with the specification.”

The Federal Circuit held that giving the term “body” such a strained breadth in the face of the otherwise different description in the specification was unreasonable.  With the correct construction, the Federal Circuit reversed the rejection of the claims.

Employee Residence is Not the Defendant’s Regular and Established Place of Business

In re: Cray Inc., 2017-129 (September 21, 2017), the Federal Circuit granted Cray’s Petition for Writ of Mandamus and directed the Eastern District of Texas to transfer a patent infringement action pursuant to 28 U.S.C. §1406(a).  The Federal Circuit found that the district court misinterpreted the scope and effect of its precedent in determining that Cray maintained “a regular and established place of business” in the Eastern District of Texas within the meaning of 28 U.S.C. §1400(b).

Although Cray did not rent or own an office or any property in the Eastern District of Texas, it allowed Harless and Testa to work remotely from their respective homes in the district.  The district court found that activities of Harless working from his home as a “sales executive” made his personal residence Cray’s regular and established place of business in the district.

The Federal Circuit found that although the law was unclear and the error understandable, the district court misunderstood the scope and effect of our decision in Cordis, and its misplaced reliance on that precedent led the court to deny the motion to transfer, which we find to have been an abuse of discretion.

The only question before the court was whether Cray has a “regular and established place of business” in the Eastern District of Texas within the meaning of §1400(b).  The Federal Circuit agreed with the district court that “the regular and established place of business standard requires more than the minimum contacts necessary for establishing personal jurisdiction or for satisfying the doing business standard of the general venue provision.”

The Federal Circuit said that:

The statutory language we need to interpret is “where the defendant . . . has a regular and established place of business.” 28 U.S.C. § 1400(b). The noun in this phrase is “place,” and “regular” and “established” are adjectives modifying the noun “place.” The following words, “of business,” indicate the nature and purpose of the “place,” and the preceding words, “the defendant,” indicate that it must be that of the defendant. Thus, § 1400(b) requires that “a defendant has” a “place of business” that is “regular” and “established.” All of these requirements must be present. The district court’s four-factor test is not sufficiently tethered to this statutory language and thus it fails to inform each of the necessary requirements of the statute.

In deciding whether a defendant has a regular and established place of business in a district, no precise rule has been laid down and each case depends on its own facts.  However, the analysis must be closely tied to the language of the statute.  The first requirement is that there “must be a physical place in the district.” The second requirement for determining venue is that the place “must be a regular and established place of business.”  sporadic activity cannot create venue.  Finally, the third requirement when determining venue is that “the regular and established place of business” must be “the place of the defendant.”  Thus, the defendant must establish or ratify the place of business. It is not enough that the employee does so on his or her own.  Relevant considerations include whether the defend-ant owns or leases the place, or exercises other attributes of possession or control over the place.  In the final analysis, the court must identify a physical place, of business, of the defendant.

The Federal Circuit stressed that no one fact is controlling, but that taken together, the facts cannot support a finding that Cray established a place of business in the Eastern District of Texas. Thus venue cannot exist there under § 1400(b).

Corroboration of the Inventor is Necessary, but Evaluated Under a Rule of Reason, Considering the Totality of the Circumstances

In NFC Technology, LLC v. Matal, [2016-1808] (September 20, 2017), the Federal Circuit reversed the PTAB’s final written decision that claims of U.S. Patent 6,700,551 we obvious, and remanded for the board to determine whether NFC presented sufficient evidence that the prototype embodied the claimed invention

The Board rejected NFC’s attempt to antedate the prior art with a prototype embodying the claimed invention before the priority date of the prior art.  The Board held that even assuming that the prototype embodied the invention, NFC had not adequately established that a third party’s fabrication of the prototype inured to NFC’s benefit.

The Federal Circuit said that an inventor’s testimony, standing alone, is insufficient to prove conception—some form of corroboration must be shown.  However, there is no particular formula that an inventor must follow in providing corroboration of conception.  Corroboration is determined by a “rule of reason” analysis, in which an evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the inventor’s story may be reached.

The Federal Circuit found that when taken as a whole, the documents corroborate Charrat’s account of conception.  While the Board was unpersuaded that the NFC had provided sufficient evidence to demonstrate that the prototype was produced according to the inventor’s design, the Federal Circuit Federal Circuit found that dorroboration of
every factual issue contested by the parties is not a requirement
of the law.  The Federal Circuit concluded that on the fact, particularly considering the amount of time that has passed, the inventor’s account was adequately corroborated.

The Federal Circuit noted that the Board’s analysis raised the question of who, if not the inventor, designed the prototype — the named inventor is the only source identified by the evidence for the design
of the prototype. There was no record evidence of any other employee communicating with the fabricator.  The Federal Circuit concluded that under the rule of reason, the totality of the evidence establishes the credibility of the inventor’s account.  Thus, the Board erred in concluding that NFC had not submitted adequate evidence of conception, and in finding that the inventor’s account was not adequately corroborated.
was not supported by substantial evidence.

The Federal Circuit remanded, however, so that the Board could determine whether the prototype embodied the claimed invention.


Response Arguments Do Not Have to Be Preemptively Addressed in the Petition or Institution Decision

In Idemitsu Kosan Co., Ltd. v. SFC Co. Ltd., [2016-2721](September 15, 2017), affirmed the PTAB decision that claims of U.S. Patent No. 8,334,648 were invalid for obviousness.

On appeal Idemitsu argued that the Board erred in finding that prior art taught combining the particular compounds for the purpose of creating a light emitting layer in an electroluminescent device.  The Federal Circuit found that what Idemitsu characterizes as an argument raised “too late” was simply the by-product of one party necessarily getting the last word.
Idemitsu argued that the prior art teaches away from combinations, and SFC simply countered, as it was entitled to do. The Federal Circuit found that to the extent Idemitsu suggests that the Board could not reach a counterargument because it was not preemptively addressed by the petition or institution decision, Idemitsu is plainly mistaken. The Federal Circuit noted that there is no requirement, either in the Board’s  regulations, in the APA, or as a matter of due process, for the institution decision to anticipate and set forth every legal or factual issue that might arise in the course of the trial.


Federal Court Lacked Jurisdiction over DJ for Non-Infringement; Where Defendant Did not Own the Patent

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.





Claims Can’t Be Construed Contrary to Specification, and then Invalidated for Being Contrary to Specification

In Intellectual Ventures I LLC v. Motorola Mobility LLC, [2016-1795](September 13, 2017), the Federal Circuit affirm the district court’s judgment in part, reversed in part, and remanded for further proceedings
on the asserted claims of the ’462 patent.

A jury found the asserted claims of 7,810,144 and 7,120,462 infringed and not invalid, and the district court denied Motorola’s motion for judgment as a matter of law.  The Federal Circuit found substantial evidence supported the validity of the ‘144 patent, but not infringement, and that substantial evidence supported the validity and infringement of the ‘462 patent.

Motorola argued that the district court erred in denying judgment as a matter of law that the asserted claim of the ’144 patent was invalid for lack of written description.  In particular, Motorola contended that the specification of the ’144 patent excludes “long-term” or “permanent” storage of the data being transmitted on an intervening computing
device, while claim 41 covers embodiments that nevertheless
use such long-term or permanent storage, in violation of the written description requirement.

The Federal Circuit noted that the claim language neither plainly includes nor plainly excludes long-term or permanent storage, finding that the limitations must be construed in view of the specification.  The Federal Circuit noted that paradoxically, Motorola contends that the specification excludes long-term or permanent storage from the scope of the invention, while simultaneously arguing that claim 41 should be read to cover such storage.  The Federal Circuit instructed that the proper result is not that claim 41 fails for lack of written description but that it should be construed “in view of the specification” to be limited.  The Federal Circuit reiterated its precedent that it is incorrect to construe the claims contrary to the specification, and then to hold the claims invalid because they are contrary to the specification.

After concluding that substantial evidence supports the jury’s verdict of no invalidity with respect to the claim of the ’144 patent, the Federal Circuit turned to the question of whether there was substantial evidence of direct infringement under 35 U.S.C. § 271(a).  The Federal Circuit said that to use a system for purposes of infringement, a party must put the invention
into service, i.e., control the system as a whole and obtain benefit from it.  The Federal Circuit found that the district court erred when it found an infringing use based on the generalized benefit of using the accused system, rather than finding a benefit from each element of the system, and reversed the finding of infringement.

Foreign Suits Involving Foreign Patents Do Not Create a Case or Controversy in the U.S.

In Allied Mineral Products, Inc. v. OSMI, Inc., [2016-2641] (September 13, 2017), the Federal Circuit affirmed the dismissal of Allied’s declaratory judgment action seeking a declaration that Stellar’s U.S. Patent No. 7,503,974 is invalid, and that Stellar committed inequitable conduct, for lack of subject matter jurisdiction.

This dispute centered on a Mexican infringement suit between Stellar and two of Allied’s Mexican distributors.  Allied manufactured the accused product in the United States, which are then sold in Mexico by Allied’s Mexican distributors.  The district court held that Stellar’s decision to enforce its Mexican patent under Mexican law against separate entities cannot, without further affirmative action by Stellar, create an
actual controversy with Allied with regard to its U.S. patent.

The Federal Circuit reasoned that the totality of the circumstances in this case does not rise to the level of a case of actual controversy. Declaratory judgment jurisdiction requires some affirmative act by
the patentee, and Stellar has not directed any actions towards Allied, nor has it litigated or threatened litigation in the United States or on its U.S.

Allied argued that it has been forced into an unwinnable business position; it can either continue to sell products in the United States knowing it may be the target of an infringement suit, or it can cease selling products it believes it has a right to sell. The Federal Circuit said that the fear of a future infringement suit is insufficient to confer
jurisdiction.  The Federal Circuit concluded that Allied has failed to establish a case or controversy regarding Stellar’s U.S. patent in the United States under Article III.

Accused Trade Secret Thief Failed to Make Uber Showing Required for Writ of Mandamus

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.

When Your Background Dooms The Invention

37 CFR 1.77(b)(7) suggests that a patent application should include a “Background of the Invention.”  However, the Background of the Invention  can cause trouble if the drafter is not careful.

The Background of the Invention, sometimes called the “fairy tale” by older practitioners (there are number of examples where the background actually contains the fairy tale beginning “once upon a time”– see U.S. Patent Nos. 7,715,960, 7,207,929, 5,537,417 and 4,206,568), not surprisingly sets for the background information and often identifies the problem(s) solved by the invention.

One of the greatest (although not necessarily the best) “backgrounds” in a U.S. patent is found in U.S. Patent No. 4,646,382 on a Lottery Ticket Scraper, where the background ties the subject ticket scraper to the rise of civilization from primitive cultures:

In contract, the best background is probably one that says as little as possible.  A background prepared after the invention (and they all are) can tend to make the invention look obvious, describing the problems of the prior art in such a way that the inventor’s solution almost seems obvious.  This appears to be the case in the Federal Circuit’s recent decision in Intercontinental Great Brands LLC v. Kellogg North American Co., discussed here, where the identification of the problem to be solved in background formed a part of the overall obviousness determination.

The Background of U.S. Patent No. 5,156,594 was used against the patent owner in Scimed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1447 (Fed. Cir. 2001), where criticisms of the prior art were used to narrow the claims.

In preparing the background of a patent application,

  • Discuss problems of “some” prior devices, rather than “all” prior art.
  • Avoid describing the problems of the prior art in a way that makes the invention seem like the obvious extension of the prior art.