Posts in Federal Circuit

In a September 13, 2016 decision relating to subject matter eligibility of software patents under 35 U.S.C. § 101, the Federal Circuit vacated the district court’s order granting Defendants’ motion for judgment on the pleadings under Fed. R. Civ. P. 12(c), and held that McRO’s patents were eligible for protection under 35 U.S.C. § 101. The disputed patent claims recited a method for “automatically . . . producing accurate and realistic lip synchronization and facial expressions in animated characters.” The McRO patents identified that a problem in the prior art was that animators, even using the assistance of computers, had to manually manipulate the character model for lip movement. The McRO patents solved this problem by using rules to automatically depict more realistic synchronization of lip movements and speech.

Over the last several months certain new trends are developing at the Federal Circuit as the court pivots to address the new reality of a much more interested Supreme Court, and the reality of a dramatically increased case load thanks to the enormous popularity of the AIA-created post grant administrative proceedings. Join me on Tuesday, September 20, 2016, at 1pm Eastern for a discussion on Federal Circuit Trends in a Post-Alice World. I will be joined by Robert Schaffer and Joseph Robinson, partners at Troutman Sanders and co-authors of the Federal Circuit Review.

Stryker Corporation was awarded $70 million in lost profits after a jury found that Stryker’s patents were valid and willfully infringed by Zimmer. The district court affirmed the jury’s verdict, awarded Stryker treble damages for willful infringement, and awarded Stryker attorney’s fees. Stryker’s patents concerned portable, battery-powered, and handheld pulsed lavage devices used in orthopedic procedures to deliver pressurized irrigation for medical therapies, including cleaning wounds.

Schlumberger raised Rutherford’s potential conflict of interest to the court in April 2014, and subsequently filed a motion to disqualify Dynamic’s counsel. The district court found that Rutherford’s work at Schlumberger was substantially related to her current work at Acacia. The court found that because the accused features of Petrel existed in the older versions that Rutherford was exposed to, and because she was involved at Schlumberger in efforts to license Petrel to other companies, the evidence created an irrebuttable presumption that she acquired confidential information requiring her disqualification.

It is hard to ignore the fact that the Federal Circuit again continued to point out that the innovation at issued was an improvement. This should give patent practitioners important clues into how to characterize software related innovations so as to maximize the likelihood of prevailing in Alice inspired challenges and rejections. Hopefully the United States Patent and Trademark Office will not ignore McRo and will issue guidance to patent examiners. Taking a “nothing to see here” approach to this case would be inexcusable.

On Wednesday, August 24th, the Patent Appeal and Trial Board (PTAB) issued decisions in two inter partes review (IPR) filings made against patents owned by private Israeli firm Yeda Research & Development Co. The company is the tech transfer arm of the Weizmann Institute of Science, a public research university located in Rehovot, Israel. The IPRs, which were filed by American pharmaceutical developer Mylan Inc. (NYSE:MYL), resulted in the invalidation of all claims in both Yeda patents. About a week later, on September 1st, PTAB invalidated a third patent owned by Yeda after another IPR challenge was filed by Mylan.

In the final decision by the Board in the IPR, the Board denied the patent owner’s motion solely because the patent owner did not discuss whether each newly added feature was separately known in the prior art. The Board concluded that the motion and the declaration of Veritas’s expert, Dr. Levy, was insufficient because it did not discuss the features separately but discuss only the newly added feature in combination with other known features. The Federal Circuit found that denying the motion to amend for this reason alone was unreasonable and, therefore, the decision of the Board had to be set aside as being arbitrary and capricious.

GPNE sued Apple for direct infringement of claims in two of GPNE’s patents. The patents at issue relate to a two-way paging system, where the paging devices are capable of not only receiving messages but also sending messages back in response. The claims asserted by GPNE all recited “nodes” rather than “pagers,” even though the word “node” was not used anywhere other than in the Abstract of the two patents containing the asserted claims. Seizing on this, Apple argued at the Markman hearing that a “node” as claimed should be construed as being a “pager.” The district court ultimately agreed with Apple, and ultimately so too did the Federal Circuit.

A lack of written opinion in the Rule 36 affirmance issued by Federal Circuit wasn’t an issue for PCT’s counsel. “These types of results reflect a wholesale rejection of the laundry list of appellate issues Holland had attempted to raise,” Laurus noted. “Prompt resolution of this is better than some lengthy opinion that might issue months down the road.”

In PCT International, Inc. v. Holland Electronics, LLC, the use of a Rule 36 judgment is particularly disconcerting because the Federal Circuit upheld the issuance of a permanent injunction by the district court. Since the Supreme Court’s decision in eBay v. MercExchange over a decade ago it has become increasingly difficult, indeed at times impossible, for victorious patent owners to enjoy exclusive rights once they have prevailed in a patent infringement litigation. Issuing a Rule 36 judgment where the patent owner was victorious and a permanent injunction stands robs the patent owner community of vital Federal Circuit precedent that could otherwise be used to inform district courts on the appropriateness of this extraordinarily important remedy.

The Court recognized that “‘[c]ommon sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning.’” However, “there are at least three caveats to note in applying ‘common sense’ in an obviousness analysis.” First, common sense is typically invoked to provide a known motivation to combine, and not to supply a missing claim limitation. Second, while some cases have allowed use of common sense to supply a missing claim limitation, “the limitation in question was unusually simple and the technology particularly straightforward.” Third, common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.”

On appeal, the Federal Circuit reviewed whether there was substantial evidence supporting the district court’s finding that Nathan and Matheson should be added as co-inventors. In determining that the inventorship evidence below was sufficient, the Court reiterated that all inventors are required to be named even if their contribution is limited to a single aspect of a single claim, and that co-inventors need not have collaborated at the same time to be named.

While much of the specification focuses on a scheme involving patient-identifying information, the Court held that a specification’s focus cannot be limited on one particular embodiment where it expressly contemplates other embodiments or purposes. The specification clearly disclosed that sorting and storage could be done in a number of ways, not only by patient-identifying information. The Court held that the district court erred when it determined that the specification limited the invention to storing prescription containers based on patient name and slot availability. Thus, the Court reversed the grant of summary judgment and remanded the case for further proceedings.

The Court held that the Board improperly continued to apply the BRI standard following the expiration. While the examiner properly applied the BRI prior to expiration, the BRI standard no longer applies the moment the patent expires – even if it means the Board applies a different standard than the examiner.

The Court noted that all of Warsaw’s arguments related to the Board’s findings of fact, and were therefore reviewed for “substantial evidence.” The Board’s reconciliation of the potentially conflicting descriptions in the reference amounted to a re-weighing of evidence, which is not permitted under the standard of review. The Court also affirmed the Board’s motivation to combine analysis. Finally the Court summarily rejected Warsaw’s arguments presented for the first time on appeal.