Overview
In this series of monthly updates, we summarize decisions where the Federal Circuit reversed or vacated PTAB or trial court rulings, which can provide guidance on how to succeed on appeal.
Quick takeaways:
- Lowe v. Shieldmark, Inc.: despite the repeated appearance of a limitation in the specification, it is erroneous to include that limitation in the claim construction when the limitation is not recited in the claims.
- VDPP LLC v. Vizio, Inc.: the district court erred in determining that "processor" and "storage" were means-plus-function terms, when they were presumed to not be subject to Section 112(f) because they did not include the word "means," there was no evidence to overcome the presumption, and intrinsic evidence showed that the terms "processor" and "storage" did connote structure to a skilled artisan.
- Dyfan, LLC v. Target Corp.: "code" and "application" are not means-plus-function terms because persons of ordinary skill would have understood them as connoting particular structures; "system" is not a means-plus-function term because the claim language defined "systems" to include specified structure.
- Immunogen, Inc. v. Hirshfeld: it is improper to grant summary judgment that claims are indefinite or obvious when there are issues in dispute, including the knowledge of a skilled artisan and whether the meaning of certain limitations could be easily determined.
- BASF v. CSIRO: the district court erred in finding written description support for an invention relating to a broad genus, where the evidence only indicated that the disclosure in the specification was predictive of a particular species; the district court also erred in interpreting inventions that drew on the lessons learned from a joint effort constituted intellectual property "subsisting in" the results of that work.
- Intel v. Qualcomm: the PTAB erred by holding that a motivation to combine prior art references required finding a key claim element in both references (rather than just one reference) and finding that the teachings of one reference were necessary to improving the other (rather than just desirable for that purpose).
- AlexSam v. MasterCard: judicial estoppel did not preclude a claim for breach of contract where the claimant had argued that a covenant not to sue was "broad" in another proceeding, where context demonstrated the claimant consistently argued that the covenant not to sue was limited to patent infringement claims.
- In re Volkswagen & In re Hyundai: independently owned and operated car dealerships did not constitute regular and established places of business of the defendant’s agents for purposes of patent venue, where franchise agreements with the dealerships constrained the dealership's services but did not amount to control of their business.
Lowe v. Shieldmark, Inc., No. 21-2164, 2022 WL 636100 (Fed. Cir. Mar. 4, 2022)
Lowe and ShieldMark both sell floor marking tape. Lowe first sued ShieldMark for patent infringement, and SheldMark later counterclaimed against Lowe for patent infringement. The district court granted summary judgment that ShieldMark did not infringe Lowe’s patents. The Federal Circuit disagreed with that decision because of erroneous claim construction of terms "lateral edge portion," "coplanar extension," and "central body portion."
The district court construed "lateral edge portion" to mean "the portion of the floor marking tape from the shoulder to the edge of the tape when viewed in cross section." For a number of reasons, the Federal Circuit held that it was error to require the tape to have "shoulders." Even though the term "shoulders" appeared repeatedly in the specification, the asserted claims did not recite "shoulders" demarcating a recess. Including shoulders in the claim at issue would also have rendered superfluous a claim that did require a recess and (by implication) shoulders that demarcated the recess. Further, the tape with shoulders and a recess was just one embodiment, and the specification described additional embodiments without shoulders. Additionally, the parent patent expressly recited claims "shoulders" and "a recess" in the claims, indicating that the patentee knew how to claim a tape with shoulders and a recess when specifically intended.
For similar reasons, the Federal Circuit held that the district court erred in construing "central body portion" to mean "the portion of the tape body between the shoulders of the two lateral edge portions," because it improperly imported the term "shoulders" into the claims.
The district court construed the term "coplanar extension" (in the phrase "lower surface of each lateral edge portion being a flat coplanar extension of the lower surface of the body") to exclude tape with a singular flat lower surface. The Federal Circuit held that was error. The claim stood for no more than that the lateral edge portions were flat, coplanar, and extensions of the lower body; it did not, as ShieldMark asserted, imply that the edges sat on two distinct points that a continuous flat line would not have. Moreover, the district court also erred in relying on the embodiment with a recess bounded by a pair of shoulders to limit the claim language, for the same reason discussed above.
Based on these errors, the Federal Circuit vacated the district court's noninfringement decision.
VDPP LLC v. Vizio, Inc., No. 21-2040, 2022 WL 885771 (Fed. Cir. Mar. 25, 2022)
VDPP owned patents directed to an apparatus that purported to create an illusion of continuous movement. VDPP sued Vizio for infringing those patents. The district court decided that the limitations "processor" and "storage" were means-plus-function terms under Section 112(f), rendering the asserted claims invalid as indefinite. The Federal Circuit found that to be error.
A § 112(f) analysis consists of two steps. At step one, the court determines whether, as a threshold matter, § 112(f) applies to the claim limitation. In the absence of the word "means," a court presumes that a claim limitation is not subject to § 112(f). At step two, the court determines whether the specification discloses structure that "corresponds to the claimed function."
Because the disputed limitations "processor" and "storage" lacked the word "means," the district court presumed that the terms were not subject to § 112(f). To overcome that presumption, Vizio was required to provide at least some evidence that a person of ordinary skill would not have understood the limitations to recite sufficiently definite structures. The Federal Circuit held that Vizio had not proffered sufficient evidence to overcome that presumption. Moreover, the district court overlooked intrinsic evidence showing that the terms "processor" and "storage" did connote structure to a skilled artisan, such as statements in the specifications that "processors" and "storage" were "well-known."
Because § 112(f) did not apply to the disputed limitations at step one, there was no need to address whether, at step two, the specifications adequately disclosed structures for those functions. In summary, the district court erred in its § 112(f) analysis and the Federal Circuit reversed that determination.
Dyfan, LLC v. Target Corp., 28 F.4th 1360 (Fed. Cir. 2022)
Dyfan alleged that Target infringed patents describing improved systems for delivering tailored messages to mobile device users based on their locations. The district court determined that claim limitations "code"/"application" and "system" were indefinite means-plus-function claims, and entered judgment of invalidity accordingly. Dyfan appealed, and the Federal Circuit reversed.
The district court had determined that the "code"/"application" limitations would not have connoted structure to a person of ordinary skill and that no corresponding structure existed in the specification. That finding, the Federal Circuit concluded, ignored the unrebutted testimony from Target’s own expert, who acknowledged that "application" was "a term of art" that would be understood to be a "computer program intended to provide some service to a user," thereby connoting structure. He also acknowledged that "code" would be understood to mean software instructions, also with a connotation of structure. The Federal Circuit also found that the district court failed to follow its recent decision in Zeroclick, LLC v. Apple Inc., 891 F.3d 1003 (Fed. Cir. 2018), which reached similar conclusions regarding the terms "program" and "user interface code."
Regarding "system," both Target and the district court suggested that "system" may be a nonce word that is merely a substitute for the word "means." The Federal Circuit agreed that "system" could be a nonce term in a vacuum, but noted that the claim language at issue recited specified structure, including communications units and code. Therefore, those units and that code—not an "unspecified black box component," (as the district court stated)—performed the function of the claimed system. In view of the interpretation of "code," the claimed "system" also connoted sufficiently definite structure. The district court’s judgment of invalidity was reversed.
Immunogen, Inc. v. Hirshfeld, No. 21-1939, 2022 WL 885774 (Fed. Cir. Mar. 25, 2022)
ImmunoGen filed a patent application relating to methods of administering the immunoconjugate mirvetuximab to treat cancer. After the PTAB affirmed the examiner's rejection of the claims, ImmunoGen filed a Section 145 suit in the district court, which permits review of the PTAB's rejection of claims via a civil action in district court in the Eastern District of Virginia. The district court determined on summary judgment that the claims of the application were "fatally indefinite and fatally obvious" as a matter of law. ImmunoGen appealed. The Federal Circuit held that the district court improperly resolved numerous factual disputes against ImmunoGen.
The district court found that the patent application failed to define certain metrics for patients in such a way to inform a skilled artisan, with reasonable certainty, as to the scope of the invention. In the district court’s view, there were multiple ways to calculate one of the metrics, creating uncertainty about how it should be calculated. The Federal Circuit, however, found that the underlying material factual findings were far from undisputed. For example, ImmunoGen identified other intrinsic evidence a skilled artisan would consider in determining the scope of the claims, as well as extrinsic evidence regarding knowledge of a skilled artisan such as drug-specific correction factors used in calculating the disputed metric. Such fact disputes made summary judgment inappropriate.
Regarding obviousness, the Federal Circuit similarly found factual disputes precluded summary judgment, including whether ocular toxicity was a known negative effect, or whether dosing could be easily determined. Such errors repeated across the district court’s other factual findings, including those relating to motivation to combine, reasonable expectation of success, and secondary considerations.
For these reasons, the Federal Circuit held that the district court erred in granting summary judgment.
BASF Plant Sci., LP v. Commonwealth Sci. & Indus. Rsch. Organisation, 28 F.4th 1247 (Fed. Cir. 2022)
CSIRO owned six patents relating to engineering plants to produce oils not native to those plants, with a particular focus on canola. This appeal addressed numerous issues arising out of a bifurcated jury trial. The Federal Circuit affirmed on most issues, but reversed on two (written description and co-ownership for certain patents) and remanded for reconsideration on one (the ongoing royalty analysis).
BASF contended that several of CSIRO's patents lacked the support of an adequate written description. The patent specifications described the successful production of oils rich with certain fatty acids, dubbed LC-PUFA, using a laboratory plant called Arabidopsis. BASF contended that was not sufficient to show the inventors had actually invented production of LC‑PUFA from canola plants (the "species" claims) or from plant cells generally (the "genus" claims). The jury disagreed. On appeal, both sides primarily focused on the species claims.
On appeal, the Federal Circuit affirmed the jury's verdict as to the canola-specific claims, finding the jury was entitled to credit CSIRO's evidence that the disclosures in the specification were adequate predictors that the invention would work in canola plants in particular. But there was not sufficient evidence, the panel held, that success in Arabidopsis plants was predictive of success in all plant cells, i.e., for the genus claims. CSIRO had not proffered the kind of evidence that prior precedent had required for written-description support for a broad genus claim, such as evidence of numerous representative species. The Federal Circuit therefore reversed as to the written-description support for the genus claims, finding those claims in CSIRO’s patents not supported by adequate written description.
BASF had also contended that it co-owned the six CSIRO patents at issue based on an agreement the parties had entered in support of a collaboration effort. The agreement provided that the intellectual property "subsisting in" the results of the parties’ experiments under that agreement would be jointly owned. The jury found BASF co-owned one, but not the other five.
On appeal, BASF argued that the jury should have found it co-owned all six patents. The Federal Circuit disagreed, ultimately holding that BASF did not co-own any of the six. BASF contended that CSIRO had "draw[n] on the lessons it learned" from the experiments using BASF's and CSIRO's materials. The Federal Circuit held that it was both linguistically and commercially unreasonable to find that drawing on the lessons learned from earlier works amounted to the intellectual property "subsisting in" that work. Rather, patentable inventions regularly draw on lessons learned from earlier work. The Federal Circuit therefore reversed the jury's sole finding in BASF’s favor on co-ownership. (Judge Newman dissented as to that holding.)
Finally, CSIRO argued that the district court erred in calculating the starting point for a hypothetical negotiation for an ongoing royalty. The parties had presented five arguably comparable licenses to use as a baseline. The district court excluded the two that covered the closest technology because they were not agreements between competitors. The Federal Circuit agreed with CSIRO, who argued that the district court erred in excluding those two agreements because the three remaining agreements were also not between competitors. The Federal Circuit therefore remanded for reconsideration of the proper baseline for the ongoing royalty remedy.
Intel Corp. v. Qualcomm Inc., No. 2020-2092, 2022 WL 880681 (Fed. Cir. Mar. 24, 2022)
Qualcomm owned a patent relating to multiplexing technology. One aspect of the claims involved "carrier aggregation," whereby a message could be split into multiple components and transmitted on multiple radio frequencies, then recompiled by the receiver. Intel challenged several claims of Qualcomm's patent as obvious over the combination of two prior art references. The PTAB rejected Intel's obviousness theory, finding there would have been no motivation to combine the references. Specifically, the PTAB found there would have been no motivation to combine the references where one of them did not teach carrier aggregation (although the other did). The PTAB also faulted Intel for failing to show that one of the reference’s particular teachings would have been necessary to achieve the benefits of the proposed combination.
The Federal Circuit reversed. Contrary to the PTAB's findings, the Federal Circuit held there was no requirement for both references to teach a key claim element to find a motivation to combine the references. And the PTAB also erred by requiring Intel to show that the teachings of a reference were necessary, as opposed to merely desirable, to the proposed combination.
AlexSam, Inc. v. MasterCard Int’l Inc., No. 2021-1785, 2022 WL 621374 (Fed. Cir. Mar. 3, 2022)
AlexSam owned two patents relating to pre-paid cards, like gift cards. AlexSam licensed its patents to MasterCard. That license agreement included a covenant not to sue for patent infringement. The parties' relationship soured, and AlexSam sued for breach of contract in district court. MasterCard countersued for declaratory judgment of noninfringement and sought covered business method review of AlexSam's patents before the PTAB.
AlexSam moved to dismiss MasterCard's declaratory judgment counterclaim, alleging MasterCard lacked standing due to the covenant not to sue. The district court denied the motion to dismiss, and reserved the issue for later in the proceedings. AlexSam also opposed institution of the CBM review, claiming MasterCard also lacked standing under the relevant regulations, again relying on the covenant not to sue. The PTAB agreed with AlexSam and denied institution of the CBM proceedings.
MasterCard then moved for summary judgment on the contract claims in the district court proceedings, claiming AlexSam took inconsistent positions regarding the covenant not to sue, warranting judicial estoppel. The district court agreed with MasterCard, finding that AlexSam had necessarily taken the position before the PTAB that the covenant not to sue was broad enough to encompass the contract breach claims.
The Federal Circuit reversed, finding that the district court had misconstrued AlexSam's position. MasterCard had argued for a broad interpretation of the covenant not to sue, while AlexSam had argued it was limited to patent infringement. MasterCard sought to defend the district court's holding by pointing to a statement by AlexSam describing the covenant as "broad," but the Federal Circuit held it was clear from context that AlexSam's statement was only further support for reading the covenant as relating to patent infringement.
The Federal Circuit was clear that its reversal was limited to finding the district court abused its discretion in applying judicial estoppel based on a mistaken reading of AlexSam’s argument. The proper construction of the covenant not to sue itself, however, was not at issue on appeal.
In re Volkswagen Grp. of Am., Inc. and In re Hyundai Motor Am., 28 F.4th 1203 (Fed. Cir. 2022)
StratosAudio, Inc., filed patent infringement cases against car manufacturers and distributors, Volkswagen and Hyundai, in the Western District of Texas. Under 28 U.S.C. § 1400(b), venue is only proper in patent cases in a district where there is a "regular and established place[s] of business" of the defendant or an agent conducting the defendant’s business at that location. Stratos contended that requirement was met here because independently owned and operated car dealerships sold the manufacturers' cars and provided warranty services in the district, pursuant to franchise agreements with the manufacturers. The manufacturers moved to dismiss or transfer venue; Judge Albright of the Western District of Texas denied the motions.
Both manufacturers petitioned for writs of mandamus at the Federal Circuit, which the Federal Circuit granted, ultimately vacating and remanding the district court’s decisions on venue. The Federal Circuit had previously recognized in In re Google LLC, 949 F.3d 1338, 1342 (Fed. Cir. 2020), that contractual provisions that give a party "interim control" over another party—such as controlling its day-to-day operations or step-by-step instructions for conducting business —could give rise to venue, while mere constraints on how the other party can perform certain services could not.
Here, the franchise agreements did not give the manufacturers sufficient control over the dealerships' sales or warranty work to transform them into agents for venue purposes. At most, the franchise agreements imposed constraints related to sales and warranty work but did not amount to control over those businesses. This holding was bolstered by a "near uniform body of case law" finding similar contracts did not amount to agency relationships as well as by express disclaimers of an agency relationship in the franchise agreements.
