Overview
In this series of monthly updates, we summarize decisions issued last month where the Federal Circuit reversed or vacated PTAB or lower court rulings, which can provide guidance on how to succeed on appeal.
Quick takeaways:
- Venue: While a foreign defendant can be sued in any district, venue for a domestic defendant in a Hatch-Waxman case is more limited.
- Motion to Transfer: The Federal Circuit granted defendant's petition to transfer the case, and noted that once a party files a transfer motion in the district court, disposing of that motion should take top priority.
- Analogous Art: The scope of prior art includes not only art from the same field of endeavor, but also art that is reasonably pertinent. Whether prior art is reasonably pertinent rests on the extent to which the prior art and the claimed invention relate to a similar problem or purpose.
- Judgment as a Matter of Law (JMOL): JMOL of non-infringement is improper when there is substantial evidence to support a jury finding of infringement. JMOL of invalidity is procedurally improper when the defendant did not present its invalidity case at trial and the plaintiff did not have the opportunity to defend its claims.
- Equitable Estoppel: Summary judgment of equitable estoppel and a finding of misleading conduct can be improper where other possible inferences can be drawn from the evidence.
- Patent Eligibility: Patent claims related to storing templates, obtaining and applying templates, and creating templates were found not to contain an inventive concept.
- Invention Assignment: Assignment provisions with broad restraining effects can render them invalid.
Valeant Pharm. North Am. LLC, et al. v. Mylan Pharm. Inc., Case No. 2019-2402 (Fed. Cir. Nov. 5, 2020)
The district court dismissed the complaint against all defendants based on improper venue. On appeal, the Federal Circuit vacated the dismissal of the foreign defendant, because a foreign entity is properly subject to venue in every judicial district. The Federal Circuit affirmed the district court’s dismissal of domestic defendants, holding that, in Hatch-Waxman cases, venue is proper only in districts where actions related to the submission of an ANDA occur, not in all locations where future distribution of the generic products specified in the ANDA is contemplated.
In re: Apple Inc., Case No. 2020-135 (Fed. Cir. Nov. 9, 2020)
The district court denied Apple's motion to transfer the case from the Western District of Texas to the Northern District of California. Apple petitioned for a writ of mandamus. The majority found that the district court abused its discretion in denying transfer. The Federal Circuit majority also stated that once a party files a transfer motion in the district court, disposing of that motion should unquestionably take top priority.
The Federal Circuit majority applied the law of the Fifth Circuit, which assesses transfer requests using the well-established private and public interest factors. The private interest factors are: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive. The public interest factors are: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws [or in] the application of foreign law.
The "relative ease of access to sources of proof" factor relates to non-witness evidence, and the district court legally erred in considering witnesses as "sources of proof." Additionally, in patent infringement cases, the bulk of the relevant evidence usually comes from the accused infringer, and the district court erred by failing to meaningfully consider the wealth of important information in the Northern District of California.
As to the "the cost of attendance for willing witnesses" factor, the district court gave too much significance to the fact that the inventors and patent prosecutor live closer to W.D. Tex. than N.D. Cal. Most relevant party witnesses are located in N.D. Cal. and it is likely that the parties will each have one or more potential trial witnesses from N.D. Cal. Therefore, this factor weighs at least slightly in favor of transfer.
As to the "all other practical problems that make trial of a case easy, expeditious, and inexpensive" factor, the district court found that the fact that significant steps had already been taken weighed heavily against transfer. The Federal Circuit majority disagreed, finding that the district court legally erred in its analysis, because almost all significant steps took place after the transfer motion was filed and the district court gave undue priority to the merits of the case over the transfer motion. The district court also misapplied the law in concluding that judicial economy weighted against transfer because N.D. Cal. had more pending cases. To the extent that court congestion matters, what is important is the speed. N.D. Cal. has historically had a shorter time to trial for patent cases. Accordingly, the Federal Circuit majority concluded that this factor weighs at least slightly in favor of transfer.
As to "the administrative difficulties flowing from court congestion" factor, the Federal Circuit majority found the district court erred by relying too heavily on the scheduled fast trial date, noting that "[a] district court cannot merely set an aggressive trial date and subsequently conclude, on that basis alone, that other forums that historically do not resolve cases at such an aggressive pace are more congested for venue transfer purposes." The Federal Circuit majority found the factor neutral.
With regard to "the local interest in having localized interests decided at home" factor, the district court found this factor to be neutral, because, among other reasons, Apple has substantial presences in both N.D. Cal. and W.D. Tex. The Federal Circuit majority stated that this factor most notably regards the significant connections between a particular venue and the events that gave rise to a suit. Because the accused products were designed, developed, and tested in N.D. Cal., and because the lawsuit calls into question the work and reputation of several individuals residing in N.D. Cal., the Federal Circuit majority found that this factor weighs in favor of transfer.
Judge Moore dissented and stated that the district court's denial of Apple’s transfer motion does not reflect a clear abuse of discretion.
Donner Tech., LLC v. Pro Stage Gear, LLC, Case No. 2020-1104 (Fed. Cir. Nov. 9, 2020)
The PTAB rejected IPR challenges, finding that the petitioner failed to prove that an asserted prior art reference (Mullen) was analogous art. The Federal Circuit disagreed.
The scope of prior art includes not only art from the same field of endeavor, but also art that is reasonably pertinent to the particular problem. The question here is whether the Mullen reference is reasonably pertinent, which ultimately rests on the extent to which Mullen and the claimed invention relate to a similar problem or purpose.
The Federal Circuit found that the Board's characterization of the problem effectively collapsed the field-of-endeavor and reasonable-pertinence inquiries. The Board did not properly identify and compare the problems to which the challenged patent and Mullen relate, and therefore failed to apply the proper standard. The case was remanded back to the Board to resolve this issue.
CR Bard, Inc. v. AngioDynamics, Inc., Case No. 19-1756 (Fed. Cir. Nov. 10, 2020)
At the close of Plaintiff Bard's case-in-chief, Defendant AngioDynamics moved for judgment as a matter of law. The district court terminated the trial and granted judgment that the asserted claims were not infringed, were not willfully infringed, and were invalid. The Federal Circuit reversed the judgment of invalidity under Section 101, vacated the judgment of invalidity as to all other grounds, and vacated the judgment of non-infringement and no willful infringement.
Regarding non-infringement, the district court granted JMOL on three grounds: (1) Bard's expert failed to apply correct claim construction, (2) Bard did not itself test the product to show it met certain claim limitation, and (3) Bard’s evidence had not shown a single entity performed all claimed steps. The Federal Circuit disagreed. First, nothing in the record suggested that Bard's expert disregarded the requirements of the claims under the correct construction, and even if the expert assumed that the claims required an additional intent element, the mistake does not make his testimony legally insufficient to support an infringement verdict. Second, Bard was entitled to rely on AngioDynamics's statements to show infringement, and there was no reason to require direct testing evidence a matter of law to establish infringement. Lastly, there was sufficient circumstantial evidence to support AngioDynamics's induced infringement of the method claims.
Regarding willful infringement, the district court granted JMOL based on its conclusion of non-infringement, and in the alternative, because AngioDynamics had obtained written opinions of counsel. That was error because Bard introduced sufficient evidence to support a jury verdict of willfulness, and while an invalidity opinion is a relevant factor in determining willfulness, it is not dispositive.
Regarding invalidity, the district court granted both summary judgment and JMOL. The JMOL was procedurally improper because AngioDynamics did not present its invalidity case at trial and Bard did not have the opportunity to defend the validity of the asserted claims. The Federal Circuit addressed the merits of the district court's invalidity judgment only as to the summary judgment grounds. Regarding patent eligibility, the Federal Circuit held that although the content of the information conveyed by the claimed markers is printed matter, each claim as whole is patent eligible because none are solely directed to the printed matter. Regarding anticipation, conflicting evidence created a genuine dispute of material fact as to the novelty of the asserted claims.
Ferring B.V. v. Allergan, Inc. Case No. 2020-1098 (Fed. Cir. Nov. 10, 2020)
In 2012, Ferring filed a complaint in the district court to correct inventorship. The defendants moved for summary judgment that Ferring's claims were barred by equitable estoppel. The district court granted the motion, finding that correspondence in 2004 demonstrated misleading conduct by Ferring.
On appeal, Ferring argued that the district court erred in concluding that Ferring engaged in misleading conduct because that was not the only possible inference from the evidence. The Federal Circuit agreed. It found that the 2004 correspondence is subject to multiple interpretations. And the district court failed to address the material differences in the scope of the issued patent claims as compared to the invention described in the correspondence and the application claim.
Additionally, Ferring presented evidence to argue that defendants' unclean hands should preclude equitable relief. The district court's opinion did not explicitly indicate that it considered all of Ferring's evidence, including that of defendant's copying and misrepresentations to the USPTO. The Federal Circuit thus found an abuse of discretion in granting summary judgment of equitable estoppel.
Gree, Inc. v. Supercell Oy, Case No. 19-1864 (Fed. Cir. Nov. 19, 2020)
In a final written decision, PTAB found claims 1, 8, and 10-20 patent-ineligible and claims 2-7 and 9 patent-eligible. On appeal, the Federal reversed the Board’s patent-eligible determination of claims 2-4 and 9, and affirmed the remaining decision.
The patent at issue relates to city building games, in which a player builds a city within a virtual space. Claims 2-4 recite storing templates of different players, applying the templates of different players, and obtaining and applying templates from different computers. Claim 9 recites creating a template by combining a plurality of templates based on a command from the player or from another player. According to the Federal Circuit, the claims merely recite generic computer components performing their standard functions, and they are broad enough to encompass the implementation of long-standing and conventional correspondence chess on a computer. Therefore, it was error to conclude such claims provide an inventive concept.
Whitewater West Industries v. Alleshouse, Case No. 19-1852 (Fed. Cir. Nov. 19 2020)
Whitewater sued two named inventors and the assignee of the patents at issue, claiming that one named inventor, a former employee of Whitewater, had to assign the patents to Whitewater under the terms of his employment contract, and that the other named inventor was improperly listed as an inventor. The district court ruled in favor of Whitewater. The Federal Circuit reversed the judgment because the assignment provision is void under California law. As a result, Whitewater lacked standing to contest inventorship. Therefore, the Federal Circuit also reversed the judgment on the inventorship count.
The assignment provision of the employment contract is broad. It requires, among other things, the former employee assign to the company all of his rights or interests in any invention he "may make or conceive," "whether solely or jointly with others," if the invention is either "resulting from or suggested by" his "work for" the company or "in any way connected to any subject matter within the existing or contemplated business of" the company. It is undisputed that the inventions were conceived post-employment and without use of the former employer's confidential information.
The Federal Circuit decided that invention-assignment provisions that go beyond protection of proprietary information and ensnare post-employment inventions are to be judged under the provision of the California law that protects former employees. Under California’s strict standards governing restraints on former employees, the agreement in this case is invalid.
Whitewater argues that a different conclusion should be reached under a different provision of California law. The Federal Circuit disagreed, finding that the cited provision did not apply to post-employment inventions, no case law supports such an interpretation, and applying it would produce a conflict with the clear prohibition on such agreements under the previously discussed provision.
