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:
- Plastronics Socket Partners, Ltd. v. Hwang: in a royalty agreement including a first section that prevents unauthorized licensing and a second section that can inform damages when the first section is breached due to unauthorized licensing, if the unauthorized licensing claim under the first section is the only claim at issue and is barred by the statute of limitations, there are no damages.
- Evolusion Concepts, Inc. v. HOC Events, Inc.: a trial court errs in excluding one type of product from its claim construction, while neither the ordinary meaning of the phrase itself, nor any other language in the relevant claims, points to such a restriction or precludes that type of product.
- In re Netflix: directing the district court to transfer the case to California, the Federal Circuit faulted the district court for placing too high a burden on Netflix to demonstrate "source of proof" and "compulsory process" factors, discounting Netflix's showing of material witnesses in California, and relying too heavily on time-to-trial statistics.
- Polygroup Limited MCO v. Willis Electric Company, Ltd.: it is erroneous to construe claims to require that two types of connections occur in a single step, when the specification discloses embodiments having a series of connections and some claims include different steps to form the connections.
- Kyocera Senco Industrial Tools Inc. v. ITC: it is error to admit the testimony of an expert who lacks ordinary skill in the art; means-plus-function provision applies to "lifter member" claim limitation that is described in a purely function matter; components that are listed separately in claims are presumed to be distinct.
- directPacket Research, Inc. v. Polycom, Inc.: construing "multimedia data stream" to require media, according to its plain and ordinary meaning, does not contradict the claim language or an embodiment, because the open-ended claim word “comprise” does not limit the multimedia data stream to the recited signaling protocol and the embodiment shows the signaling protocol as only one example and allows other protocols not identified.
- Nature Simulation Systems Inc. v. Autodesk, Inc.: it is legal error to require that questions about indefiniteness of claim terms be answered in the claims alone. Phrases "searching neighboring triangles of the last triangle pair that holds the last intersection point" and "modified Watson method" are not indefinite because any relevant questions are answered in the specification, and the patent examiner withdrawn indefiniteness objections after the patentee added designated technologic limitations to claims.
Spring pins were used with sockets to receive and test semiconductor chips. Hwang developed a type of spring pin (the "H-Pin") that provided manufacturing benefits. Hwang and Plastronics Socket executed a royalty agreement to develop the H-Pin technology. Paragraph 5 of the agreement prohibited the parties from granting licenses on the H-Pin without the other party's approval. Paragraph 4 required the parties to split any royalty payment from third parties. At trial, only paragraph 5 was at issue. The jury found both parties had breached the agreement and awarded damages to both parties. On appeal, the Federal Circuit affirmed the award of damages to Hwang, but reversed the damages awarded to Plastronics Socket Partners, Ltd. and its later created company Plastronics H-Pin, Ltd. (together "Plaintiffs").
The Federal Circuit's reversal focused on whether the four-year statute of limitations applied. Almost ten years ago, Hwang breached paragraph 5 by licensing the technology to a company without the required consent. But the district court refused to find that the statute of limitations barred the claims. The district court reasoned that since paragraph 4 allowed royalty payment under a license, the jury could award damages for failure to make periodic royalty payments during the limitations period – the four years before the complaint was filed.
The Federal Circuit disagreed with that reasoning. The fact that the royalty payments described in paragraph 4 could inform the damages for a breach of paragraph 5 due to unauthorized licensing did not affect the date on which the claim for a breach of paragraph 5 arose. This case did not involve a claim for failure to make periodic payments in situations where the statute of limitations applied separately to each missed payment. Because the facts giving rise to the breach came into existence almost ten years before the suit was filed, the four-year statute of limitations barred the claim.
Therefore, the Federal Circuit reversed the damages awarded to Plaintiffs.
Evolusion Concepts, Inc. v. HOC Events, Inc., 22 F.4th 1361 (Fed. Cir. Jan. 14, 2022)
Evolusion Concepts sued Juggernaut Tactical and HOC Events, alleging infringement of a patent directed to a device and method converting a semi-automatic rifle with a detachable magazine to one with a fixed magazine. In the Juggernaut Tactical case, the district court ruled that the term "magazine catch bar" excluded a factory-installed magazine catch bar. In the HOC Events case, the district court based its decision on the same claim construction. The Federal Circuit disagreed with the claim construction.
Contrary to the district court's claim construction ruling, the Federal Circuit held that the term "magazine catch bar" included a factory-installed magazine catch bar. In the Federal Circuit's view, neither the ordinary meaning of the phrase itself, nor any other language in these claims, pointed to such a restriction. The district court's construction relied primarily on one sentence of the specification, which stated that "[t]he invention is a permanent fixture added to a semi-automatic firearm by removing the standard OEM magazine catch assembly and installing the invention." But according to the Federal Circuit, that specific sentence, as well as an unasserted claim reciting similar steps, did not preclude the installation of a factory-installed magazine catch bar.
Thus, the Federal Circuit reversed in part, vacated in part, and remanded the district court’s decisions for further proceedings under the modified claim construction.
In re Netflix, No. 22-110, 2022 WL 167470 (Fed. Cir. Jan. 19, 2022)
CA Inc. and Avago Technologies International Sales Pte. Limited (collectively "CA") brought a patent infringement case against Netflix in EDTX. Netflix attempted to transfer the case to N.D. Cal, but the district court denied its motion. Netflix sought and received a writ of mandamus from the Federal Circuit transferring the case to N.D. Cal. under U.S.C. § 1404(a).
The Federal Circuit took issue with the district court's analysis of several factors for determining whether to grant Netflix’s motion to transfer. Specifically, the Federal Circuit addressed the district court's analysis of the (1) sources of proof factor, (2) compulsory process factor, (3) willing witness factor, and (4) time-to-trial statistics.
With respect to the "sources of proof" and "compulsory process" factors, Netflix argued that these factors supported transfer because source code, documentation, and potential non-party witnesses, including prosecuting attorneys, were located in Northern California. The district court discounted the sources of evidence because Netflix failed to "articulate the precise way that the evidence supports its claims." And for the non-party witnesses, the district court found that Netflix failed to show the witnesses would provide "important" testimony. With respect to both of these factors, the Federal Circuit found that the district court made legal error by placing too high a burden on Netflix to articulate how the evidence and non-party witnesses would support its claims.
The Federal Circuit also held that the district court abused its discretion with respect to the "willing witness" factor. The district court found this factor neutral to transfer because CA identified 7 Netflix employees in Texas as potential witnesses, while Netflix identified 21 employees in Northern California as potential witnesses. The employees identified by Netflix, however, were part of the accused products' engineering teams and had written articles about the accused technology that was relied upon by CA in its complaint. The Federal Circuit found that Netflix made a far more compelling showing on this factor, and that it should have been weighed in favor of transfer by the district court.
Finally, the Federal Circuit found that "time-to-trial statistics" alone were insufficient to warrant keeping the case in the Texas forum when other relevant factors weighed in favor of transfer.
The patents at issue were directed to lighted artificial trees having separable, modular tree portions mechanically and electrically connectable between trunk portions. With respect to one claim, the Federal Circuit found that the PTAB exceeded the scope of the previous remand and vacated the the decision regarding that claim. For the remaining claims, the Federal Circuit reversed the PTAB’s patentability decision because of erroneous claim construction.
On claim construction, the Federal Circuit agreed with Polygroup that the PTAB erroneously construed the challenged independent claims to require that mechanical and electrical connections occur in a single step (e.g., when the mechanical connection was made, an electrical connection was made). The PTAB mostly relied on the wherein clauses in independent claims as support for reading this limitation into the claims, such as "wherein the second tree portion is mechanically and electrically connectable to the first tree portion by coupling a lower end of the second trunk body to an upper end of the first trunk body . . . thereby causing the trunk connector of the first trunk portion to make an electrical connection with the trunk connector of the second trunk portion."
The Federal Circuit noted that the PTAB provided little explanation for its reliance on those wherein clauses. Additionally, the specification disclosed embodiments in which a series of mechanical connections were made when assembling the lighted artificial tree's tree/trunk portions. Some claims used more than one step to form connections – for example an "aligning" step to form a first mechanical connection, and a "receiving" step to form both a second mechanical connection and the electrical connection.
The Federal Circuit held that under the proper claim construction, Polygroup had established the unpatentability of the claims challenged on appeal.
Kyocera filed a complaint at the ITC, alleging that Koki infringed patents relating to linear fastener driving tools. The ALJ found that the accused products did not infringe either directly or by inducement, but the Commission reversed that finding. Both Kyocera and Koki appealed. The Federal Circuit disagreed with the findings as to expert testimony, the construction of "lifter member," and the construction of "initiating a driving cycle." The Federal Circuit affirmed the remaining findings.
Regarding expert testimony, the Federal Circuit held that the ALJ erred by admitting testimony of an expert who lacked ordinary skill in the art. That definition of a person of ordinary skill in the art required, at minimum, two years' experience designing power nailers. The expert, however, had no experience in power nailer design, despite having advanced degrees in engineering and extensive experience in the design and manufacture of fastener driving tools. Thus, the Federal Circuit concluded that the ALJ should not have admitted the expert’s testimony.
Regarding the construction of "lifter member," the Federal Circuit agreed with Koki that the ALJ erred by not applying the means-plus-function provision under § 112 ¶ 6. Even though the "lifter member" limitation did not use the word "means," the claim described it in a purely functional manner and did not describe any structural detail about it. Further, the Federal Circuit found that a person of ordinary skill in the art would not understand the claimed "lifter member" to have a sufficiently definite meaning as the name for a structure, and nothing in the written description provided a clear and unambiguous definition of "lifter member." Accordingly, the Federal Circuit held that § 112 ¶ 6 applied to the "lifter member" limitation, and remanded to the Commission to decide what structures corresponded to that limitation.
Regarding the construction of "initiating a driving cycle," the Commission found that initiating a driving cycle by pressing the exit end of safety contact element met the claim language that required pressing the exit end of mechanism. The Federal Circuit disagreed. The mechanism and the safety contact element were distinct components. The written description disclosed multiple embodiments. In one embodiment, a driving cycle was initiated by pressing the safety contact element. In another, a driving cycle was initiated by pressing the exit end of the mechanism. The patentees were free to claim only the latter embodiment. Because the "safety contact element" and "fastener driving mechanism" were separate components, the Federal Circuit held that the "exit end of the mechanism" could not be "the exit end of the safety contact element."
Accordingly, the Federal Circuit vacated and remanded for further proceedings.
directPacket Research, Inc. v. Polycom, Inc., No. 21-1661, 2022 WL 243918 (Fed. Cir. Jan. 26, 2022)
Polycom petitioned for inter partes review of directPacket's patent that related to facilitating multimedia communication between devices that used incompatible communication protocols. The PTAB found the claims obvious. directPacket appealed that decision, challenging the PTAB’s construction of claim term "multimedia data stream." The Federal Circuit found the PTAB's claim construction to be erroneous, construed the term to take its plain and ordinary meaning, and remanded back to the PTAB for further proceedings under the new construction.
The central dispute was whether "multimedia data stream" must include "media." The PTAB found that a multimedia data stream did not have to consist of both signaling and media messages, and might be a signaling message only. On appeal, while the parties agreed that the plain and ordinary meaning of the term required media data, Polycom argued that the term as used in the claims must contain only signaling data, and no media. Polycom argued that (1) the claim language itself supported its construction, and (2) a contrary construction would exclude a preferred embodiment. The Federal Circuit rejected both arguments.
Starting with the claim language itself, Polycom argued that the language required the "multimedia data stream" to contain only signaling data. Claim 1 recited "receiving the multimedia data stream … in a first protocol … wherein the first protocol comprises a signaling protocol." The Federal Circuit rejected this argument based on the claim's use of the open-ended "comprising" term. The term "comprising" in the claim language did not foreclose non-signaling protocols, including media, in addition to the signaling protocol.
Polycom also argued that requiring the claimed "multimedia data stream" to include media would exclude an embodiment. Polycom argued that the embodiment disclosed using only "Session Initiation Protocol" ("SIP"), which is a signaling protocol. The Federal Circuit disagreed that the embodiment disclosed only SIP. Rather, the Federal Circuit found this embodiment offered SIP as just one example. As such, requiring "multimedia data stream" to include media did not exclude any embodiments of the invention.
At bottom, the Federal Circuit construed the term "multimedia data stream" according to its plain and ordinary meaning, which must include media.
Nature Simulation Systems ("NSS") owned patents directed to computer-implemented method for building three-dimensional objects using a "Boolean operation" method. NSS sued Autodesk for infringing these patents. The district court found two terms indefinite, rendering the claims invalid. The Federal Circuit disagreed, concluding that the district court erred on the legal standard for indefiniteness, and that on the correct standard, the claims were not indefinite.
The district court held two claim terms – "searching neighboring triangles of the last triangle pair that holds the last intersection point" and “modified Watson method" – indefinite based on "unanswered questions" suggested by Autodesk’s expert. The questions included such as "what the 'last triangle pair' or 'last intersection point' is," “what is the meaning of removing a point of intersection," and etc. NSS argued that the specification answered those questions. But the district court declined to consider information in the specification, instead requiring that the questions be answered in the claim language, standing alone.
The Federal Circuit held that "claim language, standing alone" was not the correct standard of law, and was contrary to uniform precedent. Patent claims are viewed and understood in light of the specification, the prosecution history, and other relevant evidence. In the Federal Circuit’s view, it was not disputed that the specification described and enabled practice of the claimed method. Further, during prosecution, the patent examiner had withdrawn indefiniteness objections after additional technologic limitations were added to claims. Actions by examiners were entitled to appropriate deference.
Accordingly, the Federal Circuit held that indefiniteness was not established as a matter of law and reversed the district court’s decision.
