Overview
In this series of monthly updates, we summarize decisions issued last month where the Federal Circuit reversed or vacated PTAB or trial court rulings, which can provide guidance on how to succeed on appeal.
Quick takeaways:
- A district court abused its discretion by finding it lacked jurisdiction to order a defendant properly before it to transfer foreign patents to a plaintiff otherwise entitled to such relief.
- Mandamus warranted to hold district court abused discretion by ordering that trial would be held outside the geographical reach of the division, without making the findings necessary to support such a procedure under proper statutory authority.
- Claim construction inconsistent with the purpose of the invention is found unreasonable.
- The Patent Trial and Appeal Board (PTAB) erred by characterizing a reference’s selection of one design as teaching away from another or as a strong preference for that design, where the comparisons of those designs did not support the conclusion. It further erred by requiring a motivation to combine each of the elements of the proposed combination, ignoring that a reference is more than the sum of its individual parts.
- It is erroneous to extend the claim limitation of a first component to a second component even when the second component is molded into the first component.
- When multiple different methodologies exist for measuring a parameter recited in a claim, the relevant indefiniteness inquiry becomes whether the differing methodologies lead to materially different results in defining the boundaries of the claim.
SiOnyx, LLC, et al v. Hamamatsu Photonics K.K., 981 F.3d 1339, Case No. 19-2359 (Fed. Cir. Dec. 7, 2020)
A jury found that the defendant had used information subject to a non-disclosure agreement with the plaintiff to develop a product and acquire patents in numerous countries. The plaintiff moved for equitable relief including the transfer of ownership of foreign patents. The district court doubted it had jurisdiction to order such relief and denied the request. The Federal Circuit reversed, holding the district court had the jurisdiction to order a party properly before it—the defendant—to transfer the foreign patents.
SiOnyx was a company formed to develop and commercialize a material called "black silicon." SiOnyx entered into a non-disclosure agreement with Hamamatsu Photonics in furtherance of that goal. The agreement provided, among other things, that SiOnyx would retain all patent rights "in, or arising from" the information it disclosed to Hamamatsu under that agreement.
Hamamatsu developed a competing product, based in part on information that SiOnyx disclosed pursuant to the agreement. Hamamatsu further filed a series of patent applications in Japan among other applications in the US and abroad claiming priority to the Japanese applications.
SiOnyx sued Hamamatsu for breach of the NDA and patent infringement, seeking damages and equitable relief. A jury found in SiOnyx's favor and awarded damages. Among the injunctive relief that SiOnyx sought were orders requiring Hamamatsu to transfer ownership of the patents based on information disclosed under the NDA to SiOnyx. The district court granted that relief as to US patents, but denied it as to foreign patents. Although the district court acknowledged the same legal principles applied to both sets of patents, the court was concerned it lacked jurisdiction to order the relief requested.
Both sides appealed numerous issues. The Federal Circuit affirmed the vast majority of the issues before it out of deference to the jury or the district court, or finding that the district court's cited authority was appropriate. But the Federal Circuit reversed as to a single issue—the district court's denial of equitable relief as to the foreign patents.
The Federal Circuit held that the district court abused its discretion because the district court did in fact have jurisdiction to order the transfer of the foreign patents. The Federal Circuit explained that the requested relief would have been "an exercise of the court's authority over the party, not the foreign patent office in which the assignment is made." That is, even though the district court lacked authority over the Japanese patent office or any other foreign patent office, the district court could order Hamamatsu to take the actions necessary to effect the transfer in question.
In Re: Intel Corp., Case No. 21-105, 2020 WL 7647543 (Fed. Cir. Dec. 23, 2020)
On mandamus, the Federal Circuit vacated a district court's decision to hold a trial in a different division of the district, finding the district court's cited authority did not permit the order and the district court had not made findings justifying the exercise of other procedures.
This patent infringement suit was initially filed in the Waco Division of the Western District of Texas. The assigned judge, Judge Albright, transferred the case to the Austin Division under 28 U.S.C. § 1404(a) (i.e., for convenience), where he continued to preside over the case and set a trial date of January 2021. In view of an order prohibiting in-person trials at the Austin courthouse due to the COVID-19 pandemic, however, the district court ordered—over the defendant’s objection—that the trial would be held in Waco. The district court cited Rule 77(b) of the Federal Rules of Civil Procedure and its inherent powers as authority for this order. The defendant petitioned for a writ of mandamus.
The Federal Circuit first acknowledged that mandamus was the appropriate procedure for reviewing a transfer of venue or, as here, just the trial proceedings—a conclusion without serious dispute. This is because the defendant would not be able to get meaningful review otherwise.
The Federal Circuit then proceeded to examine whether Judge Albright abused his discretion by ordering that the trial would be held in Waco. He did. Specifically, the Federal Circuit held that neither cited authority permitted holding the trial in a judicial division other than where the case lied. The Federal Circuit pointed out that other statutory authority could affect the same result, if, for example, the district court determined that transfer of the whole case back to Waco was warranted.
Importantly, the Federal Circuit acknowledged that there were legal mechanisms available to the district court—such as transferring the entire action back to Waco (again under Section 1404(a)), but that the district court had failed to make the findings necessary to effectuate that transfer.
KEYnetik, Inc. v. Samsung Electronics Co., Ltd., Case No. 20-1270 (Fed. Cir. Dec. 23, 2020)
The Federal Circuit vacated and remanded the Board's final written decision based on claim construction.
The Board construed the claim's sending the "sleep command" "after the command is executed" to indicate a temporal relationship, requiring that the sleep command be issued at some point later in time after the executed command occurs. The Board made clear that there are no temporal or other limits to the "at some point in time" aspect of its construction.
The Federal Circuit found that construction unreasonably broad. Looking at the patent as a whole, the "sleep command" must be sent shortly after and in direct response to the executed command. The specification's use of the phrase "is sent" implies an immediacy. The fundamental purpose of the claimed invention is to ignore the returning motion during the sleep period. The Board's construction, which would encompass a "sleep command" that follows an executed command at any time thereafter, is inconsistent with that purpose.
The Federal Circuit held that the broadest reasonable interpretation for sending the "sleep command" "after the command is executed" requires that the time between the last "executed command" and the sending of the "sleep command" be short, without substantial intervening activity. The case is therefore remanded to the Board to conduct a new construction analysis.
General Electric Co. v. Raytheon Technologies Corp., ---F.3d ---, Case No. 19-1319, 2020 WL 7635982 (Fed. Cir. Dec. 28, 2020)
The Federal Circuit vacated and remanded an inter partes review decision that found a patent not obvious, holding that the Board’s non-obviousness decision lacks substantial evidence support.
The Board concluded that Raytheon's patent on a method of designing a gas turbine engine was not obvious. In rejecting GE's petition, the Board made three findings that GE contested on appeal: (1) that the primary reference taught away from the claimed two-stage turbine, (2) even if not, the primary reference expressed a clear preference for a one-stage engine, undermining a motivation to combine it with a reference with a two-stage design, and (3) that GE failed to prove a motivation to modify the engine in the primary reference to achieve the claimed invention "as a whole."
The Federal Circuit found no substantial evidence supported any of those three findings.
As to teaching away, the Federal Circuit noted that the Board correctly recited the legal standard for teaching away but read the facts wrong. The Board stated that the primary reference described a one-stage turbine as "critical" or "enabling" the design it disclosed, but reading the cited reference in its full context, the Federal Circuit recognized that subcomponents of the design were critical and enabling—not the design itself.
As to the preference for the one-stage design, the Federal Circuit determined the primary reference offered only weak support for that design. The reference did identify certain advantages conferred by a one-stage design, but critically, it did not disparage a two-stage design as lacking those advantages. The Federal Circuit carefully dissected a slew of statements in the primary reference, explaining why none ultimately disparaged the one-stage design.
Without the Board's teaching away or strong preference findings, the Federal Circuit found the Board lacked substantial evidence for rejecting the alleged motivation to combine those references.
The Federal Circuit then turned to the Board's conclusion that GE had failed to establish obviousness as to the challenged independent claim "as a whole." Specifically, the Federal Circuit faulted the Board for effectively requiring GE to show that an ordinary-skilled artisan would have been motivated to combine each of the elements disclosed in a reference, even where the primary reference already combined them. Rather, a prior art reference must be analyzed as "more than the sum of its individual elements." To the extent the proposed combination required modification to the elements of the primary reference, the Federal Circuit suggested that would have been properly considered a challenge to an ordinary-skilled artisan’s expectation of success in combining the references—an argument that the Board rejected.
Also notable in this decision is the Federal Circuit's analysis of appellate standing. As in district court, an appellant must establish that the appeal presents a "case or controversy" suitable for an Article III court to address—a criterion not required to petition the Board. Here, GE needed to show that it suffered an injury in fact even though Raytheon had not threatened to sue. The panel noted that even though GE had only "coyly" and "obliquely" explained how its ongoing development work presented a substantial risk of infringement—understandable, lest GE admit infringement—its allegations were adequately concrete to confer standing. Specifically, the Federal Circuit relied on GE's allegations of ongoing expenditures, together with a preferred design, an intended offeree currently engaged in commercial discussions, and indications of belief that Raytheon would accuse the product of this work of infringement.
Maxill Inc. v. Loops, LLC, Case No. 20-1519 (Fed. Cir. Dec. 31, 2020)
The Federal Circuit disagreed with the district court's non-infringement finding because the flexibility limitation as incorrectly directed to the combination of the elongated body and head, rather than the elongated body alone.
The district court sua sponte entered summary judgment of noninfringement in favor of Maxill, on the ground that the accused toothbrush's elongated body was not "flexible throughout," as required by the claims. The claimed toothbrush defines three components: (1) the elongated body, (2) the head, and (3) the bristles. The district court held that the accused product was not flexible throughout because, once the head was inserted into the elongated body, the elongated body's head portion did not bend.
The Federal Circuit disagreed, finding that the flexibility limitation does not pertain to the head component. First, the claim describes the head as a separate element from the elongated body. The language of another claim confirmed that the elongated body's flexibility limitation excludes consideration of the head. Further, the specification describes the head and the elongated body as two separate components, explaining that the elongated body is made of a flexible material whereas the head is made of a hard material. Finally, the prosecution history does not contain any disclaimer requiring that the head be considered in evaluating the flexibility of the elongated body. In sum, that flexibility requirement of the elongated body does not extend to the rigid head—even when the head component is molded to the head portion of the elongated body.
The Federal Circuit also found that Loops did not have a full and fair opportunity to argue and present its case against summary judgment of noninfringement. Maxill requested that the district court sua sponte grant summary judgment in its opposition to Loops's motion. Loops was limited by both time and page length with respect to its response. The district court also refused to consider any additional evidence. Under the circumstances, the Federal Circuit concluded that Loops did not have a full and fair opportunity to respond prior to the district court's sua sponte grant of summary judgment.
Ball Metal Beverage Container v. Crown Packaging Tech., Case No. 20-1212 (Fed. Cir. Dec. 31, 2020)
The Federal Circuit vacated the district court’s grant of summary judgment of invalidity for indefiniteness.
The district court granted summary judgment of invalidity, finding the claim terms "second point" and "transition" indefinite, on the ground that the patents failed to reference any test for locating the second point and Crown’s expert had inconsistently presented at least three different tests for locating the second point.
The Federal Circuit disagreed with the district court's indefiniteness analysis. That multiple different methodologies exist for measuring a parameter recited in a claim does not by itself render a claim indefinite. Under such circumstances, the relevant indefiniteness inquiry becomes whether the differing methodologies lead to materially different results in defining the boundaries of the claim.
The purpose of the claimed second point is simply to define the angle, and it is ultimately the claimed angle range, not the location of the second point itself, that matters for determining the scope of the claim and whether an accused product infringes it. The relevant inquiry is therefore whether the different methodologies used to identify the second point yield materially different angle ranges. The district court's analysis does not establish what material difference in angle range outcome, if any, exists among the expert's different methodologies. Accordingly, the Federal Circuit vacated and remanded the district court's decision to analyze whether the methods lead to materially different results for the angle.
