Overview
In this series of monthly updates, we summarize decisions from June 2022 where the Federal Circuit reversed or vacated the Patent Trial and Appeal Board ("Board") or trial court rulings, which can provide guidance on how to succeed on appeal.
Quick takeaways:
- Novartis Pharma. Corp. v. Accord Healthcare, Inc.: the Federal Circuit held that the negative claim limitation that required the absence of a loading dose did not meet the written description requirement.
- Netflix, Inc. v. DivX, LLC: the Federal Circuit held that it was too narrow to construe "level of detail" to mean "level of variation in visual elements across adjacent pixels" for a number of reasons, including that the claim language was broad, that the term should be broader than a dependent claim calculating the difference between adjacent pixels, and that nothing in the specification required the term "detail" to involve comparing values of immediately adjacent pixels.
- Centripetal Networks, Inc. v. Cisco Systems, Inc.: the Federal Circuit vacated the district court's verdict, finding that the judge should have recused himself after learning that his wife had Cisco's stock.
- University of Massachusetts v. L'Oréal S.A.: the Federal Circuit held that "the adenosine concentration applied to the dermal cells" actually referred to the concentration of adenosine in the product applied to the skin, not the resultant concentration in the dermis, in view of the specification and the prosecution history.
- Meenaxi Enterprise, Inc. v. Coca-Cola Co.: the Federal Circuit reversed TTAB's decision to cancel Meenaxi's registered U.S. marks (Coca-Cola used the same marks in India and other foreign countries), because Coca-Cola did not establish a statutory cause of action based on lost sales or reputational injury in the U.S.
- SynQor, Inc. v. Vicor Corp.: the Federal Circuit vacated the Board's determination that rejected new claims added during reexamination because the patent expired.
- Static Media LLC v. Leader Accessories LLC: and the Federal Circuit reversed the district court's contempt finding and its sanctions due to the disclosure of confidential information, because there was a fair ground of doubt as to whether the protective order barred the attorney’s disclosure of confidential information to develop a joint defense strategy.
Novartis owned the asserted patent and marketed a drug under its brand name Gilenya. HEC sought approval to market a generic version of the drug. Novartis sued HEC for patent infringement. The district court found the patents valid and infringed. The Federal Circuit reversed the district court’s judgment and determined that the claims lacked written description.
The asserted patent disclosed methods of treating relapsing-remitting multiple sclerosis (RRMS). Each claim required the absence of a loading dose (A loading dose is a higher-than-daily dose usually given as the first dose). Regarding negative claim limitation, the written description requirement may be satisfied if a skilled artisan would understand the specification as inherently disclosing the negative limitation. But there generally must be something in the specification that conveys to a skilled artisan that the inventor intended the exclusion, such as a discussion of disadvantages or alternatives.
The patent specification did not discuss a loading dose, and there was no evidence that a skilled artisan would understand the silence to necessarily exclude a loading dose. The district court found that the specification’s disclosure of a daily dosage combined with its silence regarding a loading dose would tell a person of skill that loading doses were excluded from the invention. But such finding was inconsistent with the district court's validity decision that a prior art with similar disclosure did not teach the loading dose limitation. Such finding was also at odds with the prosecution history. Further, intrinsic evidence indicated that not mentioning a loading dose would not lead a skilled artisan to exclude a loading dose.
Therefore, the Federal Circuit majority held that it was clearly erroneous for the district court to find that the no-loading-dose limitation met the written description requirement. Judge Linn dissented. In his opinion, the district court applied the correct standard and found ample support in the written description for the no-load limitation.
Netflix, Inc. v. DivX, LLC, 2021-1931, 2022 WL 2298983 (Fed. Cir. Jun. 27, 2022)
DivX owned the challenged patent, which was directed to methods of deblocking compressed video. Claim 1 includes “determining the level of detail of the reconstructed video frame across a region." Applying the construction of the term "level of detail" to mean "level of variation in visual elements across adjacent pixels," the Board held that none of the challenged claims were unpatentable. On appeal, the Federal Circuit vacated that construction.
In the Federal Circuit's view, the construction was too narrow. Starting from the claim language, the Federal Circuit noted that claim 1 was broad and simply provided that the level of detail was calculated across a region. Dependent claim 2 involved determining the absolute difference between each pair of vertically adjacent pixels and summing those differences. Principles of claim differentiation indicated that the term "level of detail," as used in claim 1, encompassed more than just the calculation methodology of claim 2.
The Board relied upon a statement in the specification indicating that the term "detail" referred to visual elements of a video frame that vary significantly "across adjacent pixels." But nothing in the specification required a direct comparison between immediately adjacent pixels. In light of claim 1's reference to "across a region," the use of the phrase "across adjacent pixels" in the specification was best understood to refer to a region of contiguous pixels, rather than being limited to adjacent pairs of pixels.
Therefore, the Federal Circuit held that the Board's interpretation of claim 1 was too narrow, and construed the claim term "level of detail" to mean "level of variation in visual elements across a region of pixels."
Centripetal sued Cisco for infringement of patents related to systems that performed computer networking security functions. The district court awarded enhanced damages and royalties exceeding $2.75 billion to Centripetal.
While the case was still pending before the district court judge, the judge learned that his wife owned 100 shares Cisco stock valued at $4,687.99. The judge then informed the parties that his wife had purchased the stock in October 2019 on the advice of her stockbroker and had no independent recollection of approving the transaction. The judge further explained that at the time he was informed of the existence of the stock, a full draft of his opinion had been prepared and virtually every issue was decided prior thereto. Finally, he stated that the shares did not and could not have influenced his opinion on any of the issues in the case.
Following the judge's disclosure, Cisco filed a motion requesting the judge’s recusal under both § 455(a) (requiring a judge to disqualify himself if his impartiality might reasonably be questioned) and (b)(4) (requiring a judge to disqualify himself if his spouse or minor child has a financial interest). The judge denied Cisco's Motion for Recusal. Further, the judge concluded that placing the Cisco shares in a blind trust "cured" any conflict because it constituted "divestiture" under a safe harbor provided by § 455(f) (disqualification is not required if the interest is divested).
The Federal Circuit held that placing assets in a blind trust was not divestment under § 455(f), and the judge was disqualified from further proceedings in the case under § 455(b)(4). The Federal Circuit further found that the judge's violation of § 455(b)(4) was not harmless error, and vacatur was the appropriate remedy.
University of Massachusetts v. L’Oréal S.A., 36 F.4th 1374 (Fed. Cir. Jun. 13, 2022)
UMass sued L'Oréal S.A. and its American subsidiary, L'Oréal USA, Inc., alleging that they were infringing patents related to skin treatment. Regarding "wherein the adenosine concentration applied to the dermal cells is 10-4 M to 10-7 M," the district court found that the recited concentration range referred to the concentration as it was applied to the dermal cells. Based on that construction, the district court found another limitation "topically applying to the skin a composition comprising a concentration of adenosine" indefinite. On appeal, the Federal Circuit decided that the clause "wherein the adenosine concentration applied to the dermal cells is 10-3 M to 10-7 M" actually referred to the concentration of adenosine in the product applied to the skin, not the resultant concentration in the dermis.
Starting from the claim language, the Federal Circuit stated that the word "applied" was capable of covering both direct application (to the skin surface) and indirect application (to the sub-surface layer), and concluded that the relevant claim language, especially when viewed in the context of the whole claim, was not plain on its face.
Next the Federal Circuit noted that none of the embodiments in the specification specified a measurement of concentration after seepage through the skin into the dermis—much less a measurement of concentration as an amount of adenosine per unit of volume of dermal cells. The prosecution history also required that the reference of being "applied to the dermal cells" be read as referring to concentrations of the composition applied to the skin’s surface.
Therefore, the Federal Circuit's construction eliminated the premise of the district court's indefiniteness determination, warranting vacatur of that determination and remand for further proceedings.
Meenaxi Enterprise, Inc. v. Coca-Cola Co., 38 F.4th 1067 (Fed. Cir. Jun. 29, 2022)
Coca-Cola distributed a Thums Up cola and Limca lemon-lime soda in India and other foreign markets. Meenaxi had distributed a Thums Up cola and a Limca lemon-lime soda in the United States since 2008 and registered the THUMS UP and LIMCA marks in the United States in 2012. Coca-Cola brought cancellation proceedings under § 14(3) of the Lanham Act, asserting that Meenaxi was using the marks to misrepresent the source of its goods. The Trademark Trial and Appeal Board ("TTAB") held in Coca-Cola’s favor and cancelled Meenaxi's marks. Meenaxi appealed. The Federal Circuit reversed TTAB’s decision, concluding that Coca-Cola did not establish a statutory cause of action based on lost sales or reputational injury.
SynQor, Inc. v. Vicor Corp., No. 2020-1259, 2022 WL 2187567 (Fed. Cir. Jun. 17, 2022)
In 2017, the Federal Circuit affirmed-in-part, vacated-in-part, and remanded the Board's decisions in inter partes reexamination proceedings. Before the Board issued its remand decisions, the patent at issue expired. Unaware that the patent expired, the Board issued its remand decision over a year later, again finding claims 49 and 50 unpatentable. Patent Owner SynQor appealed, asking the Federal Circuit to vacate the Board’s decision rejecting claims 49 and 50, arguing that an appellate court can vacate a lower court's or administrative agency's decision when review of that decision on the merits becomes moot. The Federal Circuit granted SynQor's request for vacatur, finding that this case was similar to a prior Federal Circuit case where the Board's determination was vacated because the patent expired before the Board's appeals process was completed.
Judge Lourie dissented, stating that in the previous case, the Board rejected new claims two years before the patent expired, but in this case, the patent expired before the Board rejected new claims. Judge Lourie further stated that SynQor's failure to notify the Board of the patent's expiration looked like gamesmanship or negligence, and rewarding that conduct with vacatur was not equity.
Static Media LLC v. Leader Accessories LLC, 38 F.4th 1042 (Fed. Cir. Jun. 28, 2022)
Static first sued Leader in Wisconsin, and the parties agreed to a protective order. Then, Static sued OJ Commerce in Florida. Leader and OJ Commerce decided to enter into a Joint Defense Group to be governed by a Joint Defense Agreement. Leader's attorney then shared confidential information with OJ Commerce's attorney who used the information to access a settlement proposal. As a result of this, the district court found Leader and Leader's counsel in civil contempt for violating the protective order and awarded Static Media LLC sanctions and attorney’s fees.
On appeal, the Federal Circuit concluded that it was improper to hold Leader and its attorney in contempt because, when read in context, there was a fair ground of doubt as to whether the protective order barred the attorney's disclosure to develop a joint defense strategy. Therefore, the disclosure was not a clear violation of the protective order.
Accordingly, the Federal Circuit reversed the district court's contempt finding and its award of sanctions and attorney's fees. Judge Reyna dissented, concluding that the district court did not abuse its discretion in determining that Appellant violated the protective order.
