Overview
In this series of monthly updates, we summarize decisions from May 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.
- Auris Health, Inc. v. Intuitive Surgical Operations: construing the "disassociating the master control from the end effector" limitation to exclude any system that maintained any communication was too narrow, since the specification did not require the wholesale termination of communications.
- Sound View Innovations, LLC v. Hulu, LLC: it was error to determine that "buffer" could not cover a "cache," because the terms "buffer" and "cache" in the asserted patent seemed to have some overlap; and in the absence of a uniformity-of-meaning determination, the asserted patent's distinguishing its buffers and caches was insufficient to support a determination that the accused-component "caches" were outside the "buffers" of the asserted patent.
- Carl Zeiss Meditec, Inc. v. Topcon Medical Systems, Inc.: finding that the paragraph in the preliminary injunction was ambiguous as to whether and to what extent it enjoined the continued use of certain products, the Federal Circuit vacated that part and remanded to clarify the scope of the conduct intended to be prohibited.
- Emerson Electric Co. v. SIPCO, LLC: construing "scalable address" and "scalable address field" to categorically exclude type codes was error because neither the claim language nor the written description supported such a negative limitation.
- Google LLC v. IPA Technologies Inc.: the Federal Circuit vacated the Board’s decision because conflicting testimony existed as to whether relied-upon reference was prior art "by another."
- Kaufman v Microsoft Corp.: it was error to deny prejudgment interest because the jury verdict could not reasonably be understood to include interest and there was no evidence that the delay in filing the lawsuit was undue or caused any prejudice.
- Mitek Systems, Inc. v. United Services Automobile Association: regarding the district court's finding of no case or controversy for a declaratory judgment action and the district court’s dismissal of the action, the Federal Circuit held that the district court's analysis was inadequate and not specific enough; it also vacated the district court's discretionary dismissal that was based on the same analysis.
- In re Google LLC, In re Waze Mobile Limited, In re Samsung Electronics Co., Ltd., In re Apple Inc.: the Federal Circuit directed the district courts to transfer the cases to California, where the venue was clearly more convenient.
Intuitive owned the challenged patent directed to systems and methods for performing robotically-assisted surgery using a master control. The Board found the challenged claims not unpatentable because with respect to the first set of claims, Auris failed to prove a reasonable expectation of success, and with respect to the second set of claims, the asserted prior art references did not disclose the "disassociating the master control from the end effector" limitation. The Federal Circuit affirmed the Board’s lack of reasonable expectation of success decision, but concluded that the Board's finding about the disassociating limitation was based on an improper claim construction.
Regarding the disassociating limitation, the Board’s decision was based on a construction that excluded any system that maintained any communication between the master control and the end effectors. The Federal Circuit found the interpretation too narrow. The specification did not require the wholesale termination of communications between the master control and the controlled devices, and disassociating required only a temporary interruption that caused the controlled devices to be held or locked in stationary position. The Board thus erred in requiring an interruption in communication.
The Federal Circuit also declined Intuitive's request to affirm on the alternative ground that the combination lacked a reasonable expectation of success, because Intuitive did not make the same arguments or create the same record for the second set of claims as it did for the first set of claims.
Therefore, the Federal Circuit remanded to the Board to decide whether the combination satisfied the disassociating limitation, and whether the claims would be nonobvious, including whether a person of skill in the art would reasonably expect success in combining the asserted prior art references.
Sound View Innovations, LLC v. Hulu, LLC, No. 21-1998, 33 F.4th 1326 (Fed. Cir. May 11, 2022)
Sound View owned the asserted patent directed to improving the caching of streaming of multimedia data, and sued Hulu for infringement. The district court construed the claim at issue to require that the same buffer be involved in the downloading and retrieving actions. With that construction, the district court granted summary judgment of non-infringement, finding that "caches" in the accused systems — on which Sound View relied for its allegation of infringement – could not be the buffer as required by the construction. The district court relied for its conclusion on the patent's references to its "buffers" and "caches" as distinct physical components.
On appeal, the Federal Circuit affirmed the district court's claim construction, but rejected the district court's determination that "buffer" could not cover a "cache." Even in the asserted patent, the terms "buffer" and "cache" did not appear to be mutually exclusive, but instead seemed to have at least some overlap. Additionally, the district court did not decide that "cache" was a term of uniform meaning in the art. In the absence of such a uniformity-of-meaning determination, the asserted patent's distinguishing its buffers and caches was insufficient to support a determination that the accused-component "caches" were outside the "buffers" of the asserted patent. Further, under the ordinary meaning proposed by Sound View, there was factual evidence that the “cache” met the requirements of a "buffer."
Therefore, the Federal Circuit vacated the district court's grant of summary judgment and remanded for further proceedings.
Topcon sought vacatur of a preliminary injunction granted by the Northern District of California in a case involving trade secrets misappropriation. Topcon asserted that paragraph 2 of the injunction failed to satisfy Federal Rule of Civil Procedure 65(d) because it did not provide sufficient specificity of what it prohibited. Further, Topcon argued that the broad prohibition against using "any CZMI confidential, proprietary, or trade secret information, including any files obtained from the Hard Drive or during the course of Former Defendants’ employment with CZMI" did not identify any particular trade secrets or describe what acts were prohibited. CZMI responded that the injunction was broad rather than ambiguous, and that paragraph 2 captured 70 all trade secrets it asserted against Topcon.
The Federal Circuit agreed with Topcon, finding that Paragraph 2 was ambiguous as to whether and to what extent it enjoined the continued use of certain products. CZMI's contention that paragraph 2 properly captured all 70 trade secrets was not sufficient to remove the ambiguity in the scope of the injunction. For example, the district court did not address whether all information asserted was confidential, or whether it was acquired, used, or disclosed improperly. Additionally, the scope of the asserted trade secrets captured was staggering, including unspecified software architecture, unnamed user interfaces, generically noted research, and other information simply identified as trade secrets.
Accordingly, the Federal Circuit vacated that part of the preliminary injunction and remanded to the district court for clarification of the scope of the conduct intended to be prohibited.
Emerson Electric Co. v. SIPCO, LLC, No. 21-1881, 2022 WL 1548866 (Fed. Cir. May 17, 2022)
This was the second time this case was appealed to the Federal Circuit. In the first appeal, the Federal Circuit concluded that the Board erred in its claim construction. On remand, the Board construed "scalable address" and "scalable address field" to categorically exclude type codes and found that the prior art reference did not disclose the claim limitation because it comprised a device code type. Emerson appealed and the Federal Circuit held that the claim construction was erroneous.
In this appeal, the Federal Circuit noted that the Board's construction error appeared to arise from the Federal Circuit’s discussion of an embodiment in the first appeal. In that embodiment, the type bytes did not identify the unique recipient and therefore was not part of the scalable address (the scalable address corresponded only to the portion of the receiver address that identified the unique recipient or recipients of a message). But the Federal Circuit did not hold that type bytes could never form part of the scalable address. The Board thus incorrectly read the Federal Circuit’s previous decision to impose such a limitation.
The Federal Circuit further stated that neither the claim language nor the written description supported such a negative limitation. The intrinsic record did not support the Board's importation of a negative limitation, particularly under the broadest-reasonable-interpretation standard.
Because of the erroneous claim construction, the Federal Circuit vacated the determination and remanded for further proceedings.
Google LLC v. IPA Technologies Inc., No. 21-1179, 34 F.4th 1081 (Fed. Cir. May 19, 2022)
Google challenged IPA's patents that related to a software-based architecture for supporting cooperative task completion by flexible, dynamic configurations of autonomous electronic agents. The Board concluded that since Google failed to establish a reference (the Martin reference) as prior art, and since each of Google’s grounds relied on that reference, Google did not establish the challenged claims unpatentable. Google appealed.
Google contended that the Martin reference was prior art as work "by others" because it described the work of an inventive entity (Martin, Cheyer and Dr. Moran) different from the inventive entity of the challenged patents (Martin and Cheyer). The Board found that Google had not provided sufficient support to explain how Dr. Moran's contribution was sufficient to establish he was an inventive entity with respect to the Martin reference. The Federal Circuit, however, concluded that Dr. Moran's testimony, if credited, might well establish that he was a co-inventor of the particular portions of the Martin reference relied on by Google. The Federal Circuit noted that the issue was whether his testimony should ultimately be credited over other witnesses’ conflicting testimony, and the Board was required to resolve this highly relevant evidentiary conflict and make appropriate findings of fact.
Accordingly, the Federal Circuit vacated the Board’s decisions and remanded for further proceedings.
Kaufman v Microsoft Corp., 34 F.4th 1360 (Fed. Cir. May 20, 2022)
Kaufman sued Microsoft, asserting a patent relating to methods for using a computer to automatically generate an end-user interface. A jury found Microsoft liable and awarded damages of $7 million to Kaufman. The district court denied Kaufman's motion to amend the judgment to include prejudgment interest. On appeal, the Federal Circuit reversed the denial of prejudgment interest.
The district court provided two rationales for denying prejudgment interest to Kaufman: (1) that the jury verdict "subsumed interest," and (2) that Kaufman was responsible for "undue delay" in bringing the lawsuit, causing prejudice to Microsoft. The Federal Circuit found neither rationale supportable. First, the jury verdict could not reasonably be understood to include interest, because no testimony would have given the jury any basis for calculating how to include prejudgment interest. Second, there was no evidence as to why Kaufman's five-year delay was undue, and Microsoft did not demonstrate prejudice from the delay.
Therefore, the Federal Circuit found that the district court erred in denying Mr. Kaufman’s motion to amend the judgment to include prejudgment interest.
Mitek Systems, Inc. v. United Services Automobile Association, 34 F.4th 1334 (Fed. Cir. May 20, 2022)
Mitek created software for mobile check capture and licensed the software to financial institutions. In 2017, USAA began sending licensing letters to financial institutions, including Mitek's customers, and then sued Wells Fargo, a Mitek customer, for patent infringement. In 2019, Mitek filed a declaratory judgment of non-infringement against USAA. The district court dismissed the case, ruling that there was no case or controversy between the parties, and alternatively, the district court exercised its discretion to dismiss the case. Mitek appealed. The Federal Circuit vacated the district court’s dismissal.
Mitek's jurisdictional argument rested on two bases: (a) its potential liability for infringement; and (b) the alleged demands for indemnity made by many of its licensees after USAA sent them letters seeking to sell them licenses to USAA patents.
Regarding (a), the district court concluded that the Wells Fargo case could not have provoked in Mitek a reasonable apprehension of suit by USAA, reasoning that Mitek did not intervene and that the Wells Fargo case did not contain implied accusations of infringement by Mitek. The Federal Circuit disagreed with both reasons. The district court did not analyze how the choice not to intervene counted materially against a finding of a reasonable apprehension of suit. Regarding the accusation of infringement, the district court did not sufficiently analyze the alleged role of the Mitek technology in the banks' applications and in infringement claims.
Regarding (b), the district court was not convinced that the USAA letters to Mitek's customers created a justiciable controversy. The Federal Circuit first found that the letters created an actual infringement controversy between USAA and Mitek's customers. The question then became whether there was actually a "reasonable potential" of Mitek's indemnification liability, which the Federal Circuit concluded needed further analysis.
The Federal Circuit also rejected the district court's alternative ground of dismissal based on discretion. There must be well-founded reasons for declining to entertain a declaratory judgment action. But the district court did not give reasons independent of those for its jurisdictional dismissal, which the Federal Circuit already held to be deficient.
Therefore, the Federal Circuit vacated the district court’s dismissal decision, and remanded to the district court for further proceedings.
In these consolidated cases, Google, Waze Mobile, and Samsung sought writs of mandamus directing the Eastern District of Texas to transfer these cases to the Northern District of California. After analyzing the private and public interest factors relevant to transfer, the Federal Circuit agreed that the Northern District of California was clearly the more convenient forum, including the location of potential witnesses and the source of proof. The California forum also had a substantial local interest in resolving the dispute, because the locus of events giving rise to the infringement suits occurred in California where the accused functionality was designed and developed. Therefore, the Federal Circuit granted the petitions and directed transfer.
In re Apple Inc., No. 2022-137, 2022 WL 1676400 (Fed. Cir. May 26, 2022)
BillJCo sued Apple in the Western District of Texas based on Apple's use of its iBeacon protocol. Apple moved to transfer the action to the Northern District of California, but Judge Albright denied the motion. Apple petitioned for a writ of mandamus to direct the Western District of Texas to transfer the patent infringement suit to the Northern District of California. Based on an evaluation of the private and public interest factors, the Federal Circuit granted Apple’s petition, finding that the California venue was clearly more convenient.
