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:
- Qualcomm Inc. v. Apple Inc.: in an inter partes review proceeding, descriptions of prior art contained in the challenged patent cannot form the basis of a ground.
- Sling TV, LLC v. Uniloc 2017 LLC: a claim construction that excludes a component is erroneous when the specification includes embodiments having that component.
- PlasmaCAM, Inc. v. CNCElectronics, LLC: during the negotiation of a settlement agreement, an agreement on the scope of products covered is reached when one party communicates that it agrees to the other party’s change regarding the definition of covered products, even though the parties continued to negotiate.
- Apple Inc. v. Wi-LAN Inc.: a new trial on damages is warranted when the expert's reliance on the asserted patents being key patents is untethered to the facts of the case.
- Nippon Shinyaku Co., Ltd v. Sarepta Therapeutics, Inc.: when the plain language of a forum selection clause requires all invalidity actions to be filed in a district court, a preliminary injunction should be entered to enjoin the IPR proceedings.
- Uniloc USA, Inc. v. Apple Inc.: it is error to make a blanket ruling that the public has a broad right to licensing information relating to patents.
- Junker v. Medical Components, Inc.: a letter that directly responds to a request for quotation and includes specific terms – such as pricing for shipment, specific delivery conditions, a payment term, and purchase options – is a commercial offer for sale within the meaning of § 102(b).
- Alarm.com Inc. v. Hirshfeld: when the PTO’s director vacates ex parte reexamination proceedings based on the estoppel provision under § 315(e)(1), judicial review of that vacatur decision is available.
Qualcomm Inc. v. Apple Inc., No. 20-1558, 24 F.4th 1367 (Feb. 1, 2022)
Qualcomm owned the challenged patent that was directed to integrated circuit devices with power detection circuits for systems with multiple supply voltages. In final written decisions of inter partes review (IPR) proceedings, the Board found several claims unpatentable. To reach that finding, the Board relied in part on applicant admitted prior art (AAPA) — statements in the challenged patent acknowledging that most of the limitations were already known in a prior art system.
The main issue on appeal focused on whether AAPA constituted "prior art consisting of patents or printed publications" under § 311(b) such that it may form "the basis" of a ground in IPR proceedings. The Federal Circuit held that it did not. This holding was based on courts’ previous understanding of “patents and printed publications” to themselves be prior art, the natural reading of the statute, and prior judicial interpretation of identical language in the reexamination statute.
Under the Federal Circuit’s holding, the descriptions of the prior art contained in the challenged patent cannot form the basis of a ground in IPRs. The Federal Circuit, however, noted that there could be permissible use of AAPA. For example, AAPA can be used to provide a factual foundation as to what a skilled artisan would have known at the time of the invention, such as furnishing a motivation to combine, or supplying a missing claim limitation.
The Federal Circuit remanded it back to the Board to determine whether AAPA improperly formed the "basis" of Apple's challenge, or whether it was permissible use.
Sling TV, LLC v. Uniloc 2017 LLC, No. 21-1651, 2022 WL 306468 (Fed. Cir. Feb. 2, 2022)
The challenged patent related to providing audio/visual presentations via a computer network and described the use of Really Simple Syndication ("RSS"), a standardized data format used to publish internet content that may be frequently updated. The claim limitation at issue was "storing feed data . . . wherein each of the feeds . . . includes no data representing content of the second collection of presentations." The Board determined that because the prior art’s RSS channel included metadata, it did not disclose the limitation, which required that the feed included "no data representing content."
According to the Federal Circuit, it was error for the Board to suggest that because the prior art's RSS included metadata, the prior art did not disclose the feed limitation. As the Federal Circuit stated, the specification made clear that RSS with metadata would be within the claim limitation. Under the Board's interpretation of "no data representing content," the preferred RSS embodiment would fall outside the scope of the claim because standard RSS feeds contained metadata.
The Federal Circuit concluded that the correct claim construction of the feed limitation encompassed RSS feeds containing metadata and remanded to the Board for further proceedings.
PlasmaCAM, Inc. v. CNCElectronics, LLC, No. 21-1689, 24 F.4th 1378 (Fed. Cir. Feb. 3, 2022)
Plasmacam and CNC were involved in a patent infringement lawsuit. The parties eventually agreed to settle the case, but disagreed as to the scope of the products that would be covered by the covenant not to sue ("Covered Products"). Plasmacam proposed a definition for the Covered Products. CNC rejected that proposal, and instead argued that Covered Products should be broader. Then, on January 21, Plasmacam stated in a communication that it "agreed to [CNC’s] change in paragraph 2 (the definition of covered products)."
The district court adopted Plasmacam’s version without addressing the January 21 agreement as to the definition of Covered Products. The district court's sole basis for disregarding the January 21 agreement was that Plasmacam’s concession on the Covered Products was contingent on CNC’s agreement to Plasmacam’s proposal regarding the mutual release. The Federal Circuit majority disagreed with that, noting that there was no support in the record for such qualification of the agreement. The Federal Circuit majority further found that the agreement concerning the definition of Covered Products was contingent only on reaching an agreement with respect to the mutual release language, which the parties eventually did.
The Federal Circuit majority held that the parties reached an agreement regarding the term on January 21, and remanded for the district court to use the January 21 agreed definition of Covered Products.
Apple Inc. v. Wi-LAN Inc., No. 20-2011, 25 F.4th 960 (Fed. Cir. Feb. 4, 2022)
Apple sued Wi-LAN, seeking a declaratory judgment of noninfringement and invalidity for all claims of two patents. Wi-LAN counterclaimed, alleging that certain Apple devices infringed. After the first trial, the jury found infringement by Apple and awarded Wi-LAN $145.1 million in damages. Finding that Wi-LAN’s expert testimony conflated the patented technology with VoLTE generally, the district court offered Wi-LAN a choice between remittitur to $10 million or a new trial on damages. Wi-LAN chose a new trial. In the second damages retrial, the jury awarded Wi-LAN damages of $85.23 million. Apple appealed, and Wi-LAN cross-appealed.
Regarding Apple's appeal, the Federal Circuit found Wi-LAN's damages calculation to be flawed. Wi-LAN relied on three license agreements to calculate reasonable royalty damages under the hypothetical negotiation approach, and its experts determined that the asserted patents were key patents in those three licenses. The Federal Circuit held that for a number of reasons, Wi-LAN's expert opinion about the asserted patents being key patents was untethered to the facts of the case. The reasons included that one license did not list either one of the two patents at issue. Another reason was that the second license listed one of the two patents among hundreds of patents. Regarding the third license, while it listed one patent as one of the "Asserted Patents," it also listed five other "Asserted Patents," and the expert failed to address the extent to which these other patents contributed to the royalty rate in the third license. Therefore, the Federal Circuit remanded for a new trial on damages.
Regarding Wi-LAN's cross-appeal, the dispute related to whether a term license or a perpetual license was created by the language in an agreement – that "For the Term License Period, Wi-LAN . . . grants to Intel . . . a worldwide . . . license . . . . For clarity, ... the licenses granted [] with respect to Licensed Activities that were actually engaged in during the Term License Period shall survive the expiration of the Term License Period." The district court found that a perpetual license was granted, focusing on the "shall survive the expiration" language. The Federal Circuit disagreed, finding that the first sentence unambiguously granted a term license by stating "for the term license period." The Federal Circuit further stated that the second sentence merely clarified that the licensee continued to enjoy protection for Licensed Activities, such as past sales, engaged in prior to the license’s expiration. Therefore, the Federal Circuit reversed the district court’s grant of summary judgment of no infringement that was based on the misinterpretation of the license agreement.
Nippon and Sarepta executed a Mutual Confidentiality Agreement ("MCA") for the purpose of discussing a potential business relationship relating to therapies for the treatment of Duchenne Muscular Dystrophy. Section 6 of the MCA contained a mutual covenant not to sue, which applied only during the Covenant Term. The MCA also included Section 10, a forum selection clause. Section 10 required that all Potential Actions – related to patent infringement or invalidity and filed within two years after the Covenant Term expired – be filed in the District Court of Delaware.
On the same day the Covenant Term ended, Sarepta filed multiple IPR petitions before the Board. Nippon then filed claims against Sarepta, including a motion for a preliminary injunction asking the district court to enjoin Sarepta from proceeding with its IPR petitions and to require that Sarepta withdraw the petitions.
The district court denied Nippon’s motion for a preliminary injunction, finding that Section 10 did not prevent Sarepta from filing IPR petitions at the Board, and thus Nippon did not show a reasonable probability that Sarepta had breached the agreement. The district court’s reasoning included that (1) it would be odd to further delay the filing of IPRs under Section 10 after the covenant not to sue expired under Section 6, (2) section 10 discussed issues (patent infringement, venue transfers, and personal jurisdiction) relating to federal district court litigation and should apply only to cases filed in federal courts, and (3) precluding IPRs under Section 10 would cause IPR petitions to be time-barred under some circumstances.
The Federal Circuit disagreed with the district court’s conclusion. In the Federal Circuit’s view, the plain language of Section 10 resolved the dispute. Section 10 stated clearly that “all Potential Actions arising under U.S. law relating to patent infringement or invalidity, and filed within two (2) years of the end of the Covenant Term, shall be filed in the United States District Court for the District of Delaware." The definition of "Potential Actions" encompassed IPRs, as acknowledged by the district court. The agreement’s forum selection clause was thus unambiguous, and the plain meaning of its terms must be given effect. The Federal Circuit thus concluded that as a matter of law, the forum selection clause in Section 10 precluded the filing of IPR petitions during the two-year period following the expiration of the Covenant Term. Because Sarepta filed IPR petitions during that time, Nippon was likely to succeed on the merits of its claim for breach of contract.
The Federal Circuit also disagreed with the district court’s other reasoning. The Federal Circuit noted that there was no conflict or tension between the two sections of the MCA – Section 6 broadly prohibited the parties from litigating any issue relating to patents during the Covenant Term, while Section 10 merely required that claims relating to patent infringement or invalidity be filed in the District Court of Delaware within two years after the Covenant Term expired. Additionally, parties are entitled to bargain away their rights to file IPR petitions, including through the use of forum selection clauses.
The Federal Circuit also found that Nippon had satisfied the remaining preliminary injunction factors as a matter of law and remanded for entry of a preliminary injunction.
Uniloc USA, Inc. v. Apple Inc., No. 21-1568, 25 F.4th 1018 (Fed. Cir. Feb. 9, 2022)
This was Uniloc’s second appeal regarding the sealing of documents. In the first appeal, the Federal Circuit remanded for the district court to conduct a more detailed analysis on whether confidential licensing information of certain third-party licensees of Uniloc’s patents should be sealed. On remand, the district court denied Uniloc’s request to seal, emphasizing the public’s right of access and a procedural failing. Uniloc filed the second appeal, and the Federal Circuit again vacated the district court’s decision here.
The Federal Circuit majority concluded that the district court failed to follow the previous remand instructions to make particularized determinations as to whether the third-party licensing information sought to be sealed should be made public. For example, the district court did not discuss whether any of the third-party materials constituted protectable trade secrets. The district court also erred in making a blanket ruling that the public had a broad right to licensing information relating to patents. Additionally, any procedural failings of could not justify unsealing the information of third parties.
The Federal Circuit vacated and remanded for the district court to comply with its previous remand instructions.
Junker v. Medical Components, Inc., No. 21-1649, 25 F.4th 1027 (Fed. Cir. Feb. 10, 2022)
Patentee brought action against Medical Component (“MedComp”) alleging infringement of a design patent directed to peelable handle of introducer sheath for a catheter. The parties filed cross-motions for summary judgment, debating whether a letter sent before the critical date was a commercial offer for sale of the claimed design under the on-sale bar. The district court held that it was not as a matter of law. In so holding, the district court determined that the letter was a preliminary negotiation, not a definite offer. The district court specifically focused on the letter's use of the word “quotation” and its invitation to further discuss specific requirements. The district court granted patentee’s motion for summary judgment of no invalidity under the on-sale bar. Following a bench trial, the district court entered judgment in favor of patentee and awarded damages. MedComp appealed.
The issue on appeal was whether the letter was a commercial offer for sale of the claimed design. The Federal Circuit disagreed with the district court’s decision and held that the letter was a commercial offer for sale of the claimed design.
The Federal Circuit's holding relied on the specific facts presented in the letter. The letter was directly responding to a "request for quotation," signaling that it was not an unsolicited price quotation or invitation to negotiate. The letter also contained a number of necessary terms typical for a commercial contract, including pricing for shipment, specific delivery conditions, a payment term, and purchase options. The completeness of the relevant commercial sale terms in the letter itself signaled that this letter was not merely an invitation to further negotiate, but rather multiple offers for sale. The specificity and completeness of the commercial terms outweighed the references to "quotation" and the mention of possible future discussions. The Federal Circuit also relied on its previous decisions where similarly complete and definite commercial terminology were held to be commercial offers for sale within the meaning of § 102(b).
Because the parties did not dispute that the invention was ready for patenting, the Federal Circuit found the patent invalid.
Alarm.com Inc. v. Hirshfeld, No. 21-2102, 2022 WL 552739 (Feb. 24, 2022)
Alarm.com filed IPR petitions, which were later instituted by the Board. In its final written decisions, the Board rejected Alarm.com’s challenges to certain claims. After the Federal Circuit affirmed the rejection, Alarm.com filed requests for ex parte reexamination of those very claims. The PTO’s director vacated the ex parte reexamination proceedings based on the estoppel provision under § 315(e)(1), which, the Director concluded, estopped Alarm.com from pursuing the requests once the IPRs resulted in final written decisions. Alarm.com sought review of the Director’s vacatur decisions in district court under the Administrative Procedure Act (APA). The district court dismissed Alarm.com’s complaint on the ground that APA review was precluded. On Alarm.com’s appeal, the Federal Circuit reversed the district court's decision.
The Federal Circuit held that review of the USPTO's estoppel decisions should be available to Alarm.com under the APA. In reaching that determination, the Federal Circuit applied a strong presumption in favor of judicial review, finding that the text, statutory scheme, and legislative history pertaining to ex parte reexamination did not evince a fairly discernable intent to preclude judicial review of these decisions.
Therefore, the Federal Circuit reversed the district court's determination, and remanded for further proceedings.
