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. In this update, we also discuss a few decisions where the Federal Circuit found the appellant lacked standing.
- Evidence of flaws in an alleged patent owner’s chain of title raises a serious question about standing, even when challenged for the first time on appeal.
- A trial court’s brief discussion of other invalidity grounds that is described in a contingent matter does not amount to an alternative holding and has no preclusive effect, but concern about that same preclusion is not a basis for appellate standing.
- A district court abuses its discretion in denying a venue transfer by giving greater weight to willing witnesses who will need to travel regardless of the forum versus willing witnesses residing in the transferee forum.
- Although prior art references need not always be self-enabling to support obviousness, there must be some evidence that a skilled artisan would have been able to create the claimed invention. A reference describing a hypothetical device built with non-existent materials, without more, must be self-enabling in order to support a claim of obviousness.
- A patent licensee lacks Article III standing to appeal an inter partes review decision where the patents at issue would not affect the payment obligations under the license, despite the patent owner’s history of litigation against the licensee and the potential estoppel effects of the decision.
WiNet Labs LLC sued Motorola for patent infringement. Motorola successfully moved to dismiss the suit on a theory of noninfringement. In subsequent attorney’s fees proceedings, Motorola raised for the first time the argument that WiNet did not own the asserted patent (and so lacked standing to sue). Specifically, public documents indicated that the inventors had assigned the patent to a different entity, notwithstanding a later purported assignment from the inventors to WiNet.
WiNet appealed the district court’s dismissal. Motorola raised the standing issue in its opposition brief on appeal. In its reply, WiNet posited that the patents had reverted to the inventors following the first assignment, but it had not set forth any facts, explanation, or legal analysis indicating how such a reversion could have occurred or did occur.
The Federal Circuit concluded that the evidence raised a serious question about standing and vacated the judgment and remanded so that the district court could address the standing question.
The district court found certain claims of a pharmaceutical patent to be invalid as obvious. The district court also discussed two alternative invalidity grounds, but did not affirmatively rule on them. On appeal, the patent owner asked the Federal Circuit to affirm the obviousness decision—a posture the panel acknowledged was “unusual”—without reaching the district court’s alternative grounds. Sebela’s wanted to avoid the preclusive effect of any adverse alternative rulings made by the district court because under applicable law, a future court would not give preclusive effect to alternative holdings that are challenged on appeal but are not reached by the appellate court.
The Federal Circuit found that Sebela’s appeal rested on a false premise. According to the panel, the district court’s discussion of the alternative invalidity grounds were not alternative holdings. The discussion of those grounds was brief and inconclusive, and they were described in a contingent manner—using language like “were [it] to find”—rather than an alternative manner—with language like “even if . . .” or “even were . . .”. A contingent finding does not amount to an alternative holding and therefore would not have had preclusive effect. Because Sebela’s only basis for standing was its preclusion concern, the Federal Circuit dismissed the appeal for lack of standing (even as it confirmed for Sebela that it should not face the preclusion that drove it to appeal in the first place).
TracFone, a defendant in a patent infringement case brought by Precis Group, successfully petitioned for a second writ of mandamus regarding its motion to transfer. The Federal Circuit’s decision on the first petition, discussed in last month’s edition of How to Win on Appeal, ordered the district court to promptly decide a long-pending motion to transfer and to stay all other proceedings until it had done so.
Following the first mandamus decision, Judge Alan Albright of the Western District of Texas denied the motion to transfer. TracFone again sought mandamus from the Federal Circuit.
The district court primarily based its denial of the transfer motion on the comparative burden for “willing witnesses” to travel to and attend trial proceedings as between the present and transfer venues. Specifically, the district court noted that the travel distance for two non-party witnesses would double if the case was transferred from Texas to Florida. The district court gave significantly more weight to that burden than to the fact that TracFone’s witnesses resided in Florida.
The Federal Circuit held this was a “clearly flawed” application of the Fifth Circuit’s “100-mile rule.” That rule generally states that when the distance between the current venue and a proposed transferee venue is more than 100 miles, “the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled.” In re Volkswagen of Am., Inc., 545 F.3d 304, 317 (5th Cir. 2008) (en banc) (citations omitted). But the Federal Circuit has previously explained that the rule “should not be rigidly applied” where a witness will be required to travel a great distance regardless of the venue. In re Genentech, Inc., 566 F.3d 1338, 1344 (Fed. Cir. 2009). In such circumstances, the difference in venue would amount only to slightly greater inconvenience, which did not outweigh the convenience to the party witnesses who would be able to testify in their home district. The district court abused its discretion in concluding otherwise, and the Federal Circuit ordered the case transferred to the Southern District of Florida.
Raytheon owns U.S. Patent No. 9,695,751, which is directed to gas turbine engines, such as those used to power airplanes. The key feature of the ’751 patent was a higher “power density”—a measurement of thrust per volume of the turbine—compared to that disclosed in the prior art.
During inter partes review proceedings before the Patent Trial and Appeals Board, GE contended that the ’751 patent was obvious in view of the “Knip” prior art reference. Knip was a NASA technical memorandum that described the expected performance of an engine made from composite materials that were then (and still now) unattainable. The memorandum described certain performance metrics of the envisioned engine, although it did not directly disclose the power density of that engine or the thrust and volume used to calculate the power density.
Raytheon argued to the Board that Knip would not have enabled a skilled artisan to make the invention of the ’751 patent because the engine described in Knip was “built” from materials that did not exist. GE did not dispute that Knip relied on unattainable materials but argued that whether Knip enabled the engine was irrelevant to the question of whether it enabled the invention of the ’751 patent. Ultimately, the Board’s enablement analysis focused on whether a skilled artisan could have determined the power density of Knip’s hypothetical engine from the metrics that it did disclose.
The Federal Circuit reversed, holding that the Board erred in failing to consider whether Knip enabled the claimed invention, despite its reliance on non-existent materials. The court explained that a prior art reference does not necessarily need to enable its own disclosure to be considered as part of an obviousness inquiry, but there must be some evidence that a skilled artisan would have been able to achieve the claimed invention without undue experimentation. GE failed to offer any such evidence. The court determined that the Board’s narrow focus on whether a skilled artisan could calculate the power density of Knip’s hypothetical engine missed the point. While GE offered nothing beyond Knip itself as evidence of enablement by contrast, Raytheon presented unrebutted evidence that Knip was not self-enabling and that nothing else in the prior art enabled the performance metrics that Knip disclosed. That sufficed to demonstrate that Knip alone failed to enable the claimed invention, which disposed of the obviousness question.
Apple appealed two inter partes review decisions by the Patent Trial and Appeal Board that found two of Qualcomm’s patents had not been shown to be obvious. Before Apple filed its appeals, Apple and Qualcomm settled all litigation between them around the world, including as to the patents at issue. The Federal Circuit found that Apple lacked standing to maintain its appeals.
Apple argued that it had standing to appeal because the parties’ global settlement required ongoing payment obligations as a condition for a license to the patents at issue, and there remained a threat that Qualcomm would sue Apple on the same patents after the agreement expired. Apple further argued that the estoppel effects of 35 U.S.C. § 315 would preclude it from effectively challenging the validity of those patents in the future. The Federal Circuit rejected each argument.
Apple contended that under Medimmune, Inc. v. Genentech Inc., 529 U.S. 118, 120 (2007), its ongoing payment obligations conferred Article III standing. There, the Supreme Court held that a licensee did not need to affirmatively break or terminate a license agreement to have standing to challenge the validity of the licensed patent. But here, the parties’ license agreement involved tens of thousands of patents, and Apple neither argued nor offered any evidence that the validity (or not) of the challenged patents would affect its ongoing payment obligations at all. So MedImmune did not control.
Regarding the threat of future suit by Qualcomm, Apple contended that Qualcomm’s refusal to grant an irrevocable or permanent license and the frequency with which it had litigated with Apple constituted a basis for standing. But the panel held that was nothing more than speculation without the specificity necessary to show an injury in fact sufficient to establish standing. In this regard, Apple needed to demonstrate that Qualcomm was likely to assert the particular patents in suit against particular products that would be sold after the license agreement expired. Apple failed to do so.
Finally, Apple argued that its injury would be compounded by the likelihood that it would be estopped from arguing that the challenged patents would have been obvious in future disputes. The court found that a bare invocation of the estoppel provision could not confer standing, a finding it had reached in prior decisions.
Accordingly, the Federal Circuit found Apple failed to show that it had standing and dismissed the appeal.