The following is a summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit for the week ending June 6, 2014. Lance Soderstrom and Ross Barton prepared this edition.
Patentable Invention: Anticipation: Prior Publication
In re Rambus, Inc., No. 13-1192 (Fed. Cir. (P.T.A.B.) June 4, 2014). Opinion by Reyna, joined by Moore and Rader.
The Federal Circuit reversed the decision of the Patent Trial and Appeal Board (“the Board”) that Claims 26 and 28 of U.S. Patent No. 6,426,916 (“the ’916 patent”) were anticipated by U.S. Patent No. 4,734,909 to Bennett (“Bennett”).
The ’916 patent discloses a method and system for improving the efficiency of computer memory. A computer may need to transfer data between different memory devices through the use of a “bus,” such as a series of wires, or “lines,” that connect the memory device and the controller. Some memory systems include a wait signal that is sent, sometimes over a wait line, from a memory device to a memory controller that says the memory device is not ready to receive or send data. Signals may be transferred via a bus using either “dedicated” lines, which do not share the line with other signals, or “multiplexed” lines, which can be shared. The ’916 patent attempts to improve such a memory transfer system with the addition of a delay time feature. Specifically, Claim 26 recites “a register which stores a value that is representative of an amount of time to transpire after which the memory device outputs the first amount of data.” Claim 28 depends on 26 and further recites “[t]he memory device of claim 26 wherein in response to a second operation code, the value is stored in the register.”
Micron Technology, Inc. sought and obtained the institution of an inter partes reexamination, during which the parties disputed whether a prior art reference (“Bennett”) anticipated the invention by disclosing, in relevant part, “a value that is representative of an amount of time to transpire after which the memory device outputs the first amount of data.” The examiner found this limitation lacking in Bennett, but the Board disagreed and found that “Parameter VI” in Bennett discloses the claimed “value.”
On appeal, the Federal Circuit noted that “Parameter VI” is representative of only one source of delay because the actual delay can be longer due to other factors. The Federal Circuit also noted that “[a] value cannot ‘represent’ an ‘amount of time’ if there are additional factors, wholly unrepresented by that value, that necessarily impact, or represent, the ‘amount of time.’” The Federal Circuit thus agreed with Rambus and concluded that Bennett did not anticipate the ’916 patent and reversed the Board’s decision.
Infringement: Literal Infringement
Infringement: Doctrine of Equivalents: Generally
Litigation Practice and Procedure: Discovery: Sanctions
Eastcott v. Hasselblad USA, Inc., et al., Nos. 13-1050, -1051 (Fed. Cir. (S.D.N.Y.) June 4, 2014). Opinion by O’Malley, joined by Wallach and Taranto.
In affirming the grant of summary judgment of noninfringement, the Federal Circuit held that the proffered evidence failed to demonstrate a genuine dispute as to any material fact that would prevent the grant of summary judgment. The Federal Circuit also vacated the district court’s imposition of sanctions and remanded for further proceedings.
In 2011, John Eastcott (“Eastcott”) filed a complaint in the U.S. District Court for the Southern District of New York, alleging that Hasselblad A/S, Hasselblad USA Inc., and B&H Photo & Electronics Corp. (collectively “Hasselblad”) infringed U.S. Patent No. 5,592,331 (“the ’331 patent”). The ’331 patent describes a camera adapter that “permits the user to control the angle of the plane of focus relative to the image plane.” This control allows tilting a lens to bring into focus simultaneously objects positioned at different distances.
Eastcott alleged that Hasselblad’s product infringed Claim 26 of the ’331 patent under the doctrine of equivalents. The district court found that Eastcott failed to provide the required particularized testimony—either in his affidavits or through his deposition testimony—to establish infringement on a limitation-by-limitation basis under the doctrine of equivalents, and granted Hasselblad’s motion for summary judgment of noninfringement as a result. The district court also assessed a sanctions award of approximately $13,000 against Eastcott for relying upon a “sham” expert witness. Eastcott appealed the grant of summary judgment and the sanctions award.
On appeal, the Federal Circuit observed that Eastcott’s deposition testimony failed to address any limitations in Claim 26. In addition, Eastcott’s affidavit testimony was determined to be conclusory and did not provide a sufficient explanation of which specific structures of the accused products are equivalent to the limitations in Claim 26. In affirming the district court, the Federal Circuit noted that “[e]quivalence must be established on a limitation-by-limitation basis, not based on an assessment of the accused product as a whole.”
Turning to the district court’s imposition of sanctions, the Federal Circuit vacated the award and remanded for further proceedings. The Federal Circuit concluded that under Second Circuit law, “due process requires that courts provide notice and opportunity to be heard before imposing any kind of sanctions.” Because Eastcott and his counsel were unaware that the court might sanction them under its inherent powers prior to the district court issuing its Memorandum Order, the Federal Circuit vacated the district court’s order imposing sanctions and remanded for further proceedings.
Litigation Practice and Procedure: Jurisdiction: Standing
Consumer Watchdog v. Wisconsin Alumni Research Foundation, No. 13-1377, (Fed. Cir. (P.T.A.B.) June 4, 2014). Opinion by Rader, joined by Prost and Hughes.
The Federal Circuit dismissed an appeal from a decision by the Patent Trial and Appeal Board (“the Board”) affirming the patentability of U.S. Patent No. 7,029,913 (“the ’913 patent”) because the appellant had not established an injury in fact sufficient to confer Article III standing.
Consumer Watchdog requested inter partes reexamination of the ’913 patent owned by the Wisconsin Alumni Research Foundation (“WARF”). The ’913 patent is generally directed to human embryonic stem cell cultures. Consumer Watchdog is a self-described “not for profit public charity dedicated to providing a voice for taxpayers and consumers in special interest-dominated public discourse, government and politics.” The Board affirmed the patentability of the ’913 patent, and Consumer Watchdog appealed.
On appeal, the Federal Circuit noted that Consumer Watchdog had not alleged any involvement in research or commercial activities involving human embryonic stem cells, nor had it alleged that it was an actual or prospective competitor of WARF or any licensee of the ’913 patent. Instead, Consumer Watchdog alleged that WARF’s assertion of the ’913 patent placed a burden on taxpayer-funded research in the State of California where Consumer Watchdog is located. The Federal Circuit noted that “Article III limits the federal courts’ jurisdiction to those disputes seeking to ‘redress or prevent actual or imminently threatened injury to persons caused by private or official violation of law.’” Although Article III standing is not necessarily a requirement to appear before an administrative agency, once a party seeks review in a federal court, the constitutional requirement that it have standing applies.
Consumer Watchdog relied on the Board’s denial of Consumer Watchdog’s requested administration action—namely, the Board’s refusal to cancel Claims 1-4 of the ’913 patent—as its alleged injury conferring standing. But the Federal Circuit concluded that denial of requested action was insufficient to confer standing since Consumer Watchdog was not denied anything to which it was entitled. In addition, as Consumer Watchdog only had a general grievance against the ’913 patent, the Federal Circuit determined that the “conjectural or hypothetical” nature of any injury flowing from the estoppel provisions contained within the inter partes reexamination statute was insufficient to confer standing because Consumer Watchdog was not engaged in any activity that would expose it to potential liability for infringement. As a result, the Federal Circuit dismissed Consumer Watchdog’s appeal.
Litigation Practice and Procedure: Procedure: Rule 11
Source Vagabond Systems Ltd. v. Hydrapak, Inc., Nos. 13-1270, -1387, (Fed. Cir. (S.D.N.Y.) June 5, 2014). Opinion by Wallach, joined by Moore and Reyna.
The Federal Circuit affirmed the decision of the district court sanctioning Source Vagabond Systems (“Source”) under Federal Rule of Civil Procedure 11 (“Rule 11”) for bringing a frivolous patent infringement suit against Hydrapak, Inc. (“Hydrapak”).
On August 2, 2011, Source sued Hydrapak for infringing U.S. Patent No. 7,648,276 (“the ’276 patent”) which relates to water reservoirs for use in backpacks. On September 16, 2011, Hydrapak served a sanctions motion under Rule 11. The parties also filed cross motions for summary judgment with respect to infringement. The district court granted Hydrapak’s motions for summary judgment and Rule 11 sanctions, stating that Source’s proposed claim interpretation “violates all the relevant canons of claim construction” and that even under Source’s own construction, Hydrapak did not infringe. It also found that the literal infringement claim “lacked evidentiary support no matter how the claim was construed” and “the difference [between the claims of the patent and the allegedly infringing product] is apparent to the naked eye.”
On appeal, the Federal Circuit noted that Source’s attempt to add language in its proposed claim construction without support from the specification or prosecution history altered otherwise unambiguous claim language and was “a practice this court has repeatedly rejected.” Although Source argued that its claim construction was necessary to avoid a nonsensical result, the Federal Circuit concluded that Source should have known it could not prevail because a court may not rewrite a claim even if giving a disputed claim its plain meaning would lead to a “nonsensical result.”
The Federal Circuit also agreed with the district court’s conclusion that even under Source’s claim construction, there was no reasonable basis for alleging that Hydrapak’s product literally infringed the ’276 patent. In opposing Hydrapak’s Rule 11 motion, Source did not explain why it believed prior to filing suit that Hydrapak’s product literally infringed. Source also failed to submit any evidence demonstrating pre-suit analysis that reasonably concluded there was either literal infringement or infringement under the doctrine of equivalents. The Federal Circuit affirmed the district court’s imposition of Rule 11 sanctions “[s]ince Source’s claim construction is clearly inadequate, and, indeed, the literal infringement claim ‘lacked evidentiary support no matter how the claim was construed.’”
Litigation Practice and Procedure: Jurisdiction: Standing
STC.UNM v. Intel Corporation, No. 13-1241, (Fed. Cir. (D.N.M.) June 6, 2014). Opinion by Rader, joined by Dyk. Dissenting opinion by Newman.
In affirming the district court’s dismissal for lack of standing, the Federal Circuit held that the right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedural rule for involuntary joinder under Federal Rule of Civil Procedure 19(a).
STC.UNM’s (“STC”) sued Intel Corporation (“Intel”) for infringement of U.S. Patent No. 6,042,998, which relates to a method for manufacturing quantum sized periodic structures in silicon materials. Relying on Ethicon, Inc. v. United States Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998), the district court explained that when a patent is co-owned, a co-owner seeking to enforce the patent must join all other co-owners as plaintiffs to establish standing; without such joinder, the plaintiff cannot pursue an infringement suit. While the district court acknowledged that Federal Rule of Civil Procedure 19(a) generally gives a court the ability to join a required party involuntarily, the district court concluded that a co-owner has the substantive right to impede another co-owner’s infringement action by refusing to voluntarily join the suit. Because co-owner Sandia Corp. (“Sandia”) refused to voluntarily join the suit, the district court dismissed STC’s complaint for lack of standing.
Reviewing the district court’s dismissal for lack of standing de novo, the Federal Circuit affirmed the district court and held “that the right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedural rule for involuntary joinder under Rule 19(a).” In this case, Sandia affirmatively retained its right by consistently expressing its desire not to join the case. The Federal Circuit noted that “[i]mportantly, this limit protects, inter alia, a co-owner’s right to not be thrust into costly litigation where its patent is subject to potential invalidation.” Therefore, because no exception to the general substantive rule applied, the Federal Circuit held that STC lacked standing to maintain its suit against Intel, and affirmed the district court’s dismissal.
In a dissenting opinion, Judge Newman stated that the majority opinion improperly created a patent case-specific exception to Rule 19. According to Judge Newman, by “refusing to apply Rule 19(a) and refusing to join co-owner Sandia, the panel majority deprives co-owner the University of judicial determination of the asserted infringement, thwarting the processes of law.”
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