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 January 16, 2015. Rich Seeger and Chris Douglas prepared this edition.
Infringement: Willful Infringement
Litigation Practice and Procedure: Jurisdiction: Standing
Bard Peripheral Vascular, Inc., et al. v. W.L. Gore & Associates, Inc., No. 14-1114 (Fed. Cir. (D. Ariz.) Jan. 13, 2015). Opinion by Prost. Concurring opinion by Hughes. Dissenting opinion by Newman.
Affirming the district court’s judgment, the Federal Circuit held that the asserted patent was willfully infringed because the defendant’s inventorship defense was not objectively reasonable.
In 2003, Bard Peripheral Vascular, Inc. (“BPV”) and Dr. Goldfarb filed suit against W.L. Gore and Associates (“Gore”) for infringement of U.S. Patent No. 6,436,135 (“the ’135 patent”).
The ’135 patent was filed in 1974 and issued some 28 years later. A jury found the patent valid and that Gore willfully infringed. In December 2010, the district court denied Gore’s motions for judgment as a matter of law. In response to an appeal by Gore, the Federal Circuit ultimately remanded, instructing the trial court to apply the correct standard to the question of willfulness in the first instance. On remand, the district court again found that Gore could not have realistically expected its defenses to succeed and entered judgment against Gore for willful infringement. Gore again appealed.
On appeal, Gore first argued that neither BPV nor Goldfarb had standing to sue due to the lack of a written assignment. Rejecting Gore’s position, the court ruled that it was bound by the prior panel’s implicit determination that Goldfarb had standing since Gore raised no new facts and sought only to relitigate the same standing theory that the courts had rejected before. On the merits, the Federal Circuit held that the necessary agreements, including a confirmatory assignment, were in place prior to the filing of the lawsuit.
Gore also claimed that its inventorship defense, based out of a prior interference proceeding, was objectively reasonable and therefore the district court’s finding of willful infringement was erroneous. Gore had argued that its employee furnished the embodiment of the invention before the named inventor conceived of the invention using that embodiment. Reviewing the determination de novo, the Federal Circuit held that the mere fact a member of the previous panel dissented on this issue did not support Gore’s contention that its position was reasonable, clarifying that any single judge’s dissent on the merits would not preclude the determination of willful infringement. The court also rejected Gore’s claim on the merits, highlighting that the named inventor arrived at conception on his own, prior to any communications between the inventors.
Judge Hughes concurred in the case’s outcome but called into question the de novo standard for reviewing willfulness determinations and suggested that a more deferential standard of review would be consistent with the standards for reviewing mixed questions of law and fact in other contexts.
Judge Newman, in dissent, reviewed the history and evidence of the case and concluded that Gore raised several substantial questions challenging the validity and enforceability of the ’135 patent that precluded a willfulness finding. She also noted that the punitive doubling of damages was inconsistent with the public benefit of Gore’s products, stating that punitive damages are intended to discourage bad behavior, not life-saving medical devices.
Litigation Practice and Procedure: Courts: Matters of Exclusive Federal Circuit Jurisdiction
Litigation Practice and Procedure: Jurisdiction: Subject Matter Jurisdiction
NeuroRepair, Inc. v. Nath Law Group, et al., No. 13-1073 (Fed. Cir. (S.D. Cal.) Jan. 15, 2015). Opinion by Wallach, joined by Chen and Hughes.
Vacating and remanding the district court’s judgments with instructions to return the case to California state court, the Federal Circuit held that a California state court malpractice case involving patent law representation was not properly removed to federal court.
NeuroRepair retained an attorney to assist in the prosecution of certain patent applications and, over time, became dissatisfied with what it viewed as slow progress and excessive fees. NeuroRepair sued the prosecuting attorney and his firm for malpractice, alleging professional negligence, breach of fiduciary duty, breach of written contract, breach of oral contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, and false promise. The defendants removed the case to federal district court on the ground that it was a civil action relating to patents. After the district court entered judgment in the defendants’ favor, NeuroRepair appealed.
The principal issued raised by NeuroRepair on appeal was whether the district court had subject matter jurisdiction under 28 U.S.C. § 1338, which gives federal district courts original jurisdiction over any civil action arising under any Act of Congress relating to patents. In Gunn v. Minton, the Supreme Court held that a cause of action created by state law may nevertheless arise under federal patent law if it involves a patent law issue that is (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.
Applying the Gunn test, the Federal Circuit concluded that the district court’s exercise of jurisdiction was improper. First, the court ruled that NeuroRepair’s suit would not necessarily raise issues of patent law because NeuroRepair’s complaint set forth multiple bases in support of its malpractice allegations and a court could find NeuroRepair entitled to relief without ever reaching a patent law issue. Next, the court acknowledged that the parties disputed at least one patent law issue: whether the defendants’ wrongdoing hindered NeuroRepair’s ability to timely obtain patents of the same scope it would have obtained but for the alleged malpractice. However, the court held that even if the disposition of this matter necessarily required the resolution of patent law issues, those issues would not be of sufficient importance to the federal system as a whole to justify the exercise of jurisdiction. In so holding, the court considered that no pure issue of federal law was dispositive of the case, the court’s decision was unlikely to control numerous other cases, and the federal government did not have a direct interest in the availability of a federal forum to vindicate its own administrative action. Finally, the court ruled that if cases such as NeuroRepair’s were heard in federal court, the federal-state balance would be disrupted because, to the extent federal interests were implicated by NeuroRepair’s state law claims, they did not outweigh the especially great interests of the state in regulating that state’s lawyers.
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