Patent Case Summaries January 30, 2019

Patent Case Summaries | Week Ending January 25, 2019

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

There were no qualifying cases for the week prior.

Case Summaries 

Princeton Digital Image Corp. v. Office Depot Inc., et al., Nos. 17-2597, -2598, -2600, -2602, -2605, -2606, -2609, -2611, -2612, -2627, -2628, -2629, -2630, -2631, -2632, -2633, 2634, 18-1006 (Fed. Cir. (D. Del.) Jan. 22, 2019). Opinion by Dyk, joined by Taranto and Stoll.

The Federal Circuit dismissed the appeal for lack of jurisdiction on the ground that the district court judgment did not constitute a final decision on the merits.

Princeton Digital Image Corp. (PDIC) sued numerous customers of Adobe Inc. for patent infringement. Adobe intervened to raise a breach of contract claim, asserting that PDIC had licensed the patent to Adobe and had included a promise not to sue Adobe’s customers. The district court determined that Adobe’s potential damages were limited to fees incurred in defending its customers and excluded fees incurred in Adobe’s affirmative breach-of-contract suit. Dissatisfied, Adobe requested that the district court enter judgment in favor of PDIC so that Adobe could appeal. The court did so despite recognizing that Adobe could still prevail on liability and recover fees associated with defending its customers.

On appeal, the Federal Circuit held that it lacked jurisdiction because the order entered by the district court was not a final decision that “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” The district court’s decision to limit damages to “defense” damages may have discouraged Adobe from going to trial, but it did not support entry of a final judgment. “There are thus further steps remaining for the district court to take: it must determine whether PDIC breached its license agreement with Adobe, and if so, it must determine the damages (actual or nominal) to which Adobe is entitled.”

Supernus Pharmaceuticals, Inc., et al. v. Iancu, No. 17-1357 (Fed. Cir. (E.D. Va.) Jan. 23, 2019). Opinion by Reyna, joined by Dyk and Schall.

The Federal Circuit held that the USPTO exceeded its statutory authority when it reduced the patent applicant’s patent term adjustment (PTA) by a time period during prosecution when the applicant could not have engaged in activity to advance prosecution.

In calculating PTA, the USPTO attributed 646 days of applicant delay to the period between the applicant’s filing of a request for continued examination (RCE) and the filing of an information disclosure statement (IDS). The applicant argued that it was entitled to 546 of those days, accounting for the time period between filing the RCE and the applicant’s receipt of an EPO Notice of Opposition that led to the IDS. Based on the Federal Circuit’s Gilead decision, the USPTO rejected the applicant’s request, finding that the applicant’s IDS submission after filing an RCE “interferes with the USPTO’s ability to process an application,” thereby invoking a reduction in PTA. When the applicant appealed to the district court, the court upheld the USPTO’s decision on the basis that Gilead foreclosed the applicant’s argument as a matter of law.

The Federal Circuit first determined that Gilead was not controlling, since that case did not address the precondition at issue here of an asserted failure to engage in reasonable efforts to conclude prosecution. Turning to the merits, the Federal Circuit held that the statute governing PTA was clear, and the PTA may be reduced only for the time period in which the applicant failed to engage in reasonable efforts to conclude prosecution. The applicant here could not have filed its IDS prior to receiving the EPO Notice of Opposition, and thus “there was no action [the applicant] could have taken to advance prosecution” during the 546-day period. The Federal Circuit accordingly reversed, ruling that, “The USPTO’s interpretation of the statute would unfairly penalize applicants, fail to incentivize applicants not to delay, and fail to protect applicants’ full patent terms.”

Barry v. Medtronic, Inc., No. 17-2463 (Fed. Cir. (E.D. Tex.) Jan. 24, 2019). Opinion by Taranto, joined by Moore. Opinion dissenting in part by Prost.

The Federal Circuit affirmed the district court’s judgment upholding a jury determination of patent infringement and a damages award of $17,721,180. The appellate court also upheld the jury’s rejection of Medtronic, Inc.’s assertions of invalidity based on public-use and on-sale statutory bars, invalidity based on prior invention, and inequitable conduct.

On appeal, Medtronic argued that one of the patents-in-suit was invalid under § 102(b)’s public-use statutory bar based on the patent owner’s successful use of his invention during surgeries before the critical date. The Federal Circuit ruled, however, that the invention was not ready for patenting before the critical date, and that the only public use was an experimental use with confidentiality for the procedures. Therefore, the public-use bar did not apply. Medtronic likewise argued that the patent was invalid under § 102(b)’s on-sale statutory bar, but the Federal Circuit rejected that argument for similar reasons. The Federal Circuit also rejected Medtronic’s challenges based on prior inventorship under § 102(g) and inequitable conduct during prosecution. Finally, the appellate court upheld the jury’s findings of direct infringement and induced infringement, as well as the jury’s damages award.

Chief Judge Prost dissented in part because, in her view, one of the patents-in-suit was invalid under § 102(b)’s on-sale and public-use statutory bars. In her view, the patent owner’s successful surgeries prior to the critical date, for which the surgeon charged his normal fee, demonstrated that the intended purpose of the invention had been satisfied and, accordingly, the invention was ready for patenting before the critical date.

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