Patent Case Summaries June 26, 2019

Patent Case Summaries | Week Ending June 21, 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.

Forum US, Inc. v. Flow Valve, LLC, No. 2018-1765 (Fed. Cir. (W.D. Okla.) June 17, 2019). Opinion by Reyna, joined by Schall and Hughes.

The Federal Circuit affirmed a district court’s grant of summary judgment of invalidity because Flow Valve’s reissue patent does not comply with the original patent requirement of 35 U.S.C. § 251.

Flow Valve owns a reissue patent related to supporting assemblies for holding workpieces during machining. Machinists often make and use fixtures that utilize arbors to hold the workpiece while it rotates on a turning machine. The patent’s written description discloses only embodiments with arbors, but in the reissue patent, the patentees broadened the claims to cover embodiments that do not use arbors.

Forum filed a declaratory judgment action seeking a declaration of invalidity on the basis that the broadened reissue claims do not comply with the original patent requirement under § 251. Forum filed a motion for summary judgment on that basis, and the district court granted the motion.

On appeal, the Federal Circuit affirmed, explaining that “for broadening reissue claims, the specification of the original patent must do more than merely suggest or indicate the invention recited in reissue claims; it must appear from the face of the instrument that what is covered by the reissue was intended to have been covered and secured by the original.” Applying this standard to Flow Valve’s reissue patent, the Federal Circuit ruled that “nowhere do the written description or drawings disclose that arbors are an optional feature of the invention.” Additionally, a declaration by Flow Valve’s expert did not raise a genuine dispute of material fact because the declaration did not aid a court in understanding what the reissue patent “actually says.”

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Hyosung TNS Inc., et al. v. International Trade Comm’n, et al., No. 2017-2563 (Fed. Cir. (ITC) June 17, 2019). Opinion by Dyk, joined by Clevenger and O’Malley.

Diebold Nixdorf, Inc. and Diebold Self-Service Systems filed an ITC complaint alleging that various automatic teller machine models imported by Hyosung infringe two Diebold patents. The ITC concluded that the products infringed, the asserted claims were not invalid, and the domestic industry requirement was met. The ITC entered a limited exclusion order and cease-and-desist orders, and Hyosung appealed.

Addressing one of the patents, the Federal Circuit noted that the patent had expired. The court therefore dismissed that portion of the appeal as moot, vacated the ITC’s decision as to that patent, and remanded with instructions to revise the applicable orders. The Federal Circuit explained: “Because the ’616 patent has expired, the ITC’s limited exclusionary order and cease and desist orders as to that patent have no further prospective effect.” Diebold argued, however, that the appeal is not moot because future enforcement proceedings are possible and because the possible stare decisis effect of the Federal Circuit’s decision on the merits could have collateral consequences in a pending district court case. The Federal Circuit ruled that these concerns do not prevent the appeal from becoming moot.

Addressing the other patent in suit, Hyosung challenged the ITC’s conclusion that the asserted claims were not shown to be invalid as obvious. The Federal Circuit disagreed, ruling that “Hyosung has failed to show that the prior art combination rendered the asserted claims obvious.”

Finally, the Federal Circuit addressed whether the ITC erred by relying on Diebold’s “multi-million-dollar investment in research and development from 2005 to 2010 to satisfy the economic prong of the domestic industry requirement.” Hyosung argued that investments that “occur five years or more before a complaint is filed and are not connected to any meaningful ongoing investments … do not count” when determining if the economic prong is satisfied. The Federal Circuit rejected that argument: “There is nothing in the statutory language that supports Hyosung’s bright line rule for rejecting research expenditures that are made more than five years earlier. To be sure, a past investment may have such an attenuated connection to the continued existence of a domestic industry as to be irrelevant, but that has not been shown to be the case here.”

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Mayne Pharma Int’l Pty. Ltd. v. Merck Sharp & Dohme Corp., et al., No. 2018-1593 (Fed. Cir. (PTAB) June 21, 2019). Opinion by Lourie, joined by Dyk and O’Malley.

Merck Sharp & Dohme Corp. (MSD) filed an IPR petition challenging certain claims of a patent held by Mayne. The patent is directed to pharmaceutical compositions of azole antifungal drugs that are practically insoluble in aqueous media. The Patent Trial and Appeal Board concluded that the challenged claims were unpatentable as anticipated or obvious. During the proceeding, the Board permitted MSD to identify its parent company as a real party in interest (RPI) without affecting the petition’s filing date, thus avoiding a potential time-bar under 35 U.S.C. § 315(b). Mayne appealed.

Mayne argued to the Federal Circuit that the Board should not have instituted review because the petition was time-barred. Mayne contended that MSD’s parent was an RPI and that the Board could not allow MSD to amend its disclosure of RPIs without resetting the petition’s filing date to the date of the amendment. Mayne also asserted that the Board erred in relying on the “interests of justice” language of 37 C.F.R. § 42.5(c)(3), arguing that it does not supplant the requirement to identify all RPIs per 37 C.F.R. § 42.104.

The Federal Circuit determined that, “[i]n applying § 42.5(c)(3), the Board did not plainly err in finding that MSD’s amendment would serve the interests of justice.” Both MSD and its parent agreed to be bound by the estoppel effects of the IPR, the Board was properly apprised of conflicts, and there was no evidence that MSD intended to conceal its parent’s identity. The court explained that “unwinding the proceedings based on a strict view of the real-party-in-interest disclosure requirement would be at odds with the PTO policy” focused on “the just, speedy, and inexpensive resolution of every proceeding.” Moreover, the Federal Circuit held that a “lapse in compliance” with the obligation to identify all RPIs “does not preclude the Board from permitting the lapse to be rectified.”

Turning to the merits, the Federal Circuit determined that intrinsic and extrinsic evidence supported the Board’s construction of certain claim terms. The specification defined “in vivo” in a manner that expressly recited animals, and therefore “the broadest reasonable interpretation of the claims is not limited to humans.” Because Mayne did not dispute that under the Board’s constructions, the claims are unpatentable as obvious or anticipated, the Federal Circuit affirmed those determinations.

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Game & Technology Co. v. Activision Blizzard Inc., et al., No. 2018-1981 (Fed. Cir. (PTAB) June 21, 2019). Opinion by Wallach, joined by Prost and Lourie.

The Federal Circuit affirmed the Patent Trial and Appeal Board’s determination in an IPR that certain claims were unpatentable as obvious.

The patent at issue in the IPR relates to customizing Internet game characters in online games by combining game items with layers of an avatar in the game. Specifically, the patent concerns providing game items to Internet characters and generating a type of avatar called a “gamvatar” that is equipped with particular game items. Activision asserted that certain claims were obvious over a prior art video game user manual alone or in view of a prior art published patent application. Game and Technology Co. (GAT) argued that the prior art failed to disclose a “gamvatar” having “layers for performing game item functions.” GAT also argued that a single reference cannot support obviousness.

The Board construed the claim terms “gamvatar” and “layers” and, based on those constructions, found the challenged claims obvious over the user manual alone and over the user manual in combination with the published patent application. The Federal Circuit affirmed. The court explained that the Board’s claim constructions were correct based on the claim language, specification, and, for the term “layers,” the prosecution history. The Federal Circuit also determined that the Board’s findings regarding obviousness were supported by substantial evidence. The Federal Circuit specifically rejected GAT’s argument that a single reference cannot support obviousness. The court explained that GAT’s view “is wrong as a matter of law,” because “a patent can be obvious in light of a single prior art reference if it would have been obvious to modify that reference to arrive at the patented invention.”

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