Patent Case Summaries February 19, 2020

Patent Case Summaries | Week Ending February 14, 2020

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.

Serta Simmons Bedding, LLC, et al. v. Casper Sleep Inc., Nos. 2019-1098, -1159 (Fed. Cir. (S.D.N.Y.) Feb. 13, 2020). Opinion by Dyk, joined by Plager and Stoll.

The Federal Circuit vacated a district court’s summary judgment order of noninfringement and remanded with instructions to enforce a settlement agreement between the parties.

In the district court, Serta asserted infringement of several patents. Casper filed motions for summary judgment of noninfringement. Prior to the district court’s ruling on the motions, the parties executed a settlement agreement and advised the district court of their settlement. Nevertheless, the district court awarded Casper summary judgment of noninfringement. Casper then informed Serta that it would not make the payment required by the settlement agreement because the summary judgment order rendered the agreement null and void. 

Serta filed motions to vacate the summary judgment order and to enforce the settlement agreement. The district court denied the motions, reasoning that the case was not moot when the court issued the summary judgment order because the parties intended to keep the case alive while they fulfilled their obligations under the settlement agreement. Serta appealed. Casper cross-appealed, seeking reversal of the district court’s denial of Casper’s motion for fees and costs.

The Federal Circuit concluded that “a binding settlement agreement generally moots the action even if the agreement requires future performance.” Concluding that this general rule applied here, the Federal Circuit vacated the district court’s summary judgment order of noninfringement.

The Federal Circuit next addressed whether the district court had jurisdiction to enforce the settlement agreement. The court ruled that “under Federal Circuit law a district court has jurisdiction to enforce a settlement agreement that resolves patent infringement claims if the motion to enforce is filed before the case is dismissed and the proceedings are ongoing.” Thus, the district court had jurisdiction, and so the Federal Circuit remanded for the district court to enforce the settlement agreement.

With regard to Casper’s cross-appeal, the Federal Circuit concluded that Casper’s request was moot in view of the Federal Circuit’s ruling vacating the summary judgment order. The Federal Circuit also noted that language in the settlement agreement precluded an award of fees and costs for proceedings that occurred prior to the settlement agreement.

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Acoustic Technology, Inc. v. Itron Networked Solutions, Inc., No. 2019-1061 (Fed. Cir. (PTAB) Feb. 13, 2020). Opinion by Reyna, joined by Moore and Taranto.

In 2010, Acoustic sued Itron Inc. for patent infringement. Thus, under 35 U.S.C. § 315(b), Itron Inc. became time-barred from seeking IPR as of 2011. Six years later, Acoustic sued Silver Spring Networks, Inc. for infringement of the same patent, prompting Silver Spring to file an IPR petition. The Board instituted the IPR in September 2017. Itron and Silver Spring agreed to a merger nine days later, after having had initial merger discussions prior to Silver Spring filing its IPR petition. Seven months after completing the merger, the Patent Trial and Appeal Board issued a final written decision finding the challenged patent claim unpatentable as anticipated and obvious. Acoustic never raised a time-bar challenge to the Board.

On appeal, Acoustic argued that the Federal Circuit should vacate the Board’s final written decision because the IPR was time-barred. Acoustic also argued that the Board’s unpatentability findings were not supported by substantial evidence. Itron argued that Acoustic had waived its time-bar challenge, that the time bar of § 315(b) does not apply because the merger occurred after institution of the IPR, and that the Board is not authorized to evaluate § 315(b) after institution.

The Federal Circuit held that “Acoustic has waived its time-bar challenge to the IPR because it failed to present those arguments before the Board.” The court explained: “To permit litigants to raise § 315(b) time-bar challenges for the first time on appeal would encourage what the Supreme Court has referred to as ‘sandbagging,’ i.e., ‘suggesting or permitting, for strategic reasons, that the tribunal below pursue a certain course, and later—if the outcome is unfavorable—claiming that the course followed was reversible error.’” The Federal Circuit declined to resolve Itron’s remaining arguments of “whether Itron’s pre-merger activities render it a real-party-in-interest, or whether the Board has any authority or obligation to reevaluate § 315(b) post institution.”

On the merits, the Federal Circuit affirmed the Board’s unpatentability findings as supported by substantial evidence.

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Acoustic Technology, Inc. v. Itron Networked Solutions, Inc., Nos. 2019-1059, -1060 (Fed. Cir. (PTAB) Feb. 13, 2020). Opinion by Reyna, joined by Moore and Taranto.

The Federal Circuit issued a companion precedential decision in this appeal which largely tracks the appeal summarized above. In this appeal, the Federal Circuit repeated its explanation and analysis as to why Acoustic had waived its argument that Itron was time-barred under 35 U.S.C. § 315(b). On the merits, Acoustic challenged the Patent Trial and Appeal Board’s findings of unpatentability based on obviousness. Itron argued that Acoustic’s appellate arguments relied on a different claim construction than what was presented to the Board, and therefore the Board had not addressed the obviousness arguments that Acoustic raised for the first time on appeal. The Federal Circuit agreed, ruling that Acoustic had waived its new arguments. Thus, the Federal Circuit affirmed the Board’s determination that the challenged claims were unpatentable as obvious.

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