Patent Case Summaries February 12, 2020

Patent Case Summaries | Week Ending February 7, 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.

Samsung Electronics America, Inc. v. Prisua Engineering Corp., Nos. 2019-1169, -1260 (Fed. Cir. (PTAB) Feb. 4, 2020). Opinion by Bryson, joined by Prost and Newman.

In a final written decision in an IPR initiated by Samsung, the Patent Trial and Appeal Board declined to analyze whether certain challenged claims were unpatentable because the Board concluded that the claims were indefinite. On appeal, Samsung contended that the Board should have canceled the claims for indefiniteness or, in the alternative, should have assessed whether the claims are unpatentable as anticipated or obvious. 

Addressing Samsung’s first argument, the Federal Circuit held that “the Board may not cancel claims for indefiniteness in an IPR proceeding.” The statutory provisions governing the IPR process “do not permit the Board to institute inter partes review of claims for indefiniteness,” “[n]or could the Board cancel those claims as indefinite on its own accord.” The Federal Circuit explained that “the proper course for the Board to follow, if it cannot ascertain the scope of a claim with reasonable certainty for purposes of assessing patentability, is to decline to institute the IPR or, if the indefiniteness issue affects only certain claims, to conclude that it could not reach a decision on the merits with respect to whether petitioner had established the unpatentability of those claims under sections 102 or 103.”

Turning to Samsung’s alternative argument, the Federal Circuit addressed two indefiniteness concerns raised by the Board. First, the Board had concluded that the claim term “digital processing unit” was indefinite because it is a means-plus-function term that lacked corresponding structure in the specification. The Federal Circuit disagreed, ruling that the term “clearly serves as a stand-in for a ‘general purpose computer’ or a ‘central processing unit,’” each of which is structural in nature. Therefore, this term is not indefinite and should not have prevented the Board from analyzing the claims for anticipation or obviousness.

Second, the Board had concluded that Claim 1 was indefinite under the Federal Circuit’s IPXL decision because the claim recited both an apparatus and a method of using that apparatus. The Federal Circuit observed, however, that IPXL concerns invalidation on the ground of indefiniteness, and “it does not speak to whether the claim is also invalid for obviousness.” The court explained that “IPXL-type indefiniteness … does not necessarily preclude the Board from addressing the patentability of the claims on section 102 and 103 grounds.” The Federal Circuit therefore remanded so that the Board could determine whether Claim 1 and its dependent claims are unpatentable as anticipated or obvious.

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HVLPO2, LLC v. Oxygen Frog, LLC, et al., No. 2019-1649 (Fed. Cir. (N.D. Fla.) Feb. 5, 2020). Opinion by Moore, joined by Newman and Chen.

HVLPO2 sued Oxygen Frog for infringement of two patents related to methods and devices for controlling an oxygen-generating system, which is used to sustain and manage airflow for torch glass artists. At trial, Oxygen Frog argued that the claims were obvious in view of a combination of two prior art references. One of the references was a video by a glass blowing artist. The artist was not qualified as an expert witness but did provide deposition testimony as a fact witness, most of which was played at trial before the jury. HVLPO2 objected to the artist’s testimony regarding obviousness as improper expert opinion testimony. The district court overruled the objection and instead gave the jury a limiting instruction. The jury found the claims obvious, and the district court denied HVLPO2’s motion for judgment as a matter of law, or in the alternative, for a new trial.

On appeal, the Federal Circuit ruled that the district court abused its discretion by admitting lay witness testimony regarding obviousness. The court explained that “it is an abuse of discretion to permit a witness to testify as an expert on the issues of noninfringement or invalidity unless that witness is qualified as an expert in the pertinent art.”

Oxygen Frog argued that a lay witness should be permitted to testify that modifying one of the prior art references to include additional claimed features would have been obvious. The Federal Circuit disagreed, ruling that the artist’s “opinion testimony was directed to the central legal and technical question at trial: whether [HVLPO2’s] asserted patent claims were invalid for obviousness.” The district court’s decision to admit the artist’s testimony “was plainly wrong,” and the court’s limiting instruction “was insufficient to cure the substantial prejudice caused by [the] testimony.” The Federal Circuit therefore reversed and remanded for a new trial.

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Cheetah Omni LLC v. AT&T Services, Inc., et al., No. 2019-1264 (Fed. Cir. (N.D. Tex.) Feb. 6, 2020). Opinion by Lourie, joined by Bryson and Chen.

Cheetah filed a complaint against AT&T alleging infringement of a patent directed to optical communication networks. AT&T’s supplier, Ciena Corporation, intervened. AT&T and Ciena then moved for summary judgment that Cheetah’s infringement claim was barred by agreements settling previous litigation. Those agreements included a license to various patents, including an express license to the ’925 patent. The agreements were silent, however, as to the ’836 patent, which had issued from a continuation of a continuation of the ’925 patent. 

Cheetah argued that all parties had been aware of the ’836 patent, and if they had intended to include it within the scope of the license, the patent would have been expressly named in the agreements. The district court disagreed, ruling that an express license of a particular patent includes an implied license for its continuations “because those continuations disclose the same inventions as the licensed patent.”

On appeal, the Federal Circuit affirmed. The court stated that “legal estoppel prevents licensors from derogating or detracting from definable license rights granted to licensees for valuable consideration.” Relying on precedent, the Federal Circuit ruled that “where continuations issue from parent patents that previously have been licensed as to certain products, it may be presumed that, absent a clear indication of mutual intent to the contrary, those products are impliedly licensed under the continuations as well.” The Federal Circuit then ruled that applying this presumption “provides a simple and clear resolution in this case.” Because the ’925 patent was expressly licensed, there is an implied license to the ’836 patent. If Cheetah had intended otherwise, “it had an obligation to make that clear.”

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Apple Inc. v. Andrea Electronics Corp., Nos. 2018-2382, -2383 (Fed. Cir. (PTAB) Feb. 7, 2020). Opinion by Plager, joined by Dyk and Stoll.

Apple filed two IPR petitions challenging certain claims of a patent relating to digital audio processing. The Patent Trial and Appeal Board instituted review on all challenged claims and grounds raised in both petitions and consolidated the two proceedings. During oral argument, the Board questioned whether Apple’s reply raised new arguments not set forth in its petitions. The Board then issued a Final Written Decision finding that some but not all of the challenged claims were unpatentable. In its decision, the Board refused to consider Apple’s reply arguments because, in the Board’s view, they raised a new theory of unpatentability.

The Federal Circuit determined that the Board abused its discretion by refusing to consider the arguments and evidence that Apple had advanced in its IPR reply brief. The court ruled that “Apple’s legal ground did not change in its reply,” and Apple’s reply arguments were “not the types of arguments that we have previously found to raise a ‘new theory of unpatentability.’” As the Federal Circuit explained, “Apple’s reply brief merely demonstrates another example of the same algorithm to further explain why” the prior art disclosed certain claim limitations. The Board therefore abused its discretion by parsing Apple’s arguments “with too fine of a filter.” Moreover, Apple’s reply arguments were responsive to arguments raised in the Patent Owner Response.

The Federal Circuit thus vacated and remanded for the Board to consider the arguments raised by Apple in its reply brief. Addressing other claims at issue on appeal, the Federal Circuit affirmed the Board’s construction of a disputed claim term and the Board’s determination that the impacted claims were unpatentable. 

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