Patent Case Summaries April 22, 2020

Patent Case Summaries | Week Ending April 17, 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.

O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC, et al., No. 2019-1134 (Fed. Cir. (D. Conn.) Apr. 13, 2020). Opinion by Hughes, joined by Lourie and Reyna.

The Federal Circuit affirmed the district court’s denial of attorneys’ fees to the accused infringer because it was not a “prevailing party” under 35 U.S.C. § 285.

Mossberg sued Timney for patent infringement, prompting Timney to initiate and pursue post-grant proceedings that lasted over five years. During that time, the district court proceedings were stayed. The USPTO eventually invalidated Mossberg’s patent. Mossberg then voluntarily dismissed its patent infringement suit without prejudice, and the district court entered a dismissal order.

Timney moved for attorney’s fees under § 285. The district court denied the motion, ruling that Timney was not a “prevailing party” because a voluntary dismissal without prejudice “is not a decision on the merits and thus cannot be a judicial declaration altering the legal relationship between the parties.”

On appeal, the Federal Circuit agreed that there had been no final court decision on the merits, and without a final court decision, Timney was not a “prevailing party.” Mossberg’s voluntary dismissal became effective immediately upon filing of the notice of dismissal. The district court’s subsequent dismissal order had no legal effect and was not a final court decision. The only other district court decision was the order granting a stay, which the Federal Circuit held could not alone make Timney a “prevailing party.” The Federal Circuit summarized: “A stay, standing alone, is simply not a final court decision capable of establishing the judicial imprimatur required for a litigant to emerge as the prevailing party under § 285.”

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Ericsson Inc., et al. v. TCL Communication Technology Holdings Ltd., et al., No. 2018-2003 (Fed. Cir. (E.D. Tex.) Apr. 14, 2020). Opinion by Prost, joined by Chen. Dissenting opinion by Newman.

The Federal Circuit reversed the district court’s denial of summary judgment and held that a patent asserted by Ericsson claimed ineligible subject matter under 35 U.S.C. § 101.

Ericsson’s patent generally claims a method and system for limiting and controlling access to resources in a telecommunications system. TCL sought summary judgment of ineligibility under § 101, but the district court denied the motion. At trial, the jury found that TCL willfully infringed certain claims and awarded Ericsson damages. TCL filed post-trial motions for judgment as a matter of law and a new trial on damages and willfulness. The district court denied the requested relief, and TCL appealed.

Ericsson argued as a threshold matter that TCL had waived any right to appeal § 101 ineligibility by failing to raise it in a motion for judgment as a matter of law. The Federal Circuit disagreed for two reasons. First, the district court’s denial of summary judgment was not based on any genuine dispute of material fact. As a result, “the district court effectively entered judgment of eligibility to Ericsson” under § 101, which was “sufficient to preserve the issue for appeal.” Second, even if waived, both Federal Circuit and Fifth Circuit law grant discretion to hear issues that have been waived.

On the merits, the Federal Circuit concluded that under Alice step one, the asserted claims “are directed to the abstract idea of controlling access to, or limiting permission to, resources.” “Although written in technical jargon, a close analysis of the claims reveals that they require nothing more than this abstract idea.” Analyzing Alice step two, the Federal Circuit ruled that the claims do not contain an inventive concept that would support patent eligibility. While Ericsson pointed to a particular three-layer arrangement of software described in the specification as the inventive concept, the Federal Circuit ruled that the structure was unclaimed and therefore cannot support an inventive concept. Consequently, the Federal Circuit held the asserted claims unpatentable under § 101, vacated the damages verdict, and declined to reach the remaining issues.

Dissenting, Judge Newman disagreed that TCL had properly preserved the § 101 patent eligibility issue for appeal because “no post-trial motion was filed, and Section 101 was not mentioned in the district court’s final decision.” Judge Newman also stated that the majority’s decision “is not in accord with law and precedent” under § 101, fails to give appropriate deference to findings of fact in a related IPR, and errantly relied on boilerplate language at the end of the specification addressing how “the invention can be varied in many ways.” In Judge Newman’s view, the “majority’s ruling that such general text converts the claimed subject matter into abstractness will import Section 101 invalidity into virtually all existing patents.”

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CardioNet, LLC, et al. v. InfoBionic, Inc., No. 2019-1149 (Fed. Cir. (D. Mass.) Apr. 17, 2020). Opinion by Stoll, joined by Plager. Opinion dissenting in part and concurring in the result by Dyk.

CardioNet filed a patent infringement complaint against InfoBionic. In response, InfoBionic filed a motion to dismiss for failure to state a claim under Rule 12(b)(6), arguing that the asserted claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101. The district court granted the motion.

On appeal, the Federal Circuit reversed, ruling that under Alice step one, the claims are not directed to an abstract idea. Instead, they are directed to “a patent-eligible improvement to cardiac monitoring technology.” Quoting precedent, the Federal Circuit explained that the claims “‘focus on a specific means or method that improves’ cardiac monitoring technology; they are not ‘directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.’” The Federal Circuit ruled that the district court’s analysis incorrectly assumed that the claims are directed to automating known techniques, when in fact “nothing in the record supports the district court’s fact finding (and InfoBionic’s assertion) that doctors long used the claimed diagnostic processes.” Because the claims are not directed to an abstract idea, the court did not reach Alice step two.

The Federal Circuit also addressed the parties’ dispute whether Alice step one can be resolved “at the Rule 12(b)(6) stage without remanding to assess the state of the art as of the invention date to determine whether the asserted claims are directed to automating a practice long used by doctors.” The court ruled that a remand is unnecessary because “Alice step one presents a legal question that can be answered based on the intrinsic evidence.” The Federal Circuit explained that “step one of the Alice framework does not require an evaluation of the prior art or facts outside of the intrinsic record regarding the state of the art at the time of the invention.” “It is within the trial court’s discretion whether to take judicial notice of a longstanding practice where there is no evidence of such practice in the intrinsic record. But there is no basis for requiring, as a matter of law, consideration of the prior art in the step one analysis in every case.”

Judge Dyk dissented regarding a court’s ability to look beyond the intrinsic evidence in analyzing Alice step one. He explained that, “on the one hand, the majority recognizes that establishing that a practice is longstanding is clearly relevant, but on the other hand seems to suggest undefined limits on the use of extrinsic evidence to determine whether a practice was longstanding in the prior art at the time of the invention.” In Judge Dyk’s view, it would be “inconsistent with authority” to “limit[] the use of extrinsic evidence to establish that a practice is longstanding.” “No case has ever said that the nature of a longstanding practice cannot be determined by looking at the prior art.”

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Spigen Korea Co. v. Ultraproof, Inc., et al., Nos. 2019-1435, -1717 (Fed. Cir. (C.D. Cal.) Apr. 17, 2020). Opinion by Reyna, joined by Newman. Dissent by Lourie without opinion.

Spigen owns design patents that claim a case for a cellular phone. Spigen sued Ultraproof for infringement, and Ultraproof filed a motion for summary judgment of invalidity. The district court granted the motion, holding that the patents were obvious as a matter of law in view of a primary reference (the ’218 patent) and a secondary reference.

On appeal, the Federal Circuit reversed, concluding that “there is a material factual dispute over whether the ’218 patent is a proper primary reference.” The Federal Circuit first reiterated that, for design patents, “the ultimate inquiry for obviousness ‘is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.’” One underlying factual issue “is whether a prior art design qualifies as a ‘primary reference.’” To qualify as a “primary reference,” the reference must create “‘basically the same’ visual impression” as the claimed design.

The district court found that despite “slight differences,” the ’218 patent was “basically the same” as the Spigen design patents and, thus, a proper primary reference. But the Federal Circuit disagreed because a reasonable factfinder could find otherwise as evidenced by the competing expert testimony before the district court. The Federal Circuit therefore reversed the district court’s grant of summary judgment of invalidity and remanded for further proceedings.

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Lectrosonics, Inc. v. Zaxcom, Inc., No. IPR2018-01129 (Jan. 24, 2020) (designated precedential on Apr. 14, 2020). Opinion by Deshpande, joined by Boalick and Pettigrew.

In a final written decision in an IPR, the Patent Trial and Appeal Board found that Patent Owner did not demonstrate a sufficient nexus between asserted objective indicia of nonobviousness and the challenged claims. But the Board found that Patent Owner’s substitute claims had a “different scope” and therefore considered the issue of nexus anew, ultimately concluding that the substitute claims did have a sufficient nexus.

The Board explained that a patentee “is entitled to a presumption of nexus ‘when the patentee shows that the asserted objective evidence is tied to a specific product and that product ‘embodies the claimed features, and is coextensive with them.’” However, a finding that a presumption of nexus is inappropriate “does not end the inquiry into secondary considerations.” The patent owner “is still afforded an opportunity to prove nexus by showing that the evidence of secondary considerations is the ‘direct result of the unique characteristics of the claimed invention.’”

On the facts presented here, the Board determined that Patent Owner had not demonstrated that a nexus exists between the evidence presented and the merits of the claimed invention “because the evidence is directed to features that are not required by the claims.” Consequently, the Board ruled that Patent Owner’s evidence of secondary considerations did not weigh in favor of nonobviousness. With respect to the substitute claims, however, the Board found that Patent Owner had demonstrated a sufficient nexus.

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Ex parte Thompson, Appeal No. 2011-011620 (Mar. 21, 2014) (designated informative on Apr. 14, 2020). Opinion by Jeffery, joined by Moore and Chen.

A patent applicant appealed an Examiner’s decision rejecting certain claims as obvious. In the appeal, the applicant did not dispute the Examiner’s findings that the prior art combinations disclosed all limitations of the pending claims and that there was motivation to combine the references. Instead, the applicant argued that the Examiner failed to properly weigh the applicant’s evidence of secondary considerations of nonobviousness, namely long-felt need and failure of others.

The Patent Trial and Appeal Board ruled that, in determining obviousness of the claimed invention, “objective evidence of secondary considerations pertaining to nonobviousness must be considered” but “it does not, however, control the obviousness conclusion.” “These indicia are not just a cumulative or confirmatory part of the obviousness analysis, but rather constitute independent evidence of nonobviousness that can be the most probative evidence in that regard ‘in avoiding the trap of hindsight when reviewing, what otherwise seems like, a combination of known elements.’”

Here, the applicant had provided evidence of a problem that had “persistent for at least 29 years,” and the problem had not been solved by another as the Examiner had asserted. The applicant also demonstrated that the claimed invention satisfied the long-felt need for a solution. The Board found that the Examiner had misunderstood the problem being solved by the claimed invention, leading the Examiner to erroneously deem the applicant’s evidence insufficient. The Board ultimately reversed the Examiner’s rejections.

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Ex parte Whirlpool Corp., Appeal No. 2013-008232 (Oct. 30, 2013) (designated informative on Apr. 14, 2020). Opinion by Wood, joined by McCarthy and Song.

The Patent Trial and Appeal Board reversed an Examiner’s finding that Patent Owner’s objective evidence of nonobviousness did not have a sufficient nexus with the pending claim 1 or associated dependent claims.

First, the Board found that even though Patent Owner’s evidence of secondary considerations related to features not covered by claim 1, that did not necessarily preclude a finding of nexus. The Board explained: “An invention may be praised or commercially successful for reasons other than the claimed invention but a nexus may still exist as long as it can be shown that such praise or success is also due in part to the claimed invention.”

Second, the Board explained that “[w]here the offered secondary consideration actually results from something other than what is both claimed and novel in the claim, there is no nexus to the merits of the claimed invention.” But here, the claimed feature that was “both claimed and novel” was a particular combination not taught by the prior art. Therefore, Patent Owner’s evidence of secondary considerations regarding certain individual features present in the prior art did not preclude a finding of nexus.

Finally, the Board disagreed with the Examiner that the lack of commercialization of the prior art embodiment is irrelevant. The Board quoted the Federal Circuit: “The length of the intervening time between the publication dates of the prior art and the claimed invention can also qualify as an objective indicator of nonobviousness.” Here, 24 years had passed between the prior art’s publication and the applicant’s filing date, “a not insubstantial period of time.”

Consequently, the Board found that Patent Owner had established a nexus between its secondary-considerations evidence and the claimed invention. The Board also found that the “evidence of secondary considerations, considered in sum, is probative and substantial, and sufficient to demonstrate nonobviousness of claim 1.” The Board therefore reversed the Examiner’s rejection.

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