Patent Case Summaries September 30, 2020

Patent Case Summaries | Week Ending September 25, 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.

Network-1 Technologies, Inc. v. Hewlett-Packard Co., et al., Nos. 2018-2338, -2339, -2395, -2396 (Fed. Cir. (E.D. Tex.) Sept. 24, 2020). Opinion by Prost, joined by Newman and Bryson.

Network-1 sued HP and others for infringement of a patent directed to electronic devices that automatically determine if remote equipment is capable of accepting remote power over Ethernet. After the Complaint was filed, a co-defendant petitioned for IPR. Following institution of the IPR, HP filed its own petition along with a motion to join the existing IPR, which the Patent Trial and Appeal Board granted.

In the district court action, the court construed various claim terms, including “low level current” and “main power source.” A jury trial was held, and the jury found the patent not infringed and invalid. Addressing the parties’ post-trial motions, the district court upheld the jury finding of noninfringement but overturned the invalidity finding. According to the court, 35 U.S.C. § 315(e) estopped HP from raising obviousness challenges that “reasonably could have been raised” in the IPR. Network-1 appealed, and HP cross-appealed.

Addressing the district court’s claim constructions, the Federal Circuit affirmed the construction of “low level current” but ruled that the district court erred in limiting “main power source” to a DC power source. The Federal Circuit held that neither the claims nor the specification supported excluding AC power sources. The court determined that Network-1 was prejudiced by the claim construction error, and thus remanded for a new trial on infringement.

Turning to HP’s cross-appeal, the Federal Circuit vacated and remanded the district court’s judgment that HP was estopped under § 315(e). The Federal Circuit held that HP was not estopped since it had joined an existing IPR involving existing challenges to the patent claims. The court explained that “the joinder provision does not permit a joining party to bring into the proceeding new grounds that were not already instituted.” Therefore, “because a joining party cannot bring with it grounds other than those already instituted, that party is not statutorily estopped from raising other invalidity grounds.”

Lastly, HP argued that claim 6 of the patent had been improperly broadened during a reexamination proceeding. The Federal Circuit disagreed. Claim 6 was not itself amended during the reexamination, and “there can be no dispute, therefore, that the scope of claim 6 was not changed,” meaning “there has not been improper claim broadening.”

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Apple Inc. v., Inc., Nos. 2018-1456, -1457 (Fed. Cir. (PTAB) Sept. 25, 2020). Opinion by Reyna, joined by Prost and Hughes.

Apple initiated separate IPR proceedings against two patents owned by Voip-Pal. During the proceedings, Voip-Pal’s former CEO sent letters to various parties, copying members of Congress, the President, federal judges, and APJs at the Patent Trial and Appeal Board. The letters criticized the IPR system and requested judgment in favor of Voip-Pal but did not discuss the merits of Apple’s IPR petitions.

Addressing Apple’s obviousness arguments, the Board determined that the claims were not invalid as obvious. The Board found that Apple did not provide evidentiary support for a motivation to combine the cited prior art references. Apple then moved for sanctions based on Voip-Pal’s CEO’s ex parte communications. The Board determined that sanctions were appropriate, but only in the form of having a new panel preside over Apple’s pending petition for rehearing. The new panel denied the petition.

On appeal, the Federal Circuit determined that Apple’s appeals were moot as to certain patent claims that had been held ineligible in an intervening matter. As to the remaining claims, the Federal Circuit rejected Apple’s challenges to the Board’s sanctions order and denial of rehearing. First, 37 C.F.R. § 42.12(b) gives the Board discretion to issue sanctions and identifies exemplary sanctions, and here the Board did not violate the APA by issuing “a sanction not explicitly listed under Section 42.12.” Second, the Board’s sanctions order did not deprive Apple of due process.

Addressing the merits, the Federal Circuit determined that the Board applied the proper evidentiary standard in finding that Apple had failed to establish a motivation to combine. Also, substantial evidence supported the Board’s findings. Thus, the Federal Circuit affirmed the nonobviousness determinations as to the claims that were not moot.

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