Patent Case Summaries September 1, 2021

Patent Case Summaries | Week Ending August 27, 2021

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.

CommScope Technologies LLC, et al. v. Dali Wireless Inc., Nos. 2020-1817, -1818 (Fed. Cir. (N.D. Tex.) Aug. 24, 2021). Opinion by Stoll, joined by Reyna and Schall.

CommScope and Dali cross-sued each other for infringement of patents relating to telecommunications technologies. A jury rendered a verdict of infringement, no invalidity, and damages for both CommScope and Dali. The district court then denied both parties’ motions for judgment as a matter of law, among other motions. CommScope appealed, and Dali cross-appealed.

The Federal Circuit’s opinion focused on just one of Dali’s asserted patents, specifically addressing the district court’s judgment upholding the jury’s findings of infringement and no invalidity. As to all other issues, the Federal Circuit stated that it had thoroughly considered them and that each is affirmed. Regarding the Dali patent addressed in the opinion, the Federal Circuit reversed the judgment of infringement and affirmed the judgment of no invalidity.

The Federal Circuit first addressed a disputed claim construction issue concerning the phrase “switching a controller off,” which the district court construed to mean “switching a controller to a nonoperating state.” The court ruled that Dali “fails to mount a meaningful appellate challenge to this construction.” First, Dali’s argument was found only in a footnote, thus forfeiting the argument. Second, Dali’s argument was insufficiently developed and was irreconcilable with statements made in other portions of Dali’s appellate brief.

On the question of infringement, the Federal Circuit overturned the finding of infringement. The court held that “not only was there a lack of evidence to show that the accused product met the proper construction of the claims, there is unrebutted evidence showing the opposite.” The court explained that Dali could not simultaneously argue that the accused product infringes and that the prior art does not anticipate. The court explained that “this case falls squarely within the principle that a ‘patent may not, like a nose of wax, be twisted one way to avoid anticipation and another to find infringement.”

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Universal Secure Registry LLC v. Apple Inc., et al., No. 2020-2044 (Fed. Cir. (D. Del.) Aug. 26, 2021). Opinion by Stoll, joined by Taranto and Wallach.

The Federal Circuit affirmed the district court’s conclusion that four patents were ineligible for patenting under 35 U.S.C. § 101.

USR sued Apple and Visa for infringement of four patents directed to technologies for securing electronic payment transactions. The defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that the patents claim patent-ineligible subject matter under § 101. The district court granted the motion, and USR appealed.

Applying the two-step Alice test, the Federal Circuit analyzed representative claims from each patent and determined that each is directed to an abstract idea and fails to recite an inventive concept that would transform the abstract idea into patentable subject matter.

For example, addressing one of the patents, the Federal Circuit ruled that the claims are abstract. The claims “simply recite conventional actions in a generic way (e.g., receiving a transaction request, verifying the identity of a customer and merchant, allowing a transaction) and do not purport to improve any underlying technology.” The claims also lacked an inventive concept. Addressing that issue, the Federal Circuit rejected USR’s argument that the claim’s recitations of time-varying codes and sending data to a third party (as opposed to the merchant) rise to the level of an inventive concept.

The Federal Circuit separately addressed the three other patents involved in the case, finding that, like the first, each is directed to an abstract idea and fails to recite a sufficient inventive concept. The court explained that “in cases involving authentication technology, patent eligibility often turns on whether the claims provide sufficient specificity to constitute an improvement to computer functionality itself.” None of USR’s patents passed muster under the two-step Alice test, and thus the Federal Circuit affirmed the district court’s dismissal of the complaint.

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Juno Therapeutics, Inc., et al. v. Kite Pharma, Inc., No. 2020-1758 (Fed. Cir. (C.D. Cal.) Aug. 26, 2021). Opinion by Moore, joined by Prost and O’Malley.

Juno sued Kite for infringement of a patent relating to a nucleic acid polymer encoding a three-part chimeric antigen receptor (CAR) for a T cell. After a two-week jury trial, the jury reached a verdict in favor of Juno. The verdict included a finding that Kite failed to prove any of the asserted claims were invalid for lack of written description. The district court denied Kite’s motion for judgment as a matter of law on that issue, and Kite appealed.

The Federal Circuit reversed, ruling that the record does not contain substantial evidence that the patent contains written description support for the asserted claims. Thus, the Federal Circuit held the claims invalid.

The patent at issue involved a binding element called a single-chain antibody variable fragment (scFv). Kite argued that the patent discloses neither representative species nor common structural features of the claimed scFv genus to identify which scFvs would function as claimed. Kite argued that “the claims cover an enormous number (millions of billions) of scFv candidates, only a fraction of which satisfy the functional binding limitation for any given target, and that the written description does not meet the written description requirement for this functional binding limitation.”

The Federal Circuit agreed, noting that the broadest claims cover “any scFv for binding any target.” The written description, in contrast, “fails to provide a representative sample of species within, or defining characteristics for, that expansive genus.” In other words, the written description lacked representative species and, moreover, failed to disclose “structural features common to the members of the genus to support that the inventors possessed the claimed invention.” The Federal Circuit thus held that, without this information, no reasonable jury could find that the patent satisfies the written description requirement.

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MLC Intellectual Property, LLC v. Micron Technology, Inc., No. 2020-1413 (Fed. Cir. (N.D. Cal.) Aug. 26, 2021). Opinion by Stoll, joined by Newman and Reyna.

MLC sued Micron for infringement of a patent relating to methods of programming multi-level cells. A multi-level cell stores multiple-bits (n-bits) of data in a single memory cell.

In the district court, Micron filed a motion in limine to preclude MLC’s damages expert, Mr. Milani, from mischaracterizing certain agreements involving Hynix and Toshiba as reflecting a 0.25% royalty rate. Micron also moved to strike portions of Mr. Milani’s expert report that raised new theories not disclosed by MLC. Finally, Micron filed a Daubert motion, seeking to exclude Mr. Milani’s reasonable royalty opinion for failure to apportion out the value of non-patented features. The district court issued orders granting all three motions. The court then certified the orders for interlocutory appeal, and the Federal Circuit granted MLC’s petition for permission to appeal.

The Federal Circuit affirmed all three of the district court’s exclusion orders. First, the Federal Circuit ruled that “Mr. Milani’s characterization of the Hynix and Toshiba licenses reflecting a 0.25% royalty rate is not reliable.” Neither agreement reflected a specific royalty rate, and Mr. Milani’s testimony rested on an inference “that goes well beyond” what the agreements recite. Second, recognizing that district courts have “particularly wide latitude” in excluding information not disclosed during discovery, the Federal Circuit upheld the exclusion of the new theories in Mr. Milani’s expert report that MLC had failed to disclose. Lastly, the Federal Circuit agreed that “Mr. Milani did not properly apportion either the royalty base or the royalty rate to account for the patented technology.” The Federal Circuit explained that it has “repeatedly held that when the accused technology does not make up the whole of the accused product, apportionment is required.”

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Data Engine Technologies LLC v. Google LLC, No. 2021-1050 (Fed. Cir. (D. Del.) Aug. 26, 2021). Opinion by Stoll, joined by Reyna and Hughes.

DET sued Google for infringement of three patents relating to displaying and navigating three-dimensional electronic spreadsheets by implementing user-customizable “notebook tabs” on the spreadsheet interface. In an earlier appeal, the Federal Circuit determined that the claims are eligible for patenting under 35 U.S.C. § 101.

On remand, Google asked the district court to reopen claim construction and construe the preamble term “three-dimensional spreadsheet” in view of the Federal Circuit’s eligibility determination. The district court did so. The court then ruled that the term is limiting and means “a spreadsheet that defines a mathematical relation among cells on different spreadsheet pages, such that cells are arranged in a 3-D grid.” Based on that construction, Google moved for summary judgment of noninfringement arguing that the accused product is not a three-dimensional spreadsheet. The district court granted the motion, and DET appealed.

On appeal, DET disputed only whether the preamble is limiting and, if so, whether the district court’s construction of “three-dimensional spreadsheet” is correct.

The Federal Circuit ruled that the preamble is limiting. In the first appeal, the Federal Circuit had agreed with DET that the asserted claims are directed to improvements in three-dimensional spreadsheets, thus giving patentable weight to the term. The Federal Circuit therefore concluded that, “in view of DET’s emphasis on this preamble term in support of patent eligibility, we conclude that the preamble term ‘three-dimensional spreadsheet’ is limiting.”

The Federal Circuit also affirmed the district court’s construction requiring “a mathematical relation among cells on different spreadsheet pages.” Neither the claims nor the specification provided guidance on this point, but the prosecution history did. During prosecution, the applicants distinguished prior art by arguing that it “falls short of a true 3D spreadsheet.” The applicants explained that a “3D spreadsheet defines a mathematical relation among cells on the different pages so that operations such as grouping pages and establishing 3D ranges have meaning.” The Federal Circuit agreed with the district court’s construction because it “giv[es] effect to this express definition in the prosecution history.”

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