Patent Case Summaries October 13, 2021

Patent Case Summaries | Week Ending October 8, 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.

In re: SurgiSil, L.L.P., et al., No. 2020-1940 (Fed. Cir. (PTAB) Oct. 4, 2021). Opinion by Moore, joined by Newman and O’Malley.

SurgiSil filed a design patent application that claims an “ornamental design for a lip implant as shown and described.” The application contains one figure, and the figure depicts a lip implant. The examiner rejected the application as anticipated by the “Blick” reference, which discloses an art tool called a stump. The Patent Trial and Appeal Board affirmed the examiner’s rejection, finding that the differences in shape between the claimed design and Blick are minor. In its analysis, the Board found it “appropriate to ignore the identification of the article of manufacture in the claim language.” SurgiSil appealed.

The Federal Circuit reversed, ruling that the Board’s anticipation finding “rests on an erroneous interpretation of the claim’s scope.” The court explained that “a design claim is limited to the article of manufacture identified in the claim; it does not broadly cover a design in the abstract.” Here, the claim language recites “a lip implant,” and the lone figure depicts a lip implant. The Federal Circuit thus ruled that “the claim is limited to lip implants and does not cover other articles of manufacture.” Because Blick discloses an art tool rather than a lip implant, it did not anticipate.

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CosmoKey Solutions GmbH & Co. KG v. Duo Security LLC, et al., No. 2020-2043 (Fed. Cir. (D. Del.) Oct. 4, 2021). Opinion by Stoll, joined by O’Malley. Concurring opinion by Reyna.

CosmoKey sued Duo Security for infringement of a patent involving methods of “authenticating the identity of a user performing a transaction at a terminal (e.g., a computer), including activating an authentication function on the user’s mobile device.” According to the specification, the invention improves on conventional mobile phone authentication methods.

Duo Security moved for judgment on the pleadings, arguing that the patent claims are ineligible under 35 U.S.C. § 101. The district court granted the motion, agreeing that, under Alice step one, the claims “are directed to the abstract idea of authentication—that is, the verification of identity to permit access to transactions.” Under Alice step two, the district court concluded that the patent “merely teaches generic computer functionality to perform the abstract concept of authentication.”

The Federal Circuit reversed. Addressing Alice step one, the Federal Circuit questioned the district court’s “broad characterization of the focus of the claimed advance.” The Federal Circuit determined that it need not answer that question, however, because even under the district court’s narrow characterization of the claims, the claims satisfy Alice step two. Both the claims and specification “recite a specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity.” Contrary to the district court’s conclusion, the Federal Circuit ruled that the patent “discloses a technical solution to a security problem in networks and computers.”

Judge Reyna filed a concurring opinion agreeing with the majority’s decision to reverse the district court’s judgment that the claims are ineligible. In Judge Reyna’s view, however, the claims are patent-eligible under Alice step one. Judge Reyna took issue with the majority’s approach of skipping step one and basing its decision on step two. He explained that the majority’s approach “is extraordinary and contrary to Supreme Court precedent,” and it “turns the Alice inquiry on its head.”

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Acceleration Bay LLC v. 2K Sports, Inc., et al., No. 2020-1700 (Fed. Cir. (D. Del.) Oct. 4, 2021). Opinion by Reyna, joined by Moore and Hughes.

Acceleration Bay filed suit in district court alleging infringement of four patents relating to networking technologies. The court issued a series of claim construction orders and then granted summary judgment of noninfringement for all four patents. Acceleration Bay appealed.

For two of the patents, the district court had based its summary judgment determination on two independent grounds: (1) the accused products do not meet the “m-regular” claim term, and (2) Acceleration Bay lacked case law support for its theory that the defendants were the “final assembler” of the claimed networks. On appeal, however, Acceleration Bay challenged only the second ground. The Federal Circuit thus ruled that Acceleration Bay “forfeited any challenge to the district court’s grant of summary judgment of noninfringement on the basis that the accused products fail to satisfy the ‘m-regular’ limitation,” rendering Acceleration Bay’s appeal as to those two patents moot.

For the remaining two patents, the Federal Circuit affirmed the district court’s judgment. Addressing one of the patents, Acceleration Bay argued on appeal that the asserted claims do not explicitly recite an “m-regular” limitation and that the district court erred in construing another term—“fully connected portal computer”—to require the m-regular limitation. Acceleration Bay did not, however, challenge the district court’s separate construction of another limitation that likewise was construed to require the m-regular limitation. Thus, Acceleration Bay could not prevail, and so the Federal Circuit affirmed the summary judgment of noninfringement.

For the final patent, Acceleration Bay argued on appeal that it had asserted a viable “final assembler” theory of direct infringement. The Federal Circuit disagreed, ruling that Acceleration Bay misapprehended the court’s case law. Acceleration Bay’s “final assembler” theory was distinguishable from the court’s precedent, instead offering “a novel theory, without case law support, that the defendants are liable for ‘making’ the claimed hardware components, even though they are in fact made by third parties, because their accused software runs on them.” The Federal Circuit thus concluded that the district court did not err in granting summary judgment of noninfringement.

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Kannuu Pty Ltd. v. Samsung Electronics Co., et al., No. 2021-1638 (Fed. Cir. (S.D.N.Y.) Oct. 7, 2021). Opinion by Chen, joined by Prost. Dissenting opinion by Newman.

The Federal Circuit held that the district court did not abuse its discretion in denying Kannuu’s motion for a preliminary injunction. Specifically, addressing a question of first impression, the Federal Circuit ruled that a forum selection clause in a non-disclosure agreement between Kannuu and Samsung did not prohibit Samsung from petitioning for IPR of Kannuu’s patents.

The forum selection clause stated that “any legal action, suit, or proceeding arising out of or relating to this agreement … must be instituted exclusively in a court of competent jurisdiction, federal or state, located within the Borough of Manhattan, City of New York, State of New York and in no other jurisdiction.”

After Kannuu sued Samsung in district court for patent infringement and breach of the non-disclosure agreement, Samsung filed IPR petitions challenging the patents. Kannuu then filed a motion for a preliminary injunction compelling Samsung to seek dismissal of the IPRs. The district court denied the motion, ruling that the plain meaning of the forum selection clause did not encompass the IPR proceedings.

The Federal Circuit agreed, thus affirming the denial of Kannuu’s motion. The Federal Circuit explained that the non-disclosure agreement “is a contract directed to maintaining the confidentiality of certain disclosed information, and not related to patent rights.” The connection asserted by Kannuu was “too attenuated to place the [IPR] petitions within the scope of an agreement that was always about protecting confidential information and was never about patent rights.”

Judge Newman dissented because, in her view, the forum selection clause “is clear and unambiguous” and requires dismissal of the IPRs. As Judge Newman explained, the forum selection clause expressly applies to “any legal action, suit or proceeding arising out of or related to this Agreement or the transactions contemplated hereby.” She explained that there was no dispute between the parties that the infringement suit was subject to the forum selection clause, that the IPRs are directed to the asserted patents, and that the patents relate to the subject matter communicated under the agreement.

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