Patent Case Summaries June 8, 2022

Patent Case Summaries | Week Ending June 3, 2022

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.

ClearOne, Inc. v. Shure Acquisition Holdings, Inc., No. 2021-1517 (Fed. Cir. (PTAB) June 1, 2022). Opinion by Moore, joined by Newman and Hughes.

Shure owns a patent that relates to “arrays of microphones and housings for the arrays so that the arrays and housings may be fitted into a drop ceiling grid.” ClearOne filed a petition for IPR, prompting Shure to move to amend the claims to add a new independent claim requiring that the microphones are “arranged in a self-similar configuration.”

The Patent Trial and Appeal Board granted Shure’s motion to amend and concluded that the self-similar configuration limitation is not indefinite. The Board found that a skilled artisan would understand “self-similar” to have had a well-known meaning that includes “fractal-like configurations or constellations.” 

ClearOne then requested rehearing and leave to file a sanctions motion against Shure, arguing that (based on the Board’s rationale for the term “self-similar”) Shure violated its duty to disclose material prior art. The Board denied authorization to file the sanctions motion because the identified references were cumulative and because allowing the motion would be little more than a second opportunity for the IPR with the hindsight benefit of knowing the Board’s views of the deficiencies in Shure’s invalidity contentions. ClearOne appealed.

The Federal Circuit affirmed. Regarding definiteness, the court concluded that “based on the intrinsic record alone,” the written description provides, with reasonable certainty, the scope of the term “self-similar.” In particular, the disclosures showed that the term self-similar configuration “refers to repeating or fractal-like configurations, such as concentric rings, ovals, or other shapes.” Also, substantial evidence supported the Board’s finding that “self-similar” has a well-known meaning and confirmed the scope of the invention in the written description. The Federal Circuit rejected ClearOne’s argument that “similar” is a term of degree, explaining that the word “similar” is not used in isolation but “in the context of a self-referential or self-repeating geometric pattern.” 

The Federal Circuit next determined that the Board did not abuse its discretion in denying ClearOne’s request to file a sanctions motion. The Board had found that the arguments were essentially the same as the arguments presented in ClearOne’s rehearing request, that allowing ClearOne a second attempt at the IPR after the final written decision would be inefficient, and that Shure did not intend to breach its duty to disclose references. The Federal Circuit ruled that these findings “establish that the Board did not abuse its discretion.” 

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Pavo Solutions LLC v. Kingston Technology Co., No. 2021-1834 (Fed. Cir. (C.D. Cal.) June 3, 2022). Opinion by Prost, joined by Lourie and Chen.

Pavo asserted that Kingston infringed a patent directed to a cover for a USB thumb drive. During claim construction, the district court allowed Pavo to correct a clerical error in the claims, replacing the word “case” with the word “cover.” The case then proceeded to trial, where the jury returned a verdict of willful infringement and awarded Pavo a 20-cent reasonable royalty. During the trial, Pavo’s damages expert relied on an earlier settlement agreement involving a 1-cent royalty as representing approximately 25% of the profits for sales of the involved products. 

Kingston appealed, raising five arguments. The Federal Circuit addressed only the first three, ruling that the remaining two had been forfeited. The Federal Circuit rejected all three of Kingston’s substantive arguments and thus affirmed. 

First, the Federal Circuit concluded that the district court permissibly corrected “an obvious minor typographical or clerical error” in the claims by replacing the word “case” with the word “cover.” The error was “clear from the full context of the claim language,” which recited “structural elements—hinge holes on the cover receiving hinge protuberances on the case—that result in a configuration in which the cover pivots with respect to the case.”

Continuing its analysis, the Federal Circuit agreed with the district court that the correction “was not subject to reasonable debate because both proposed corrections [by Pavo and by Kingston] would result in the same claim scope.” Lastly, the Federal Circuit agreed with the district court that the prosecution history does not suggest a different interpretation of the claims. In doing so, the court was not swayed by the fact that, during an IPR, Pavo had asked the Patent Trial and Appeal Board to make the same correction, but the Board denied the request. The Federal Circuit explained that the Board’s “denial does not suggest that a different construction is appropriate,” and regardless, the denial was based “on procedural grounds.”

Second, the Federal Circuit rejected Kingston’s argument that it could not have willfully infringed Pavo’s patent because it lacked the requisite intent to infringe “the claims as originally written” and because Kingston “could not have anticipated that a court would later correct the claims.” The Federal Circuit held “that reliance on an obvious minor clerical error in the claim language is not a defense to willful infringement.” The court explained that “judicial correction does not re-make the claim; rather, it gives effect to its obvious meaning.” And “an obvious minor clerical error, by definition, does not mask that meaning, so Kingston cannot hide behind the error to escape the jury’s verdict.”

Lastly, the Federal Circuit determined that the district court did not abuse its discretion in declining to exclude the testimony of Pavo’s damages expert. The testimony was not unduly speculative because the expert relied on a provision of an agreement that both parties agreed was a comparable license agreement. The Federal Circuit also ruled that the “analysis correctly apportioned for non-infringing features.” When a “sufficiently comparable license is used as the basis for determining the appropriate royalty, further apportionment may not necessarily be required” because the comparable license may have “built-in apportionment.” Here, the comparable license “provided sufficient evidence of ‘already built-in apportionment.’”

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