Patent Case Summaries April 3, 2024

Patent Case Summaries | Week Ending March 29, 2024

Virtek Vision International ULC v. Assembly Guidance Systems, Inc. d/b/a Aligned Vision, Nos. 2022-1998, -2022 (Fed. Cir. (PTAB) Mar. 27, 2024). Opinion by Moore, joined by Hughes and Stark.

Virtek owns a patent directed to an improved method for aligning a laser projector with respect to a work surface. Aligned Vision filed an IPR petition against all claims, asserting four grounds of unpatentability. The Patent Trial and Appeal Board instituted review and issued a final written decision holding claims 1, 2, 5, 7, and 10–13 unpatentable as obvious over the prior art presented in Grounds 1 and 3. The final written decision also held claims 3, 4, 6, 8, and 9 not unpatentable as obvious over the prior art asserted in Grounds 2 and 4. Both parties appealed.

First, the Federal Circuit reversed the Board’s findings for both Grounds 1 and 3 because substantial evidence did not support the Board’s findings on a motivation to combine the cited references. The primary reference in each Ground did not disclose identifying targets in a 3D coordinate system as claimed. Aligned Vision thus relied on a secondary reference that disclosed use of a 3D coordinate system.

The Federal Circuit held that Aligned Vision did not demonstrate a motivation to combine the references. The court explained that “it does not suffice to meet the motivation to combine requirement to recognize that two alternative arrangements … were both known in the art.” Aligned Vision’s arguments involved “nothing other than an assertion that because two coordinate systems were disclosed in a prior art reference and were therefore ‘known,’ that satisfies the motivation to combine analysis.” The Federal Circuit held that this was “an error as a matter of law.” “It does not suffice to simply be known. A reason for combining must exist.”

Next, addressing Grounds 2 and 4, the Federal Circuit affirmed the Board’s finding that Aligned Vision failed to show a motivation to combine. Aligned Vision argued that a skilled artisan would have been motivated as a matter of “common sense,” but the Federal Circuit noted that Aligned Vision never presented that argument to the Board. Instead, Aligned Vision relied on the fact that the claim elements were known in the prior art. And Aligned Vision supported its argument with “conclusory testimony” by an expert that “fail[ed] to address why or whether a skilled artisan would have been motivated to combine” the disclosures of the prior art.

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Brumfield v. IBG LLC, et al., No. 2022-1630 (Fed. Cir. (N.D. Ill.) Mar. 27, 2024). Opinion by Taranto, joined by Prost and Hughes.

Trading Technologies International (TT)—the predecessor of the plaintiff-appellant—sued IBG for infringement of four patents that describe improved graphical user interfaces for commodity trading and methods for placing trade orders using those interfaces. The district court held the asserted claims of two patents invalid because they claim subject matter ineligible for patenting under 35 U.S.C. § 101. For the other two patents, a jury found the asserted claims infringed and not proved invalid for obviousness, and awarded TT over $6.6 million in damages. IBG did not appeal, but TT did, challenging three of the district court’s rulings. The Federal Circuit rejected each challenge and thus affirmed.

First, TT challenged the district court’s holding of ineligibility under § 101. Applying the Federal Circuit’s rationale in earlier decisions involving other TT patents, the district court ruled that the claims amount to nothing more than “the abstract idea of placing orders on an electronic exchange.” And the claims lacked any inventive concept that transforms them into patent-eligible claims.

The Federal Circuit affirmed, explaining that it had drawn “the same conclusion in two precedential decisions involving four other TT patents,” one of which was a related patent. The court “saw no material distinction between those cases and this one.” “Nothing in the claims, understood in light of the specification, calls for anything but preexisting computers and displays, programmed using techniques known to skilled artisans, to present the new arrangement of information.”

Second, TT challenged the district court’s exclusion of its damages expert’s theories concerning “foreign damages” flowing from making the accused products in the United States. TT argued that the district court should have applied the extraterritoriality analysis the Supreme Court articulated in WesternGeco, rather than the more restrictive principles the Federal Circuit expressed in Power Integrations.

The Federal Circuit agreed with TT that WesternGeco displaces and “necessarily supersedes” the analysis in Power Integrations. Thus, “here, and in future cases, analysis of the issue [of damages based on foreign conduct] should simply proceed under the WesternGeco framework.” Upon analyzing that framework, the Federal Circuit affirmed because “even under the WesternGeco framework, the evidence offered by TT’s damages expert was properly excluded.”

Third and finally, TT challenged the district court’s denial of TT’s motion for a new damages trial and new discovery on damages. TT argued that IBG failed to give TT enough information about how IBG was counting trades for purposes of damages. The Federal Circuit, however, saw “no clear error, based on the record, in the district court’s careful evaluation of the evidence available to TT through discovery and its determination that IBG did disclose the key information that TT alleged was withheld.”

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Inline Plastics Corp. v. Lacerta Group, LLC, Nos. 2022-1954, -2295 (Fed. Cir. (D. Mass.) Mar. 27, 2024). Opinion by Taranto, joined by Chen and Hughes.

Inline owns several patents related to containers with features that make them resistant to tampering (and make tampering evident) and methods of making such containers. The district court granted Inline summary judgment of infringement as to certain claims, and the remaining claims were tried to a jury. The jury found those claims not infringed and found all asserted claims (including those already held infringed) invalid.

The district court denied the parties’ post-trial motions, found the case not exceptional for purposes of attorney fees under 35 U.S.C. § 285, and entered a final judgment. Inline appealed, arguing entitlement to judgment as a matter of law of no invalidity and that an error in the jury instructions requires a new trial on invalidity. Lacerta cross-appealed, challenging the denial of attorney fees and the judgment’s dismissal without prejudice of certain patent claims Inline voluntarily dropped near the end of trial.

The Federal Circuit rejected Inline’s argument for judgment as a matter of law of no invalidity, but agreed that the jury instruction on the objective indicia of nonobviousness constituted prejudicial error warranting a remand for a new trial on invalidity. On Lacerta’s cross-appeal, because there was no longer a final judgment, the Federal Circuit vacated the without-prejudice dismissal of Inline’s late-withdrawn claims and the denial of attorney fees.

As to the jury instruction, Inline argued that the instruction given by the district court as to the objective indicia of nonobviousness was erroneous because the instruction mentioned “only the objective indicia of commercial success and long-felt need, not other objective indicia for which there was evidence,” such as industry praise, copying, and licensing. Inline argued that the error was prejudicial, requiring a new trial on invalidity.

The Federal Circuit agreed, explaining that the district court’s error “was not harmless.” The Federal Circuit “[could not] say that a proper instruction would have made no difference to a reasonable jury regarding invalidity.” The Federal Circuit continued: “Moreover, the prima-facie-case part of the obviousness evidence in this case is not so strong that we are prepared to say that a reasonable jury, properly instructed to consider all objective indicia for which Inline presented material evidence, including industry praise, copying, and licensing, had to find all asserted claims invalid for obviousness.”

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Edwards Lifesciences Corp., et al. v. Meril Life Sciences Pvt. Ltd., et al., No. 2022-1877 (Fed. Cir. (N.D. Cal.) Mar. 25, 2024). Opinion by Stoll, joined by Cunningham. Dissenting opinion by Lourie.

Edwards sued Meril for patent infringement based on Meril’s importation of two transcatheter heart valve systems. The systems were samples of Meril’s “Myval System” for which it was seeking premarket approval from the FDA.

The district court granted Meril’s motion for summary judgment of noninfringement. Meril’s importation of the heart valve systems was exempt from patent infringement under the safe harbor of 35 U.S.C. § 271(e)(1). The issue on appeal was “whether [the] safe harbor applies when undisputed evidence shows Meril’s importation of two demonstration samples of its transcatheter heart valves to a medical conference was reasonably related to recruiting investigators for a clinical trial to support FDA approval.” In a divided opinion, the Federal Circuit held that it does.

Section 271(e)(1) applies to medical devices and is a safe harbor for certain acts that would otherwise constitute infringing activity. The statutory provision says it applies “solely for uses reasonably related to the development and submission of information” to the FDA. The Federal Circuit explained that, “read in context, ‘solely’ modifies ‘for uses,’” meaning “for each act of infringement the safe harbor is available only for acts or uses that bear a reasonable relation to the development and submission of information to the FDA.”

The court noted the Supreme Court’s holding in Merck that the safe harbor “provides a wide berth for the use of patented [inventions] in activities related to the federal regulatory process.” The Federal Circuit also stated that its own precedent “is clear that the exemption applies as long as there is a reasonable basis for believing that the use of the patented invention will produce the types of information that are relevant to an FDA submission.” The Federal Circuit continued that, “the relevant inquiry is not why Meril imported the two transcatheter heart valve systems, or how Meril used the imported transcatheter heart valve systems, but whether the act of importation was for a use reasonably related to submitting information to the FDA.”

The Federal Circuit ruled that the district court’s safe harbor inquiry adhered to precedent, and the court did not err in granting summary judgment under the undisputed facts. Thus, the court affirmed.

Judge Lourie dissented because, in his view, “the majority perpetuates the failure of this court and others to recognize the meaning of the word ‘solely’ in interpreting § 271(e)(1),” and “the majority also errs in following the error of [the Federal Circuit’s AbTox opinion] and its progeny that the purposes of the infringing act do not matter in evaluating the safe harbor.”

Judge Lourie believes that “‘solely’ creates a safe harbor only for uses, sales, and importations that solely are for, as the statute says, development of information for the FDA.” The court’s case law, he explained, “has incorrectly given short shrift to the word ‘solely’ in the statute.” Judge Lourie said, “the law could usefully be clarified by an en banc holding of this court, expressly returning the word ‘solely’ to its Congressionally enacted place in the statute.”

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