Insights

The PTAB ruled last week that the common law doctrine of claim preclusion only applies at the PTAB in one direction, holding that Congress did not intend for an adverse district court judgment to block a party from pursuing a subsequent inter partes review challenge. 

On October 22, 2021, the Court of Federal Claims (Court) unsealed a decision awarding contractor SecurityPoint Holdings, Inc. (SecurityPoint) over $100 million in damages for TSA’s infringement of SecurityPoint’s patent No. 6,888,460 (“the ‘460 patent”). The ‘460 patent concerns a system of trays that recycle through security screening checkpoints by use of movable carts, and was first filed with the U.S. Patent and Trademark Office on July 3, 2002 by SecurityPoint CEO Joseph Ambrefe. Ambrefe had offered the TSA a license to use the patent in exchange for the exclusive right to advertise on the trays, but TSA refused the offer.

On Tuesday, May 30, 2017 the Supreme Court continued its trend of overruling the Federal Circuit, issuing a decision on patent exhaustion in Impression Products, Inc. v. Lexmark International, Inc.  The doctrine of patent exhaustion, which is rooted in 17th century common law, generally holds that patented items, once sold, should not be subject to post-sale restraints by the patentee.  A single sentence encapsulates the Supreme Court’s decision: “We conclude that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.”  Slip Op. at 1.  Notably, this conclusion broadens the reach of U.S. patent law by removing the location of the sale from the patent exhaustion equation.  Judge Ginsburg, the lone dissenter, dissented in part on this aspect of the decision, specifically disagreeing that U.S. patent rights were exhausted by foreign sales. 

The U.S. Supreme Court held argument yesterday on whether enhanced damages should be easier to obtain in patent infringement cases. Based on the tenor of the questioning, the Supreme Court appears ready to topple the Federal Circuit's "rigid" two-part willful infringement test and give district courts more discretion in awarding enhanced damages. If it does, the reversal would be yet another step in the High Court's now long trail of disagreement with the Federal Circuit on issues unique to patent law. The Justices grappled, however, with exactly which test or guidance they would use to replace the current test. Regardless of the ultimate replacement, it is likely that more patent plaintiffs will seek enhanced damages than before.

In CLS Bank International v. Alice Corp. Pty. Ltd., Appeal No. 2011-1301 (Fed. Cir. May 10, 2013) (en banc), a closely watched appeal with over twenty amicus filings, a divided court reversed its previous panel decision and held that the claims at issue were not directed to eligible subject matter under 35 U.S.C. § 101. The court's one-paragraph per curiam opinion was followed by five separate non-precedential opinions and an "Additional Reflections" section by Chief Judge Randall Rader presenting diverging views on the proper analytical framework for assessing patent eligibility under 35 U.S.C. § 101. The failure of a majority of the court to agree on a particular analytical framework means that absent a decision by the Supreme Court, there will be much uncertainty as to whether any particular software patent claim is patent-eligible under 35 U.S.C. § 101.

On January 3, 2013, the FTC announced the settlement of its long-standing investigation of Google's business practices related to search algorithms, search advertising, and the assertion of standard-essential patents ("SEPs") encumbered by commitments to license on fair, reasonable, and nondiscriminatory ("FRAND") terms. This update focuses on the portion of the settlement that relates to Google's SEPs.

In the wake of the Supreme Court's recent decision in Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289 (2012), the Federal Circuit in CLS Bank Int'l v. Alice Corp Pty. Ltd., Case No. 2011-1302 (Fed. Cir., July 9, 2012) attempts to clarify the murky field of patentable subject matter by introducing a new "manifestly evident" test. The new test was created in response to a district court's ruling on summary judgment that the claims of a computerized trading system are unpatentable because they are directed to an abstract idea. The district court was not persuaded by the fact that the claims recited computer elements, characterizing those elements as merely superfluous to the fundamental unpatentable idea of using a neutral third party to settle obligations between two other parties. The Federal Circuit disagreed. While recognizing that the mere implementation on a computer of an otherwise ineligible abstract idea will not render an invention patentable, the Federal Circuit nevertheless explained that if the addition of a computer imposes a meaningful limit on the scope of a claim, and if the computer also plays a significant part in permitting the claimed method to be performed, then the inclusion of a computer limitation can render an invention patent eligible.

A contractual covenant that bars a future challenge to the validity of a patent is unenforceable if it is made before the parties have engaged in litigation involving a validity challenge. Once the issue of patent validity is litigated, however, the public's interest in discovering invalid patents is more or less satisfied, and a "no-challenge" clause in a settlement agreement can be enforced. So said the Second Circuit in the case of Rates Technology Inc. v. Speakeasy Inc., Case No. 11-4462 (2d Cir., July 10, 2012).

On February 10, 2012, the Federal Circuit affirmed a jury's determination of willful infringement and a district court's subsequent award of $371 million in enhanced damages. That victory was taken away, however, when the Federal Circuit vacated its earlier ruling and issued a new panel decision in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., Case No. 2010-1510 (Fed. Cir., June 14, 2012). The new decision builds on the 2007 Seagate test for willfulness and adds a further refinement that a judge, not a jury, must make a threshold objective assessment of an accused infringer's defenses in view of the risk presented by an asserted patent. If a judge first determines that an accused infringer's actions are objectively reckless, then a jury may be allowed to subjectively determine whether the risk of infringement was known to the infringer. The final determination of willful infringement is therefore a two-part test. The first part is performed by a judge as a matter of law, subject to de novo review. The second part is performed by a jury as a matter of fact and is reviewed for substantial evidence.

The United States Supreme Court yesterday issued its long-awaited decision in Bilski v. Kappos, 561 U.S. ___ (2010). Although this case was expected to be a vehicle for a definitive pronouncement on the patentability of so-called "business methods," the Supreme Court decided the case on much narrower grounds, leaving the broader question unanswered. Specifically, the Supreme Court agreed with the United States Court of Appeals for the Federal Circuit that the particular invention at issue, directed to a method for managing risk in commodities markets, was unpatentable. However, rather than relying on the "machine-or-transformation" test that the Federal Circuit erroneously determined was the exclusive test for deciding whether a claimed "process" qualified as patentable subject matter, the Supreme Court found the invention at issue unpatentable under its own precedent rejecting the patentability of abstract ideas.

For the first time, the Federal Circuit has affirmed the extension of a thirty month stay under the Drug Price Competition and Patent Term Restoration Act (known as the "Hatch-Waxman Act"). The U. S. District Court for the Southern District of Indiana extended the stay because the generic company recast its product, disclosing new samples only eight months before trial was to commence and produced documents after the discovery cut-off. But a vigorous dissent claims that what the majority had done is to "effectively eliminate the statutorily required finding."

In Rentrop v. Spectranetics Corp. (No. 2007-1560; Dec. 18, 2008), inventor Rentrop sued his former employer Spectranetics for infringement of U.S. Patent No. 6,673,064 ("the '064 patent"), which involves an "Eximer Laser Catheter" used to perform angioplasty procedures. Spectranetics appeals from a final judgment of the district court awarding $500,000 to Rentrop. The judgment was based on a jury's verdict that found claim 1 of the '064 patent not invalid and infringed. After trial, the district court also rejected Spectranetics inequitable conduct defense and denied its motion for judgment as a matter of law on infringement. On appeal, Spectranetics argues that the trial court erred in its decisions on infringement and inequitable conduct and also argues that it is entitled as a matter of law to judgment of invalidity of the '064 patent.

In In re DBC (No. 2008-1120; November 3, 2008), the Federal Circuit affirms a final decision of the United States Patent and Trademark Office Board of Patent Appeals and Interferences ("the Board"), which affirmed the examiner's rejection of all pending claims under 35 U.S.C. § 103 as obvious during ex parte reexamination of U.S. Patent No. 6,730,333. The Federal Circuit holds that: (1) DBC waived the argument that the decision of the Board must be vacated because two of the administrative patent judges on the panel were appointed unconstitutionally by failing to raise it before the Board; (2) contrary to the assertion of DBC, the Board's prima facie case of obviousness is based upon a substantial new question of patentability, and the reference newly cited during the ex parte reexamination, together with the other references cited, is substantial evidence fully supporting the Board's finding of a prima facie case of obviousness; and (3) the evidence of commercial success presented by DBC was insufficient to overcome the prima facie case of obviousness of the claimed subject matter.

A divided Federal Circuit panel, in Abbott Laboratories v. Sandoz, Inc. (No. 07-1300; October 21, 2008), affirms a preliminary injunction against accused infringer Sandoz, Inc. ("Sandoz"), holding that Abbott Laboratories ("Abbott") demonstrated, inter alia, that it will likely succeed at trial against Sandoz's claim that Abbott's patents are invalid for obviousness under 35 U.S.C. § 103(a).

In Net Moneyin, Inc. v. Verisign, Inc. (No. 07-1565; October 20, 2008), the Federal Circuit affirms a district court's judgment that certain disputed claims were invalid as indefinite under 35 U.S.C. § 112, ¶6, but reverses the summary judgment that another disputed claim was invalid as anticipated by prior art.

In Cohesive Technologies, Inc. v. Waters Corp. (Nos. 08-1029, -1030, -1031, -1032, -1059; October 7, 2008), the Federal Circuit reverses a district court's judgment as a matter of law of no anticipation and remands for consideration of the patent challenger's anticipation defense.

In Minks v. Polaris Industries, Inc. (No. 2007-1490, -1491; October 17, 2008), a Federal Circuit panel vacates the decision of the U.S. District Court for the Middle District of Florida and remands for a new trial on damages because the district court improperly reduced plaintiff's damages award without offering plaintiff a new trial and provided an improper jury instruction regarding actual notice of infringement. The Court also affirmed the jury's findings of infringement, willful infringement, and attorneys' fees.

In Technology Licensing Corp. v. Videotek, Inc. (Nos. 07-1441, -1463; Oct. 10, 2008), the Federal Circuit affirms a trial court's judgment of invalidity, noninfringement, and no inequitable conduct.

In Asyst Technologies, Inc. v. Emtrak, Inc. (No. 2007-1554; October 10, 2008), the Federal Circuit affirms a district court's grant of judgment as a matter of law that United States Patent No. 5,097,421 ("'421 patent") is invalid due to obviousness.

An amendment changing a software claim term from "said at least one index" to "at least one said index" does not broaden the scope of the claim, a Federal Circuit panel concludes in Predicate Logic, Inc. v. Distributive Software, Inc. (No. 2007-1539; October 9, 2008).