The Court of Appeals for the Federal Circuit ruled in February that it was wrong for a judge to rule that a patent was ineligible under the Alice standard because there were underlying factual disputes that could not be resolved on summary judgement. The case is Berkheimer v. HP Inc., case number 17-1437, in the U.S. Court of Appeals for the Federal Circuit.
Automated Tracking Solutions, LLC, (“ATS”) appealed findings of invalidity for failing to claim patent-eligible subject matter by the United States District Court for the Northern District of Georgia. In a decision rendered by the United States Court of Appeals for the Federal Circuit on February 16, 2018, the Court affirmed the district court’s finding that the subject matter was not patent-eligible.
The Federal Circuit’s damages apportionment jurisprudence is an ever-evolving area of the law. On January 10, 2018, a three judge panel of the Federal Circuit revisited the issue in connection with a patent covering a method for providing computer security in the case Finjan, Inc. v. Blue Coat Systems, Inc. While the Federal Circuit affirmed the damages award for 2 of 4 asserted patents, it reversed as to one computer security patent which was found to be infringed by a product that performed both infringing and non-infringing functions.
In calculating damages, the plaintiff sought the reasonable royalty they “would have received through arms-length bargaining.” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324
In a recent development from the Eastern District of Texas, Magistrate Judge Roy S. Payne concluded that defendants Globalfoundries, Qualcomm, and Samsung waited too long prior to moving to dismiss or transfer the case due to improper venue (see report and recommendation here). KAIST IP US LLC filed its complaint back in November 2016, and a significant portion of discovery already occurred. Similar to In re Micron (which we previously covered here), defendants reserved the right to challenge venue pending the decision in TC Heartland, in their respective answers to the complaint. However, it was not until September 2017, about four months after the decision in TC Heartland issued, that defendant Globalfoundries affirmatively challenged venue. Qualcomm and Samsung filed similar motions a month later. The defendants argued that “after lengthy negotiations… it become clear that KAIST did not have a legitimate, good faith interest in an agreed transfer to a proper venue.”
MJ Payne disagreed, largely because the parties were already immersed in claim construction briefing. MJ Payne opined that “[g]ranting such untimely motions at this stage of the proceeding would disrupt the efficiency of the judicial process, both here and in the proposed transferee district.” Further, MJ Payne was perplexed as to why defendants sat on their hands for four to five months after the TC Heartland decision to move. Accordingly, the court denied defendants motions to dismiss or transfer venue citing In re Micron (affirming a district court’s ability to find forfeiture when a party does not raise a timely objection to venue). We will continue to track any developments regarding this matter.
Further to our ongoing coverage of the post-TC Heartland patent litigation landscape, a pair of recent and interesting cases from Texas and Delaware further evolved this important venue-related jurisprudence.
On November 22, 2017, in Intellectual Ventures II LLC v. FedEx Corp. et al., Case Number 2:16-cv-00980 (E.D. TX Nov. 22, 2017), Judge Rodney Gilstrap denied defendants’ motion to dismiss for improper venue due to their conduct in view of the Federal Circuit’s recent decision in In re Micron, which determined that TC Heartland was a change in the law, potentially reviving venue-based transfer motions previously waived. (We previously covered the In re Micron case here.) Defendants sought to dismiss the case for improper venue a few days after the denial of their IPR petitions. After they participated actively in litigation for months, the court did not take kindly to defendants’ motion. Citing In re Micron, the court reasoned that “defendants who take a ‘tactical wait-and-see’ approach in objecting to venue present ‘an obvious starting point for a claim of forfeiture.’” Further, the court noted that prior to the TC Heartland decision, defendants sought to transfer the case to the Western District of Tennessee under § 1404 rather than § 1406. Judge Gilstrap noted that this reliance on § 1404 was important because that statute “is premised on venue being proper in the transferor court whereas a motion under § 1406 reflects an objection to the current venue as being proper.” Accordingly, the court concluded that defendants’ waived their venue objection based on their own conduct, the judicial resources already expended, and the prejudice to plaintiff in reopening a dormant venue dispute “simply because it has become convenient for Defendants to litigate the issue now.” Continue Reading Lower Courts Continue to Grapple with Venue in the Wake of In re Micron and In re Cray
In June, we covered the Supreme Court’s grant of certiorari in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 137 S. Ct. 2239 (2017). The Court will decide whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) since September 16, 2012 to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury. With its remarkably high rate of invalidating challenged patents, inter partes review (IPR) has become an effective method for defendants in patent disputes to apply pressure on patent holders, often utilizing serial IPRs to take multiple shots at invalidating patents they infringe. With the potential for IPRs to be declared unconstitutional, some parties have asked courts to stay active litigation until after Oil States is decided. One court in the Northern District of Texas recently denied such a motion to stay in Leak Surveys, Inc. v. FLIR Systems, Inc., 3-13-cv-02897 (TXND 2017-11-13, Order) (Lynn, USDJ). Continue Reading District Court Denies Motion to Stay Pending Supreme Court Decision in Oil States
In a nonprecedential opinion issued on November 13, 2017, the United States Court of Appeals for the Federal Circuit affirmed a district court finding that Apotex’s aBLAs for biosimilar versions of Neulasta® and Neupogen® did not infringe an Amgen protein folding patent. The Federal Circuit affirmed the non-infringement finding despite statements made in Apotex’s pre-litigation letters sent during the parties’ information exchange (i.e., the “patent dance”), which the district court found were controverted by evidence presented by Apotex at trial.
Amgen makes the biologic drugs Neulasta® (pegfilgrastim) and Neupogen® (filgrastim). Apotex submitted aBLAs (“abbreviated Biologics License Applications”) to the FDA seeking approval of biosimilar versions of both drugs under the BPCIA (“Biologics Price Competition and Innovation Act”) framework. The parties engaged in the BPCIA’s “patent dance” information exchange process, whereby Apotex provided Amgen with copies of Apotex’s aBLAs. Amgen ultimately brought suit under 35 U.S.C. § 271(e)(2)(C), (a) and (g), asserting that Apotex’s proposed manufacturing processes would infringe, among others, Amgen’s U.S. Patent. No. 8,952,138 (the ‘138 patent).
The ‘138 patent covers a method of refolding misfolded proteins. This process purportedly allows for large-scale protein refolding using lower reagent volumes than was previously possible. The district court construed (and the Federal Circuit did not reverse) asserted claim 1 of the ‘138 patent to require “refold mixture” protein concentrations above 1.0 g/L. Continue Reading Federal Circuit Evaluates Import of Factual Statements Made During BPCIA Pre-litigation Patent Dance
On November 15, 2017, the United States Court of Appeals for the Federal Circuit resolved a split among district courts on the question whether the United States Supreme Court’s TC Heartland decision constituted a change in the law, or merely a course-correction to honor preexisting law. The Federal Circuit held that the Supreme Court’s decision changed the controlling law. In re: Micron, No. 17-00138 at 13 (Fed. Cir. Nov. 15, 2017).
Micron Technology, Inc. asked the Federal Circuit to set aside the district court’s denial of its motion to dismiss or transfer the case for improper venue. The district court held that Micron waived its objection to venue because it failed to raise an available venue defense in its initial Rule 12 motion to dismiss, and concluded that TC Heartland was not a change in the law.
The Federal Circuit disagreed. It reasoned that the Supreme Court clearly rejected V.E. Holding and concluded that the definition of “resides” in § 1391(c) does not apply to § 1400(b). The Federal Circuit further reasoned that the Supreme Court changed the law by severing § 1400(b) from § 1391(c). As a result, the objection was not “available” under Rule 12(g)(2) when Defendant filed its motion to dismiss in 2016, before TC Heartland came down. On this basis, the Federal Circuit reversed and remanded the case. This decision resolves a previously open question in the wake of TC Heartland that we wrote about here.
In issuing its precedential decision earlier this month in Two-Way Media v. Comcast, the Federal Circuit affirmed a Delaware district court determination that four data streaming patents were directed to ineligible subject matter pursuant to § 101 and the Alice framework. The four related patents (U.S. Patent Nos. 5,778,187, 5,983,005, 6,434,622, and 7,266,686) describe methods and systems for streaming audio/visual data over a communications system (e.g., the Internet) and, in particular, a scalable architecture for delivering real-time information to a number of users, including a control mechanism allowing for management and administration of users intended to receive the real-time information.
Under Alice step one, the Court found that the patents claimed the abstract idea of sending and monitoring the delivery of audio/visual information. The Federal Circuit agreed with this characterization of the claims, finding that the claims used results-based functional language with no articulation of how the particular results are achieved. Two-Way Media also proposed claim constructions that it argued tied the claims to a scalable network architecture. Even after adopting Two-Way Media’s propose constructions, both the District Court and the Federal Circuit found that the constructions, at best, encompassed using generic computer components to carry out the abstract idea and still failed to indicate how the claims themselves “are directed to a scalable network architecture that itself leads to an improvement in the functioning of the system.” (emphasis added) Continue Reading Federal Circuit Affirms Delaware Alice Decision
In an interesting development in the post-TC Heartland world, it appears that the Federal Circuit will soon answer the question whether the Supreme Court’s venue decision was a change in the law, or merely a course-correction to honor preexisting law. Here, in a case arising out of the Eastern District of New York, the Federal Circuit ordered AlmondNet, Inc., Datonics, LLC, and Intent IQ, LLC to respond to a petition for a writ of mandamus submitted by Yahoo Holdings, Inc. In its petition, Yahoo argued that the District Court erred in denying its motion to transfer, and specifically that it waived the right to challenge venue on the basis that TC Heartland did not change the law of venue.