In our continuing coverage of the post-TC Heartland landscape, the Federal Circuit recently clarified that venue is proper in only one district per state in In re BigCommerce, Inc., 2018-122 (Fed. Cir. May 15, 2018) (slip op.). Last year, the Supreme Court held in TC Heartland that a company resides where it is incorporated. Among the many unresolved questions flowing from that decision involved the treatment of patent venue in states with multiple districts. Specifically, no appellate court had determined whether a domestic corporation incorporated in a multi-district state “resides” only in the single judicial district where it maintains a principal place of business or registered office, or whether venue could be proper in all judicial districts within that state.
In a May 10, 2018 ruling, discussed earlier on this blog, Magistrate Judge Payne affirmed the jury’s willfulness finding largely on the ground that TCL did not proffer any evidence that it held a subjective, good faith belief that it did not infringe the patent-in-suit or that the patent was invalid. The fact that TCL filed over a dozen petitions for inter partes review of the asserted patents did not mean, as a matter of law, that TCL held such a subjective, good faith belief. The ruling demonstrates the importance, post-Halo, of alleged infringers performing their own investigation of allegations against them – mere pleadings taking non-infringement or invalidity positions may not suffice to defeat a willfulness allegation. Continue Reading Willfulness Finding in EDTX Ruling in TCL v. Ericsson Illustrates the Risk to Accused Infringers of Failing to Investigate Allegations
On May 10, 2018, Magistrate Judge Payne reconsidered his previous March 2018 order which had vacated a jury award, and granted plaintiff Ericsson’s motion for reconsideration. The May ruling makes clear that the accused infringer bears the burden of production for royalty-stacking and other mitigatory arguments on damages. Whereas the March ruling excluded Ericsson’s damages expert for failing to account properly for the royalty stack on the accused products that his damages theory implied, the May ruling scrutinized the record and found that TCL had failed to submit any evidence into the record that would support even a jury instruction on royalty stacking. The decision underscores the importance of developing an affirmative record in support of each element of a damages theory or counter-theory.
The ruling also stands in stark relief to Judge Selna’s 2017 ruling in the Central District of California case between the parties. There, Judge Selna determined that approximately $20 million would represent a fair, reasonable, and non-discriminatory (FRAND) royalty for TCL’s infringement of Ericsson’s worldwide portfolio of patents declared essential to various telecommunications standards (SEPs) – thousands of patents that, the parties agreed, represented a significant share of the value of the technology in those standards.
Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent case in the Western District of Wisconsin, the court granted defendants’ motion to transfer for improper venue. In doing so, it rejected the plaintiff’s contention that venue can be proper where one corporation “works closely” with another corporation resident in the jurisdiction.
In Unity Opto Technology Co. Ltd. v. Lowe’s Home Centers LLC and LG Sourcing, Inc., 18-cv-27-jdp (W.D. Wis.) (May 4, 2018), co-defendant Lowe’s Home Centers has a place of business in the district, namely a physical store located in Plover, Wisconsin. However, co-defendant LG Sourcing does not own, lease, maintain, or operate any facilities in the district, nor does LG Sourcing employ any residents that reside in the district either.
On Tuesday, May 8, 2018, the International Trade Commission (“ITC” or the “Commission”) published the final changes to its rules of practice and procedure. The Commission stated that the changes are intended to both modernize and simplify Commission practice as well as to increase the speed and efficiency of investigations. In total, the Commission provided eleven amendments/additions to its current rules of practice and procedure, which take effect beginning on June 7, 2018. Going forward, the new rules will apply only to those Section 337 investigations instituted after that date; any investigations currently pending or filed before June 7 will proceed under the current rules. Of these changes, several may have a lasting impact on practice in Section 337 investigations, while other changes are minor but still require practitioners to take note.
The Federal Circuit’s decision in Vanda Pharm. Inc. v West-Ward Pharm. Intl. Ltd. (2016-2707, 2016-2708 April 13, 2018) provided some good news on the subject matter eligibility front for innovators and other stakeholders in the personalized medicine space, as discussed in a previous post. So there is some hope for getting issued claims that will withstand a validity challenge under the Mayo/Alice framework. But what about enforcement? How does one prove infringement of claims that require various discreet steps that can, and typically are, performed by separate actors?
On April 18, 2018, the International Trade Commission (“Commission”) reversed an Administrative Law Judge’s (“ALJ”) finding that a litigation funding agreement destroyed standing for a complainant at the ITC. In Certain Audio Processing Hardware, Software, and Products Containing the Same, Inv. No. 337-TA-1026 (the “1026 investigation”), the ALJ issued an initial determination (“ID”) that found that Complainant Andrea did not have standing to assert the 6,363,345 (“the ’345 patent”) against Respondent Apple without joining litigation funder AND34, with which Andrea entered into a Revenue Sharing and Note Purchase Agreement (the “funding agreement”) to fund Andrea’s enforcement activities. But on review, the Commission concluded that the ALJ was wrong and reversed the portion of the ID that found that the funding agreement between Andrea and AND34 undermined standing.
On April 16, 2018 in a precedential opinion, the United States Court of Appeals for the Federal Circuit, Sumitomo Dainippon Pharma v. Emcure Pharms., Nos. 2017-1798, -1799, -1800, affirmed the United States District Court for the District of New Jersey by construing the claimed chemical structure diagram to encompass at least the specific enantiomer depicted, refusing to limit the claim to only cover a racemic mixture of the (+) and (–) enantiomers, absent clear indication that the depicted enantiomer should be excluded from the claim.
The Federal Circuit provided a welcome boost for stakeholders in the field of personalized medicine with its recent decision in Vanda Pharm. Inc. v West-Ward Pharm. Intl. Ltd. (2016-2702, 2016-2708 April 13, 2018). Vanda Pharma’s asserted claims relate to a method of treating schizophrenia patients with iloperidone in which the dose is adjusted based upon the patient’s CYP2D6 genotype. The Federal Circuit agreed with the court below that these claims were both directed to patent eligible subject matter and infringed.
Functional Claiming in Software Patents
Software patents are generally directed to a sequence of steps or rules, i.e., an algorithm, performed by a computer programmed to carry out the algorithm. Because algorithms are inherently functional in nature, software patent claims are frequently written using functional, as opposed to structural, terms. In many cases, software claims recite vague sounding “units” or “modules” to carry out steps of the algorithm.
Consequently, software claims are often subject to the means-plus-function guidelines set forth in 35 U.S.C. §112(f), which require that the specification describes structure to perform the claimed function. Although a computer-implemented algorithm is necessarily executed using structural parts—e.g., a microprocessor, a memory, etc.—a description of such parts in the specification, on its own, may not suffice as the structure needed to satisfy 35 U.S.C. §112(f) and protect the claims from indefiniteness. Continue Reading With Software Patents and Means-Plus-Function, “Structure” Takes On a New Meaning