The Federal Circuit recently overturned a decision estopping the plaintiff from pursuing its infringement claims in the United States District Court for the Eastern District of Arkansas, and clarified the effect of reexamination on equitable estoppel and laches. In John Bean Technologies Corporation v. Morris & Associates, Inc., the Federal Circuit held that District Court abused its discretion applying equitable estoppel to bar John Bean Technologies Corp.’s (“John Bean”) infringement action without considering the impact of an intervening ex parte reexamination on the claims of the asserted patent.
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.
An introduction to § 271
Section 271 of Title 35 of the United States Code is the statute that codifies unlawful acts of patent infringement. The most commonly asserted provisions are § 271(a) (direct infringement), § 271(b) (induced infringement), and § 271(c) (contributory infringement). However, other less frequently asserted provisions must also be considered when enforcing United States patents. For example, § 271(e) pertains to the infringement of patents on pharmaceuticals, specifically barring certain acts, while explicitly permitting others. Additionally, § 271(f) covers infringement by a party who supplies components of a patented invention to recipients outside of the United States with the knowledge the components will be combined “in a manner that would infringe the patent if such combination occurred within the United States.” And, finally, § 271(g) covers importation infringement, making liable a party that imports into the United States or offers to sell, sell or uses within the United States a product which is made by a patented process during the term of such a patent. While possibly the least often litigated, § 271(f) is now before the Supreme Court, in a case examining the applicability of foreign lost profits damages to § 271(f) infringement.
On March 20, 2018, the public version of Eastern District of Texas Magistrate Judge Roy Payne’s March 7, 2018 order tossing a $75 million jury verdict obtained by Ericsson against TCL Communication was released. Ericsson Inc., et al, v. TCL Communication Technology Holdings, Ltd., et al, Case No. 2:15-cv-00011-RSP, Doc. No. 460 (redacted memorandum opinion and order) (E.D. Tex. March 7, 2018) (“Order”). Judge Payne’s order sheds important light on the damages analysis for infringement of patents covering features of smartphone technology and potentially provides lessons to future litigants seeking damages for smartphone innovations.
After a jury verdict finding infringement, Ericsson also won a damages verdict of $75M due to TCL’s ongoing and willful infringement of U.S. Patent No. 7,149,510 (“the ’510 patent”). Ericsson contended that the ’510 patent covers smartphone functionality that allows a user to grant or deny access to native phone functionality to a third-party application, which is a standard feature in all Android smartphones. After trial, TCL moved for judgment as a matter of law on infringement and damages, or in the alternative new trials. Judge Payne indicated that he was going to uphold the infringement verdict, but ordered a new trial on damages. Order at 1.
In an application of 2017 U.S. Supreme Court precedent in Impressions Products, Inc. v. Lexmark Intern., Inc., the Northern District California in International Fruit Genetics LLC v. Orcharddepot.com, No. 4:17-cv-02905-JSW, recently denied a motion to dismiss a claim of patent infringement by holding that the patent exhaustion doctrine did not apply to a sale of a patented product that was outside the scope of the license granted by the patent owner. This decision helps inform how licenses may be interpreted post-Impression Products.
We thank Gary Gutzler, of AlixPartners, for co-authoring this post.
On January 12, 2018 in Exmark Manufacturing Co. Inc., v. Briggs & Stratton Power Products Group, LLC, the Federal Circuit once again addressed the issue of apportioning damages, an area of the law that continues to evolve. The parties in Exmark are competitors in the commercial lawn mower market. The patent-in-suit related to a lawn mower with an improved “baffle” that more efficiently directed air flow and grass clippings when the mower was operating. At the conclusion of the jury trial, the defendant’s mower was found to infringe and the jury awarded the plaintiff over $24 million in damages. On appeal, the Federal Circuit affirmed the method of apportionment utilized by the Plaintiff’s expert, but rejected the expert’s application of that method.
The Medicines Company (“MedCo”) appealed findings of no infringement made by the United District Court for the District of Delaware. Hospira cross-appealed the district court’s finding that a distribution agreement did not constitute an invalidating “offer for sale” under 35 U.S.C. § 102(b). In a decision rendered by United States Court of Appeals for the Federal Circuit on February 6, 2018, the Court affirmed the district court’s non-infringement findings and remanded the case for the district court to determine if the on-sale bar applies.
MedCo asserted two patents, U.S. Patent Nos. 7,582,727 and 7,598,343, covering its Angiomax drug product against Hospira, a generic drug maker who filed Abbreviated New Drug Application (“ANDA”) with the Food and Drug Administration. Although Angiomax has been available for decades, MedCo developed a new method of formulating Angiomax to reduce impurities. This formulation was the subject of the asserted patents, both of which were filed on July 27, 2008. Prior to filing the patents, MedCo entered into a distribution agreement on February 27, 2007 with Integrated Commercialization Solutions, Inc. (“ICS”) to distribute the new Angiomax formulation. The agreement stated that MedCo “desire[d] to sell the Product” to ICS and ICS “desire[d] to purchase and distribute the Product.” Under the agreement, title passed to ICS upon receipt of the Product at the distribution center. The district court concluded that the patents were neither infringed nor invalid. The district court found that the invention was ready for patenting at the time of the agreement, but was not sold or offered for sale before the critical date of July 27, 2008 because the distribution agreement between MedCo and ICS did not constitute an offer to sell. Both parties appealed.
On December 19, 2017, an expanded panel of the Patent Trial and Appeal Board (PTAB) ruled that the state of Minnesota waived its Eleventh Amendment immunity to challenges to patent validity by inter partes review (IPR) by filing suit in federal court alleging infringement of the same patent being challenged by IPR. In Ericsson Inc. and Telefonaktiebolaget LM Ericsson v. Regents of the University of Minnesota (IPR2017-01186; IPR2017-01197; IPR2017-01200; IPR2017-01213; IPR2017-01214; IPR2017-01219), Petitioner Ericsson Inc. filed IPR petitions against five University of Minnesota patents covering wireless communications technology. In response, the University filed a motion to dismiss, arguing its Eleventh Amendment sovereign immunity exempted the patents from IPR challenge.
On Monday, November 27, 2017, the Supreme Court heard oral arguments in SAS Institute v. Matal.
Whether 35 U.S.C. § 318(a) requires that the Patent Trial and Appeal Board (PTAB or Board) issue a final written decision as to every claim challenged by a petitioner, or does it allow the Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner.
On September 14, 2012, ComplementSoft sued SAS in the Northern District of Illinois for infringement of U.S. Patent No. 7,110,936. On March 29, 2013, SAS filed a petition with the PTAB for inter partes review (IPR) of the ‘936 Patent, challenging patentability of all 16 claims of that patent. The PTAB instituted IPR as to 9 claims (1 and 3-10) of the ‘936 patent and on August 6, 2014 issued a final written decision under 35 U.S.C. § 318(a), holding that claim 4 was not invalid over prior art, whereas claims 1-3 and 5-10 were unpatentable. SAS’ request for rehearing before the Board was denied. On June 10, 2016, the 2-1 divided Panel of the Federal Circuit Rejected SAS’s argument that the Board must address all claims challenged in an IPR petition in its final written decision, and affirmed the PTAB’s decision, except vacated with respect to claim 4. The Panel consisted of Judges Stoll, Chen, and Newman, with Judge Newman dissenting in part. As Judge Stoll stated, there is “no statutory requirement that the Board’s final decision address every claim raised in a petition for inter partes review. Section 318(a) only requires the Board to address claims as to which review was granted.” The Federal Circuit reasoned that 35 U.S.C. § 314 and 35 U.S.C. § 318(a) are different and that § 318(a) “does not foreclose the claim-by-claim approach the Board adopted [in Synopsys] and in this case.” In a dissenting opinion, Judge Newman stated that 35 U.S.C. § 314(a) required USPTO either refuse to institute IPR entirely, or to review all challenged claims when “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”
In Vecco Instruments Inc. v. SGL Carbon, LLC, No. 17-CV-2217 (E.D.N.Y. Nov. 2, 2017), Judge Pamela Chen in the Eastern District of New York recently granted Vecco’s motion for a preliminary injunction enjoining SGL Carbon. The requested injunction sought to prevent SGL Carbon’s further actions related to its likely indirect infringement of Vecco’s asserted patents. Notable in this extensive and detailed 76-page decision is the Court’s discussion of how “long-term and second-order” effects of the accused infringer’s actions can satisfy the “irreparable harm” requirement of the preliminary injunction analysis.
Plaintiff Vecco designs, manufactures, and services LEDs, power electronics, hard drives, and other electronic devices. It also owns patents related to metal-organic chemical vapor deposition (MOCVD) reactors, a technology that enables high-volume fabrication of metal-organic semiconductor wafers that can be turned into LEDs. Vecco enjoys a large share of the MOCVD market due, in large part, to a distinctive feature of its MOCVD reactors: a removable wafer carrier, typically made of graphite that is mounted on a spindle centrally positioned within the reactor. Vecco authorized SGL Carbon to manufacture these wafer carriers for Vecco and its customers, but in 2013, SGL Carbon began manufacturing wafer carrier for a new entrant into the MOCVD market. Vecco claims this constituted infringement of its MOCVD patents, and sought a preliminary injunction to stop this activity during the pendency of the patent litigation case.