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No Boundaries? European UPC Confirms Its International Jurisdiction

by Bianca Zagatta | Oct 3, 2024 | EU Update, Patents

The Court of Appeal (CoA) of the Unified Patent Court (UPC) ruled that the UPC has international jurisdiction for alleged infringement actions that originate outside the UPC’s Member States. Dish and Sling v. AYLO, Case No. UPC-CoA-188/2024 (CoA UPC Sept. 3, 2024) (Grabinski, Pres. CoA; Barutel, Blok, JJ.)

In its ruling, the CoA upheld the order of the Court of First Instance Local Division Mannheim. In the main proceedings, Dish and Sling brought an infringement action against AYLO. The patent in dispute concerned a method for presenting rate adaptive streams from a media player. AYLO was accused of indirectly infringing the patent in numerous UPC Member States, including Germany, by offering and supplying the video files made available for streaming and the media players for streaming videos. AYLO lodged a preliminary objection requesting that the infringement action be dismissed for lack of UPC jurisdiction, Rule 19.1(a) of the UPC Rules of Procedure. After the preliminary objection was rejected, AYLO lodged an appeal against the order of the Local Division Mannheim.

AYLO argued that the UPC does not have international jurisdiction on the basis of Article 7(2) in conjunction with Article 71b(1) of the Brussels I Recast Regulation because the harmful event would not occur in a UPC Member State since AYLO’s servers are located in the United States. The CoA disagreed, explaining that the Article 7(2) phrase “place where the harmful event occurred or may occur” is intended to cover both the place where the damage occurred and the place of the event giving rise to the damage. Consequently, the alleged infringer can be sued in either place.

The UPC has international jurisdiction with respect to an infringement action under two conditions:

The European patent in suit has effect in at least one contracting Member State.
The alleged damage may occur in that particular Member State.

Therefore, irrespective of the location of AYLO’s server, the UPC had jurisdiction over the infringement action because AYLO’s websites are accessible in Germany where the patent has effect. This access was sufficient to satisfy the likelihood of damage, which was allegedly caused via the internet. Users in Germany can obtain means (media players and video files) that allegedly relate to an essential element of the patented invention and are suitable and intended for putting the invention into practice. The CoA clarified that it is not necessary for a website to be directed at users in the territory of the concerned Member State. The actual availability of access to the website and damage to the European patent owner in a Member State are decisive.

Practice Notes:

While UPC courts may consider infringement allegations in a case when evaluating UPC jurisdiction, that consideration is limited to the context of what the patent owner must prove to establish its allegations. Argument as to the specific requirements of the infringement allegations is not necessary. In the reported case, which was based on allegations of indirect infringement, it was not necessary to determine whether AYLOS’s alleged [...]

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When Can Same Claim Limitation Have Different Meanings? When It’s Functional, Of Course

by Sydney E. McDermott | Sep 26, 2024 | Patents

Addressing for the first time whether a functional limitation must carry the same meaning in all claims, the US Court of Appeals for the Federal Circuit determined that it need not, vacating a district court decision to the contrary. Vascular Sol. LLC v. Medtronic, Inc., Case No. 2024-1398 (Fed. Cir. Sept. 16, 2024) (Moore, Prost, JJ.; Mazzant, Dist. J., by designation).

The seven patents asserted by Teleflex syin this case all come from a common application and are directed to a “coaxial guide catheter that is deliverable through standard guide catheters by utilizing a guidewire rail segment to permit delivery without blocking use of the guide catheter.” The asserted patents all share a common specification. However, the asserted claims differ in how they refer to the “side opening.” Some claims include the side opening as part of the “substantially rigid portion/segment” while other claims recite that the side opening is separate and distal to the “substantially rigid portion/segment.”

This case has a long procedural history involving an initial preliminary injunction motion and multiple inter partes reviews (IPRs). At the second preliminary injunction stage, Medtronic and the district court grouped the asserted limitations into two mutually exclusive groups:

Group One, which included the “substantially rigid portion/segment” claim limitation.
Group Two, which “required that the side opening not be in the substantially rigid portion” (emphasis supplied).

In denying Medtronic’s preliminary injunction motion, the district court questioned “how a skilled artisan could possibly be expected to understand the scope of a patent when the same device could simultaneously infringe two mutually exclusive claims within that patent.”

The district court then proceeded to claim construction. It rejected both parties’ initial constructions and appointed an independent expert – former US Patent & Trademark Office Director Andrei Iancu – to propose a construction. Teleflex argued that Iancu should adopt a split construction (i.e., one construction for the Group One limitations and another construction for the Group Two limitations). Medtronic argued that the claims were indefinite. Iancu rejected both proposed constructions but agreed with the district court on the mutual exclusivity of the two groups. The district court determined that all claims that included the “substantially rigid portion/segment” were indefinite, and since all the asserted claims included that term, the parties stipulated to final judgment. Teleflex appealed.

Teleflex argued that the district court erred in determining that the boundary of the substantially rigid portion must be the same for all claims. Medtronic argued that the claims were indefinite.

The Federal Circuit concluded that the district court erred when it determined that the Group One and Group Two limitations were mutually exclusive and indefinite. The Federal Circuit cautioned that affirming the district court’s conclusion would mean that claims in a patent cannot vary in how they claim the disclosed subject matter and that independent claims must be entirely consistent with other independent claims, neither of which is a restriction in how patentees may claim subject matter. The Federal Circuit explained that at the claim construction stage [...]

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A New Vision: Collateral Estoppel Doesn’t Extend to Related Claims

by Alexander P. Ott | Sep 19, 2024 | Patents

The US Court of Appeals for the Federal Circuit reversed a district court order excluding expert validity testimony based on collateral estoppel stemming from an inter partes review (IPR) proceeding of a related patent, finding that an unpatentability decision in an IPR does not collaterally estop a patentee from making validity arguments about related claims in a district court litigation. ParkerVision, Inc. v. Qualcomm Inc., Case Nos. 22-1755; 24-2221 (Fed. Cir. Sept. 6, 2024) (Lourie, Mayer, Stark, JJ.)

This case has a long and complicated history. In 2011, ParkerVision sued Qualcomm for alleged infringement of eight patents related to wireless communications technology. In October 2013, a jury returned verdicts rejecting Qualcomm’s invalidity defense, finding 11 claims across four patents to be infringed by Qualcomm, and awarded $172 million in damages to ParkerVision.

In June 2014, the district court granted Qualcomm’s motion for a judgment as a matter of law on noninfringement, which the Federal Circuit affirmed in late 2015. Meanwhile, ParkerVision filed a second case against Qualcomm in May 2014 alleging infringement of 11 more patents. That case was stayed in favor of a Section 337 investigation that ParkerVision filed against Qualcomm at the International Trade Commission.

Qualcomm then filed 10 petitions for IPR, six of which targeted one of ParkerVision’s patents. While the challenged apparatus claims of that patent were found unpatentable during the IPR, the challenged method claims survived. The district court statutory stay (during the Commission proceeding) was lifted in December 2018. Prior to trial, the district court granted Qualcomm’s Daubert motions seeking to exclude ParkerVision’s expert’s testimony on invalidity due to collateral estoppel arising from the IPRs, and the expert’s testimony on infringement for being unreliable. The district court granted Qualcomm’s motion for summary judgment of noninfringement based on its finding that the asserted claims were materially similar to the claims from the first case. ParkerVision appealed.

In July 2024, after the briefing was completed and the Federal Circuit held oral argument, the Court dismissed the appeal for lack of appellate jurisdiction and returned it to the district court because Qualcomm’s invalidity counterclaims had not been adjudicated. The parties then filed a joint motion at the district court seeking entry of a final judgment, which was granted in August 2024. ParkerVision appealed again.

The Federal Circuit reinstated ParkerVision’s initial appeal and reversed the district court’s determination. On the summary judgment of noninfringement, the Court rejected the collateral estoppel finding because the district court failed to conduct claim construction to determine whether the scope of the claims was the same as in the first case. As for the district court’s exclusion of expert validity testimony due to the IPRs, the Federal Circuit concluded that because of the different legal standards for proving invalidity (preponderance versus clear and convincing), a finding underlying an unpatentability decision in an IPR does not collaterally estop a patentee from making validity arguments regarding related claims in district court litigation.

Finally, the Federal Circuit concluded that the district court had abused its discretion [...]

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Stay Focused: New Point of View of Patent Eligibility

by Cecilia Choy, Ph.D. | Sep 19, 2024 | Patents

The US Court of Appeals for the Federal Circuit reversed and remanded a district court’s decision that the asserted claims were patent ineligible under 35 U.S.C. § 101, finding that the district court improperly characterized the claims at an “impermissibly high level of generality.” Contour IP Holding LLC v. GoPro, Inc., Case Nos. 22-1654; -1691 (Fed. Cir. Sept. 9, 2024) (Prost, Schall, Reyna, JJ.)

Contour owns two patents related to portable point-of-view (POV) video cameras. The patents disclose a hands-free POV action sports video camera configured for remote image acquisition control and viewing. The key embodiment describes “dual recording” where the camera generates video recordings “in two formats, high quality and low quality.” The lower quality file is streamed to a remote device for real-time adjustment of bandwidth limiting video parameters while the higher quality version of the recording is saved for later viewing.

In 2015, Contour sued GoPro, alleging that several GoPro products infringed the asserted patents. In 2021, Contour again sued GoPro, alleging that several newer products infringed the same patents. In 2021, after the district court granted partial summary judgment that GoPro’s accused products infringed the claims in the first lawsuit, GoPro filed a motion in the second lawsuit challenging the claims as patent ineligible under 35 U.S.C. § 101. GoPro relied heavily on the Federal Circuit’s 2021 decision in Yu v. Apple in its arguments for ineligibility. The district court initially denied the motion, but when GoPro raised the issue again at summary judgment, the district court agreed with GoPro and found the claims patent ineligible under § 101.

At step one of the Alice eligibility test the district court found that the claims were directed to the abstract idea of creating and transmitting video at two different resolutions and adjusting the video’s settings remotely. At Alice step two, the district court found that the claim recited only functional, result-oriented language without indicating that physical components behaved in any way other than their basic generic tasks. Contour appealed.

The Federal Circuit reversed, finding that when read as a whole, the claim was directed to a specific means that improved a relevant technology and required “specific, technological means – parallel data stream recording with the low-quality recording wirelessly transferred to a remote device – that in turn provide a technological improvement to the real time viewing capabilities of a POV camera’s recordings on a remote device.”

The Federal Circuit found that the district court’s decision was based on an “impermissibly high level of generality” that led to its incorrect conclusion that the claims were related to an abstract idea. The Court also disagreed with GoPro’s argument that Yu was dispositive in this case, explaining that in Yu, there was no dispute that the “idea and practice of using multiple pictures to enhance each other has been known by photographers for over a century.” The Court determined that Contour’s claim enabled a POV camera, with its dual recording capability, to operate differently than it otherwise [...]

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The Conversation Continues: Some Post-Patent-Termination Royalties Are Acceptable

by Kathleen Lynch | Sep 12, 2024 | Patents

For the second time in less than two weeks, a circuit court decided an appeal hinging on the Brulotte rule, which holds that patent royalties are impermissible when based on payments for the use of expired patents. Like the US Court of Appeals for the Ninth Circuit, the Fourth Circuit upheld a royalty agreement that purported to require payments after patent expiration. Ares Trading S.A. v. Dyax Corp., Case No. 23-1487 (4th Cir. Aug. 14, 2024) (Krauser, Porter, Chung, JJ.)

Dyax is a biotechnology company engaged in “phage display” research – a laboratory process used to identify antibody fragments for use in developing medications. Dyax holds multiple patents related to phage display, including licenses to patents owned by Cambridge Antibody Technology (CAT). Dyax and Ares entered a licensing agreement. Dyax’s main obligation was to use its phage display technology to identify antibody fragments and then provide those fragments to Ares so that Ares could incorporate them into commercial medications, including one called Bavencio. In exchange, Ares agreed to pay Dyax at various research milestones and pay royalties for identified products, including Bavencio. Although Bavencio was first sold in 2017, the last CAT patent expired in 2018.

After learning of the Brulotte rule, Ares tried to renegotiate its contract obligations. When renegotiation attempts failed, Ares sued Dyax, seeking multiple related declaratory judgments revolving around its argument that its royalty obligations to Dyax were unenforceable under Brulotte. Dyax countersued on six claims, including for declaratory judgment that Brulotte did not apply. The district court found the royalty obligation enforceable and not in violation of Brulotte. Ares appealed.

Ares asked the Fourth Circuit to reconsider the applicability of the Brulotte rule and to relatedly find that Dyax had breached the covenant of good faith and fair dealing. The Fourth Circuit first examined its own jurisdiction in the context of the Federal Circuit’s exclusive jurisdiction over patent appeals. Of the 10 total claims and counterclaims, nine arose under Massachusetts contract law. According to the Fourth Circuit, these were not “substantial” patent law claims and thus regional circuit appellate jurisdiction was appropriate.

The Fourth Circuit next turned to the Brulotte prohibition on post-termination royalties and found no violation because “Ares’ royalty obligation is not calculated based on activity requiring post-expiration use of inventions” covered by Dyax or CAT patents. The Court emphasized the policies underpinning the federal patent regime and the Brulotte rule, particularly the importance of inventions entering the public space once a patent expires to allow continued innovation and general use of the once-patented invention. The Court also explained its understanding of the nuances of Brulotte, as informed by the Supreme Court’s 2015 decision in Kimble v. Marvel. For instance, a court’s inquiry must focus on post-expiration use, so where “royalties are not calculated based on activity requiring post-expiration use, they do not hinder post-expiration use ‘on their face’ and Brulotte is not implicated.” In the present case, this was a key delineation because the Fourth Circuit found that Ares’ [...]

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Back to the Future: Expert Can Be Skilled Artisan Based on Later-Acquired Knowledge

by Amol Parikh | Sep 12, 2024 | Patents

The US Court of Appeals for the Federal Circuit clarified that a technical expert does not need to have been a person of ordinary skill in the art (POSITA) at the time of the invention. Instead, they may rely on later-acquired knowledge to offer testimony from the vantage point of a skilled artisan at the time of the invention. Osseo Imaging, LLC v. Planmeca USA Inc., Case No. 23-1627 (Fed. Cir. Sept. 4, 2024) (Dyk, Clevenger, Stoll, JJ.)

Osseo owns patents related to orthopedic imaging systems that use X-ray beam techniques to create tomographic and/or densitometric models of a scanned object. The alleged invention date of the patents was 1999. Osseo sued Planmeca for infringement of dental imaging systems that generate and display 3D models to a user.

At trial, the jury was instructed to determine the requisite level of ordinary skill and was told that a POSITA would have a bachelor’s degree in electrical or computer engineering, plus three to five years’ experience working in a diagnostic imaging environment that uses the techniques described in the asserted patents. During cross-examination, Planmeca sought to demonstrate that Osseo’s technical expert did not have the requisite experience in 1999, the alleged date of invention. The jury returned a verdict that Planmeca infringed the asserted patents.

After trial, Planmeca moved for judgment as a matter of law (JMOL), arguing that Osseo’s expert’s testimony should be disregarded because he was not a POSITA at the time of the patents’ alleged date of invention in 1999. The district court denied the motion as legally incorrect. Planmeca appealed.

Planmeca argued that the district court erred in denying JMOL because although Osseo’s expert became a POSITA eight to 10 years after the time of the invention, he was not so skilled at the time of the invention, and thus the verdict could not be supported by his testimony. The Federal Circuit reiterated that “[to] offer expert testimony from the perspective of a skilled artisan in a patent case – like for claim construction, validity, or infringement – a witness must at least have ordinary skill in the art.” The Court rejected Planmeca’s argument to add a timing requirement that the expert must have possessed the requisite ordinary skill in the art at the time of the invention. Instead, the expert must be qualified to offer testimony from the vantage point of a skilled artisan.

The Federal Circuit explained that it made little sense to add a timing requirement because an expert could acquire the necessary skill level later and develop an understanding of what a POSITA knew at the time of the invention. The Court noted that the fact that the expert was not a POSITA at the time of the invention may well be used during cross-examination to undermine the credibility of the expert but also noted that an expert could avoid such potential damage by explaining how they gained the perspective of a POSITA at the time of the invention.

Accordingly, the Federal Circuit affirmed [...]

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Lower the Red Flags: Flawed Fee Award Flops

by Keval Amin | Sep 5, 2024 | Patents

The US Court of Appeals for the Federal Circuit vacated and remanded a district court decision awarding attorneys’ fees, finding that the district court abused its discretion by failing to properly explain its basis for the fee award. Realtime Adaptive Streaming L.L.C. v. Sling TV, L.L.C., Case No. 23-1035 (Fed. Cir. Aug. 23, 2024) (Albright, Dist. J., sitting by designation; Moore, Lourie, JJ.)

Realtime Adaptive Streaming sued Sling and DISH for patent infringement related to digital data compression. The district court granted DISH’s motion for summary judgment of invalidity. While the invalidity finding was on appeal, the district court granted DISH’s motion for attorneys’ fees based on six so-called “red flags” that it found should have served as warning signs to Realtime that its case was fatally flawed.

The district court explained that the first red flag was two prior court decisions against Google and Netflix, which found similar claims of Realtime’s patent ineligible as abstract ideas under 35 U.S.C. § 101. Despite these decisions, Realtime pursued its claims. The second red flag came when the Federal Circuit ruled against Realtime in a related case. The third occurred when an inter partes review (IPR) proceeding invalidated key claims of Realtime’s patent. Following a nearly two-year stay, the district court identified the fourth and fifth red flags: a non-final office action from the US Patent & Trademark Office rejecting a key claim of the remaining patent, and a letter from DISH indicating its intention to seek attorneys’ fees if Realtime continued the case. The sixth red flag was an expert declaration from DISH that addressed invalidity of the claims at issue, and which was unfavorable to Realtime. Realtime appealed the district court’s attorneys’ fees award.

The Federal Circuit concluded that the district court erred by relying on the six so-called red flags without explaining the weight for each. Addressing the first flag, the Federal Circuit agreed with the district court’s reliance on the Google and Netflix decisions because they involved a patent with a virtually identical specification and essentially the same claims. The Court disagreed with the remaining red flags. The Court found that the second red flag related to a different technology and should not have put Realtime on notice that its patent claims were meritless. With respect to the third, fourth, and fifth flags, the Federal Circuit found that the district court did not adequately explain why these decisions supported exceptionality.

With regard to the sixth flag (the expert opinion), the Federal Circuit found that the district court’s analysis was insufficient. The Court explained that it is typical in a patent infringement case for the parties’ experts to disagree on invalidity issues. The Court found that Realtime and its expert developed critiques and counterarguments to DISH’s expert’s opinions, demonstrating that Realtime did not fail to give “serious consideration” to invalidity. While the district court may have found DISH’s expert more persuasive, that fact alone should not have put Realtime on notice that its claims lacked merit.

Accordingly, the Federal [...]

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Some Post-Expiration Patent Royalty Payments May Be OK

by Kathleen Lynch | Sep 5, 2024 | Patents

The US Court of Appeals for the Ninth Circuit reversed a district court’s finding that a contract impermissibly allowed for patent royalties after the patent expired because the post-termination royalty payments were allocated to non-US patents. C.R. Bard, Inc. v. Atrium Med. Corp., Case No. 23-16020 (9th Cir. Aug. 23, 2024) (Friedland, Mendoza, Desai, JJ.) (per curiam).

C.R. Bard held one US and one Canadian patent covering a type of vascular graft. In 2011, Bard and Atrium entered a licensing agreement to settle a patent dispute. Under the terms of the agreement, Atrium agreed to pay Bard a 15% royalty on covered US sales until 2019 (when the US patent expired) and a 15% royalty on covered Canadian sales until 2024 (when the Canadian patent expired). The contract also included a quarterly royalty minimum. Through 2019, as the contract contemplated, Atrium paid royalties on its US and Canadian sales. Because of a US Food and Drug Administration delay, Atrium had lower than expected sales and never exceeded the quarterly minimum royalty.

Atrium eventually refused to continue making royalty payments, which after 2019 covered only Canadian sales (likewise never exceeding the quarterly minimum). Bard sued for breach of contract in 2021. Atrium argued that the royalty provision was unenforceable under Brulotte v. Thys, a 1964 US Supreme Court decision holding that collecting royalties for patent use after a patent’s expiration constitutes patent misuse. The district court determined that the “clear and primary purpose” of the parties’ contractual minimum royalty was to compensate Bard for US sales of the patented product. The district court therefore agreed with Atrium. Bard appealed.

The Ninth Circuit undertook to determine whether the terms of the parties’ contract constituted patent misuse under Brulotte. The Ninth Circuit first explained that in Brulotte, the Supreme Court considered a contract between the owner of multiple patents related to picking hops and farmers who made seasonal license payments to use machines incorporating those patents. The Supreme Court found patent misuse because the license amount did not decrease as patents incorporated into the machines expired, which indicated that the farmers were paying to use expired patents.

Despite pushback, the Supreme Court refused to overturn Brulotte in 2015 when it decided Kimble v. Marvel. That case involved a patent holder’s license allowing Marvel to incorporate patented web-shooting technology into a Spiderman toy. In Kimble, the Ninth Circuit had ruled that the license agreement was invalid under Brulotte because it required Marvel to continue to pay a royalty fee after the patent expired. The Ninth Circuit noted, however, that an ongoing license after the expiration of a patent may be permissible if the license contemplates both patented and non-patented features, as long as the terms of the royalty adjust when the patent expires. For instance, a license covering both a patented invention and a trade secret may continue past the life of the patent, as long as the royalty rate diminishes after the patent expires. This reflects that the royalty is [...]

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Later-Filed, Earlier-Expiring Patent Not an ODP Reference

by Alexander P. Ott | Aug 29, 2024 | Patents

Addressing invalidity due to obvious-type double patenting (ODP) based on later-filed-related patents, the US Court of Appeals for the Federal Circuit reversed a district court’s application of In re Cellect (Fed. Cir. 2023) and held that the later-filed, earlier-expiring continuation patents were not available as ODP references against the earlier-filed, later-expiring patent. Allergan USA, Inc. v. MSN Labs Private Ltd., Case No. 24-1061 (Fed. Cir. Aug. 13, 2024) (Lourie, Dyk, Reyna JJ.)

In 2015, the US Food and Drug Administration approved a new drug application for a drug sold by Allergan to treat the symptoms of irritable bowel syndrome. In 2019, Sun Pharma filed an abbreviated new drug application (ANDA) seeking to market a generic version of the drug. Allergan then sued Sun Pharma and MSN Labs for infringement of four patents related to the drug. One of the patents, which claims a compound of the drug, had been granted almost three years of patent term adjustment (PTA) and was followed by two more patents from continuation applications in the same patent family. The other three patents all claimed tablet forms of the drug. The claims of one of the patents recited that a glidant was optional while the claims of the other two patents did not require a glidant at all.

The US District Court for the District of Delaware held a three-day bench trial and concluded that the asserted claim of the compound patent was invalid under the ODP doctrine and that the claims of the three tablet patents were invalid for lack of written description. On the issue of ODP, the district court found Allergan’s “first-filed, first-issued” distinction “immaterial.” The district court stated that “[w]hen analyzing ODP, a court compares patent expiration dates, rather than filing or issuance dates.” Allergan appealed.

The Federal Circuit reversed on both issues. The Court held that the claims of the later-filed, earlier-expiring continuation patents were not available as ODP references against the first patent because the purpose of the ODP doctrine is to prevent patentees from obtaining a second patent to effectively extend the life of the first patent. The Federal Circuit explained that the district court misread Cellect as binding it to solely consider expiration dates in the ODP analysis. The Court explained that Cellect only controls to the extent that it requires a court to consider the later-filed patent’s expiration date (i.e., the expiration date after the addition of PTA) in its ODP analysis, not the expiration date that it would have shared with the reference patents in the absence of a PTA award. The panel majority emphasized that it does not follow that the later-filed patent must be invalidated by the earlier-filed reference patents simply because it expires later. The majority noted that “Cellect does not address, let alone resolve, any variation of the question presented here – namely, under what circumstances can a claim properly serve as an ODP reference – and therefore has little to say on the precise issue before us.”

The Federal Circuit also [...]

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Blurred Vision: Appeal Dismissed for Lack of Standing

by Lillian Spetrino | Aug 29, 2024 | Patents

The US Court of Appeals for the Federal Circuit dismissed a patent challenger’s appeal in an inter partes review (IPR) because the challenger could not meet the injury-in-fact requirement for Article III standing. Platinum Optics Tech. Inc. v. Viavi Solutions Inc., Case No. 23-1227 (Fed. Cir. Aug. 16, 2024) (Moore, Taranto, JJ.; Checchi, Dist. J, sitting by designation).

Viavi Solutions owns a patent directed to optical filters that include layers of hydrogenated silicon and to sensor systems comprising such optical filters. Platinum Optics Technology (PTOT) petitioned for IPR. The Patent Trial & Appeal Board found that PTOT had failed to establish that the challenged claims were unpatentable. PTOT appealed.

The Federal Circuit dismissed the appeal, finding that PTOT did not have Article III standing. The Court explained that while Article III standing is not required to appear before an administrative agency (such as the US Patent & Trademark Office), such standing is required once a party seeks judicial review in an Article III federal court. PTOT argued it had standing because of potential infringement liability due to its continued distribution of a product previously accused of infringing the patent and its development of new models of the previously accused product. The Court rejected both arguments.

First, PTOT asserted that it suffered an injury in fact because there was a likelihood that Viavi would sue again. PTOT relied on a letter from Viavi stating that it did not believe PTOT could fulfill its supply agreements with noninfringing products. The Federal Circuit disagreed with PTOT’s assertion, concluding that mere speculation about the possibility of suit, without more, is insufficient to confer Article III standing. Moreover, the Court noted that Viavi’s letter was sent prior to the patent infringement suits, which were dismissed with prejudice. Thus, the Court found that PTOT had not established an injury in fact based on potential infringement liability due to its continued distribution of a previously accused product.

Second, PTOT asserted that it suffered an injury in fact based on its development of new models of the previously accused product. PTOT’s argument was supported by a declaration from a Deputy Director of Operation Management at PTOT and the same letter from Viavi threatening future suit. The Federal Circuit did not find the declaration testimony compelling. It explained that the declaration, which generally alleged that PTOT continued to develop new models of the previously accused product, did not identify any specific concrete plans for PTOT to develop a product that might implicate the patent. The declaration did not explain the particulars of these new models or how the models might relate to the patent. The Court found that the declaration was insufficient to establish that PTOT’s development activities created a substantial risk of infringement or were likely to cause Viavi to assert infringement. The Court noted that the letter from Viavi did not specifically address models in development or foreclose PTOT’s ability to develop a noninfringing product.

Thus, the Federal Circuit concluded that PTOT failed to establish an injury [...]

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