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Context Is Key in Claim Construction

The US Court of Appeals for the Federal Circuit reiterated that intrinsic evidence trumps extrinsic evidence in determining the meaning of claim terms. Sequoia Technology, LLC v. Dell, Inc. et al., Case Nos. 21-2263; -2264; -2265; -2266 (Fed. Cir. Apr. 12, 2023) (Stoll, Lourie, Dyk, JJ.)

Sequoia Technology owns a patent directed to data storage methods involving storing the same data across multiple physical disk drives to make up a virtual disk drive. Sequoia asserted the patent against several companies, all based on a product sold by Red Hat. During litigation, the parties disputed the construction of the terms “computer-readable recording medium,” “disk partition” and “logical volume.” Related to the latter two claim construction issues, the parties construed the term “used or not used” in the context of an extent’s usage in an “extent allocation table.”

The district court adopted Red Hat’s construction of “computer-readable recording medium” to include transitory media (i.e., signals or waves). The district court found no clear language in the specification that excluded transitory media and found Red Hat’s extrinsic evidence to be persuasive, “particularly given the lack of any substantive rebuttal from Sequoia’s expert.” For “disk partition” and “logical volume,” the district court agreed with Red Hat and construed “disk partition” to mean a “section of a disk that is a minimum unit of a logical volume” and “logical volume” to mean an “extensible union of more than one disk partition, the size of which is resized in disk partition units.” These constructions require that a logical volume is constructed by whole disk partitions, not subparts of disk partitions such as extents. The district court also construed the phrase “used or not used” in the limitation “extent allocation table for indicating whether each extent in the disk partition is used or not used,” adopting Red Hat’s construction that “used or not used” means that an extent “is or is not storing information.”

Following claim construction, the parties stipulated that under the district court’s claim construction of “logical volume” and “disk partition,” the accused products did not infringe the asserted claims. The parties also stipulated that under the district court’s construction of “computer-readable recording medium,” certain claims were subject matter ineligible under 35 U.S.C. § 101 as including transitory media. Sequoia appealed.

The Federal Circuit concluded that the district court erred in construing “computer-readable recording medium.” Starting with the claim language, the Court noted that the claim recited a “computer-readable recording medium storing instructions” and not simply a “computer-readable medium.” The Court reasoned that an ordinarily skilled artisan would understand transitory signals to be incompatible with the claimed invention because such fleeting signals would not persist for sufficient time to store instructions. Turning to the specification, the Court explained that although the specification did use open-ended “including” language to describe a computer-readable medium, the relevant portion of the specification defined computer-readable media as “including compact disc read only memory (CDROM), random access memory (RAM), floppy disk, hard disk, and magneto-optical disk,” all of which are non-transient [...]

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Allegations in Complaint Prevail over Statements in Exhibit

The US Court of Appeals for the Federal Circuit, prioritizing specific allegations in the complaint over disclosures in exhibits to the complaint, reversed and remanded a district court decision dismissing an original complaint, denying leave to file an amended complaint. Healthier Choices Management Corp. v. Philip Morris USA, Inc.; Philip Morris Products S.A., Case Nos. 22-1268; -1563 (Fed. Cir. Apr. 12, 2023) (Taranto, Cunningham, Stoll, JJ.)

Healthier Choices Management (HCM) filed a complaint for patent infringement against two Philip Morris defendants in the Northern District of Georgia. The infringement allegation involved a patent for a nicotine delivery device. The relevant language from the claims focused on a heating element in the device “initiating . . . a combustion reaction . . . [with] the combustion reaction at least partially combusting the combustible material.” In its complaint, HCM alleged that the heating in the accused product resulted in at least partial combustion.

Philip Morris defended the claim by arguing that its accused product aerosolized the nicotine at a low temperature and, therefore, never combusted the tobacco. Philip Morris filed a motion under Fed. R. Civ. Pro. 12(b)(6) against HCM arguing that an exhibit to the complaint “conclusively demonstrated” that the accused product did not initiate a combustion reaction. The district court agreed and granted the motion to dismiss, prompting HCM to file a motion for leave to amend its complaint to more definitively allege infringement. The district court denied the motion and granted Philip Morris’s subsequent motion for attorneys’ fees under 35 U.S.C. § 285. HCM appealed.

Since the issues raised were not unique to patent law, the Federal Circuit addressed HCM’s appeal under the law of the relevant regional circuit, the Eleventh Circuit. The Court noted that in the Eleventh Circuit, exhibits attached to a complaint can be considered and the exhibit controls in the event of any conflict with allegations pertaining to the exhibit. However, when an exhibit is alleged to be factually false in some way and the allegations in a complaint are specific and well pleaded, then the allegations in the complaint control. The exhibit regarding the accused product in this case was alleged to be incorrect, as far as it stated that there was no combustion initiated by the “heat-not-burn” method described in the exhibit. HCM contended that combustion occurred despite the assertions in that document. Relying on several cases disavowing the truth of the exhibit, the Federal Circuit found Eleventh Circuit law to be both clear and in alignment with HCM. The Court concluded that in light of the detailed allegations as to the basis underlying HCM’s disagreement with the facts asserted in the exhibit, the complaint should not have been dismissed based on the exhibit.

The Federal Circuit next turned to HCM’s amended complaint. Noting that the amended complaint “superseded” the earlier complaint, the Court found that the amended complaint removed the offending exhibit and any references to the offending exhibit and included a declaration of a technical expert to further support HCM’s allegations. [...]

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Overlapping Ranges in Prior Art Put Burden on Patentee to Show Criticality

The US Court of Appeals for the Federal Circuit found that the challenged patents were invalid as anticipated and obvious in a case involving claimed ranges and prior art that included teachings with overlapping ranges. UCB, Inc. v. Actavis Laboratories UT, Inc., Case No. 21-1924 (Fed. Cir. Apr. 12, 2023) (Moore, C.J.; Chen, Stoll, JJ.)

UCB owns two prior art patents (the Mueller patents), one directed to methods for stabilizing rotigotine that covers a drug used in UCB’s Neupro® transdermal patches to treat Parkinson’s disease, and the other directed to the stable dispersions of rotigotine used in Neupro® transdermal patches.

Soon after UCB began marketing its original Neupro® transdermal patch in 2007, it discovered that rotigotine crystallized when the patch was kept at room temperature, which lowered the amount of rotigotine available to cross the skin/blood barrier and enter the patient’s circulation and reduced the product’s effectiveness. UCB recalled Neupro® from the market in the United States. In Europe, it marketed Neupro® only under “cold chain” conditions, which reduced the rotigotine crystallization.

The challenged patent in this case solved the problem of room temperature crystallization using dispersions in which the ratio of rotigotine to the stabilizer polyvinylpyrrolidone (PVP) ranged from “about 9.4 to about 9.6.” The original Neupro® formulation had a rotigotine to PVP ratio of 9:2, and the Mueller patents disclosed a partially overlapping range of 9:1.5 to 9:5, as shown in the following graphic from the Federal Circuit’s opinion:

The reformulated Neupro had a ratio of 9:4 rotigotine to PVP and exhibited stability for up to two years at room temperature.

The district court held that the Mueller patents anticipated all asserted claims because a person of ordinary skill in the art (POSA) would “readily envisage” a combination of 9% rotigotine with 4% to 5% of PVP. The district court also determined that all claims were obvious in light of the Mueller patents and other prior art.

Anticipation/Overlapping Ranges

The Federal Circuit first noted that although the prior art that discloses a point within a claimed range generally anticipates that claim, such was not the case here, and the district court committed legal error treating it thus.

Instead, the Federal Circuit treated this case as one of overlapping ranges. Under that legal rubric, once a patent challenger establishes a prima facie case of anticipation by showing that the claimed range partially overlaps with the cited art, the burden shifts to the patentee to show that the “claimed range is critical to the operability of the claimed invention.” The Court stopped short of ruling that UCB had not met its burden of showing the criticality of the range because it concluded that the two patents in question were obvious in light of the overlap between the claimed ranges and those of the Mueller patents.

Teaching Away

The Federal Circuit affirmed the district court’s rejection of UCB’s arguments that Tang, another [...]

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And All That Jazz: Trademark Used for One Service Doesn’t Permit Tacking for Others

Reversing the Trademark Trial & Appeal Board’s decision to dismiss an opposition, the US Court of Appeals for the Federal Circuit addressed the requirements for a trademark owner to employ “tacking” based on the use of a mark for one service in the context of a trademark application listing multiple services. Bertini v. Apple Inc., Case No. 21-2301 (Fed. Cir. Apr. 4, 2023) (Moore, C.J.; Taranto, Chen, JJ.)

Charles Bertini is a professional jazz musician who filed a notice of opposition to Apple’s application to register the mark APPLE MUSIC. Because the parties did not dispute that there was a likelihood of confusion between the two marks, the only disputed issue was which party’s mark was entitled to an earlier priority date. Bertini’s mark, APPLE JAZZ, had a priority date of June 13, 1985, for use in live music festivals and concerts. Apple’s mark, APPLE MUSIC, which was the subject of the opposition, had a priority date of June 8, 2015. In its application, Apple sought to register its mark for 15 broad service categories, including the production and distribution of sound recordings and the arranging, organizing, conducting and presenting of live musical performances.

Because Bertini’s mark had the earlier priority date, Apple attempted to use tacking to claim an earlier priority date to an APPLE mark used by Apple Corps. for gramophone records featuring music since August 1968. Apple purchased this mark from the Beatles’ Apple Corps. in 2007. Tacking allows a trademark owner to give a newly modified mark the priority date of its old mark, but only if both marks “create the same, continuing commercial impression so that consumers consider both as the same mark.” The Board found that Apple was entitled to tack back to use the 1968 date of use of the APPLE MUSIC mark and thus had priority over Bertini. The Board accordingly dismissed Bertini’s opposition. Bertini appealed.

The Federal Circuit first addressed the tacking standard in the context of trademark registration. The Court explained that in order to obtain an earlier priority date through tacking, an applicant must show that the old mark was associated with all of the goods and/or services listed in its application as of the proposed earlier priority date. The Court found that Apple failed to meet this burden. As of 1968, the APPLE mark was not associated with the service of “arranging, organizing, conducting, and presenting live musical performances.” Because this service was listed in Apple’s trademark application, the APPLE MUSIC mark application was not entitled to claim priority back to the priority date of the Apple Corps. APPLE mark. The Court noted that Bertini only needed to show priority of use of APPLE JAZZ for any service listed in Apple’s application to succeed in his opposition. Because the Court rejected Apple’s attempt to tack back to the 1968 priority date for all of Apple’s listed services where Apple could only show priority for one service listed in its application, Bertini met this burden. The Court also concluded [...]

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PTO to Host Listening Session on Role of AI in Innovation

As previously reported, the US Patent & Trademark Office (PTO) published a Request for Comments Regarding Artificial Intelligence and Inventorship, seeking input from stakeholders on inventorship issues that may arise as artificial intelligence (AI) and emerging technologies play a greater role in the innovation process. In the wake of the request, the PTO published a Notice announcing that it is hosting a listening session to address the “current state of AI technologies and inventorship issues,” including whether AI should qualify as an inventor and whether the PTO should expand its current guidance.

The listening session will be held at the PTO’s headquarters in Alexandria, Virginia, on April 25, 2023, from 10:30 am to 2:45 pm EDT. Anyone seeking to speak at the listening session must register by 5:00 pm EDT on April 20, 2023. Anyone seeking to attend, either virtually or in person, but not speak at the event must register by April 24, 2023.

Registration information is available here.




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Nitpicking Allowed When Determining Statutory Damages

On the second round of a copyright dispute, the US Court of Appeals for the Seventh Circuit affirmed in part, reversed in part and remanded (again) to the district court to apply the “independent economic value test” handed down by the Court in the first iteration of the dispute to determine what constitutes as “one work” for purposes of calculating statutory damages where a jury finds infringement on multiple works registered in a single copyright application. Amy Lee Sullivan, dba Design King v. Flora Inc., Case No. 15-cv-298 (7th Cir. Mar. 31, 2023) (Flaum, Scudder, Eve, JJ.)

In 2013, graphic design artist Amy Sullivan sued herbal supplemental company Flora for copyright infringement after Flora used Sullivan’s illustrations in a manner exceeding the scope of the parties’ license agreement. The district court instructed the jury that Sullivan could receive separate statutory awards for 33 acts of infringement on 33 individual illustrations, which were the subject of two separate US copyright registrations, as compilations. The jury issued a statutory damages award of $3.6 million. Flora appealed.

In its decision on the first appeal, the Seventh Circuit adopted the independent economic value test to address the standard for determining whether multiple related works of authorship are each entitled to a separate statutory damages award, or if the related works constitute one compilation warranting only a single statutory damages award. Because the record in Sullivan’s case was insufficient to make that determination and assess proper damages, the Seventh Circuit remanded to the district court to determine whether Sullivan’s illustrations had standalone “distinct and discernable value to the copyright holder.”

On remand, the district court found that Flora waived several arguments challenging the independent economic value of certain of Sullivan’s illustrations, and therefore entered the same jury verdict. Flora appealed again.

After a lengthy analysis on the scope of remand, the Seventh Circuit found that the district court violated its mandate on remand because it did not put the independent economic value assessment to a jury, and instead decided the factual issue on the same record the appeals court had previously found insufficient. The Court then moved to its summary judgment analysis and reiterated the independent economic value test for considering whether Sullivan’s 33 illustrations constituted 33 individual works or instead were parts of two compilations. The Court articulated several relevant factors that went into its totality of the circumstances analysis, including whether the copyright holder marketed or distributed the works independently or as a compendium, whether the works were produced together or separately, how the works were registered for copyright protection and, ultimately, whether the market assigned value to the works.

The Seventh Circuit concluded that Flora raised facts and arguments relating to the independent economic value test that were within the scope of remand and not waived. Flora was not prohibited from arguing several primary positions. First, Flora noted that it provided Sullivan with only two invoices for both “illustration collections,” and Sullivan registered the illustrations in two compilation copyrights, [...]

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Console Yourself: Patent Owner Bears IPR Estoppel Burden

Addressing for the first time the standard and burden of proof for the “reasonably could have raised” requirement for inter partes review (IPR) estoppel to apply, the US Court of Appeals for the Federal Circuit concluded that a patent owner bears the burden of proving that an IPR petitioner is estopped from using invalidity grounds that a skilled searcher conducting a diligent search reasonably could have been expected to discover. Ironburg Inventions Ltd. v. Valve Corp., Case Nos. 21-2296; -2297; 22-1070 (Fed. Cir. Apr. 3, 2023) (Lourie, Stark, JJ.) (Clevenger, J., dissenting).

Ironburg sued Valve for infringing Ironburg’s video game controller patent. Valve responded by filing an IPR petition in 2016. The Patent Trial & Appeal Board partially instituted on three grounds but declined to institute on two other grounds (the Non-Instituted Grounds), as was permitted prior to the Supreme Court’s 2018 decision in SAS Institute Inc. v. Iancu. Valve did not seek remand pursuant to SAS, which would have allowed the Board to consider the Non-Instituted Grounds. In the district court litigation, Valve alleged invalidity based on the Non-Instituted Grounds and grounds Valve learned of from a third party’s IPR filed after Valve filed its IPR (the Non-Petitioned Grounds). Ironburg filed a motion asserting that Valve was estopped, pursuant to 35 U.S.C. § 315(e)(2), from asserting both the Non-Instituted Grounds and the Non-Petitioned Grounds. The district court granted Ironburg’s motion in full, removing all of Valve’s invalidity defenses. After trial, the jury returned a verdict finding that Valve willfully infringed the patent. Valve appealed.

35 U.S.C. § 315(e)(2) precludes an IPR petitioner from asserting invalidity during a district court proceeding based on “any ground that the petitioner raised or reasonably could have raised during that [IPR].” The Federal Circuit first addressed the legal standard needed to meet the “reasonably could have raised” requirement for IPR estoppel. The Court found that the “skilled searcher” standard used by several district courts is appropriate, as opposed to a higher “scorched earth” search standard. The “skilled searcher” standard is consistent with the § 315(e)(2) statutory requirement of discovering prior art references that “reasonably could have been raised.”

The Federal Circuit next addressed which party has the burden to prove what prior art references a skilled searcher reasonably would, or would not, have been expected to discover. The district court placed the burden on Valve, the party challenging the patent’s validity, and determined that Valve did not show how difficult it was to find the Non-Petitioned Grounds that Valve did not initially uncover. The Court noted that the third party that did find the Non-Petitioned Grounds may have used a “scorched earth” search, which would make its discovery of the Non-Petitioned Grounds irrelevant to estoppel. The Court concluded that the patent owner has the burden of proving what a skilled searcher reasonably would have found because the patent holder is looking to benefit from estoppel. The Court explained that this conclusion is consistent with the practice of placing the burden on the party asserting [...]

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Preliminary Injunction, Meet Irreparable Harm

The US Court of Appeals for the Fifth Circuit, in a case where an ex-employer sought preliminary injunctive relief based on an alleged breach of non-disclosure and non-compete agreements and alleged misappropriation of confidential business information, ruled that the Texas presumption of irreparable harm for breach of non-compete clauses does not always apply and that a finding of irreparable harm requires particularized findings regarding the alleged harm. Direct Biologics L.L.C. v. McQueen, Case No. 22-50442 (5th Cir. April 3, 2023) (Davis, Dennis, JJ., Higginson, C.J.).

Adam McQueen previously was executive vice president of Direct Biologics (DB). As a member of DB’s management, McQueen had access to DB’s confidential trade secret information regarding the production and production specifications of DB’s novel medical technologies. To protect that information, McQueen signed both non-compete and non-disclosure agreements with DB, preventing him from providing “services . . . similar to that which [he] provided to [DB],” and from disclosing or using DB’s confidential information.

McQueen resigned from his position and joined Vivex, DB’s direct competitor. Almost immediately DB sued McQueen and Vivex, alleging breach of the non-compete, breach of the non-disclosure agreement and trade secret misappropriation. Shortly thereafter, DB moved for a preliminary injunction to compel McQueen to comply with the non-compete covenant and prevent him from using DB’s confidential and trade secret information. Vivex countered by arguing that McQueen’s new role as vice president of product strategy was a “non-competitive role,” and that McQueen was sequestered from all products that would compete with DB. The district court denied the preliminary injunction motion, agreeing with Vivex that DB failed to provide any evidence that DB had been harmed. DB appealed.

DB argued that the district court erred in two ways—first, by failing to apply Texas’s presumption of irreparable harm based on McQueen’s breach of a non-compete agreement, and second, by failing to correctly apply the irreparable harm analysis by looking only at past actions.

The Fifth Circuit began by reviewing Texas’s presumption of irreparable harm. Under Texas law, the breach of a non-compete agreement can result in a presumption of irreparable harm. But, as the Court explained, the presumption does not always apply. Texas courts can decline to apply the presumption when there is no independent proof of harm. Here, not only did DB fail to produce any evidence that McQueen disclosed or used DB’s confidential information, but there also was evidence showing that he had not. Based on this record, the Court held that it was not an abuse of discretion to decline to apply the presumption.

The Fifth Circuit then analyzed the district court’s irreparable harm analysis. The Court explained that the irreparable harm analysis requires that the trial court make particularized findings regarding whether the harm was likely to occur over the pendency of the litigation, and if so, whether the harm would be difficult to quantify monetarily. While the district court here made findings directed to whether McQueen had caused harm, it did not make any findings regarding what might happen during the litigation. The [...]

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It’s All in the Grammar: “A” Still Means “One or More,” but Single Component Must Perform All Claimed Functions

The US Court of Appeals for the Federal Circuit affirmed a jury’s noninfringement verdict, finding that the district court correctly interpreted the article “a” and antecedent “said” in the asserted claims to require that a single microprocessor be capable of performing every one of the recited microprocessor functions. Salazar v. AT&T Mobility LLC et al., Case No. 21-2320; -2376 (Fed. Cir. Apr. 5, 2023) (Stoll, Schall, Stark, JJ.)

Joe Salazar owns a patent directed to technology for wireless and wired communication, including command, control and sensing systems for two-way communications. In 2016, Salazar sued HTC, alleging that HTC infringed the patent by selling certain phones that allegedly embodied the asserted claims. A jury returned a verdict finding that HTC did not infringe. In 2019, Salazar sued AT&T, Sprint, T-Mobile and Verizon (collectively, the Telecom Providers) asserting the same patent against the same HTC products. HTC intervened, arguing that the accused products did not infringe. The district court severed HTC and stayed that portion of the case.

At claim construction, the parties disputed limitations that required “a microprocessor for generating, . . . said microprocessor creating . . . , a plurality of parameter sets retrieved by said microprocessor . . . , [and] said microprocessor generating.” The essence of the dispute was “whether the claims require one microprocessor that is capable of performing the recited ‘generating,’ ‘creating,’ ‘retrieving,’ and ‘generating’ functions.” The district court answered the question in the affirmative and construed the term to mean “one or more microprocessors, at least one of which is configured to perform the generating, creating, retrieving, and generating functions.” The district court further reasoned that “at least one microprocessor must satisfy all the functional (and relational) limitations recited for ‘said microprocessor.’” At trial, the jury found that the accused products did not infringe and that the patent was not invalid. Salazar appealed, and the Telecom Providers cross-appealed.

Salazar argued that the district court erred in construing “a” microprocessor and “said” microprocessor and that the court should have interpreted the claim terms to require one or more microprocessors, any one of which may be capable of performing the “generating,” “creating” and “retrieving” functions recited in the claims. Put another way, in Salazar’s view, the correct claim construction would encompass one microprocessor capable of performing one claimed function and another microprocessor capable of performing a different claimed function, even if no single microprocessor could perform all of the recited functions.

The Federal Circuit rejected Salazar’s argument. Generally, the indefinite article “a” means “one or more” in open-ended claims containing the transitional phrase “comprising.” An exception to the general rule arises where the language of the claims themselves, the specification or the prosecution history necessitates a departure from the rule. The Court found that while the claim term “a microprocessor” does not require that there be only one microprocessor, the subsequent limitations referring to “said microprocessor” require that at least one microprocessor be capable of performing each of the claimed functions. The Court further explained that [...]

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“Goods in Trade” in the Age of the Internet

The Trademark Trial & Appeal Board recently redefined what it takes in the age of the internet to meet the “goods in trade” requirement for registrability by holding that the Lens.com three-factor test is the universal legal standard for that inquiry. In re The New York Times Company, Serial Nos. 90106071, 90112154, 90112577, 90115155, 90115491, 90115337 (TTAB Mar. 30, 2023) (Lykos, J.) (precedential).

The New York Times applied to trademark six column names: “The New Old Age,” “A Good Appetite,” “Hungry City,” “Work Friend,” “Off the Shelf” and “Like a Boss.” The Examining Attorney issued a final refusal, explaining that the specimens did not demonstrate that the marks were used on separate goods in trade. The Times appealed. The question before the Board was whether the printed columns were independent “goods in trade.”

The Board reversed the refusal and held that The Times could register the marks. While past decisions had found that non-syndicated print newspaper columns failed to rise to the level of “goods in trade,” the Board reasoned that those decisions were based on the fact that such columns were only available to consumers as part of an overall purchase of a particular print publication—but in the age of the internet, that is no longer the case. The Board reasoned that determining whether a non-syndicated column is a good in trade should not depend on the format in which it is offered.

The Board held that going forward, the appropriate test to apply to non-syndicated print columns or sections in printed publications or recorded media is the three-part test found in the 2012 Federal Circuit Lens.com decision. The Federal Circuit test outlines the following factors to consider when evaluating whether an applicant’s goods are “goods in trade”:

  • Are the goods for which registration is sought a conduit or necessary tool useful only in connection with the applicant’s primary goods or services?
  • Are the goods for which registration is sought so inextricably tied to and associated with the primary goods or services as to have no viable existence apart from them?
  • Are the goods for which registration is sought neither sold separately nor do they have any independent value apart from the primary goods or services?

Applying the Lens.com factors to the print columns, the Board concluded that the columns were “goods in trade” even though they were not syndicated.

As to the first factor, the Board found that the columns were not just a conduit or necessary tool to get to The New York Times newspaper in print. The Board reasoned that the columns were not like an instructional manual or brochure telling the reader how to navigate The New York Times print edition.

Regarding the second factor, the Board found probative that a Google search of the proposed trademarks yielded the columns for which registration was sought. The Board found that this demonstrated that each individual print column was not so “inextricably tied to and associated with The New York Times print edition of the [...]

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