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Swing and a Miss: Failed Interferences Don’t Affect Later Ones

by Mike Baldwin | Jan 19, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s (Board) interference decision finding that priority belonged to the junior party based on sufficiently corroborated reduction to practice. Dionex Softron GmbH v. Agilent Technologies Inc., Case No. 21-2372 (Fed. Cir. Jan. 6, 2023) (Reyna, Chen, Stark, JJ.)

Both parties attempted to instigate an interference by copying each other’s claims regarding a method of operating a liquid chromatography system. Agilent first substantially copied Dionex’s claims but failed to secure declaration of an interference and subsequently amended its claims. Dionex then copied verbatim Agilent’s amended claims, successfully provoking an interference. The Board identified Dionex as the senior party and Agilent as the junior, placing the burden for priority on Agilent.

At the interference, Dionex moved for judgment based on lack of written description for the relevant count language (emphasis added):

. . . determining a movement amount of the piston within the chamber from a first position to a second position to increase a pressure in the sample loop from an essentially atmospheric pressure to the pump pressure, based on the pump pressure […] wherein decreasing the volume includes forwarding the piston within the chamber by the determined movement amount from the first position to the second position.

Dionex contended that Agilent’s specification lacked written description for “determining a movement amount” and subsequently “forwarding the piston,” wherein the order of those two separate operations was important and lacking support. Dionex also contended that while the relevant specification was Dionex’s patent for a majority of count terms, some terms, such as “determining,” should be viewed in light of Agilent’s application. The Board disagreed and found that Agilent’s specification was controlling and contained adequate written description to support the count.

In finding Agilent’s written description adequate, the Board rejected Dionex’s contention that the claims required a determination of movement amount before forwarding the piston. Applying the broadest reasonable interpretation standard, the Board found that the count language permitted determination of movement amount while forwarding the piston and that consequently there was adequate support in the specification.

Both parties moved for judgment on priority. The Board granted Agilent’s motion, finding that even as the junior party, Agilent proved conception and reduction to practice before Dionex’s earliest conception date. Applying the rule of reason, the Board found that the testimony of one of Agilent’s co-inventors was sufficiently corroborated by two coworkers to show successful reduction to practice by the critical date. The Board also credited Agilent’s coworker testimony in denying Dionex’s contention that Agilent’s reduction to practice lacked a pressure senor and credited testimony stating that a high-pressure pump with a built-in pressure system was used. The Board also declined Dionex’s request to draw a negative inference from the lack of testimony of the other co-inventor, crediting Agilent’s explanation that the testimony would have been cumulative. Dionex appealed.

On appeal, the Federal Circuit found that the Board had correctly treated Agilent’s specification as the “originating specification” because it was Dionex’s [...]

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More Delays: Appeal Dismissed under Collateral Order Doctrine

by Kathleen Lynch | Jan 12, 2023 | Patents

The US Court of Appeals for the Federal Circuit dismissed a patent holder’s interlocutory appeal for lack of jurisdiction under the collateral order doctrine. Modern Font Applications LLC v. Alaska Airlines, Inc., Case No. 21-1838 (Fed. Cir. Dec. 29, 2022) (Reyna, Cunningham, JJ.) (Newman, J., dissenting).

Modern Font Applications (MFA) is a nonpracticing entity that holds the exclusive license to a patent disclosing a method for operating systems to read and display nonstandard fonts. In 2019, MFA sued Alaska Airlines in district court for patent infringement. During the proceeding, Alaska Airlines designated portions of its source code files as confidential information for attorneys’ eyes only under the district court’s standing protective order. MFA moved to allow its in-house counsel to access the source code, and Alaska Airlines moved to keep it protected. The district court denied MFA’s motion and granted Alaska Airlines’ motion, finding that the source code amounted to a trade secret and MFA’s in-house attorney was properly excluded as a “competitive decisionmaker.” MFA sought interlocutory appeal of the order.

The Federal Circuit found that it lacked jurisdiction to review the discovery order. The Court explained that US Congress holds appellate courts to the final judgment rule, which states that decisions are only appealable if they end disputes on the merits, leaving nothing but execution of the judgment. A “practical construction” of this rule is the collateral order doctrine, which allows appellate review of a “small class” of attendant rulings. To qualify for review under this doctrine, a decision must be “conclusive”; address an important question, separate from the case’s merits; and be such that an appeal of the final judgment would not encompass a review of the decision at issue. The Federal Circuit stressed that the Supreme Court of the United States “has repeatedly emphasized the limited scope” of this doctrine.

The Federal Circuit found that MFA’s appeal failed the third prong of the collateral order doctrine. The Court noted that across appellate jurisdictions, pretrial discovery orders almost always fail this prong because review of final judgments can usually adequately address discovery issues. MFA argued that dismissing its appeal would prejudice MFA both financially and by eliminating its key litigation strategists and that the district court’s error would not be sufficient to overturn a final adverse judgment. The Court was not persuaded, noting that any financial harm was speculative, and that MFA could hire outside counsel or experts instead of relying on its in-house attorney. The Court also reiterated that to merit review under the collateral order doctrine, the issue must be “effectively unreviewable” on appeal, and the likelihood of an appellant’s success is irrelevant. The Court also found that MFA’s appeal failed the second prong because the exclusion of MFA’s attorney was too entangled with the ultimate outcome of the case to be considered an issue “separate” from the case. Because MFA failed two of three collateral order doctrine prongs, the Court did not address the first prong and dismissed the appeal for lack of jurisdiction.

In [...]

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Contingent Statement Doesn’t Unequivocally Abandon Defense of Challenged Claims

by Cecilia Choy, Ph.D. | Jan 12, 2023 | Patents

The Director of the US Patent & Trademark Office (PTO) initiated a sua sponte review of the Patent Trial & Appeal Board’s (Board) adverse judgments in multiple related inter partes review (IPR) proceedings. The PTO Director ultimately ordered that the judgments be vacated and remanded for further consideration. Apple Inc. v. Zipit Wireless, Inc., IPR2021-01124; -01125; -01126; -01129 (Dec. 21, 2022) (Vidal, Dir.)

Apple filed six petitions for IPR, all of which were instituted and assigned to the same panel of Administrative Patent Judges. After institution, Zipit filed responses to two of the IPRs, but not the other four companion IPRs. The Board held a hearing in the two IPRs for which Zipit filed responses. At the end of the hearing, Zipit’s counsel was asked with reference to the four companion IPRs whether Zipit was “not contesting if a final written decision or adverse judgment was entered with respect to those IPRs.” The counsel responded, “correct . . . if the board determines that [Apple has] met their burden of proof with respect to those claims Zipit hasn’t filed any opposition.” Based on this exchange, the Board determined that Zipit abandoned the contests and entered adverse judgments.

The PTO Director initiated review under the interim process for Director review §§ 13, 22, which allows sua sponte Director review, explaining that notice would be given to parties of the proceedings if such a review was initiated. Upon review, the PTO Director did not consider the counsel’s statements to be an “unequivocal abandonment of the contest of these proceedings.” In an IPR, a petitioner has the “burden of proving a proposition of unpatentability by a preponderance of the evidence” and the “burden from the onset to show with particularity why the patent it challenges is unpatentable.” The PTO Director’s interpretation of Zipit’s statements was that “non-opposition was contingent on the Board determining that [Apple] met its burden of proving by a preponderance of the evidence that the challenged claims are unpatentable.”

The PTO Director thus vacated the Board’s adverse judgments and remanded the proceedings to the panel to issue either an order clarifying whether Zipit indeed abandoned the contest or a final written decision addressing the patentability of the challenged claims.

Calling All US IP Owners: Submit Your Comments on IP-Lax States

by Thomas DaMario | Jan 5, 2023 | Uncategorized

The Office of the US Trade Representative (USTR) seeks public commentary regarding countries that deny adequate and effective protection of intellectual property rights, or deny fair and equitable market access to US persons that rely on intellectual property protections. Comments are due by January 30, 2023.

Each year the USTR requests that intellectual property owners, stakeholders and other interested parties submit commentary regarding countries that weaken protections and benefits associated with intellectual property ownership and registration in the United States. The USTR interprets the feedback and compiles an annual report.

The USTR’s authority for such action arises out of Sections 301-305 of the Trade Act (19 U.S.C. §§ 2411-2415). These “Special 301 Provisions” require the USTR to determine which, if any, of the countries submitted by commenters should be identified as Priority Foreign Countries. In furtherance of this goal, the USTR maintains a Priority Watch List and a Watch List. The Special 301 listings and actions announced in the annual report are the result of intensive deliberations among all relevant agencies within the US government, which in turn are informed by extensive consultations with participating stakeholders, foreign governments, the US Congress and other interested parties.

The 2022 report identified a wide range of concerns, including the following:

Challenges with border and criminal enforcement against counterfeits, including in the online environment
High levels of online and broadcast piracy, including through illicit streaming devices
Inadequacies in trade secret protection and enforcement in China, Russia and other countries
Troubling “indigenous innovation” and forced technology transfer policies that may unfairly disadvantage US right holders in markets abroad
Other ongoing, systemic issues regarding intellectual property protection and enforcement, as well as market access, with many trading partners around the world.

The 2022 report listed the following countries on the Priority Watch List: Argentina, Chile, China, India, Indonesia, Russia and Venezuela. The report listed the following countries on the Watch List: Algeria, Barbados, Bolivia, Brazil, Canada, Colombia, Dominican Republic, Ecuador, Egypt, Guatemala, Mexico, Pakistan, Paraguay, Peru, Thailand, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan and Vietnam.

The USTR is soliciting comments for this year’s report via the online Federal eRulemaking Portal in lieu of an in-person hearing. Commenters are encouraged to include detailed information, including the following:

Specific references to laws, regulations and policy statements, including innovation policies; executive, presidential or other orders; and administrative, court or other determinations that should factor into the review
Particular regions, provinces, states or other subdivisions of a country in which an act, policy or practice is believed to warrant special attention
Data, loss estimates and other information regarding the economic impact on the United States, US industry and US workforce caused by the denial of adequate and effective intellectual property protection.

Commentators should act now, as the window to submit public commentary ends on January 30, 2023. Keep an eye out for the 2023 report, which is scheduled for release on or around April 18, 2023.

PTO Update: COVID-19 Prioritized Examination Extended, Non-DOCX Filing Fee Deferred and More

by Amol Parikh | Jan 5, 2023 | Patents

On December 22, 2022, the US Patent & Trademark Office (PTO) announced the fifth extension of the Modified COVID-19 Prioritized Examination Pilot Program. The pilot program had been set to terminate on December 31, 2022, and is now extended to February 15, 2023. The program was implemented to support the acceleration of innovations in the fight against COVID-19. Under the pilot program, an applicant may request prioritized examination without payment of the prioritized examination fee and associated processing fee if the following criteria are met:

The patent application’s claim(s) cover a product or process related to COVID-19.
The product or process is subject to an applicable US Food & Drug Administration approval for COVID-19 use.
The applicant meets other requirements noted in the COVID-19 Track One Notice.

For more information, see the Federal Register notice.

The PTO also announced on December 29, 2022, that the new fee for filing nonprovisional utility patent applications that do not conform to the PTO requirements for submission in DOCX format will be deferred to the new effective date of April 3, 2023. The fee was originally scheduled to become effective on January 1, 2023. For more information, see the Federal Register notice.

The PTO and the US Copyright Office announced on December 23, 2022, that the deadline for submitting written comments on intellectual property considerations related to non-fungible tokens (NFTs) has been extended from January 9, 2023, to February 3, 2023. The dates for the public roundtables directed to patents, trademarks and copyrights, respectively, also have changed as follows:

The first roundtable, Trademarks and NFTs, is now set for January 24, 2023 (originally scheduled for January 12, 2023).
The second roundtable, Patents and NFTs, has been moved to January 26, 2023 (originally scheduled for January 10, 2023).
The third roundtable, Copyrights and NFTs, has been moved to January 31, 2023.

The roundtables will be livestreamed, and the PTO and Copyright Office will post instructions for the public to register to view them live. Click here for more information about the topics that will be discussed. For more information about the schedule change, see the Federal Register notice.

The PTO also announced that small entity filing fee discounts are increased from 50% to 60% and micro entity filing fee discounts are increased from 75% to 80%. The discount increases went into effect on December 29, 2022, when US President Joe Biden signed into law the Consolidated Appropriations Act, 2023, which included the Unleashing American Innovators Act of 2022. The new PTO fee schedule can be found here.

Challenging Inventorship on Summary Judgment? Put a Cap on It

by Benjamin Ediger, Ph.D. | Jan 5, 2023 | Patents

The US Court of Appeals for the Federal Circuit, citing a dispute as to material facts, held that a factfinder could reasonably conclude that an alleged joint inventor failed to sufficiently contribute to inventing the claimed technologies and thus reversed a district court order granting summary judgment of invalidity based on failure to join an inventor. Plastipak Packaging, Inc. v. Premium Waters, Inc., Case No. 21-2244 (Fed. Cir. Dec. 19, 2022) (Newman, Stoll, Stark, JJ.)

Plastipak sued Premium Waters, asserting 12 patents directed in part to the neck portions of lightweight plastic containers and preforms. These neck portions include a dispensing opening, a tamper-evident formation (TEF) that indicates if the container has been opened and a support flange/ring to facilitate manufacturing handling:

The patents list Richard Darr and Edward Morgan as inventors. Premium Waters countered that the patents should have included a third co-inventor, Alessandro Falzoni, an employee of another company with whom Darr and Morgan had collaborated on a project involving a design that included a neck portion, a specialty closure and a discontinuous TEF. Premium Waters moved for summary judgment of invalidity on the theory that the failure to include Falzoni as a joint inventor rendered the patent invalid, contending that Falzoni contributed the following to the invention:

A discontinuous (as opposed to continuous) TEF that is claimed by five of the asserted patents
A neck portion with only 0.580 inches or less separating its dispensing opening from its support flange/ring’s lower surface (the X dimension, as shown in the diagram above) that is claimed by the other asserted patents.

Plastipak contended that the asserted inventors were the sole inventors and that discontinuous TEFs (Falzoni’s alleged contribution) were merely state-of-the-art.

In granting the motion for summary judgment, the district court observed that Falzoni was “at least” a joint inventor because he had disclosed to one of the named inventors a neck finish measuring less than 0.580 inches with a discontinuous TEF in the form of an image of a 3D model that “constituted clear and convincing evidence of Falzoni’s disclosure, leaving ‘no doubt’ that the image ‘contributed significantly to the conception of a complete neck finish.’”

That model’s support ring lacked a lower surface, however, and Plastipak argued that without a lower surface the 3D model’s X dimension was undeterminable.

Plastipak also argued that Falzoni’s email circulating the 3D model stated that “[t]he area below the neck support ring has been left undefined” and seemingly invited the named inventor (Darr) to finalize it. Darr did so and, on the same day, emailed Falzoni a schematic depicting a support ring with a lower surface and a 0.591-inch X dimension.

Falzoni testified that while he calculated that the model had a ~0.563-inch X dimension, that calculation was based on “a reasonable indication” of where the support ring’s lower surface should be, and that the absence of an [...]

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Litigation Funding Probe Continues to Make Waves

by Amol Parikh | Jan 5, 2023 | Patents

On remand from a decision allowing the US District Court for the District of Delaware to continue its probe into who was funding a patent owner’s infringement litigation, the district court denied the patent owner’s motion to withdraw the court’s memorandum explaining why records sought in its prior order were relevant to addressing several concerns. The district court also issued an order to show cause as to why the patent owner should not be sanctioned for failing to produce the records that the court sought. Nimitz Techs. LLC v. Bloomberg L.P., Case No. 22-413-CFC, ECF Nos. 27-28 (D. Del. Dec. 14, 2022) (Connolly, J.)

Nimitz filed a mandamus petition seeking to reverse a district court order that sought litigation funding records from Nimitz. While the mandamus petition was pending, the district court issued a memorandum explaining the relevancy of the records it sought. On December 8, 2022, the US Court of Appeals for the Federal Circuit issued its decision denying Nimitz’s mandamus petition.

On the same day that the Federal Circuit’s decision issued, Nimitz filed a motion in the district court asking the court to withdraw its memorandum. Less than a week later, the court issued an order summarily denying the motion but addressing two matters raised in the motion because those matters had been raised in related actions.

In its motion, Nimitz argued that the court’s disclosure order did not cover limited liability companies because the order referred to “limited liability corporations.” The court rejected the argument, explaining that courts—including the Supreme Court of the United States, the Delaware Supreme Court, the Delaware Court of Chancery and the last four chief judges of the district court itself—routinely refer to limited liability companies as “limited liability corporations.”

Nimitz also sought the judge’s recusal, arguing that the district court had already publicly adjudged Nimitz and its counsel guilty of fraud and unethical conduct. The court rejected Nimitz’s argument, noting that the judge previously stated that the memorandum purposefully did not repeat his concerns “about counsel’s professionalism and potential role in the abuse of the Court because I have made no definitive conclusions about those issues, and I did not want to unnecessarily embarrass counsel.” The court, therefore, denied the motion.

The district court separately issued an order to show cause why Nimitz should not be sanctioned for failing to produce the litigation funding documents sought by the court. The court noted that the Federal Circuit denied the mandamus petition on December 8, and as of December 14, Nimitz had not produced any documents or asked for an extension of time to produce documents. Nimitz filed a response on December 21 arguing that the district court proceeding remained stayed until the Federal Circuit issued a mandate. Nimitz also argued that it is seeking further appellate review of the district court’s order and cannot produce the requested documents because it would moot the further appeal.

Burdens Can’t Be Avoided No Matter How They’re Dressed Up

by Mike Baldwin | Jan 5, 2023 | Patents

Addressing a multitude of issues, the US Court of Appeals for the Federal Circuit affirmed the district court’s ruling dismissing infringement of one patent and finding a trade dress invalid but reversed the invalidation of the other patent and vacated dismissal of an inequitable conduct defense. Mosaic Brands, Inc. v. Ridge Wallet LLC, Case Nos. 22-1001, -1002 (Fed. Cir. Dec. 20, 2022) (Newman, Prost, Stark, JJ.)

Mosaic Brands sued Ridge Wallet alleging infringement of a patent relating to a combination money clip and card holder adapted to retain paper currency and to removably store flexible cards such as credit cards, as well as Mosaic’s associated trade dress. Ridge denied the allegations and counterclaimed that Mosaic infringed a Ridge patent directed to a nearly identical wallet. In response to the counterclaim, Mosaic raised inequitable conduct as an affirmative defense.

During claim construction, the district court construed the terms “lip” and “varying thickness” in Mosaic’s patent. Following claim construction, the parties stipulated to noninfringement of Mosaic’s patent. The district court also found the trade dress of Mosaic’s wallet to be functional and thus invalid. As to Ridge’s patent, the district court granted summary judgment of invalidity based on a prior art product sold by Mosaic, and further denied summary judgment that Ridge had obtained its patent through inequitable conduct. Mosaic filed a motion for reconsideration regarding the inequitable conduct defense and to clarify remaining merits issues. The district court exercised its discretion to address the defense and identify deficiencies. The district court noted that Mosaic had only met a portion of its burden and later proceedings would present an opportunity to present more evidence of inequitable conduct. Both parties appealed.

The Federal Circuit first addressed a potential issue of appellate jurisdiction since the assertion of inequitable conduct was an affirmative defense and not a counterclaim yielding a final judgment to review. The Court found it had jurisdiction because the inequitable conduct defense merged and became final when the judgment denying summary judgment for inequitable conduct was entered.

Turning to the merits, the Federal Circuit addressed the two claim terms appealed by Mosaic. Mosaic argued that the district court’s interpretation of “lip” was too narrow because it required the lip to be made of “extruded plastic.” The Court quickly dispatched this argument by citing the specification of Mosaic’s patent, which described the lip as being made of extrudable plastic and extolled the benefits of such material. The Court focused on the context of how the patent used the phrase “the present invention” and found it to be limiting. As to the other claim term (“varying thickness”), Mosaic advocated for a plain and ordinary meaning of the term. The Court rejected Mosaic’s argument, finding that Mosaic failed to provide intrinsic evidence or meaningful explanation of how the district court’s construction differed from the plain and ordinary meaning. As such, the Court found that the district court made no error in either construction.

Turning to the appeal of Ridge’s patent, the Federal Circuit found that [...]

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ANDA Filing Alone Insufficient for Induced Infringement of Method Patent

by Tessa Kroll | Jan 5, 2023 | Patents

The US Court of Appeals for the Federal Circuit upheld a district court’s findings of invalidity and noninfringement in a Hatch-Waxman case involving two sets of method patents directed to modulating dosages of pirfenidone, a drug used to treat idiopathic pulmonary fibrosis (IPF). The Court found that the first set of patents were obvious over the prior art and standard medical practice, while the second set were not directly infringed in light of actual physician prescription practice. Genentech, Inc. v. Sandoz Inc., Case No. 22-1595 (Fed. Cir. Dec. 22, 2022) (Newman, Lourie, Prost, JJ.) (Newman, J., dissenting).

Sandoz submitted two abbreviated new drug applications (ANDAs) for approval to market a generic version of pirfenidone, which Genentech sells under the brand name Esbriet®. Genentech sued Sandoz under the Hatch-Waxman Act, asserting that Sandoz’s generic version would induce infringement of two sets of patents: one directed to modifying dosages of pirfenidone in patients with abnormal liver biomarkers (LFT patents), and the other directed to avoiding adverse interactions in patients also taking fluvoxamine (DDI patents).

The LFT patents are directed to methods of administering pirfenidone to a patient who has exhibited Grade 2 abnormalities in liver function biomarkers alanine transaminase (ALT) and/or aspartate transaminase (AST) in response to pirfenidone. The LFT patents generally recite the following administration options:

Temporarily reducing the dose before returning to the full dose
Maintaining the full dose
Reducing the dose
Temporarily discontinuing pirfenidone before returning to the full dose
Temporarily discontinuing pirfenidone before returning to a reduced dose.

Sandoz’s proposed label included a “Dosage Modification due to Elevated Liver Enzymes” section, which stated that if a patient exhibits grade 2 elevations of ALT and/or AST, “[t]he full daily dosage may be maintained, if clinically appropriate, or reduced or interrupted (e.g., until liver chemistry tests are within normal limits) with subsequent re-titration to the full dosage as tolerated.” Genentech argued that these instructions constituted induced infringement of the LFT patents. The district court disagreed and held that the LFT patents were obvious over the prior art and standard medical practice and that the defendant would not induce infringement because the labels “merely described” the infringing uses but did not recommend them.

The DDI patents are directed to methods for avoiding adverse interactions between pirfenidone and fluvoxamine and generally involve the steps of discontinuing fluvoxamine or modifying the dose of pirfenidone and continuing fluvoxamine. Sandoz’s proposed label warned of the adverse interactions between pirfenidone and fluvoxamine and stated that fluvoxamine should be discontinued prior to administering pirfenidone or the dose of pirfenidone should be reduced. Genentech similarly argued that these instructions constituted induced infringement of its DDI patents, but the district court held that there was insufficient evidence for infringement because Genentech had not shown that a patient would actually be prescribed both pirfenidone and fluvoxamine in practice.

Genentech appealed the district court’s holdings with respect to both the LFT and DDI patents.

LFT Patents

The Federal Circuit first observed that “varying doses in response to the occurrence [...]

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Tag, You’re It: Sanctions Award Must Reflect Violative Conduct

by Lillian Spetrino | Dec 22, 2022 | Patents

The US Court of Appeals for the Federal Circuit determined that an accused infringer was entitled to a new trial relating to validity issues but still faced sanctions for its continuous disregard of its discovery obligations. ADASA Inc. v. Avery Dennison Corp., Case No. 22-1092 (Fed. Cir. Dec. 16, 2022) (Moore, Hughes, Stark, JJ.)

ADASA owns a patent relating to methods and systems for commissioning radio-frequency identification (RFID) transponders. ADASA sued Avery Dennison for patent infringement, alleging that its manufacture and sale of certain RFID tags infringed ADASA’s patent. Both parties sought summary judgment following discovery. Avery Dennison asserted that the patent was ineligible for patent protection under 35 U.S.C. § 101, and ADASA argued that the asserted claims were not anticipated or obvious based on the book RFID for Dummies. The district court granted ADASA’s motion on validity and denied Avery Dennison’s motion for patent ineligibility. Prior to trial, ADASA moved in limine to exclude Avery Dennison’s damages expert’s testimony related to certain licenses, and the district court granted the motion.

At trial, ADASA entered licenses into evidence as part of its damages case and alleged that they reflected lump-sum agreements to practice the asserted patent. The district court declined to include a jury instruction on lump-sum damages and a lump-sum option on the verdict form, observing that Avery Dennison’s expert had not offered a lump-sum damages opinion and concluding that the licenses alone were insufficient for the jury to award lump-sum damages. The jury returned an infringement verdict and awarded ADASA a running royalty of $0.0045 per infringing RFID tag, which resulted in an award of $26.6 million.

In its post-trial motions, Avery Dennison moved for a new trial, arguing it was reversible error for the district court to exclude its damages expert’s testimony and to decline to provide a jury instruction for a lump-sum damages award. Before the district court ruled on its motion, Avery Dennison revealed to ADASA that it had discovered additional previously undisclosed RFID tags in its databases. A subsequent investigation determined that the number of undisclosed tags was more than two billion. Avery Dennison agreed to pay an additional $9.5 million in damages, which corresponded to the royalty rate determined by the jury. ADASA subsequently moved for sanctions. The district court award $20 million in sanctions after finding that Avery Dennison had engaged in protracted discovery failures and a continuous disregard for the seriousness of the litigation and its expected obligations. The sanctions award corresponded to a $0.0025 per-tag rate applied to both the adjudicated and late-disclosed tags. Avery Dennison appealed.

Avery Dennison challenged the district court’s summary judgment rulings, its denial of a new trial and its imposition of sanctions. The Federal Circuit affirmed the district court’s patent eligibility determination, finding that the patent “is directed to a specific, hardware-based RFID serial number data structure designed to enable technological improvements to the commissioning process,” which “is not a mere mental process,” and concluded that the claim was directed to patent-eligible subject matter.

[...]

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