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Message to Judge Albright: Venue Motions Are First Order of Business

by | Nov 17, 2022 |

The US Court of Appeals for the Federal Circuit vacated a scheduling order from the US District Court for the Western District of Texas and directed the court to postpone fact discovery and other substantive proceedings until it considered a motion for transfer. In re: Apple Inc., Case No. 22-162 (Fed. Cir. Nov. 8, 2022) (Reyna, J.) The Federal Circuit ordered that Apple’s motion to transfer must proceed expeditiously as the first order of business, precluding fact discovery and other substantive matters. The Court has repeatedly scolded Judge Albright for his refusal to transfer patent cases out of the Western District of Texas.

Aire Technology sued Apple for patent infringement in October 2021. In April 2022, Apple moved to transfer the action to the US District Court for the Northern District of California, pursuant to 28 U.S.C. § 1404(a). During venue discovery, Apple submitted declarations by its employees, offered to make the declarants available for deposition, and stated non-opposition to a “reasonable continuance” of the transfer proceedings. Judge Albright granted Apple’s motion but sua sponte ordered the parties to complete fact discovery (which the court extended by 30 weeks) followed by another six weeks of rebriefing before he would rule on Apple’s request to transfer. Apple filed a petition for mandamus with the Federal Circuit seeking an order to vacate the district court’s scheduling order and promptly rule on the transfer motion, staying all proceedings on the merits until the transfer was resolved.

Apple argued that the district court abused its discretion in ordering the parties to complete 30 more weeks of fact discovery and six weeks of rebriefing the issue to decide on Apple’s transfer request. Apple noted that by the time the district court considered Apple’s motion, a full year would have elapsed since Apple initially sought the transfer, fact discovery would be completed, the parties’ infringement and invalidity contentions would be served, the asserted claims and prior art references would be narrowed, and the parties would have exchanged preliminary trial exhibits and witness lists.

The Federal Circuit agreed with Apple that the district court’s scheduling order went too far. The Court stated that “it is a clear abuse of discretion to require the parties to expend additional party and court resources litigating the substantive matters of the case while Apple’s motion to transfer unnecessarily lingers on the docket.” The Court noted that Aire consented to resolving Apple’s transfer motion at any time, provided that no stay interfered with discovery, claim construction proceedings or preparation of the case for trial.

The Federal Circuit disagreed with the district court’s view that delaying the decision until after full fact discovery and rebriefing could reduce “speculation” and “allow the parties to provide the court with the best evidence for ruling on a motion to transfer.” The Court stated that discovery on the transfer motion itself was sufficient to allow a decision of that motion, especially because the parties agreed that further venue discovery was unnecessary. The Federal Circuit ordered the district [...]

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Another Kind of Term Limit: Delay Resulting from After-Allowance Amendments Deducted from PTA

by | Nov 17, 2022 |

The US Court of Appeals for the Federal Circuit affirmed the US Patent & Trademark Office’s (PTO) decision on a patent term adjustment (PTA), finding that it was appropriate to deduct days from a patent term when the applicant files an amendment after notice of allowance and could have completed prosecution earlier by withdrawing the amendment or abstaining from filing it in first instance. Eurica Califorrniaa v. Vidal, Case No. 22-1640 (Fed. Cir. Nov. 7, 2022) (Lourie, Dyk, Hughes, JJ.) (per curiam) (non-precedential).

Eurica Califorrniaa is the sole inventor of a patent application entitled “nondestructive means of ectopic pregnancy management,” which was filed on March 15, 2014. Near the close of an extended patent prosecution, the examiner identified minor additional changes to the claim language of the patent application that would place it in position for allowance. The examiner unilaterally made the amendments and provided Califorrniaa a notice of allowance. In response, Califorrniaa requested an interview with the examiner and provided a list of further proposed amendments that included changes to the examiner’s amended claim limitations as well as substantive changes unrelated to the Examiner’s Amendments. Following the interview, Califorrniaa formally submitted his proposed amendments for the examiner’s consideration. As a result, the PTO deducted 51 days from the adjusted patent term of the patent to account for the time it took the examiner to consider and accept Califorrniaa’s post-allowance amendments. Califorrniaa appealed the PTO’s calculations, first to the district court (which affirmed the PTO) and then to the Federal Circuit.

The PTO may extend the nominal 20-years-from-filing patent terms to account for each day of delay attributable to the PTO, minus the number of days of delay attributable to an applicant’s failure to engage in reasonable efforts to conclude prosecution. Congress has granted the PTO authority to define when this “reasonable efforts” standard is not met, and the PTO has created regulations to address the issue. In 2019, the Federal Circuit issued its decision in Supernus v. Iancu, finding that the PTO failed to properly consider whether the applicant reasonably engaged in efforts to conclude prosecution. In response, the PTO adjusted its regulations to distinguish between post-allowance amendments expressly requested by the PTO and those voluntarily made by the applicant, and to change the relevant timeframe for the calculation of a reduction in PTA. The PTO’s regulations state, in part, that an applicant’s decision to amend their patent application after the examiner has issued a notice of allowance is not a reasonable effort to conclude prosecution.

Unlike its ruling in Supernus, where no identifiable effort to conclude prosecution existed, here the Federal Circuit agreed with the PTO’s finding that Califorrniaa could have, at any time, withdrawn his post-allowance amendments and accepted the examiner’s amendments to conclude prosecution. As such, an “identifiable effort” existed by which Califorrniaa could have avoided additional delay and concluded prosecution. Therefore, the Court affirmed the 51-day deduction of the patent term.

The Federal Circuit also found that the PTO’s post-Supernus updates to [...]

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Up in Smoke: TTAB Dismisses E-Cigarette Opposition, Provides Guidance for Effective Evidence and Testimony

by | Nov 10, 2022 |

In a precedential opinion, the Trademark Trial & Appeal Board (Board) dismissed an opposition filed against an application for registration of a logo mark containing the word “SMOKES,” finding no likelihood of confusion with the opposer’s registered mark SMOK. The Board cited the dissimilarity of the marks and the weakness of the common mark element SMOK, as well as a lack of evidence that the parties’ trade channels overlapped. Shenzhen IVPS Technology Co. Ltd. v. Fancy Pants Products, LLC, Opp. No. 91263919 (Oct. 31, 2022) (precedential) (Goodman, Pologeorgis, English, ATJ). The decision was rendered without a brief, testimony or evidence filed by the trademark applicant.

Fancy Pants Products filed an application to register a logo mark (depicted above) that included the stylized word “SMOKES.” The application record disclaimed “smokes,” meaning that Fancy Pants conceded that the word “smokes” was not inherently distinctive for its applied-for goods: “[c]igarettes containing tobacco substitutes … with a delta-9 THC concentration of not more than 0.3% on a dry weight basis,” i.e., a description for hemp-derived products eligible for federal registration in accordance with the 2018 Farm Bill. Shenzhen IVPS Technology opposed registration of Fancy Pants’ mark on the ground of likelihood of confusion with Shenzhen’s alleged rights in the trademark SMOK. In support of the opposition, Shenzhen pleaded ownership of 11 registered SMOK and SMOK-variant marks for electronic cigarettes, parts and components (among other goods) and related retail services.

Fancy Pants did not take testimony or introduce any evidence during its testimony period, nor did it file a brief. The Board noted, however, that Fancy Pants was not required to make these submissions because Shenzhen bore the burden of proving its entitlement to a statutory cause of action and its trademark “likelihood of confusion” claim by a preponderance of the evidence.

The Board first looked at what trademark rights Shenzhen could properly rely on in the opposition proceeding in view of the rights pleaded. As a result of Shenzhen’s errors in the presentation of its trademark registrations into the record with respect to verifying the current status and title of the registrations, the Board found that 10 of Shenzhen’s 11 pleaded trademark registrations were not properly made of record. Nevertheless, Shenzhen was allowed to rely on common law rights for these 10 SMOK-variant trademarks since Fancy Pants failed to object to Shenzhen’s evidence of common law use.

Having determined the scope of the trademark rights at issue, the Board turned to the issue of priority in Shenzhen’s alleged trademarks. Priority over Fancy Pants’ mark was not at issue with respect to Shenzhen’s one properly pleaded §2(f) trademark registration for the SMOK mark that was made of record (and the goods and services covered thereby). As to Shenzhen’s common law rights in its alleged family of the other 10 SMOK-variant marks, the Board explained that Shenzhen first had to establish that it even owned a “family” of marks—i.e., marks that share a “recognizable common characteristic” [...]

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Family Matters, but Only Sometimes if Claim Construction Is Involved

by | Nov 10, 2022 |

The US Court of Appeals for the Federal Circuit reversed a district court’s claim construction, explaining that the use of a restrictive term in a definition in an earlier application does not reinstate that term in a later patent that purposely deletes the term, even if the earlier patent is incorporated by reference. Finjan LLC v. ESET, LLC, Case No. 21-2093 (Fed. Cir. Nov. 1, 2022) (Prost, Reyna, Taranto, JJ.)

Finjan filed a lawsuit against ESET for infringement of five patents directed to systems and methods for detecting computer viruses in a “downloadable” through a security profile. Each of the asserted patents was part of the same family, and each claimed priority to the same provisional application. The term “downloadable” appeared in the claims of all the asserted patents but was defined slightly differently in the various patents in the family. The original provisional application defined “downloadable” as “an executable application program which is automatically downloaded from a source computer and run on the destination computer.” Two of the non-asserted patents in the family defined “downloadable” as “applets” and as “a small executable or interpretable application program which is downloaded from a source computer and run on a destination computer.” Two of the asserted patents defined “downloadable” as “an executable application program, which is downloaded from a source computer and run on the destination computer.” The two asserted patents incorporated by reference one of the non-asserted patents. The other three asserted patents did not include a definition of “downloadable,” but they incorporated by reference one of the asserted patents and one of the non-asserted patents that defined “downloadable.”

The district court construed the term “downloadable” as used in the asserted patents to mean “a small executable or interpretable application program which is downloaded from a source computer and run on a destination computer.” The district court based its construction on the incorporation by reference of one of the non-asserted patents, reasoning that although the patent family contained “somewhat differing definitions,” these definitions “can be reconciled.” In particular, the district court found that based on the definitions and examples included throughout the various patents in the family tree, the term “downloadable” in the asserted patents should be construed to include the word “small” as defined in the non-asserted patent. ESET moved for summary judgment of invalidity due to indefiniteness based on the word “small” as used in the adopted construction of “downloadable.” The district court granted the motion. Finjan appealed.

The Federal Circuit began by reciting the well-known maxim that claims must be read in light of the specification, which includes any patents incorporated by reference since those patents are “effectively part of the host patents as if they were explicitly contained therein.” However, the Court explained that “incorporation by reference does not convert the invention of the incorporated patent into the invention of the host patent.” Instead, the disclosure of the host patent provides context to determine what impact, if any, the patent incorporated by reference will have on the [...]

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Supreme Court to Consider Whether Lanham Act Reaches Foreign Defendants’ Extraterritorial Conduct

by | Nov 10, 2022 | ,

The Supreme Court of the United States agreed to review the geographic scope of the Lanham Act and the extent to which trademark owners can use US trademarks to police foreign sales. Abitron Austria GmbH et al. v. Hetronic International Inc., Case No. 21-1043 (Supr. Ct. Nov. 4, 2022) (certiorari granted). The question presented is as follows:

Whether the court of appeals erred in applying the Lanham Act extraterritorially to petitioners’ foreign sales, including purely foreign sales that never reached the United States or confused U.S. consumers.

In the underlying case, the US Court of Appeals for the Tenth Circuit upheld a damages award for Hetronic International based on its conclusion that the Lanham Act can affect conduct that substantially affects US commerce, such as the products Hetronic Germany and others sold to European customers.

The US Solicitor General suggested that the case is “a suitable vehicle” to clarify the Lanham Act’s geographic scope, noting that the Lanham Act provides a remedy for a foreign defendant’s use of a US trademark abroad only if that use is likely to cause confusion within the United States.



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Supreme Court to Consider Enablement Requirement

by | Nov 10, 2022 | ,

The Supreme Court of the United States agreed to consider how much a patent must disclose in order to meet the enablement requirement under 35 U.S.C. § 112. Amgen Inc., et al. v. Sanofi, et al., Case No. 21-757 (Supr. Ct. Nov. 4, 2022) (certiorari granted). The question presented is as follows:

Whether enablement is governed by the statutory requirement that the specification teach those skilled in the art to “make and use” the claimed invention, 35 U.S.C. § 112, or whether it must instead enable those skilled in the art “to reach the full scope of claimed embodiments” without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments of the invention without substantial time and effort.

Amgen owns two patents that describe antibodies that bind to PCSK9 protein and lower LDL cholesterol levels by blocking PCSK9 from binding to LDL receptors. After a jury determined that Sanofi failed to prove that the asserted claims were invalid for lack of enablement, the district court granted Sanofi’s post-trial motion for invalidity based on lack of enablement. The US Court of Appeals for the Federal Circuit affirmed, finding that the scope of the claims encompassed millions of antibodies and that the patent thus did not meet the enablement requirement because practicing the full scope of the claims would require “undue experimentation.”

The Supreme Court declined to consider the first question presented in Amgen’s petition: whether enablement should be a question of law (under current Federal Circuit precedent) or be designated a question of fact to be decided by a jury. In granting certiorari, the Supreme Court proceeded contrary to the recommendation of the US Solicitor General.



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Don’t Stand for It—Collateral Estoppel and Standing

by | Nov 10, 2022 |

In a series of related cases, the US Court of Appeals for the Federal Circuit affirmed two decisions from the US District Court for the District of Delaware regarding collateral estoppel on standing issues and reversed a decision from the US District Court for the Northern District of California regarding the effect of license termination on standing. Uniloc 2017 LLC v. Google LLC, Case No. 21-1498 (Fed. Cir. Nov. 4, 2022) (Lourie, Dyk, Hughes, JJ.); Uniloc USA, Inc. v. Motorola Mobility LLC, Case No. 21-1555 & Uniloc LLC v. Blackboard Inc., Case No. 21-1795 (Fed. Cir. Nov. 4, 2022) (Lourie, Dyk, Hughes, JJ.)

These actions arose out of a series of patent suits filed by various Uniloc entities against tech companies in the Eastern District of Texas, the Western District of Texas and the District of Delaware involving several different patents. The Eastern District of Texas case against Google was transferred to the Northern District of California, and the Western District of Texas case against Blackboard was transferred to the District of Delaware. All three cases were dismissed for lack of standing due to a prior license agreement.

In 2014, a Uniloc entity entered into a Revenue Sharing and Note and Warrant Purchase Agreement with Fortress regarding a loan Fortress made to Uniloc. Under the terms of this agreement, if Uniloc defaulted, Fortress would receive a royalty-free license with the ability to sublicense. Uniloc defaulted in March 2017. In May 2018, Uniloc and Fortress entered into a Payoff and Termination Agreement, which explicitly terminated the patent licenses.

Uniloc sued several companies, including Motorola, Blackboard and Apple, in the period between the default and the Termination Agreement. In the Apple case, the district court found Uniloc lacked standing because it had granted a royalty-free license with the ability to sublicense to Fortress. The cases involving Motorola and Blackboard were subsequently dismissed for lack of standing. Uniloc appealed the decision in the Apple case but later settled with Apple. The settlement did not address vacatur of the district court decision. When Uniloc appealed the Motorola and Blackboard decisions, Motorola and Blackboard raised collateral estoppel. Given the virtually identical factual circumstances, the Federal Circuit held that collateral estoppel applied and that Uniloc could not relitigate the standing issues.

Unlike the cases involving Motorola and Blackboard, Uniloc filed the action against Google after it entered into the Termination Agreement with Fortress. At the district court, Google argued that Uniloc lacked standing because the Termination Agreement could not terminate the irrevocable license provision and that as a consequence of the grant under the Termination Agreement Uniloc lacked standing. Applying New York law (as the law governing the contract), the district court held that the Termination Agreement could not terminate the irrevocable license and therefore dismissed the case for lack of standing. The Federal Circuit, reviewing the issue of law de novo, held that “irrevocable” referred to whether Uniloc could unilaterally terminate an agreement, and not to whether the parties could mutually agree to terminate the [...]

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PTO Extends Deadline for Comments on Initiatives to Ensure Patent Robustness, Reliability

by | Nov 3, 2022 |

On November 3, 2022, the US Patent & Trademark Office (PTO) announced that it is extending the deadline for public input on its proposed initiatives aimed at ensuring the robustness and reliability of patent rights from January 3, 2023, to February 1, 2023.

For further details about the extension of the deadline, check out the notice here.



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Ordinary Observer Conducts Product-by-Product Analysis in View of Prior Art

by | Nov 3, 2022 |

In one of two concurrent opinions concerning the same design patent case, the US Court of Appeals for the Federal Circuit vacated a district court’s entry of a preliminary injunction after concluding that the court had failed to properly consider the accused products separately and in view of the prior art when determining the plaintiffs’ likelihood of success. ABC Corp. I v. P’ship & Unincorporated Ass’ns Identified on Schedule “A”, Case No. 22-1071 (Fed. Cir. Oct. 28, 2022) (Dyk, Taranto, Stoll, JJ.)

Hangzhou Chic Intelligent Technology and Unicorn Global (collectively, the plaintiffs) own four patents claiming designs for handle-less, two-wheeled, motorized, stand-on vehicles commonly referred to as “hoverboards.” Urbanmax, GaodeshangUS, Gyroor-US, Fengchi-US, Jiangyou-US, Gyroshoes and HGSM (collectively, the appellants) sell Gyroor-branded hoverboards. In 2020, the plaintiffs sued the appellants for patent infringement and sought a temporary restraining order and a preliminary injunction. As explained here, the district court granted the preliminary injunction in 2020, but thereafter invited the plaintiffs to file a second motion for a preliminary injunction in light of unsuccessful motions by Fengchi-US, Urbanmax and Gyroor-US to dissolve the 2020 preliminary injunction for lack of notice under Fed. R. Civ. P. 65(a). Heeding the court’s advice, the plaintiffs filed a motion for a second preliminary injunction on August 24, 2021.

The primary issue before the district court concerning the 2021 preliminary injunction was whether the plaintiffs had demonstrated a likelihood of success on the merits that the accused products infringed the plaintiffs’ patents in light of certain prior art hoverboards. The prior art included a hoverboard with an hourglass-shaped body, which was a significant feature of the patented designs and the majority of the accused products. Despite the similarities between the prior art board and the claimed designs, the plaintiffs generally disregarded the prior art in their analysis. After comparing the four accused products as a group to the claimed designs, the plaintiffs’ expert opined that the accused products infringed the asserted patents based in large part on their similar hourglass bodies, in addition to other features.

The appellants’ expert countered that “the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that differ from the prior art,” rather than the hourglass shape, and that the additional ornamental features of the accused products were not substantially similar to the claimed designs. While the district court acknowledged that “resolving this expert dispute will likely require a trial,” it nonetheless concluded that the plaintiffs had demonstrated likelihood of success and entered the preliminary injunction order. The appellants filed a notice of appeal.

On appeal, the Federal Circuit concluded that the lower court had erred in four material respects:

  • Applying the wrong legal standard
  • Failing to conduct the ordinary observer analysis in view of the prior art
  • Failing to apply the ordinary observer analysis on a product-by-product basis
  • Crafting an overbroad injunction.

First, the Federal Circuit took issue with the district court’s entry of a preliminary injunction despite its [...]

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Heads Up: Defendants Deserve Fair Notice of Preliminary Injunctions

by | Nov 3, 2022 |

In one of two concurrent opinions concerning the same design patent case, the US Court of Appeals for the Federal Circuit vacated a district court’s grant of a preliminary injunction and an order extending the preliminary injunction to new defendants for lack of notice under Rule 65(a). ABC Corp. I v. P’ship & Unincorporated Ass’ns Identified on Schedule “A”, Case No. 21-2150 (Fed. Cir. Oct. 28, 2022) (Taranto, Dyk, Stoll, JJ.)

On August 17, 2020, ABC Corporation I and ABC Corporation II (collectively, ABC) brought a design patent infringement action asserting four “hoverboard” design patents against several online merchants. The ABC patents claim designs for handle-less, two-wheeled, motorized, stand-on vehicles commonly referred to as hoverboards. Attached to its original and amended complaints, ABC provided a list of defendants in a Schedule A that was amended throughout the proceedings as new defendants were identified. Gyroor-US was an originally named defendant on Schedule A, but it was not served with the complaint and summons until January 29, 2021.

On November 24, 2020, the district court granted ABC’s November 20, 2020, motion for a preliminary injunction against the defendants then listed on Schedule A, including Gyroor-US, which had not yet been served and was not given notice of the motion under Fed. R. Civ. P. 65(a). On May 24, 2021, the court also granted ABC’s May 6, 2021, motion to amend Schedule A to add GaodeshangUS, Fengchi-US and Urbanmax, binding them to the 2020 preliminary injunction even though they too had not received Rule 65(a) notice and were not served with process until June 25, 2021. GaodeshangUS filed a notice of appeal immediately following the court’s May 24 order. After several unsuccessful motions to vacate the 2020 preliminary injunction for lack of notice, Fengchi-US, Urbanmax and Gyroor-US also filed notices of appeal.

The Federal Circuit first determined that it had jurisdiction to hear the three appeals by GaodeshangUS, Fengchi-US, Urbanmax and Gyroor-US under 28 U.S.C. § 1292(c)(1), which grants the Federal Circuit exclusive jurisdiction of an appeal from an “interlocutory order[] . . . granting, continuing, modifying, refusing or dissolving [an] injunction[], or refusing to dissolve or modify [an] injunction[]” in any case over which the Federal Circuit would have jurisdiction of an appeal under 28 U.S.C. § 1295, such as cases arising under the patent laws. The Court began by considering GaodeshangUS’s May 24, 2021, notice of appeal, which stated that the appeal was from the preliminary injunction “entered in this action on November 24, 2021 [sic],” rather than the May 24, 2021, order. The parties disputed whether GaodeshangUS’s notice of appeal was timely filed within 30 days of the relevant order and whether the May 24 order was appealable as a modification of the 2020 preliminary injunction. The Federal Circuit concluded that GaodeshangUS’s appeal should be interpreted to refer to the May 24 order because it was filed on the same day as the order and “a mistake in designating the judgment appealed from” is not fatal if “the intent to [...]

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