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Federal Circuit Sends iPhone Patent Dispute Back for Third Damages Trial

by Christopher M. Bruno | Feb 17, 2022 | Patents

Considering numerous claim construction, infringement and damages issues related to patents allegedly covering Apple’s iPhones 5 and 6 series technology, a panel of the US Court of Appeals for the Federal Circuit determined that the district court should have held a third trial on damages because the plaintiff’s expert improperly treated the asserted patents as key during his analysis of purportedly comparable license agreements. Apple Inc. v. Wi-Lan Inc., Case No. 20-2011 (Fed. Cir.) (Moore, C.J.; Bryson, Prost, JJ.)

This appeal is the latest iteration of a patent dispute between Apple and Wi-Lan that has lasted eight years and included two trials. The two patents at issue are directed to bandwidth technology that allows a “subscriber unit” rather than the “base station” to allocate bandwidth. At issue in the appeal were numerous challenges from both Apple and Wi-Lan.

The Federal Circuit rejected Apple’s challenge to the district court’s construction of “subscriber unit,” which Apple claimed was limited to “customer premises equipment [CPE]” (e.g., home routers). Although Apple pointed to parts of the specification that suggested that a CPE was a subscriber unit, the Court found that no language met the heavy burden of a clear and unmistakable redefinition of “subscriber unit.” That the sole disclosed embodiment was a CPE did not move the needle, as nothing indicated that the embodiment was limiting.

Next, the Federal Circuit affirmed the jury verdict on liability, finding that substantial evidence supported the jury’s determination that the accused iPhones contained a subscriber unit. The Court found that a jury could conclude from expert testimony that an iPhone allocates bandwidth between two separate connections—voice-over-LTE and data.

Because of the appeal, Apple may now be on the hook for additional infringement liability. The district court had granted Apple summary judgment of noninfringement based on a license agreement between Intel (the maker of Apple’s processor chips in the accused products) and Wi-Lan. According to Apple, this agreement gave Intel a license through patent expiry rather than for the license term. The Federal Circuit rejected that reading of the license between Intel and Wi-Lan, instead finding that the license extended only to pre-termination sales, not in perpetuity as Apple claimed.

Finally, the Federal Circuit found that the district court correctly ordered a new trial on damages after the first trial in the case but erred by not ordering the new trial on damages based on expert testimony admitted at the second damages trial. Regarding the first damages trial, the Court rejected Wi-Lan’s challenge to the district court’s determination that Wi-Lan’s damages expert did not appropriately tie his damages opinion to the benefits of the patented technology. With respect to the second damages trial, the Court found that Wi-Lan’s damages expert gave improper testimony because, without tying his opinion to the facts of the case, he stated that the asserted patents were the “key” drivers of the royalty rates in other license agreements he relied upon—licenses that were to a much larger patent portfolio. Without a sound basis in evidence, [...]

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The PTO Isn’t Playing Around: More Sanctions for Improper Trademark Filings

by Sarah Bro | Feb 17, 2022 | Trademarks

The US Patent & Trademark Office (PTO) continues to uphold its promise to combat fraud and “protect the integrity of the U.S. trademark register” with initiatives to investigate and sanction actions before the PTO that appear to violate the Trademark Rules of Practice or the PTO website terms of use. The latest effort comes in the form of a January 25, 2022, sanctions order signed by the commissioner for trademarks against Abtach, 360 Digital Marketing and Retrocube based on evidence that each of the respondents engaged in an “egregious scheme to deceive and defraud both the PTO and individual applicants in more than 5,500 trademark applications, including engaging in the unauthorized practice of law and intentionally providing false, fictitious, or fraudulent information to the PTO in violation of the PTO’s rules of practice in trademark matters.” According to the sanctions order, the respondents were each given an opportunity to respond to a show cause order issued in November 2021, but the PTO received no responses from the noticed parties.

In the sanctions order, the PTO outlined the activities of the three respondents, which appear to operate as separate entities but are ultimately controlled by Abtach, a Pakistan-based company that is also under investigation by Pakistan’s Federal Investigation Agency for criminal fraud. The PTO’s use of the word “egregious” to describe the respondents’ actions might be an understatement. The sanctions order describes how the respondents set up dozens of websites to hold themselves out as providers of logo designs and low-cost trademark application filing services while forging documents that appear to be issued by the PTO, artificially modifying official PTO documents, threatening customers with legal action if they did not file for registration of their logos through the respondents, intentionally filing applications with errors to delay and increase the cost of the prosecution process, submitting invalid verifications and declarations and demanding payments for unnecessary services or fraudulently inflated fees. The respondents took these actions while failing to employ any US-licensed lawyers to do this work before the PTO.

In determining appropriate sanctions, the PTO considers several factors, including whether the conduct was willful or negligent, whether it was part of a pattern of activity or an isolated event, whether it infected the entire record or was limited to a single submission, whether it was intended to injure a party, what effect it has on the PTO and what is needed to deter similar conduct by others. In this case, the PTO found that the respondents had orchestrated a “widespread, intentional and coordinated effort to defraud both applicants and the USPTO.” Finding the respondents’ activities to be both willful and fraudulent, and to have harmed thousands of applicants while also delaying proceedings in the PTO and “eroding trust in the U.S. trademark registration process,” the PTO ordered termination of all trademark applications and proceedings submitted by the respondents. The PTO will also flag any issued registrations as being subject to a sanctions order. To the extent any victims of the respondents have [...]

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Bargained-Away Rights to File for IPR May Not Be Recovered

by McDermott Will & Emery | Feb 17, 2022 | Patents

In a precedential opinion, the US Court of Appeals for the Federal Circuit reversed a district court’s denial of a plaintiff’s requested injunction seeking to force a patent challenger to abandon its petitions for inter partes review (IPR). Nippon Shinyaku Co. Ltd. v. Sarepta Therapeutics, Inc., Case No. 2021-2369 (Fed. Cir. Feb. 8, 2022) (Newman, Lourie, Stoll, JJ.)

Nippon Shinyaku and Sarepta Therapeutics executed a mutual confidentiality agreement (MCA) to facilitate discussion of “a potential business relationship relating to therapies for the treatment of Duchenne Muscular Dystrophy.” The MCA established a mutual covenant not to sue for “any legal or equitable cause of action, suit or claim or otherwise initiate any litigation or other form of legal or administrative proceeding against the other Party . . . in any jurisdiction in the United States or Japan of or concerning intellectual property in the field of Duchenne Muscular Dystrophy” during a covenant term. The mutual covenant explicitly “include[d], but [wa]s not limited to, patent infringement litigations, declaratory judgment actions, patent validity challenges before the U.S. Patent and Trademark Office or Japanese Patent Office, and reexamination proceedings before the U.S. Patent and Trademark Office” (emphasis added). The MCA also included a forum selection clause to govern post-term intellectual property disputes between the parties, which stipulated:

that all Potential Actions arising under U.S. law relating to patent infringement or invalidity, and filed within two (2) years of the end of the Covenant Term, shall be filed in the United States District Court for the District of Delaware and that neither Party will contest personal jurisdiction or venue in the District of Delaware and that neither Party will seek to transfer the Potential Actions on the ground of forum non conveniens (emphasis added).

“Potential actions” were defined as:

any patent or other intellectual property disputes between [Nippon Shinyaku] and Sarepta, or their Affiliates, other than the EP Oppositions or JP Actions, filed with a court or administrative agency prior to or after the Effective Date in the United States, Europe, Japan or other countries in connection with the Parties’ development and commercialization of therapies for Duchenne Muscular Dystrophy (emphasis added).

The day the covenant term ended, Sarepta filed seven petitions for IPR at the Patent Trial & Appeal Board (Board). Nippon Shinyaku filed suit in the US District Court for the District of Delaware for breach of contract, declaratory judgment of noninfringement and invalidity and patent infringement. Nippon Shinyaku motioned for a preliminary injunction to enjoin Sarepta from proceeding with the IPR petitions and to force Sarepta to withdraw them. The district court denied Nippon Shinyaku under each of the preliminary injunction factors (likelihood of success on the merits, irreparable harm in the absence of extraordinary preliminary relief, balance of harms in its favor and relief being in the public interest).

The district court explained that any irreparable harm arguments fell within Nippon Shinyaku’s contract interpretation arguments, and that Nippon Shinyaku’s balance of hardships and public interest arguments relied on Sarepta’s ability to file [...]

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Federal Circuit Tosses Shaw: IPR Estoppel Applies to All Grounds That Reasonably Could Have Been Raised

by Paul Devinsky | Feb 17, 2022 | Patents

March 2022 Update: The Federal Circuit has issued an errata to this decision. Read about it here.

Addressing inter partes review (IPR) estoppel after the Supreme Court of the United States’ 2018 decision in SAS Institute, Inc. v. Iancu, the US Court of Appeals for the Federal Circuit overruled its decision in Shaw Industries Group v. Automated Creel Systems, stating that the only plausible reading of 35 U.S.C. § 315(e)(2) estops a party from raising all claims and grounds that reasonably could have been included in the party’s petition for IPR. The Court also rejected the district court’s two-tier damages model as contrary to customary patent damages calculations. California Institute of Technology v. Broadcom Limited, Case Nos. 20-2222; 21-1527 (Fed. Cir. Feb. 4, 2022) (Lourie, Linn, Dyk, JJ.) (Dyk, J., dissenting in part).

Background

California Institute of Technology (Caltech) filed suit against Broadcom and Apple, alleging patent infringement directed to the generation and repetition of information in a wireless data transmission system. Wireless transmission systems generally use data repetition so that the transmitted information may be decoded even when data loss occurs. The patented circuitry discloses a form of irregular data repetition in which portions of the information bits may be repeated a varying number of times.

Apple filed multiple IPR petitions challenging the validity of the claims at issue. The Patent Trial & Appeal Board (Board) concluded in all cases that Apple failed to show that the challenged claims were unpatentable as obvious. At the district court, Apple and Broadcom raised new arguments of obviousness not asserted in the IPR proceedings. The district court granted Caltech’s motion for summary judgment of no invalidity, precluding Apple and Broadcom from raising arguments at trial that they reasonably could have raised in their IPR petitions.

At trial, the district court instructed the jury that “repeat” means “generation of additional bits, where generation can include, for example, duplication or reuse of bits.” Apple and Broadcom argued that the Broadcom chips (which were integrated into Apple devices) did not infringe the asserted claims because they did not repeat information at all. With respect to one of the asserted patents, the district court did not provide a jury instruction relating to its construction that the claim language “information bits appear in a variable number of subsets” requires irregular information bit repetition. The jury found infringement of all asserted claims. Apple and Broadcom filed post-trial motions for judgment as a matter of law (JMOL) and a new trial, both of which the district court denied.

The district court adopted Caltech’s proposed two-tier damages theory, explaining that Broadcom and Apple’s products were different and therefore possessed different values simply because they were “different companies at different levels in the supply chain.” The district court ultimately entered judgment against Broadcom for $288 million and against Apple for $885 million. Broadcom and Apple appealed.

The Appeal

Broadcom and Apple argued that the district court’s construction of “repeat” was inconsistent with the claim language and specification. The Federal Circuit [...]

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2022 IP Outlook Report: The Developments Shaping Trademark Law

by Sarah Bro, Eleanor B. Atkins and Joshua Revilla | Feb 15, 2022 | Trademarks

Key Takeaways and Outlook for 2022

While Gen Z taught us all on TikTok how not to be “cheugy,” or out of touch with pop culture, similarly, trademark law in 2021 ushered in new and changed regulations, provided further guidance on traditional legal concepts and gave us a peek into how brands may help shape the future in the “metaverse”—and beyond. Trademarks (like Gen Z), keeping us all hip.

After another year of uncertainty marked by an ongoing pandemic, environmental strains, fights for social justice and a growing understanding of what it means to be truly equitable and inclusive, we expect that brands will continue to serve as cultural beacons, consumer protection tools and drivers of change in 2022. Developments to watch include:

Read the full report.

This .SUCKS: Trademark Applications for Identical Characters Is a No-Go

by Jodi Benassi | Feb 10, 2022 | Trademarks

The US Court of Appeals for the Federal Circuit affirmed a Trademark Trial and Appeal Board (Board) decision affirming the US Patent and Trademark Office’s (PTO) refusal to register two trademark applications for “.SUCKS.” In Re: Vox Populi Registry Ltd., Case No. 21-1496 (Fed. Cir. Feb. 2, 2022) (Lourie, Dyk, Stoll, JJ.)

Vox is a domain registry operator that maintains the master database of all domain names registered in each top-level domain. Vox filed two trademark applications for identical characters, one as a standard character and the other as a stylized form of .SUCKS, as shown below.

The PTO refused Vox’s applications on the grounds that, when used in connection with the domain services, each failed to function as a trademark. Vox appealed to the Board. The Board concluded that .SUCKS, whether as a standard mark or in the stylized form, would not be perceived as a source identifier. Vox appealed the Board’s decision only with respect to the stylized form of .SUCKS.

On appeal, the Federal Circuit noted that although Vox did not appeal the rejection of the standard character application, it spent much of its opening brief arguing that the standard character functions as a mark. As such, the Court reviewed the Board’s decision with respect to the standard character mark .SUCKS under the substantial evidence standard. Substantial evidence “means only such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” The Court found that substantial evidence supported the Board’s finding that consumers will view .SUCKS as only a non-source identifying part of a domain name, rather than as a trademark. The Court cited evidence reviewed by the Board, including Vox’s website, online articles and advertisements showing that .SUCKS refers to a product rather than as an identifiable provider or service. Ultimately, the Court found that the Board reasonably weighed the evidence.

The Federal Circuit next addressed the question of whether the stylized design of .SUCKS is registerable. The Court found no error in the Board’s analysis of whether the stylized form creates a separate commercial impression, where “all of the characters in the mark are the same height and width and are merely displayed in a font style that was once mandated by the technological limitations of computer screens.” Because the stylized design was not inherently distinctive, the Court rejected Vox’s application, thus affirming the Board’s decision in full.

IPR Petition Cannot Be Based on Applicant Admitted Prior Art

by Thomas DaMario | Feb 10, 2022 | Patents

Addressing the type of prior art that may form the basis of an inter partes review (IPR) proceeding, the US Court of Appeals for the Federal Circuit vacated an unpatentability finding based on “applicant admitted prior art” in the challenged patent. Qualcomm Inc. v. Apple Inc., Case Nos. 20-1558, -1559 (Fed. Cir. Feb. 1, 2022) (Taranto, Bryson, Chen, JJ.)

Qualcomm owns a patent directed to integrated circuit devices having power detection circuits for systems with multiple supply voltages. The patent seeks to solve problems associated with stray currents causing level shifters in integrated circuits to trigger input/output devices for transmission, which results in erroneous output signals from the circuit. The patent describes various prior art methods for solving the stray current problem.

Apple filed IPR petitions based on two grounds. The first was based on the combination of four prior art references. In its final written decision, the Patent Trial & Appeal Board (Board) found that the combination of these four references did not render the challenged claims invalid. The second ground relied on the applicant admitted prior art disclosed in the specification of the challenged patent in combination with another prior art reference (Majcherczak). During the IPR proceedings, Qualcomm admitted that the combination of the applicant admitted prior art and Majcherczak taught every element of the challenged claims but argued that Apple’s use of the applicant admitted prior art as the basis for an invalidity ground is barred in an IPR proceeding. The Board disagreed with Qualcomm and found the challenged claims unpatentable based on Apple’s second ground. Qualcomm appealed.

Qualcomm argued on appeal that IPR proceedings may only be based on “prior art patents or prior art printed publications” and that 35 U.S.C. § 311(b), which governs IPR proceedings, does not allow for the use of “a patent owner’s admissions” that is contained in non-prior art documents. Apple countered, arguing that any prior art that is contained in “any patent or printed publication, regardless of whether the document itself is prior art, can be used as a basis for [an invalidity] challenge.”

The Federal Circuit agreed with Qualcomm, finding that applicant admitted prior art in a challenged patent may not form the “basis” for an invalidity claim in an IPR proceeding. The Court explained that invalidity grounds advanced in an IPR must be based on patents or printed publications that are themselves prior art to the challenged patent. In reaching this conclusion, the Court relied on the 2019 Supreme Court opinion in Return Mail, Inc. v. U.S. Postal Serv., which referred to “patents and printed publications” in the context of § 311(b) as “existing at the time of the patent application.” The Court also looked to its own interpretations of “prior art consisting of patents or printed publications” in the context of ex parte reexamination proceedings under 35 U.S.C. §§ 301 and 303, which “permits the Director to institute a reexamination after ‘consideration of other patents or printed publications.’” Accordingly, the Court vacated the unpatentability [...]

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The Net Is Tightening on European SEP Regulation

by Dr. Henrik Holzapfel and Dr. Maximilian Kiemle, LLM | Feb 10, 2022 | EU Update, Patents

The regulation of standard-essential patents (SEPs) has increasingly attracted the attention of policymakers in recent years. This includes the European Commission, which institutes multiple projects to profoundly review the European Union’s SEP and competition law framework. Some of these EU projects are still in the making, with the next public consultations coming up in early 2022.

EU review has been undertaken mainly for two reasons. The first is that the European Commission is responsible for the enforcement of European competition law. It is this set of rules that prohibits the abuse of a dominant market position in the European Union and, at least from an EU perspective, also obligates SEP holders to offer licenses on fair, reasonable and non-discriminatory terms (F/RAND terms). The second reason is the European Union’s goal to act as an international norm-setter in intellectual property (IP) protection.

In November 2017, the European Commission published an EU approach to standard-essential patents as part of its “IP Package.” The aim was to provide a clearer framework to incentivize and facilitate access to the key technologies enabling interconnection and connectivity.

These relatively narrow targets were made more concrete in November 2020 with the release of the “Intellectual Property Action Plan.” This plan sought to support the European creative and innovative industry sector in remaining a global leader. In the area of SEPs, the European Commission’s objective was to reduce friction and litigation between SEP holders and users by relying on potential regulatory reforms—in addition to industry-led initiatives—to clarify and improve the framework for SEP enrollment, licensing and enforcement. By providing incentives for good faith negotiations, the European Commission tried to reconcile the interests of SEP holders, standard development organizations (SDOs) and users of SEP-protected technologies.

In January 2021, the European Commission’s Group of Experts on Licensing and Valuation of SEPs published its contributions to the debate. This group, which consists of scholars, judges and stakeholders, proposed, inter alia, a number of principles for licensing SEPs, namely licensing at a single level of the value chain, a single F/RAND royalty, passing on F/RAND royalties downstream and establishing licensee negotiation groups. The European Commission’s next step in terms of a new framework for standard-essential patents is a public online consultation to be held in the first quarter of 2022.

Ahead of that event, on 2 February 2022, the European Commission presented its new Standardization Strategy, as well as a draft law amending EU Regulation No 1025/2012, with the aim of ensuring a balanced stakeholder representation within European SDOs and addressing the issue of agility and governance in the European standardization system. This strategy and the draft law highlight the European Union’s priority to defend its key position as a global standardization policymaker.

The EU Regulation of SEPs is also affected by the review of the EU Horizontal Block Exemption Regulation, which defines certain research and development (R&D) and specialization agreements that can be [...]

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Alleged Trademark Infringer Remains Hog-Tied after Appeal

by Paul Devinsky | Feb 3, 2022 | Trademarks

The US Court of Appeals for the Tenth Circuit dismissed an appeal of a district court order denying a stay of a federal action for lack of jurisdiction under 28 U.S.C. § 1291 and reversed in part the district court’s grant of a preliminary injunction. The Trial Lawyers College v. Gerry Spence Trial Lawyers College at Thunderhead Ranch, Case No. 20-8038 (10th Cir. Jan. 27, 2022) (Bacharach, Briscoe, Murphy, JJ.).

The dispute between the parties arose out of a program called The Trial Lawyers College at Thunderhead Ranch in Wyoming. The College’s board of directors split into two factions known as the “Spence Group” and the “Sloan Group.” After the split, the two groups sued each other. The Spence Group sued in state court for dissolution of the College and a declaratory judgment regarding control of the board of directors. The Sloan Group sued in federal court claiming trademark infringement under the Lanham Act.

Both groups sought relief in the federal case. The Spence Group filed a motion to stay the federal court proceedings in light of the state court proceedings, and the Sloan Group requested a preliminary injunction. The district court denied the Spence Group’s stay and granted the Sloan Group’s request for a preliminary injunction. The Spence Group appealed both rulings.

The Tenth Circuit found that it lacked jurisdiction to review the district court’s stay denial. First, the state court resolved the dispute concerning board control, rendering part of the requested stay moot. Second, the Court determined that it lacked jurisdiction over the remaining motion for stay because it was not a final order. The Court explained that it needed to decide the appealability of the ruling based on the category of order rather than the particular facts of the case. The Court found that there was no unsettled issue of unique urgency or importance that warranted the Court exercising jurisdiction over the denial of the stay. Specifically, the Court explained that piecemeal litigation was unlikely because the state court already decided the issue of board control, and the Spence Group did not identify an unsettled issue of unique urgency.

The Tenth Circuit did exercise jurisdiction over the district court’s grant of a preliminary injunction. The Spence Group challenged the district court’s finding of irreparable harm, the order to remove sculptures bearing the College’s name, restrictions on what the Spence Group could say and the consideration of evidence presented after the hearing ended. The Court reviewed the district court’s findings under an abuse-of-discretion standard. The Court found that the district court did not abuse its discretion by finding irreparable harm, considering evidence after the hearing and enjoining the Spence Group from using words associated with the College. The Court explained that the district court reasonably found irreparable harm based on the College’s efforts to protect its name, logo and trademarks, as well as evidence of likely confusion among customers of the College based on the Spence Group’s use of those trademarks. As for the sculptures, the Court found [...]

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PTO Launches New Patent Public Search Tool and Webpage

by Amol Parikh | Feb 3, 2022 | Patents

On February 1, 2022, the US Patent and Trademark Office (PTO) announced a new Patent Public Search tool similar to the search tools used by patent examiners to provide more convenient and robust full-text searching of all US patents and published patent applications.

The Patent Public Search tool is free to all users with internet access and is based on the advanced Patents End-to-End (PE2E) search tool used by patent examiners. It also combines the capabilities of four existing search tools scheduled to retire in September 2022: (1) Public-Examiner’s Automated Search Tool (PubEAST), (2) Public-Web-based Examiner’s Search Tool (PubWEST), (3) Patent Full-Text and Image Database (PatFT) and (4) Patent Application Full-Text and Image Database (AppFT). (In the past, the public could only access PubEAST and PubWEST at a PTO facility or a Patent and Trademark Resource Center.)

Additional benefits of the new search tool include:

Multiple layouts with several tools to provide more data at once
Multicolor highlighting that can be viewed across multiple gadgets and be turned on or off
Ability to tag documents into multiple groups that can be renamed and color coordinated
Ability to add notes, tags, relevant claims and highlights to an image
Use of the same searching syntax as PubEAST and PubWEST.

The PTO also introduced a new Patent Public Search webpage that includes FAQs, training resources and additional information to assist the public in using the new tool. The PTO is also planning on conducting public training sessions that will be posted on the webpage as soon as they are scheduled.

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