IP UPDATE
Exploring the Latest in Intellectual Property Law
IP UPDATE
Exploring the Latest in Intellectual Property Law
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“TRUMP TOO SMALL” Trademark Decision Leaves Big Questions

by | Mar 10, 2022 |

Revisiting jurisprudence touching on the Lanham Act and the First Amendment from the Supreme Court’s decisions in Matal v. Tam and Iancu v. Brunetti, the US Court of Appeals for the Federal Circuit held that applying Sec. 2(c) of the Lanham Act (which bars registration of a trademark that consists of or comprises a name of a particular living individual without their written consent) may, in certain instances, unconstitutionally restrict free speech in violation of the First Amendment. In this instance, the Federal Circuit found that the Trademark Trial & Appeal Board’s (Board) refusal to register the trademark “TRUMP TOO SMALL” for use on t-shirts involved content-based discrimination that was not justified by a compelling or substantial government interest. In re: Steve Elster, Case No. 20-2205 (Fed. Cir. Feb. 24, 2022) (Dyk, Taranto, Chen, JJ.)

Steve Elster filed a US trademark application in 2018 for the mark “TRUMP TOO SMALL” (a reference to a 2016 Republican presidential primary debate exchange between then- candidate Donald Trump and Senator Marco Rubio (R-FL)) for use on shirts. The US Patent & Trademark Office (PTO) examining attorney, and subsequently the Board, refused registration of the mark on grounds that it clearly referred to former President Trump, and that Elster did not have written consent to use former President Trump’s name in violation of Sec. 2(c) of the Lanham Act. Sec. 2(c) requires such consent when a trademark identifies a “particular living individual.” Elster argued that his trademark aimed to convey that some features of former President Trump and his policies were diminutive and appealed the Board’s holding that Sec. 2(c) is narrowly tailored to advance two compelling government interests, namely, protecting an individual’s rights of privacy and publicity and protecting consumers against source deception.

The Federal Circuit started with a brief primer on relatively recent decisions in which the Supreme Court found certain provisions of Sec. 2(a) to be improper viewpoint discrimination because they barred registration of trademarks that were disparaging or comprised of immoral or scandalous matter. The Federal Circuit found that while neither Tam nor Brunetti resolved Elster’s appeal pertaining to Sec. 2(c), the cases did establish that a trademark represents private, not government, speech entitled to some form of First Amendment protection, and that denying a trademark registration is akin to the government disfavoring the speech being regulated. The Court then examined whether Sec. 2(c) could legally disadvantage the specific “TRUMP TOO SMALL” speech at issue in Elster’s case, and whether the government has an interest in limiting speech on privacy or publicity grounds if that speech involves criticism of government officials.

The Federal Circuit did not decide the matter on whether a trademark is a government subsidy, avoiding the somewhat varying opinions of the Supreme Court on that issue. Instead, the Federal Circuit found that Elster’s mark constituted speech by a private party for which the registration restriction must be tested by the First Amendment. Regardless of whether strict or intermediate scrutiny is applied [...]

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Patent Invalidity Doesn’t Demonstrate Good Faith for Consent Order Violation

by | Mar 10, 2022 |

The US Court of Appeals for the Federal Circuit affirmed a US International Trade Commission (ITC) decision upholding a civil penalty for violating a consent order based on a patent that was later found to be invalid. The Court agreed with the ITC that a belief that a patent is invalid does not support a finding of good faith for violating a consent order, even if that belief is later vindicated by invalidation of the patent. DBN Holding, Inc. v. ITC, Case No. 20-2342 (Fed. Cir. March 1, 2022) (Moore, C.J.; Newman, Reyna, JJ.)

In 2012, BriarTek IP instigated a Section 337 investigation at the ITC against DBN based on allegations of infringement of a single patent related to two-way satellite notification devices. That investigation was terminated in early 2013 after DBN agreed by a consent order to not import any infringing devices. Only a month later, however, BriarTek filed a complaint seeking an enforcement action against DBN and asserting that DBN had continued selling its infringing devices in violation of the consent order. A month after that, DBN filed a declaratory judgment action in the Eastern District of Virginia alleging that BriarTek’s asserted patent was invalid. In June 2014, the ITC found that DBN had violated the consent order and imposed a civil penalty of $6.2 million against DBN. Later, in November 2014, the district court granted summary judgment of invalidity of BriarTek’s patent. DBN appealed the ITC’s civil penalty finding and BriarTek appealed the district court’s invalidity finding. On appeal, the Federal Circuit affirmed the invalidity finding but also affirmed the ITC’s imposition of a civil penalty for violating the consent order even though the patent was later found invalid.

Undeterred, DBN filed a petition in early 2016 asking the ITC to rescind or modify the civil penalty in view of the finding that the asserted patent was invalid. The ITC denied DBN’s petition based on its view that the Federal Circuit’s previous decision constituted res judicata that barred the ITC from reconsidering the civil penalty. DBN again appealed, and the Federal Circuit reversed and remanded to the ITC to decide, in the first instance, whether the civil penalty should be rescinded or modified. On remand, in August 2020, the ITC again denied DBN’s petition. The ITC first rejected DBN’s argument that civil penalties had been modified in similar circumstances, finding that the only identified case where a civil penalty (as opposed to a remedial order) was rescinded was distinguishable because the civil penalty had been negated by a retroactive license while the appeal was still pending. The ITC next analyzed the EPROM factors and concluded that they did not favor rescission or modification. With regard to the first EPROM factor (whether DBN acted in good or bad faith), the ITC held that the invalidity finding had no effect because a belief in invalidity is not one of the factors considered for good faith.

DBN appealed again to the Federal Circuit. The Court agreed with the ITC that [...]

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Third-Party Licensing Information May Be Exception to General Right of Public Access to Court Records

by | Feb 24, 2022 |

In a second appeal relating to sealing third-party licensing information, the US Court of Appeals for the Federal Circuit vacated and remanded a district court’s order denying a motion to seal because the district court failed to follow the Federal Circuit’s previous instruction to make particularized determinations regarding the information. Uniloc USA, Inc. v. Apple Inc., Case No. 21-1568 (Fed. Cir. Feb. 9, 2022) (Lourie, Cunningham, JJ.) (Mayer, J., dissenting).

In a previous decision, the Federal Circuit affirmed the denial of a motion to seal with regard to information pertaining to Uniloc but vacated and remanded the denial of the motion to seal with regard to certain third-party licensing information. The Court instructed the district court to “make particularized determinations as to whether and, if so, to what extent, the materials of each of these [third] parties should be made public.”

On remand, the district court again denied the motion to seal the third-party licensing information. The district court made findings regarding the relative weight of the public’s interest in accessing judicial records, including patent licensing information. It also found that the particular licensing information at issue was relevant to a dispute over Uniloc’s standing to sue. With regard to one particular third party, Uniloc’s financier Fortress Credit Co. LLC, the district court denied the motion to seal because Fortress had not complied with Local Rule 79-5(e)(1) of the Northern District of California, which requires that a supporting declaration be filed. Uniloc appealed a second time.

The Federal Circuit found that the district court failed to follow its instructions to make particularized determinations regarding whether the third-party licensing information sought to be sealed should be made public. Accordingly, the Court remanded for the district court to carry out the inquiry it had previously ordered.

The Federal Circuit also noted its disagreement with certain statements the district court had made in its order denying the motion to seal. The district court had stated that “[t]he public has an interest in inspecting the valuation of patent rights . . . particularly given secrecy so often plays into the patentee’s advantage in forcing bloated royalties.” The Federal Circuit stated that the district court committed “an error of law in making a blanket ruling that the public has a broad right to licensing information relating to patents.” While the district court had stated that the public has a strong interest in knowing the full extent of the terms and conditions involved in the exercise of its patent rights and in seeing the extent to which the patentee’s exercise of the government grant affects commerce, the Federal Circuit wrote that “[a]bsent an issue raised by the parties concerning license rights and provisions, there is no public interest or entitlement to information concerning consideration for the grant of licenses.” And while the amount Uniloc received in royalties was relevant to the dispute regarding standing, the Court wrote that “that fact can be proved without opening up all the licenses that the court granted [...]

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Multiple Purchasing Options Overpower Use of “Quotation” in Finding Offer for Sale

by | Feb 24, 2022 |

The US Court of Appeals for the Federal Circuit reversed a district court’s summary judgment of no invalidity under the on-sale bar, finding that the completeness of relevant commercial sale terms, including multiple purchase options, was not an invitation to further negotiate but rather was multiple offers for sale. Junker v. Medical Components, Inc., Case No. 21-1649 (Fed. Cir. Feb. 10, 2022) (Dyk, Reyna, Stoll, JJ.)

Larry Junker designed a sheath that makes it easier for doctors to grasp the sheath during catheter insertion. After designing the sheath, Junker inquired about manufacturing and eventually began a business relationship with James Eddings and his company, Galt Medical, to manufacture the product. Eddings also started a new company, Xentek Medical, to help with the development, manufacture and sale of the product. In January 1999, Eddings, through Xentek, communicated with Boston Scientific Corporation about the sheath products and sent a letter detailing bulk pricing information for the products. The letter concluded by noting Eddings’ appreciation for “the opportunity to provide this quotation.” In February 2000, Junker filed a design patent directed to an “ornamental design for a handle for introducer sheath.”

Junker sued MedComp in 2013 for infringement of the claimed design. In response, MedComp asserted invalidity, unenforceability and noninfringement defenses, as well as counterclaims. The parties filed cross-motions for summary judgment for several issues, including invalidity under the on-sale bar. The primary dispute regarding the on-sale bar was whether the January 1999 letter to Boston Scientific was considered an offer for sale of a product embodying the claimed design. The district court found that it was not an offer for sale because it was a preliminary negotiation and not a definite offer. The district court reasoned that although the letter included many specific commercial terms, the repeated use of the word “quotation” and the invitation to discuss specifics rendered the letter a preliminary negotiation. The district court proceeded with a bench trial, ultimately finding in favor of Junker and awarding damages. MedComp appealed.

A patent claim is invalid under § 102(b) if the invention was on sale more than a year before the application date and the claimed invention was the subject of a commercial offer for sale and was ready for patenting. There was no dispute that the January 1999 letter was sent more than one year before the patent’s filing and that the claimed design was also ready for patenting. As a result, the only issue on appeal was whether the letter was a commercial offer for sale of the claimed design.

The Federal Circuit determined that the letter was a commercial offer for sale. The Court found that the statement that Xentek was responding to a “request for quotation” signaled that the letter was more than just an unsolicited price quote and was instead a specific offer to take further action. The Court found that the letter contained many necessary terms typical in a commercial contract, including prices for bulk shipments, specific delivery conditions and payment terms. The Court [...]

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Federal Circuit Divided on Whether Skinny Labeling Compliance Precludes Inducement or Supports Equitable Estoppel

by | Feb 24, 2022 |

The US Court of Appeals for the Federal Circuit denied a generic drug manufacturer’s petition for en banc review of a panel opinion finding induced infringement liability despite the manufacturer’s adherence to skinny labeling rules, and suggested that equitable estoppel was the appropriate vehicle for considering whether the branded drug manufacturer’s representations to the US Food & Drug Administration (FDA) should prevent it from recovering. GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., Case Nos. 18-1976, -2023 (Fed. Cir. Feb. 11, 2022) (per curiam) (Moore, C.J., concurring) (Prost, J., dissenting) (Dyk, J., dissenting) (Reyna, J., dissenting).

GlaxoSmithKline (GSK) developed a drug called carvedilol, which it markets (with FDA approval) for three indications: hypertension, left ventricular dysfunction following myocardial infarction (post-MI LVD) and congestive heart failure (CHF). GSK indicated to the FDA that only the CHF indication was under patent. Teva developed a generic version of carvedilol. Commensurate with skinny labeling regulations, Teva carved out from its label the language that GSK indicated was related to the protected CHF indication. Nonetheless, GSK alleged that Teva’s label induced infringement of patents covering the CHF indication. After trial, the jury agreed that the remaining language on Teva’s label would encourage physicians to practice the patented method of treating CHF. Notwithstanding the jury’s verdict, the district court granted judgment as a matter of law that Teva did not induce infringement. GSK appealed, and a divided panel reinstated the verdict (GSK v. Teva). Teva sought panel rehearing, which was denied, and then sought en banc review.

Out of the nine judges who considered the petition for en banc review, six voted to deny it and three would have granted it. All nine judges expressed concern that Teva should be held liable for induced infringement notwithstanding its compliance with the skinny labeling regulations and GSK’s representation to the FDA that the carved-out language was the only language in the label that would implicate its patents on the CHF indication. The judges differed, however, as to why Teva should not be held liable.

Chief Judge Moore’s concurrence, in which Judges Newman, O’Malley, Taranto, Chen and Stoll joined, affirmed the panel majority’s opinion and endorsed its approach of considering all the evidence. According to Judge Moore, any concerns that the result was unfair to Teva, which had complied with the skinny labeling requirements, should be addressed in the district court’s resolution of the still-pending equitable estoppel defense. In Judge Moore’s view, the facts fit squarely within the doctrine of equitable estoppel: GSK’s representations to the FDA could be seen as misleading Teva into believing that GSK would not seek to enforce its patents against the skinny label (which would omit the language GSK identified as relating to the infringing use); Teva could be seen as having relied on GSK’s representations in obtaining its skinny label and bringing its generic carvedilol product to market; and Teva could be seen as having been greatly prejudiced by later being found liable for GSK’s lost profits, which were greatly in [...]

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Long-Felt Need Not Felt Long Enough to Overcome Obviousness

by | Feb 24, 2022 |

The US Court of Appeals for the Federal Circuit upheld a finding that patents covering Narcan, a naloxone-based intranasal opioid overdose treatment, were obvious despite evidence of long-felt need. Adapt Pharma Operations Ltd. v. Teva Pharms. USA, Inc., Case No. 20-2106 (Fed. Cir. Feb. 10, 2022) (Prost, Stoll, JJ.) (Newman, J., dissenting).

In 2012, during the growing opioid crisis, the US Food & Drug Administration (FDA) identified a need for an improved intranasal naloxone treatment that could be FDA-approved and deliver the same amount of naloxone to the blood as an injectable formulation. In 2015, Adapt filed a patent application for Narcan, a method of nasally administering naloxone using about 4 mg of naloxone, benzalkonium chloride (BZK) and three other excipients. After Teva submitted an abbreviated new drug application (ANDA) to sell a generic version of Narcan, Adapt sued Teva for infringement. After a two-week bench trial, the district court determined that Adapt’s patents were obvious in view of prior art. Adapt appealed.

The Federal Circuit found no error in the district court’s conclusions that a skilled artisan would have been motivated to combine the prior art, that the prior art did not teach away from the claimed combination and that Adapt’s evidence regarding unexpected results, copying and industry skepticism was not probative of nonobviousness. The Court noted that a skilled artisan would have been motivated to improve on existing treatments because their shortcomings were well known, and the FDA had explicitly identified a need for an improved intranasal product. The claimed excipients also were separately taught in the prior art within the claimed concentration ranges. The Court agreed that a skilled artisan would have been motivated to combine these components to achieve the tonicity and pH required for a drug to be tolerable in the nose and to preserve and stabilize the formulation. While the prior art suggested that BZK causes naloxone degradation, the Court found that this did not teach away from its use because BZK was commonly used in intranasal formulations.

Turning to secondary considerations of nonobviousness, the Federal Circuit affirmed the following:

  • Narcan’s 56% increase in bioavailability was not “evidence of unexpected results” because BZK was a known permeation enhancer expected to increase bioavailability.
  • “[C]opying in the ANDA context is not probative of nonobviousness because . . . bioequivalence is required for FDA approval.”
  • The FDA’s recommendation to increase naloxone dosage in intranasal formulations negated any alleged industry skepticism regarding the higher dosage.

While the Federal Circuit found that the district court erred in finding there was no long-felt but unmet need for an effective intranasal naloxone product, the Court concluded that this error was harmless because the long-felt need began just three years before the patents’ priority date, which was not long enough to overcome the “strong case of obviousness . . . in view of the plethora of prior art.” The Court further agreed that competitors’ alleged failure to obtain FDA approval was not probative of nonobviousness and ultimately affirmed the district [...]

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Specification Sheds Light on Broadest Reasonable Interpretation

by | Feb 17, 2022 |

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) obviousness decision, finding that the Board did not err in restricting the broadest reasonable interpretation of a claim term based on its use in the specification. Quanergy Systems, Inc. v. Velodyne Lidar USA, Inc., Case Nos. 20-2070; -2072 (Fed. Cir. Feb. 4, 2022) (Newman, Lourie, O’Malley, JJ.)

Velodyne owns a patent directed to a lidar-based 3D point cloud measuring system that can be used in self-driving vehicles to sense their surroundings. Quanergy petitioned for inter partes review of Velodyne’s patent, challenging the claims as obvious over a Japanese patent application (Mizuno). During the proceedings, the Board construed the broadest reasonable interpretation of the term “lidar (light detection and ranging)” to mean “pulsed time-of-flight (ToF) lidar” based on the written description of Velodyne’s patent and found that Mizuno’s system was not a ToF lidar system. The Board also presumed a nexus between the claimed pulsed ToF lidar system and Velodyne’s evidence of commercial success, relying on mapping the features of the claimed ToF lidar system to Velodyne’s commercial products. Based on its obviousness analysis and presumption of nexus, the Board issued final written decisions, finding that Velodyne’s patent was not unpatentable as obvious. Quanergy appealed.

Quanergy raised two arguments on appeal: The Board erred in its construction of the term “lidar,” and the Board erred in its obviousness analysis. Addressing claim construction, Quanergy argued that the Board did not use the broadest reasonable interpretation of “lidar” since “lidar” merely requires the use of laser light for detection and ranging, and thus “lidar” includes not only “pulsed ToF lidar” but also triangulation and other detection techniques described in Mizuno. The Federal Circuit rejected Quanergy’s argument, finding that the Board did not err in construing the term “lidar” according to its broadest reasonable interpretation because the written description focuses exclusively on “pulsed ToF lidar.”

Turning to obviousness, Quanergy argued that the Board erred in concluding that Velodyne’s claims were nonobvious over Mizuno because the expert testimony that the Board relied upon focused only on one particular embodiment of Mizuno’s device, which was not directed to a pulsed ToF lidar system. The Federal Circuit rejected this argument, finding that the Board did not err because Mizuno described “detect[ing] light reflected at an angle using position or image sensors, neither of which are used in pulsed time-of-flight lidar systems.” Based on this description, the Court found that Mizuno’s device was not a ToF lidar system.

Quanergy also argued that the Board failed to consider the issue of unclaimed features before presuming nexus. Quanergy argued that Velodyne’s evidence of commercial success related to those unclaimed features, such as a 360-degree horizontal field of view, a wide vertical field of view, a dense 3D point cloud and software, all of which were critical and materially impacted the functionality of Velodyne’s products. The Federal Circuit rejected this argument, finding that the Board did not err in finding a presumption of nexus [...]

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Precision Is Paramount: Court Enforces Terms of Email Agreement in Settlement

by | Feb 17, 2022 |

The US Court of Appeals for the Federal Circuit reversed a district court order enforcing one party’s version of a settlement agreement, finding that version unsupported by the record. The Court found that the other party’s version accurately reflected the parties’ understanding. PlasmaCam, Inc. v. CNCElectronics, LLC, Case No. 21-1689 (Fed. Cir. Feb. 3, 2022) (Dyk, Reyna, JJ.) (Newman, J., dissenting).

PlasmaCam and CNCElectronics (CNC) both operate in the precision cutting industry. PlasmaCam is the exclusive licensee of a patent related to precision cutting equipment, and it sued CNC for allegedly infringing the patent. In December 2019, the parties notified the district court that they had settled the case but disputes arose in the process of drafting a formal agreement, particularly with respect to the scope of “covered products” under the settlement license and the scope of a “mutual release.” Although the parties eventually advised the district court that they had reached a complete agreement, disputes remained as to the scope of covered products. On PlasmaCam’s motion, the district court ordered CNC to execute PlasmaCam’s version of the agreement, execute a promissory note contemplated by the agreement and pay any unpaid settlement funds. CNC appealed.

The Federal Circuit first evaluated whether it had jurisdiction. The Court found that it had jurisdiction because the district court’s order was an injunction (since it ordered CNC to specifically perform an action, i.e., execute an agreement and promissory note, and not merely to pay money) and a final judgment (because it resolved all substantial issues between the parties).

The Federal Circuit next considered the negotiations between the parties with regards to the settlement agreement. As to the scope of covered products, the Court found that the parties had reached agreement regarding a definition of “covered products” in an email, even though the scope of the mutual release was still being negotiated. However, the Court found that the agreed definition of “covered products” was different from the one PlasmaCam provided to the Court and the one which the Court had subsequently ordered CNC to adopt. The Court also recognized the parties’ subsequent agreement regarding the mutual release, which both parties had confirmed to the district court. Because the district court had clearly erred by adopting a definition of “covered products” different from the one that was agreed by the parties, the Court reversed the district court’s order and remanded for further proceedings consistent with the parties’ actual agreement.

Judge Newman dissented. In her view, no agreement had been reached at all, as the parties had apparently continued to disagree as to the scope of key terms.

Practice Note: In this case, the parties’ statements to the district court that they had reached an agreement played a large role in establishing that an agreement had been formed even though there was no single signed document that reflected the agreement and, in some views, there continued to be disputes about important terms. Litigants should be careful not to represent to a court that an agreement has been [...]

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Seeing Eye to Eye: Preliminary Injunction Affirmed for Patent Filed After Accused Product Was Sold

by | Feb 17, 2022 |

The US Court of Appeals for the Federal Circuit affirmed the grant of a preliminary injunction, finding that the district court did not abuse its discretion, clearly err in its underlying factual findings or abuse its discretion in setting the scope of the preliminary injunction. BlephEx, LLC v. Myco Indus., Inc., Case Nos. 2021-1149; -1365 (Fed. Cir. Feb. 3, 2022) (Moore, Schall, O’Malley, JJ.)

Myco sells AB Max, a mechanical device with an attached swab used for treating an eye condition known as blepharitis. Myco began marketing AB Max at a trade show in February 2019. One month later, BlephEx filed an application that later issued as a patent. The patent is directed toward cleaning debris from an eye during treatment of ocular disorders, including blepharitis. According to the patent, prior art treatment for blepharitis included at-home treatment where the patient would use a cotton swab, fingertip or scrubbing pad to scrub the eyelid margin in order to remove debris. Patients would often fail to adequately cleanse the eyelid margin, however. The patent’s solution is an electromechanical device with an attached swab for use by an eyecare professional to clean the patient’s eyelid margins.

The day the patent issued, BlephEx sued Myco and its chairman, John R. Choate, alleging that Myco’s AB Max infringed BlephEx’s newly issued patent. BlephEx moved the district court for a preliminary injunction prohibiting Myco from selling, distributing or offering the AB Max for sale. Myco opposed, arguing that a prior art reference (Nichamin) raised a substantial question of invalidity. The district court disagreed with Myco and granted the injunction. The district court noted that to anticipate, a prior art reference must disclose all elements of a claim arranged as in the claim, and Nichamin did not disclose combining the electromechanical applicator device depicted in one embodiment with a swab disclosed in another. The district court also rejected Myco’s argument that the patent examiner failed to consider Nichamin because he did not substantively discuss it during prosecution. The district court further rejected Myco’s obviousness argument as unsupported by expert evidence, finding Myco failed to overcome “the safety concerns of attaching a swab that is soaked in an abrasive to the Nichamin hand-held device.”

After the district court granted the preliminary injunction, Myco moved for reconsideration and argued that the preliminary injunction was overbroad because the AB Max had noninfringing uses. The district court rejected Myco’s argument, finding it was untimely and presented hypothetical noninfringing uses that were “outweighed by evidence that the only actual use of the AB Max was to treat anterior blepharitis,” which would likely infringe the asserted patent. Myco appealed.

The Federal Circuit affirmed the preliminary injunction grant. With respect to Myco’s anticipation argument, the Court found “Myco offers nothing other than attorney argument as to what the highly skilled artisan would do,” and this was insufficient to raise a substantial question of validity. The Court also noted that Myco had “put all of its eggs in the anticipation basket” and fatally failed [...]

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Federal Circuit Sends iPhone Patent Dispute Back for Third Damages Trial

by | Feb 17, 2022 |

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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