D THREE ENTERPRISES, LLC v. SUNMODO CORPORATION

D THREE ENTERPRISES, LLC v. SUNMODO CORPORATION, Appeal Nos. 2017-1909 and -1910 (Fed. Cir. May 21, 2018).  Before Reyna, Clevenger and Wallach.  Appealed from D. Colo. (Judge Shaffer).  (Priority; Written Description)

Background:

D Three sued SunModo and Rillito River for infringing claims of three patents directed to roof mount sealing assemblies.  SunModo’s products were available to the public in 2010, and Rillito River’s products were available in 2009.  In order to antedate these products, D Three needed to rely on the earliest effective filing date of the priority application (February 5, 2009) for written description support.

The district court determined that the asserted claims could not rely on the

February 5, 2009, priority date because the asserted claims were broader than the invention disclosed in the priority application.  As a result, the district court found the defendants’ products to be intervening prior art that rendered the asserted claims invalid.  D Three appealed.

Issue/Holding:

Did the district court err in holding that the claims were not entitled to the priority date and thus invalid?  (continue reading)

Summary by:  Graham Nelson

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M-I DRILLING FLUIDS UK LTD. v. DYNAMICS AIR LTDA

M-I DRILLING FLUIDS UK LTD. v. DYNAMICS AIR LTDA, Appeal No. 2016-1772 (Fed. Cir. May 14, 2018).  Before Reyna, Hughes, and Stoll.  On appeal from D. Minn. (Judge Montgomery).  (Personal Jurisdiction)

Background:

M-I Drilling Fluid UK Ltd. (M-I Drilling), owner of a number of patents drawn to systems for transferring drill cutting waste from oil drilling rigs to receiving ships, and its US exclusive licensee, together sued Dynamics Air Ltda. (DAL) for patent infringement.

DAL is a Brazilian corporation having its principal place of business in Brazil and is a subsidiary of a company having its principal place of business in Minnesota.  DAL contracted with the Brazilian company Petrobras to install and operate pneumatic conveyance systems aboard ships.  DAL ultimately installed the systems on two U.S.-flagged ships, which was the accused patent infringement.

In the district court, DAL moved to dismiss the complaint for lack of personal jurisdiction, arguing that it would be inconsistent with the due process requirements of Fed. R. Civ. P. 4(k)(2), even though the alleged infringement occurred on U.S.-flagged ships, which DAL did not dispute was U.S. territory.

The court granted the motion, its rationale being that the contract did not identify the specific ships upon which DAL would be required to install and operate the pneumatic conveyance systems and as such, DAL “did not purposefully” direct its activities within the United States.

M-I Drilling appealed to the Federal Circuit.

Issue/Holding:

Did the district court err in holding that personal jurisdiction was lacking? (continue reading) 

Summary byHarris Pitlick

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MEDTRONIC, INC. v. BARRY

MEDTRONIC, INC. v. BARRY,  Appeal Nos. 2017-1169 & 2017-1170 (Fed. Cir. June 11, 2018).  Before Taranto, Plager, and Chen.  Appealed from Patent Trial and Appeal Board. (Prior Art; Printed Publications)

Background:

Medtronic successfully sought inter partes review of all claims of two of Barry’s patents, which were alleged to have been obvious over various combinations of the ‘928 patent, a book chapter, and a certain video and associated slides.   The claims of Barry’s patents relate to aligning vertebrae, including simultaneously rotating multiple vertebrae with a single motion using a derotation tool.  The ‘928 patent discloses a tool for moving vertebrae closer or further apart from each other during spinal surgery. The book chapter describes a spinal derotation procedure including multiple separate derotation maneuvers to derotate the spine. The video and slides relating to derotation surgery were presented to spinal surgeons at several industry meetings.  The PTAB concluded that the ‘928 patent and the book chapter did not disclose the simultaneous rotation features recited by the claims, and that the video and slides were not prior art because they were not a publication available to the public.  The PTAB held that Medtronic failed to prove that the challenged patent claims were unpatentable.

Issues/Holdings:

  1. Did the PTAB err in finding Medtronic failed to prove that the claims of the Barry’s patents were unpatentable over the ‘928 patent and the book chapter?
  2. Did the PTAB err in concluding that the video and slides were not prior art printed publications? (continue reading)

Summary by:  Donald Raymond

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IPR Proceeding Is Not Time-Barred By Prior Litigation Where Parties To Ipr And Litigation Are Not Privies

WESTERNGECO LLC v. ION GEOPHYSICAL CORPORATION, Appeal Nos. 2016-2099, -2100, -2101, -2332, -2333, -2334 (Fed. Cir. May 7, 2018).  Before Wallach, Chen, and Hughes.  Appealed from Patent Trial and Appeal Board.  (Time-Bar Under 35 U.S.C. §315(b); Privity)

Background:

WesternGeco (WG) sued ION for patent infringement.  In support of its infringement case, WG served Petroleum GeoServices (PGS) with a third party subpoena seeking information about PGS’s use of ION’s allegedly infringing product.  PGS then appeared in the lawsuit as a third party and was represented by its own counsel, but did not file anything.  A jury found that ION infringed WG’s patents and that ION failed to prove that WG’s patents were invalid.

WG next sued PGS for infringement of the same patents.  In response, PGS filed inter partes review petitions seeking invalidation of WG’s patents.  After PGS’s petitions were instituted, ION moved to join the proceedings.  Both WG and PGS opposed.  WG argued that joinder would create delay and scheduling complications, while PGS sought to avoid prejudicial testimony from the WG-ION litigation being added to the IPR proceeding because PGS did not have the opportunity to participate in the WG-ION litigation.  The PTAB granted ION’s request, but limited ION’s role to spectator status.  The PTAB eventually found that various claims of WG’s patents were invalid.  WG appealed, arguing that the PTAB improperly denied WG the opportunity to be heard on whether the IPRs were time barred pursuant to 35 U.S.C. §315(b).  After PGS settled with WG, WG was permitted to file supplemental briefing addressing whether ION was a “privy” of PGS.

Issues/Holdings:

Did the district court err in holding that the IPR petitions are not time-barred under 35 U.S.C. §315(b)?  (continue reading)

Summary byJay Stelacone

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FEDERAL CIRCUIT AFFIRMS INEQUITABLE CONDUCT FOR FAILING TO DISCLOSE PRE-FILING ON-SALE ACTIVITY

ENERGY HEATING, LLC v. HEAT ON-THE-FLY, LLC, Appeal No. 2016-1559, 2016-1893, 2016-1894 (Fed. Cir. May 8, 2018).  Before Moore, Hughes, and Stoll.  Appealed from D.N.D. (Judge Erickson).  (Inequitable Conduct)

Background:

Heat On-The-Fly (HOTF) owns a patent directed to heating water on demand during a hydraulic fracking process and sued its rival, Energy Heating, for infringement of the patent.  Energy Heating raised an inequitable conduct defense alleging that HOTF failed to disclose material information to the Patent Office.  The founder of HOTF and the sole inventor of the patent, Mark Hefley, filed a provisional application on September 18, 2009.  But, more than a year before filing the provisional application, Hefly and his company had provided services on at least 61 fracking jobs using the claimed method and collected over $1.8 million for those services.  It was undisputed that Hefly’s business partner had discussed the on-sale bar requirements with Hefly.  Nonetheless, Hefly and his prosecution attorney did not disclose any of the 61 fracking jobs during prosecution of the patent.  The district court held that the 61 fracking jobs performed before the critical date of the patent were material to patentability, and that Hefly knew of the materiality of the 61 fracking jobs but made a deliberate decision to withhold this information from the Patent Office.  Thus, the district court held that the patent was unenforceable due to inequitable conduct.  HOTF appealed.

Issue/Holding:

Did the district court err in finding inequitable conduct on the part of Hefly? (continue reading)

Summary byAshley Yeum

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GILEAD SCIENCES, INC. v. MERCK & CO., INC

GILEAD SCIENCES, INC. v. MERCK & CO., INC., Appeal No. 2016-2303; 2016-2615 (Fed. Cir. April 25, 2018).  Before Taranto, Clevenger and Chen.  Appealed from N.D. Cal. (Judge Freeman).  (Unclean Hands)

Background:

Merck held two patents for a Hepatitis C treatment.  Gilead sought a declaratory judgment that Merck’s patents were invalid.  Merck counterclaimed against Gilead for infringement of the two patents.  Gilead stipulated to infringement based upon the district court’s claim construction, but argued that the patents were invalid under §112(a).

Gilead also argued that because Merck had unclean hands by misrepresenting the role of its prosecution counsel with respect to both patents, any infringement finding would be unenforceable.  The district court found infringement, but that Merck had unclean hands.  Thus, the district court held that the infringement finding was unenforceable.

Issue/Holding:

Was the district court’s finding that the infringement of Merck’s patents was unenforceable due to the defense of unclean hands proper?  (continue reading)

Summary by:  Joel Gotkin

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AN ASSIGNMENT OF SOFTWARE DEVELOPMENT COPYRIGHTS MAY NOT IMPLY AN ASSIGNMENT OF PATENT RIGHTS IN THE SOFTWARE

JAMES v. J2 CLOUD SERVICES, LLC, Appeal No. 2017-1506 (Fed. Cir. April 20, 2018).  Before Reyna, Taranto, and Hughes.  Appealed from C.D. Cal. (Judge Snyder).  (Inventorship Rights)

Background:

James was a software developer hired by JFAX Communications to develop software for converting facsimiles to emails.  The terms of the development of this software were dictated by a Software Development Agreement (“SDA”) between JFAX and a company called GSP Software, which was affiliated with James.  The SDA stated that GSP “will develop software solutions for the exclusive use of JFAX,” and expressly required the assignment to JFAX of “all copyright interests” in the developed “code and compiled software.” James alleged that he developed and delivered the software under the SDA, and that JFAX did not assist him in developing the software.

Without James’ knowledge, JFAX obtained a patent based on the software (“the ‘638 patent”) directed to systems and methods for converting facsimiles to emails.  Two JFAX employees were listed as the only inventors of the ‘638 patent.  J2 Cloud Services inherited the rights to the ‘638 patent, and James learned of the ‘638 patent when he was contacted by an accused infringer in a separate lawsuit.

James filed a complaint requesting correction of inventorship under 35 U.S.C. § 256.  The District Court dismissed the claim for lack of standing.  Specifically, the District Court ruled that even if James were an inventor, he had assigned, or obligated himself to assign, his patent rights to JFAX.  The District Court relied on two related sources for that conclusion: (1) the SDA; and (2) the “hired-to-invent” doctrine.  James appealed.

Issues/Holdings:

Did the District Court err in dismissing James’ claim for lack of standing?  (continue reading)

Summary by:  Brian Repper

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FEDERAL CIRCUIT HOLDS THAT ALICE’S APPLICATION OF MAYO’S TWO-PART TEST DID NOT CHANGE THE LAW

VOTER VERIFIED, INC., v. ELECTION SYSTEMS & SOFTWARE LLC, Appeal No. 2017-1930 (Fed. Cir. April 20, 2018).  Before Newman, Lourie and Reyna.  Appealed from N.D. Fla. (Issue Preclusion—§101)

Background:

In 2009, Voter Verified sued Election Systems for infringement of the ‘449 patent, which discloses computer-implemented methods of “voting and checking the accuracy of a paper election ballot.”  In this first litigation, the court determined that the claims were not infringed, but were also not invalid under §101 (because Election Systems failed to present any arguments or evidence regarding invalidity of the claims).  The Federal Circuit upheld these determinations on appeal.

In 2016, Voter Verified again sued Election Systems for infringement of the ‘449 patent.  Election Systems filed a motion to dismiss under Rule 12(b)(6) arguing that the claims of the ‘449 patent are invalid under §101.  In response, Voter Verified argued that issue preclusion, or collateral estoppel, precludes Election Systems from relitigating the §101 issue, which it argued had already been decided in the prior litigation.  Election Systems countered that issue preclusion should not apply because there was an intervening change in the law, and, in the alternative, that two of the four required elements of issue preclusion were not present.

The district court granted Election Systems’s motion to dismiss, concluding that the “two-step analysis” recited in Alice constituted a “substantial change” in the law such that the issue of patent validity is not precluded from further litigation.  Under the two-step §101 framework, the court then determined that the patent was based on the abstract idea of “vote collection and verification,” and was made up of “generic computer components performing generic computer functions,” which were insufficient to transform the abstract idea into patent-eligible subject matter.   As a result, the court held that the claims of the ‘449 patent were directed to patent-ineligible subject matter and thus invalid under §101.  Voter Verified appealed.

Issues/Holdings:

Did the district court err in finding that Alice constituted an intervening change in the law? Did the district court err in finding the claims invalid under §101?  (continue reading)

Summary by:  John Hocker

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INCORPORATION BY REFERENCE OF AN IMMEDIATELY PRECEDING APPLICATION DOES NOT SATISFY THE REQUIREMENTS OF A CLAIM FOR PRIORITY TO OTHER PRIOR APPLICATIONS

DROPLETS, INC. v. ETRADE BANK, Appeal Nos. 2016-2504, 2602 (Fed. Cir. April 19, 2018).  Before Dyk, O’Malley and Wallach.  Appealed from the PTAB.  (Claim for Priority)

Background:

After Droplets sued ETRADE Bank for infringement, ETRADE Bank petitioned the PTAB for inter partes review of one of Droplets’ patents at issue in the suit.  The Board found all claims of the patent to be invalid as obvious.  In reaching this determination, the Board found that (1) the patent failed to specifically claim priority to any of the prior applications other than its immediately preceding parent application, and (2) the patent’s incorporation by reference of the immediately preceding parent application did not suffice as a priority claim to the other prior applications.  Thus, the patent was not entitled to the earliest effective filing date in the chain of applications, and as a result a related PCT publication qualified as prior art.

Droplets appealed, and the USPTO Director intervened to defend the Board’s decision.

Issue/Holding:

Did the Board err in finding the priority claim deficient?  (continue reading)

Summary by:  Graham Nelson

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JOHN BEAN TECHNOLOGIES CORPORATION v. MORRIS & ASSOCIATES, INC.

JOHN BEAN TECHNOLOGIES CORPORATION v. MORRIS & ASSOCIATES, INC., Appeal No. 2017-1502 (Fed. Cir. April 19, 2018).  Before Prost, Reyna, and Wallach.  Appealed from E.D. Ark. (Judge Wilson).  (Affirmative Defenses; Ex Parte Reexamination)

Background:

Plaintiff owns a patent directed to a chiller for cooling poultry.  Shortly after the patent issued, Defendant sent a letter to Plaintiff, notifying Plaintiff  that (i) Defendant believed the patent to be invalid based on multiple prior art references identified in the letter, and (ii) any further statements to Defendant’s customers that assert infringement of the patent by the Defendant are likely to be met with a suit for unfair competition.  Plaintiff did not respond to the letter.

Over a decade later, Plaintiff filed a request for ex parte reexamination of the patent, and during the course of that proceeding Plaintiff amended the claims to overcome art-related rejections over various references (including those identified in Defendant’s letter).   The Patent Office issued a reexamination certificate allowing the amended claims and shortly thereafter Plaintiff sued Defendant for infringement of the patent based on activity occurring after the reexamination certificate issued.  Defendant moved for summary judgment and asserted, inter alia, the affirmative defenses of laches and equitable estoppel.

The district court granted summary judgment in favor of Defendant—holding that Plaintiff’s infringement action was barred by both laches and equitable estoppel.  In reaching its determination, the district court found Plaintiff’s silence in response to Defendant’s letter constituted misleading conduct because Plaintiff was aware that Defendant would continue to invest, develop, and sell its chillers absent a response from Plaintiff.  The district court also found that based on the parties’ history of patent litigation, Plaintiff’s choice to not pursue a patent-infringement claim for over twelve years was evidence of misleading conduct.  The district court thus granted summary judgment in favor of Defendant, and entered final judgment.  Plaintiff appealed.

Issue/Holding:

Did the district court err in granting summary judgment?  (continue reading)

Summary byBenji Prebyl

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