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Federal Circuit Review Provided by Patterson, Belknap, Webb & Tyler LLP

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The following is a review of Federal Circuit intellectual property cases decided the week ending August 22, 2003.

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CLAIM CONSTRUCTION; DICTIONARY DEFINITIONS

E-Pass Technologies, Inc. v. 3COM Corp., No. 02-1593 (August 20, 2003).

Opinion by Dyk, joined by Clevenger and Linn.

The Federal Circuit reversed and remanded a district court's grant of summary judgment of non-infringement.

The district court relied on statements in the written description that the electronic multi-function card had the dimensions of usual credit cards, that the object of the invention was to simplify the use of credit cards, and that the electronic multi-function card was a replacement for multiple credit cards. The district court interpreted these statements as requiring interchangeability between credit cards and the claimed multi-function card. Since interchangeability required that the multi-function card must fit into the many ATM slots and other devices designed for credit cards, the district court held that the term multi-function card was limited to standard-credit-card-size devices. The court also relied on inventor testimony supporting this construction, and on the fact that all of the prior art considered during prosecution concerned credit cards. In regard to the doctrine of equivalents, the district court held that application of the doctrine of equivalents to include larger cards would vitiate the multi-function card claim term.

The Federal Circuit opined that the district court's reliance on certain objects of the invention was erroneous. There could be many objects of an invention, and claims are not required to achieve all of these objects. The statements in the written description could be characterized as descriptions of the preferred embodiment, and therefore, there was no clear evidence that the patentees were acting as their own lexicographers. Hence, the presumption that claim language has its ordinary meaning was not rebutted. The ordinary meaning is properly determined by reference to dictionary definitions of the word "card," and these definitions did not support the district court's limitation to standard credit cards. An issue of fact remained concerning whether the accused devices-3COM and Palm, Inc.'s "Palm Pilot" PDAs-met the "flat rectangular piece of stiff material" definition.
Click here <http://www.fedcir.gov/opinions/02-1593.doc>

 

JURISDICTION

Elec. For Imaging, Inc. v. Coyle and Kolbet Labs, No. 02-1536 (August 18, 2003).

Opinion by Gajarsa, joined by Rader and Bryson.

The district court granted a motion to dismiss for lack of personal jurisdiction. The Federal Circuit reversed and remanded.

Plaintiff sought declaratory and injunctive relief that defendants' patent was invalid and that plaintiff did not misappropriate defendants' trade secrets or breach contracts entered into with defendants. The district court, applying Ninth Circuit law, found that the defendants did not have the "minimum contacts" with California to justify the exercise of jurisdiction over defendants.

The Federal Circuit held that Federal Circuit law applied to the patent claim and Ninth Circuit law applied to the state law claims. Plaintiff only claimed specific personal jurisdiction. The court held that personal jurisdiction existed for the patent claim because the defendant's activities were purposefully directed at residents of California, the claim arose out of the or related to defendant's activities with California, and no other considerations made jurisdiction unreasonable. The court also found that personal jurisdiction existed for the state law claims under Ninth Circuit law.
 <http://www.fedcir.gov/opinions/02-1536.doc>

 

271(g) INFRINGEMENT

Bayer AG et al. v. Housey Pharmaceuticals, Inc., No. 02-1598 (August 22, 2003).


Opinion by Dyk, joined by Mayer and Prost.

Bayer brought a declaratory judgment action against defendant Housey. Housey counterclaimed for infringement under 271(g). The patent in suit related to a process for identifying the effect that different agents have on the activity of a particular protein. The district court dismissed Housey's 271(g) counterclaims for failure to state a claim because Bayer was simply using in the United States information that resulted from the patented process (i.e., the effect any agent causes on a particular protein). In affirming the dismissal, the Federal Circuit held that 271(g) is limited to physical goods that are manufactured and does not include information generated by a patented process.

 

 

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The following is a review of Federal Circuit intellectual property cases decided the week ending August 29, 2003.

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INDEFINITE; ENABLEMENT

Honeywell International, Inc. v. International Trade Commission, No. 02-1393, -1448 (August 26, 2003)

 

Opinion by Linn, joined by Lourie and Gajarsa.

 

The Federal Circuit affirmed a decision by the United States International Trade Commission ("Commission"), which held that appellees (collectively, "Hyosung") did not violate section 337 of the Tariff Act of 1930 because the patent at issue, U.S. Patent No. 5,630,976 (the "'976 patent"), was invalid as indefinite under 35 U.S.C. § 112, para. 2.

 

The '976 patent disclosed a process for production of a product called polyethylene terephthalate ("PET") yarn. The claims of the '976 patent required that the PET yarn produced by the claimed process fall within a specified melting point elevation ("MPE") range at some point during the process. The written description gave one example of how to measure MPE: using a Differential Scanning Calorimeter ("DSC"). But neither the claims, the written description, nor the prosecution history disclosed any method that must be used to prepare the PET yarn specimen for thermal analysis in the DSC.

 

As of the earliest priority date of the '976 patent, there were three methods published in the art for gathering a sample PET yarn specimen: coil, cut, and restrained. A fourth method was the "ball" method, which was known to those of skill in the art at the time of the invention but had not been published. The Choice of sample preparation was critical, because the calculated MPE for a given sample could vary greatly depending on which sample preparation was used. Without any reference to a sample preparation method, the Federal Circuit found that there were at least two possible constructions of the term "MPE". One construction was the "any one method", i.e., if the MPE fell within the claimed range using any one of the four known sample-preparation techniques (cut, coil, restrained, or ball), the claim would be satisfied. The second construction was the "all methods" construction, i.e., the claims are only satisfied if, during the relevant step in the production process, the MPE fell within the claimed range using each of the four known sample-preparation techniques.

 

The patentee ("Honeywell") suggested a third construction: The Federal Circuit should adopt the "ball method only" construction because this was the "more practical" method than the others. But the Federal Circuit rejected this argument, holding that even if the "ball method" were most practical, "intrinsic evidence cannot be construed to eliminate all other known methods of sample preparation." And the Federal Circuit observed that, in any event, the ball method was "outside the scope of any written publication."

 

The Federal Circuit further found that it could not limit the construction of the MPE to the "any one method" construction, because the sample preparation method was critical and because "[c]ompetitors trying to practice the invention or to design around it would be unable to discern the bounds of the invention."

 

Finally, Honeywell admitted that, under the "all method" construction, the invention would be inoperable. The Federal Circuit found that "[w]hile an inoperable claim construction would render the claim invalid for lack of enablement rather than for indefiniteness, the claim is nevertheless invalid." Therefore, the court concluded that, because the '976 patent claims were either indefinite or not enabled, the Commission correctly determined that Hyosung did not violate section 337 of the Tariff Act.

http://www.fedcir.gov/opinions/02-1393.doc

 

 

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The following is a review of Federal Circuit intellectual property cases decided the week ending September 5, 2003.

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PREEMPTION

University Of Colorado Foundation, Inc., et al., v. American Cyanamid Corp., No. 02-1587 (September 3, 2003)

Opinion by Gajarsa, joined by Rader and Bryson

 

The Federal Circuit held that a state law claim for unjust enrichment was not pre-empted by federal patent law.

 

Several doctors developed a formula for a prenatal vitamin that would permit increased iron absorption over vitamins available on the market. The doctors provided a confidential paper describing the improvement to American Cyanamid. Without informing the doctors, American Cyanamid applied for a patent that covered the improved vitamin and copied sections of the doctors' confidential paper into their application. American Cyanamid obtained the patent and successfully enforced it against generic manufacturers. The doctors filed a claim for unjust enrichment against American Cyanamid.

 

The Federal Circuit found that this claim was not pre-empted by federal patent law. The court reasoned that the doctors' did not seek "patent-like protection" for their idea with their unjust enrichment claim. Instead, it was truly a claim for breach of an implied-in-law contract between the doctors and American Cyanamid relating to the confidentiality of the paper. The court also found that the doctors' claim did not conflict with the purposes of the patent system explained in the Supreme Court's decision in Aronson v. Quick Point Pencil. Recovery on the claim would allow the doctors to recover the fruits of their invention, which thus fostered innovation, but would not withdraw ideas from the public domain.

 

The court also affirmed the damages award, which consisted of a disgorgement of that portion of American Cyanamid's profits attributable to its right to exclude generic competitors, and affirmed that the doctors were the sole inventors of the patent obtained by American Cyanamid.

http://www.fedcir.gov/opinions/02-1587.doc

 

 

ASSIGNMENT

University of West Virginia Board of Trustees v. VanVoorhies, No. 02-1533 (September 3, 2003).

 

Opinion by Clevenger, joined by Lourie and Prost.

 

VanVoorhies appealed the decision of the district court denying his motion requesting relief from an order requiring the assignment of certain patents to the University of West Virginia (the "University"). The Federal Circuit reversed.

 

VanVoorhies, a graduate student at the University, co-invented an antenna that would later be embodied in a U.S. Patent. VanVoorhies assigned his rights to this invention ("First Invention") to the University. Later, VanVoorhies invented a second antenna ("Second Invention"). VanVoorhies failed to assign this invention to the University, and both VanVoorhies and the University submitted patent applications based on the Second Invention. After the University sued, the district court issued an order (the "May 25 Order") that VanVoorhies assign the '340 application (submitted by the University) and the '609 and '610 applications (submitted by VanVoorhies). The Federal Circuit affirmed.

 

Afterward, the University sent VanVoorhies assignment forms covering the three applications mentioned in the May 25 Order as well as three U.S. Patents also based on the Second Invention, which issued after the May 25 Order ("Second Generation patents"). When VanVoorhies refused to sign, the University successfully sought an order with the district court directing VanVoorhies to execute the assignment forms. VanVoorhies then moved under Federal Rule of Civil Procedure 59 and 60 for relief from the order. The district court denied the motion, stating that the three assignments at issue "included patents that were part of the litigation in this matter."

 

On appeal, the Federal Circuit stated that the issue to resolve was whether VanVoorhies was compelled to assign the Second Generation patents by: (1) the assignment agreement relating to the First Invention, (2) the University's patent policy, or (3) the May 25 Order. The Federal Circuit quickly disposed of the first two possibilities. The court found that the clear language of the First Invention's assignment agreement limited the exact invention embodied in the First Invention along with its direct descendents and that the applicability of the University's patent policy to the Second Generation patents had never been litigated. Therefore, neither required assignment of the Second Generation patents.

 

Nevertheless, the Federal Circuit held that the case must be remanded to the lower court for a determination of whether the May 25 order covered the Second Generation patents. The court conceded that the Second Generation patents were neither specifically named in the May 25 Order nor were they patents "arising from" the applications that were specifically named. However, the Federal Circuit held that the Second Generation patents might cover the "invention and technology embodied or disclosed" in the applications named in the May 25 Order, an issue that can only be resolved after claim construct

ion and an examination of the disclosures of the patents and applications in question.

http://www.fedcir.gov/opinions/02-1533.doc

 

CORROBORATION; DAMAGES

The Dow Chemical Company v. Mee Industries, Inc. et al., No. 03-1117 (September 5, 2003).

 

Opinion by Dyk, joined by Clevenger and Bryson.

 

Following a bench trial, the district court found the asserted claims invalid and not infringed. In addition, the district court held that the patentee failed to prove damages because it did not offer expert testimony. The Federal Circuit reversed the finding of invalidity of 2 claims, vacated and remanded with regard to contributory infringement and induced infringement of those claims and held that the district court erred in finding that Dow did not carry its burden with respect to damages.

 

As to invalidity, the Federal Circuit found that the district court erred in relying on the testimony of Twombly, a turbine operator. Twombly's testimony was vague on whether it occurred more than 1 year before the filing date and lacked corroboration. "Corroboration is required of any witness whose testimony alone is asserted to invalidate a patent, regardless of his or her level of interest."

 

As to inducing and contributory infringement, the Federal Circuit held that the district court committed two legal errors. First it looked to the reason why the user added water. However, the motive of the accused infringer when performing a method is irrelevant. Second, although the claim had a statement of intended use, it is irrelevant that the claimed method was not necessary for achieving that result.

 

As for damages, the Federal Circuit held that the district court was wrong in not awarding damages without expert testimony. The patent statute requires a court to award a reasonable royalty. Section 284 also makes it clear that expert testimony may be considered, but does not have to be. If the court finds infringement on remand, it must consider the Georgia Pacific factors and award such a reasonable royalty as the evidence will support. http://www.fedcir.gov/opinions/03-1117.doc