Federal Circuit Case Alert Archive

• (Procedure) May 13, 2008 Acumed v. Stryker No. 2007-1115
  (Procedure) In Acumed v. Stryker, No. 2007-1115, the Federal Circuit (Newman, Gajarsa and Linn) reversed a district court’s ruling the claim preclusion barred the plaintiff from asserting its patent against a product that it could have included in a prior lawsuit against the defendant’s other products. Even though the instant product was sold at the same time as the prior adjudicated product and could have been included in that prior case, the Fed. Cir. held that the new case was not barred because the defendant conceded that the products were not “essentially the same”:
  
  “[A] claim for patent infringement can only be barred by claim preclusion if that claim arises from the same transactional facts as a prior action. … [O]ne of the essential transactional facts giving rise to a patent infringement claim is ‘the structure of the device or devices in issue.’ Thus, two claims for patent infringement do not arise from the same transactional facts unless the accused devices in each claim are ‘essentially the same.’” [Slip Op. at 10].
  
  The Fed. Cir. also explained that “[a]ccused devices are ‘essentially the same’ where the differences between them are merely ‘colorable’ or ‘unrelated to the limitations in the claim of the patent.’” [Slip Op. at 6].
  
  
• (Claim Construction) April 15, 2008 O2 Micro v. Beyond Innovation, No. 2007-1302
  (Claim Construction) On April 3, 2008, in O₂ Micro v. Beyond Innovation, No. 2007-1302, the Federal Circuit (Lourie, Clevenger and Prost) ruled that the district court must construe ordinary terms – like the term "only if" at issue in the instant case – if the parties dispute its scope (e.g., dispute how the term should be construed): “When the parties present a fundamental dispute regarding the scope of a claim term, it is the court’s duty to resolve it.”
  
  
• (Obviousness) March 31, 2008 Ortho-McNeil Pharmaceutical v. Mylan Labs, No. 2007-1223
  The Federal Circuit (Michel, Rader and Linn) issued a patentee-friendly ruling that affirmed a judgment that patent claims to a pharmaceutical were not obvious under the KSR standard. Although a key ingredient of the invention may have been one of many ingredients a skilled artisan may have tried, evidence showed it was "not the easily traversed, small and finite number of alternatives that KSR suggested might support an inference of obviousness." The court referenced the need to avoid "hindsight," stating that the inventor's "pathway to the invention, of course, seems to follow the logical steps to produce these properties, but at the time of invention, the inventor's insights, willingness to confront and overcome obstacles, and yes, even serendipity, cannot be discounted." The court also emphasized that "a flexible TSM test remains the primary guarantor against a non-statutory hindsight analysis such as occurred in this case.
  
  
• (Infringement) Sep. 20, 2007 BMC Resources, Inc. v. Paymentech, L.P., No. 2006-1503
  n(Infringement) In BMC Resources, Inc. v. Paymentech, L.P., No. 2006-1503, the Federal Circuit (Rader, Gajarsa and Prost) ruled that, for a single party to be directly liable for "joint infringement by multiple parties of a single claim," that party must "control or direct" the actions of the other parties that results in performance of all steps of the claimed method – e.g., “control or direct” the activities of another party or “provide instructions or directions” regarding how another party should use supplied data to perform claimed steps. This case involved an e-commerce method claim in which the accused defendant performed only one of several claim steps, and other steps were performed by financial or other industries to which there was no showing that the defendant controlled or directed.
  
  
• (Willfulness, Discovery) Aug. 20, 2007 In re Seagate Tech., Misc. No. 830
  (Willfulness, Discovery) In in re Seagate Tech., Misc. No. 830, the Federal Circuit (en banc, Gajarsa (concur) and Newman (concur) issued a ruling that substantially revises the standard for willful infringement and the scope of waiver for trial counsel advice and work-product. The Federal Circuit also held that, generally, relying on advice of counsel does not constitute waiver of the attorney-client privilege for communications with trial counsel or trial counsel work-product. The court cautioned that this was not an absolute rule, and waiver may be possible "such as if a party or his counsel engages in chicanery." In reaching its holding, the Fed. Cir. indicated that in many circumstances post-litigation conduct may be of little significance, and that whether a preliminary injunction is sought and the ruling thereon may be indicative of whether post-litigation conduct was willful.
  
  
• (Obviousness) Sep. 6, 2006 Alza Corp. v. Mylan Labs, No. 06-1019
  (Obviousness)  In Alza Corp. v. Mylan Labs, No. 06-1019, the Federal Circuit (GAJARSA, Clevenger and Prost) affirmed a bench trial judgment that patent claims were invalid as having been obvious.  Perhaps in light of the Supreme Court's pending review of the obviousness standard in the KSR case, the Court provided historical support for its motivation-to-combine test.  The Court also stressed that its test was not rigid or tied to any particular type of evidence -- e.g., evidence is not just prior art references, but also may be expert testimony of what was known by a person skilled in the art at the time of the invention.
  
  
• (Equivalents) August 3, 2006 Amgen v. Hoechst Marion Russel, No. 05-1157
  In Amgen v. Hoechst Marion Russel, No. 05-1157, the Federal Circuit (Michel (Dissenting), Clevenger and SCHALL) ruled that the patent owner did not overcome the presumption that a narrowing amendment created prosecution history estoppel that barred the Doctrine of Equivalents (Chief Judge Michel's dissent concerned other issues).  The decision provides incremental insight into -- and narrowly applies -- the three exceptions for overcoming the presumption of prosecution history estoppel -- i.e., (1) equivalent in question was not foreseeable, (2) the narrowing amendment was tangential to the accused equivalent in question or (3) some other reason the patentee could not have reasonably been expected to describe in the claim language the accused equivalent.  The discussion is too complex to summarize here, but those persons addressing this issue should read at least pages 30-43 of the attached decision.
  
  
• (Inequitable Conduct) Oct. 10, 2007 Nillsen v. Osram Sylvania, No. 2006-1550
  (Inequitable Conduct) In Nillsen v. Osram Sylvania, No. 2006-1550, the Federal Circuit (Mayer, Lourie and Linares (sitting by designation) affirmed a finding that a family of related patents were unenforceable based on inequitable conduct related to (1) improperly paying small entity maintenances fees after patents had been licensed to a large entity; (2) improperly claiming priority to prior related patents; (3) failure to disclose pending litigation to the Patent Office; or (4) failure to disclose prior art. The Court emphasized the limits of its decision to the facts of this particular case and the deference it gave to the district court’s fact finding as to the patentee’s intent to mislead.
  
  
• (Injunction) Oct. 18, 2007 Paice LLC v. Toyota No. 2006-1610
  (Injunction) In Paice LLC v. Toyota, No. 2006-1610, the Federal Circuit (Lourie, Rader and Prost) issued its first significant post-eBay decision by affirming a district court’s grant of an “ongoing royalty” in lieu of the injunction sought by a patent licensing company. The district court denied a permanent injunction, but sua sponte ruled that the defendant must pay an ongoing royalty of $25 per future infringing product (the Toyota Prius II hybrid car). That was the same royalty rate found by the jury for past infringement. The Federal Circuit affirmed denial of the injunction, but vacated and remanded the ongoing royalty amount because the district court had not articulated how it was derived. The court also strongly suggested that he parties first be allowed to negotiate an ongoing rate and other terms for future use before the court imposes them. Judge Rader’s concurrence also emphasized first giving the parties a chance to negotiate, and that the ongoing rate for future use has different considerations than the jury determined reasonable royalty for past infringement.