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Fresh From the Bench: Recent Patent Cases From the Federal Circuit

March 10, 2014

Overview

Ancora Technologies – The Circuit reinstates a patent case because the district court improperly limited the construction of "program" to "application program."

In re Apple – Applying the "clear abuse of discretion" standard of review, a split panel denies a writ of mandamus that would have ordered the E.D. of Texas to transfer case to the N.D. of California.

Ancora Technologies, Inc. v. Apple, Inc., Fed. Cir. Case 2013-378 (3/3/2014)

The Federal Circuit continued its assault on district court claim construction rulings (see Butamax, Frans Nooren and Starhome cases discussed in March 3 report) in holding that the district court improperly construed the claim term "program." In doing so, a unanimous panel reversed the district court's summary judgment dismissal of plaintiff Ancora's claims and reinstated an infringement case against Apple.

The district court had ruled that the term "program" was limited to "application programs," thereby excluding operating systems such as Apple's accused iOS that automatically checks for signs of piracy. The parties agreed in briefing before the Circuit that the normal definition of "program" would encompass both operating systems and the application programs that run them. The panel noted that the doctrine of claim differentiation supports the broader definition as well, since claim 1 at issue references simply a "program" while unasserted claim 18 recites a method for accessing an "application software program." Several examples of application programs are provided in the specification, but for each example applicant noted that this was the "preferred embodiment" or a "non-limiting example." The panel therefore concluded that nothing in the specification would lead one of ordinary skill to understand that a narrower definition was intended. Finally, the panel reviewed the prosecution history in detail and found that it similarly did not support narrowing the normal definition of "program."

Apple also contended that the terms "volatile memory" and "non-volatile memory" were indefinite but the court rejected that contention, finding that the ordinary meaning, the specification and the prosecution history all showed what applicant regarded as his invention.

Therefore, the panel reversed the granting of Apple's motion for summary judgment of noninfringement and affirmed the denial of Apple's motion for summary judgment of indefiniteness.

While we often tire of repeatedly referencing "the preferred embodiment" and "non-limiting examples," this case shows the value of such descriptions. It also shows that when we are providing coverage opinions, we have to be very careful when considering defining terms in a manner that is different than the way such terms are commonly used by those skilled in the art.

In re Apple Inc., Fed. Cir. Case Misc. Docket 156 (2/27/2014)

It was not a good week for Apple as a split panel of the Circuit denied Apple's writ of mandamus that would have ordered the Eastern District of Texas to transfer a case to Apple's home district, the Northern District of California.

Writing for a majority of the panel, Judge Reyna first recited the high standard of proof that is needed to be successful – "clear abuse of discretion." Stated another way, mandamus will be granted only if refusing transfer would produce a "patently erroneous result" or "if it is clear that the facts and circumstances are without any basis for a judgment of discretion."

The district court examined the private and public interest factors but, according to the majority opinion, was stymied in its analysis by Apple's lack of evidence. The district court had noted that it was unable to evaluate the convenience of witnesses because of Apple's failure to identify willing witnesses who would have to travel to Texas. In light of Apple's "vague assertions," the district court was unable to weigh the "ease of access to sources of proof." As to the remaining factors, the district court found that local factors weighed slightly in favor of transfer and the remaining public factors were neutral.

Apple also asserted that the district court erred by failing to permit Apple to supplement the record after denial of the motion, but the district court noted that there was no reason that evidence could not have been submitted earlier.

In reviewing the district court's handling of the case, the majority found that nothing suggests that the district court conducted an improper analysis, but that the court simply determined that the evidence before it was so general that the court was unable to evaluate its relevance in the transfer analysis.

In a stinging dissent Judge Newman wrote that the plaintiff Core Wireless, a Texas corporation that manages patent license agreements, had only six employees who lived in the district, and the patented products are not made, used, or sold in Texas or elsewhere. She noted that the record shows that the research, design and development of the accused products, the iPhone and iPad, took place in Cupertino, where Apple employs 13,000 people. Virtually all of Apple's business documents relating to marketing strategy and product revenue for the accused products are located in or near Cupertino. Judge Newman conceded that Apple may not have identified specific witnesses or singled out individual documents but the evidence shows that all relevant Apple witnesses and documents are located in the Northern District, as are the suppliers of the accused components. Moreover, she noted, the Eastern District of Texas has "no meaningful connection to the litigation."

In conclusion, Judge Newman argued that the district court "greatly mischaracterized Apple's proffered evidence" and the writ of mandamus should issue to account for the "extreme imbalance of convenience" as between California and Texas.

If nothing else, this case is a perfect example of how difficult it is to be successful on a writ of mandamus to the Circuit. It also shows that, regardless of how confident we are that a motion to transfer will be granted, we nonetheless have to disclose our case strategies early on and review, in exhaustive detail, the particular witnesses and documents that will be used to defend a case brought in a remote forum. It also shows the value in bringing a case in a forum of your client's choosing, whether for patent infringement or declaratory judgment, as to achieve a transfer the defendant will have to lay out its evidence far earlier than it otherwise would have to do so.

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