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

March 17, 2014


Vederi v. Google - The Circuit reversed a claim construction that relied too heavily on extrinsic evidence and an alleged disclaimer, and that did not give sufficient weight to the plain language of the claim or the specification.

E2Interactive – Here the Circuit reached a conclusion that was different from that in Vederi, reversing a claim construction ruling based upon what the panel determined to be a clear prosecution disclaimer.

Therasense - In a case that turned 10 years old this month, a divided panel affirmed the denial of a motion for attorney fees incurred on appeal, on remand and in pursuing additional fees.

Danisco - The Circuit reversed the dismissal of a declaratory judgment action filed the day a patent issued based upon pre-patent-issuance conduct by the patentee.

Vederi, LLC v. Google, Inc., 2013-1057, 1296 (3/14/2014)

Chief Judge Rader, writing for a unanimous panel, vacated a summary judgment of non-infringement based upon faulty claim construction by the district court, which, due to a narrow claim construction, ruled that the claims at issue did not cover Google's popular Street View product.

The asserted patents relate to a method for creating images of a geographic area through which the user may visually navigate via a computer. In acquiring the images, one or more cameras are mounted on top of a vehicle that is driven through the area. A composite image is generated that provides a wider field of view than would be provided by any single image. Unfortunately for Vederi, all of the asserted independent claims in all four of the asserted patents recited that the image source provides a plurality of images "being substantially elevations of the objects in the geographic area."

The district court concluded that Google's Street View did not infringe after construing "being substantially elevations" as being flat as opposed to being curved or spherical. Google's product combines images of a wide range of views recorded by multiple cameras having wide-angle lenses mounted on a moving vehicle. The views are then stitched together, providing a spherical panorama that permits the user to scroll around and view objects as if the user were standing in the center of the sphere. According to Google, Street View does not infringe because it produces images that are curved or spherical, and not flat.

The district court based its construction largely on extrinsic evidence regarding the technical meaning of "elevation" as an architectural term of art. The panel disagreed with this approach because the court did not adequately consider the intrinsic evidence supporting a broader construction. For example, the claim language supports a broader interpretation since the claim recites "substantially elevations" and not simply "elevations." The panel found that the district court's construction effectively read "substantially" out of the claim, and "a claim construction that gives meaning to all the terms of the claim is preferred over one that does not do so."

According to the panel, the specification also supports a broader construction. For example, the specification discloses the option of using a fish-eye lens and such an image "provides a curved, as opposed to vertical, projection, and almost certainly reflects curvature and perspective." Google's proposed "flat" construction would not allow the claims to cover the fish-eye lens embodiment. The examples in the specification that provide flat images do not require the narrower construction since those examples are merely described as preferable.

Google also cites to a statement in the specification that distinguishes prior art imaging providing samplings on the surface of an imaginary sphere, which is "computationally intensive and hence cumbersome and inefficient in terms of time and cost." However, the panel did not think this statement amounted to a clear and unmistakable disavowal of claim coverage, noting that this reference is fundamentally different from the use of a cluster of cameras to take images looking out in all directions. Google also suggested that an argument made during prosecution to distinguish prior art disclaimed the construction sought by Vederi, but the panel similarly did not think that argument constituted a clear and unambiguous disavowal of spherical or curved images.

Vederi argued, given the broader construction, that the Circuit should reverse the district court's denial of its motion for summary judgment of infringement, but the panel refused to do so without the district court's fact-finding under a proper construction of the claims.

E2Interactive, Inc. v. Blackhawk Network, Inc., Fed. Cir. Case 2013-1151 (3/12/2014)

In an interesting but nonprecedential opinion, a unanimous panel reversed a $3.5 million judgment of infringement against a Safeway subsidiary based on faulty claim construction. The district court considered InComm's statements made during reexamination but relied upon what it characterized as the plain language of the claim in broadly construing the claim and rendering a judgment of infringement. The Circuit panel disagreed, ruling that the statements disavowed a broad definition in order to distinguish the prior art.

The claims are directed to the use of prepaid gift cards at point-of-sale terminals. They describe a computer-implemented method for processing a card having a central processor in communication with point-of-sale terminals having a terminal identifier. Blackhawk argued that the claims require using the terminal identifier to determine whether a terminal is authorized to request a particular transaction. It argued that during reexamination, InComm acknowledged that the prior Weber patent discloses a transaction request that includes a terminal identifier but overcame the rejection by arguing that Weber fails to disclose using the terminal identifier as a basis for determining if a terminal is authorized to perform the requested transaction. InComm argued that the plain language of the claims simply requires determining terminal authorization without requiring the use of any particular type of information, and that Blackhawk's proposed narrower construction would exclude disclosed embodiments in which the determining step does not require using the terminal identifier.

Coming to a different conclusion than the panel in Vederi v. Google, the panel here agreed with Blackhawk that InComm's statements clearly and unmistakenly require using the terminal identifier to determine if a terminal is authorized to make the requested transaction, and that the doctrine of prosecution disclaimer precludes patentees from recapturing through claim interpretation specific meanings disclaimed during prosecution. Here, not only did InComm's prosecution counsel argue that Weber failed to disclose using the terminal identifier to determine if a terminal was authorized, but InComm's expert witness made the same argument in a declaration supporting counsel's reexamination argument.

This decision is interesting because the panel did not even address InComm's arguments (1) that the plain language in claim supported the district court's construction and (2) that the narrower construction would exclude coverage of one of the disclosed embodiments, both of which were considered critical in Vederi. This case demonstrates the importance of closely studying the prosecution history when rendering an infringement opinion or when presenting claim construction arguments, even when the claim language appears to be clear and broad.

Therasense, Inc. v. Becton, Dickinson & Co., Fed. Cir. Case 2012-1504 (3/12/2014)

In the district court Becton and Nova ("Becton") won judgments of non-infringement, invalidity, and inequitable conduct, supporting a finding that the case was exceptional and awarding almost $6 million in attorney fees. On appeal, in an important en banc ruling, Therasense v. Becton Dickinson & Co., 649 F.3d 1276, 1297 (Fed. Cir. 2011), the Federal Circuit elevated the standard of proof for inequitable conduct to require that the accused infringer must prove both elements – intent and materiality - by clear and convincing evidence. The Circuit thus vacated the district court's judgment of inequitable conduct but, applying the higher standard on remand, the district court again concluded that the patent was procured through inequitable conduct. The district court reinstated its $6 million attorney fee award, supplementing it with post-judgment interest. However, the court denied Becton's motion for fees incurred on appeal and remand, as well is its fees incurred seeking additional fees, referred to as "fees-for-fees."

On appeal, Becton argued it was entitled to appellate and remand fees because of the district court's exceptional case finding. Chief Judge Rader, writing for the majority, noted that Becton presented no evidence of bad faith, and the mere act of pursuing an appeal cannot by itself suggest an abuse of the legal system. Here the en banc ruling shows that the appeal was not without merit. Even if the appeal could possibly be considered exceptional, section 285 only permits the award to "prevailing parties" and in this appeal it was Therasense's successor Abbott and not Becton who prevailed. Therefore, the district court did not abuse its discretion in declining to award fees for the appeal, the rehearing en banc, or the remand.

Becton also argued that Abbott forced it to incur additional fees in pursuing additional attorney fees. These "fees-for-fees" were denied by the district court and the panel affirmed that ruling, citing Supreme Court precedent for the proposition that such fees-for-fees litigation should be excluded, as such "can spawn a Kafkaesque judicial nightmare of infinite litigation to recover fees for the last round of litigation over fees."

In dissent, Judge Dykargued that fee shifting statutes in other areas of the law treat all phases of the litigation, including appellate proceedings, as a unitary whole, and there is no reason section 285 should be handled any differently. As to the "prevailing party" argument, Becton prevailed in the appeal on invalidity and noninfringement, and therefore Becton was in fact a prevailing party and could be awarded attorney fees on appeal under section 285. Finally, Judge Dyk noted that fees-for-fees litigation should be excluded only to the extent the applicant ultimately fails to prevails, and since Becton prevailed here, those fees should be allowed.

Danisco US Inc. v. Novozymes A/S, Fed. Cir. Case 2013-1214 (3/11/2014)

The district court dismissed this declaratory judgment case filed the day Novozymes's patent issued based upon lack of subject matter jurisdiction since, according to the court, Novozymes had not engaged in any post-patent-issuance behavior toward Danisco, and therefore there was no case or controversy. A unanimous Circuit panel refused to accept the "bright line" rule that activity prior to issuance of a patent cannot give rise to a justiciable controversy.

Citing MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), the panel noted that the Supreme Court has repeatedly found the existence of an actual case or controversy even in situations in which there was no indication that the declaratory judgment defendant was preparing to enforce its legal rights. The Court has instead only "required that the dispute be definite and concrete, touching the legal relations of parties having adverse legal interests." Given the low bar set by MidImmune, the panel found plenty of bases for Danisco's DJ filing.

Here Novozymes's claim covering genetically modified enzymes was the sole claim of its patent and is the same claim that Novozymes described during prosecution as interfering with the claim in a Danisco patent. Novozymes twice asserted that Danisco's patent covering similar subject matter was invalid and that Novozymes, not Danisco, was entitled to a patent on the claimed invention. Novozymes has twice sued Danisco or its predecessors for patent infringement regarding related products, once on the day its patent issued. Novozymes has never withdrawn its allegation that Danisco's variant is encompassed by the claim that issued in Novozymes's patent.

According to the panel, Danisco was in the position of either abandoning its product or running the risk of being sued for infringement, which is precisely the situation that the Declaratory Judgment Act was intended to remedy.


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