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

February 1, 2016


By Peter E. Heuser and Steve S. Ford

Akzo – The Circuit affirms the granting of defendant Dow's summary judgment of non-infringement and the granting of Akzo's summary judgment of no indefiniteness. The panel rejects Akzo's proposed construction since its proposal renders a critical term of the claim superfluous. As to literal infringement, the panel also disagrees that Akzo's unrebutted expert testimony creates genuine issues of fact that preclude summary judgment. The testimony is "ambiguous at best" and does not refute Dow's evidence as to a lack of "accumulation" in Dow's accused process. Akzo's expert testimony also fails to establish a genuine issue of material fact as to the doctrine of equivalents because it fails to address the issue of whether Dow's process operates in "substantially the same way."

Dow's cross-appeal as to indefiniteness of the phrase "viscosity below 10 Pa.s" is unsuccessful even though the claim fails to recite the temperature at which viscosity is to be measured. There is no "clear error" as to the district court's ruling that extrinsic evidence supports Akzo's argument that one of skill in the art would measure viscosity at room temperature. With respect to the other language Dow challenges as being indefinite, the panel rejects Dow's argument that, in affirming the district court's construction, the Circuit runs afoul of the principle that courts may not redraft claims to sustain their validity. The panel notes that it is merely construing the claims in accordance with the specification.

Avid – The jury found that Harmonic did not infringe two patents asserted by Avid. As to one of two disputed claim elements, the jury was provided a narrow construction based on what the district court determined to be a prosecution disclaimer. However, the Circuit rules that the prosecution disclaimer is not sufficiently "clear and unmistakable." The panel thus sets aside the general noninfringement verdicts as to each patent because Harmonic did not argue that the evidence compels a finding of non-infringement independently of the construction error. Avid is entitled to a new trial on infringement, though satisfaction of this particular claim element is now settled because Harmonic has not disputed Avid's contention that Harmonic's system satisfies this claim element when properly construed. Avid has not, however, shown entitlement to entry of a judgment of infringement because the evidence does not compel a finding of infringement of the other claim element in dispute, which at present is without a claim construction.

Agilent – The Circuit dismisses an appeal by an alleged successor-in-interest to an inter partes reexamination for lacking a cause of action. The correct party to bring the appeal was the third party that requested and participated in the reexamination proceedings. The Circuit declines to decide whether a successor-in-interest becomes the third party requester since no successor-in-interest was ever established in this case.

Akzo Nobel Coatings, Inc. v. Dow Chemical Company,
Fed. Cir. Cases 2015-1331, -1389 (January 29, 2016)

Akzo sued Dow for infringement of its '956 patent, directed to an extrusion process that generates low viscosity aqueous polymer dispersions. In order to achieve uniform distribution of the polymer in the aqueous medium, the specification notes that "the mixture cannot be heated above the boiling point of the carrier liquid, or else the liquid boils and it becomes impossible to disperse the polymer." Claims 1 and 2 are pertinent to this appeal:

1. A process for producing a dispersion of a polymer in an aqueous medium in which the polymer is dispersed in an aqueous medium in an extruder at a temperature above 100° C. in an extruder having an outlet

wherein the pressure in the extruder is maintained above atmospheric so that the aqueous medium does not boil characterized by maintaining the pressure above atmospheric for the extruder at the outlet with a pressurized collection vessel and

wherein aqueous dispersion from the extruder has at least 25% by weight of the aqueous medium where the aqueous medium has less than 40% by weight of organic solvent and

wherein the aqueous dispersion enters the outlet and pressurized collection vessel at a pressure above atmospheric so that the aqueous medium does not boil and is subjected to the action of a cooling zone to lower the temperature of the aqueous dispersion to below 100° C. to have an aqueous dispersion with a viscosity below 10 Pa.s.

2. A process according to claim 1 which is carried out at a temperature of from about 5 to 150° C. above the melting point of the polymer.

Dow's accused process uses an extruder to generate low viscosity polymer dispersions. The dispersion exits the extruder, passes through a valve located at the extruder's outlet, and then travels through a series of pipes and heat exchangers. The dispersion then continues on through a filter and collects in a "Product Tote," an unpressurized compartment, eventually used to transport the end-product. In view of what Dow considered to be Akzo's failure to identify any "pressurized collection vessel" in the accused process, Dow sought leave of court to file an early summary judgment motion of noninfringement. The district court granted the request and combined the summary judgment and Markman hearings.

The district court first construed "pressurized collection vessel" as "tubing, piping, or other container where a desired material accumulates, which is maintained above atmospheric pressure." The court next addressed and rejected Dow's contention that "viscosity below 10 Pa.s" rendered the claims indefinite.

In light of the above constructions, the district court granted Dow's motion for summary judgment of noninfringement of claims 1-8. The court found that "Dow's accused process uses a valve and allows the polymer dispersion to flow continuously. It does not accumulate." That lack of accumulation precluded a finding of literal infringement as well as infringement under the doctrine of equivalents.

Claim Construction Is Affirmed

On appeal, Akzo first faults the district court for narrowly construing "pressurized collection vessel" to require accumulation. Akzo argues that the term should instead assume its ordinary meaning of "gather or receive." Akzo contends that such a construction is supported by both the claim language and specification, neither of which requires the dispersion to be held for a period of time. According to Akzo, the court's construction imports further, unspecified process limitations on how long the dispersion must be in the vessel and the manner by which the dispersion exits the vessel, among others.

We agree with the district court that adopting Akzo's proffered construction of "gather or receive" would "obviate the import of the word 'collection.'" There is no dispute that the "pressurized collection vessel" receives the dispersion; that function is clearly contemplated by the surrounding claim language. But allowing "collection" to mean "receive" would render "collection" entirely superfluous and allow any pressurized vessel to constitute a "pressurized collection vessel"; such a result is disfavored. The district court's construction of "accumulation," on the other hand, gives the term "collection" proper meaning in context. Moreover, the remainder of the specification supports the court's construction. Thus, as the court noted, to give meaning to "collection" consistent with the specification, "material must be permitted to accumulate within the vessel, rather than all of the material flowing through the vessel at a constant rate."

Summary Judgment of No Literal Infringement Is Affirmed

Akzo next argues that it has raised a genuine issue of material fact as to literal infringement under the court's construction of "pressurized collection vessel." As the movant, Dow had the initial responsibility of identifying the legal basis of its motion, and of pointing to those portions of the record that it believes demonstrates the absence of a genuine issue of material fact. Dow satisfied this burden by identifying that its accused process lacks a "pressurized collection vessel," as construed, and by pointing to record evidence suggesting that, in its process, the material continuously passed through the heat exchangers. Accordingly, the burden shifted to Akzo to designate specific facts showing that there is a genuine issue for trial.

For its part, Akzo had to present evidence that the dispersion accumulates in Dow's downstream heat exchangers and pipes. Akzo primarily relied on the declaration of its expert, Dr. Mount, which stated that the piping "represents a defined volume of space in which the dispersion collects and is resident for a period of time such that a backpressure is created" on the extruder. According to Akzo, that "unrebutted" statement established a genuine issue of material fact as to whether Dow's pipes and heat exchangers "accumulate" dispersion, as required by the claims.

We disagree. Dr. Mount's statement is ambiguous at best as to whether accumulation occurs in Dow's accused process. It does not recite "accumulation," nor does it expressly refute Dow's contention that dispersion flows continuously throughout its process and does not accumulate. Akzo instead relies heavily on Dr. Mount's language, "resident for a period of time." Such reliance is misplaced, however, for such a phrase does not invoke the "accumulation" envisioned by the claims, and certainly, as Dow notes, "liquid passing through pipes is always 'resident for a period of time.'" Ultimately, the passage states that "dispersion collects," yet it fails to identify which construction of "collection" it relies on. Such evidence did not establish a genuine issue of material fact.

Summary Judgment of No Infringement Under the Doctrine of Equivalents Is Also Affirmed

Akzo lastly contends that the district court committed legal error by applying the concept of vitiation and impermissibly creating "a 'binary choice' in which an element is either present or 'not present.'" Under a correct application of the doctrine of equivalents, Akzo argues, it raised a genuine issue of material fact as to whether Dow's equipment performed the same function in substantially the same way to reach the same result. Specifically, Akzo hones in on and challenges the district court's use of "vitiate" in its equivalents analysis. Under the doctrine of equivalents, an infringement theory fails if it renders a claim limitation inconsequential or ineffective. And as we have explained, "saying that a claim element would be vitiated is akin to saying that there is no equivalent to the claim element in the accused device based on the well established 'function-way-result' or 'insubstantial differences' tests."

We conclude that Akzo failed to establish a genuine issue of material fact as to whether Dow's process operates in substantially the same way. The claimed process operates by using a pressurized collection vessel wherein dispersion accumulates to maintain backpressure in the extruder. To state it differently, it is the accumulation of dispersion in the collection vessel that generates the backpressure. Dow's accused process, on the other hand, "uses a valve" and does not allow for accumulation in the downstream pipes. Thus, in order to survive summary judgment, Akzo had to show that a valve and a series of pipes and heat exchangers, wherein the dispersion flows continuously, generate backpressure in the extruder in substantially the same way to increase the boiling point of the carrier fluid. It did not do so.

Dr. Mount's discussion of the doctrine of equivalents is broad and scant. Nevertheless, what truly undermines Dr. Mount's statement is failure to articulate how Dow's accused process operates in substantially the same way. Dr. Mount states that Dow's process operates "in substantially the same way (by collecting the disperse material in a contained volume)," yet he fails to articulate which construction of "collecting" he invokes, much less articulate how the differences between the two processes are insubstantial. Such ambiguity and generality cannot create a genuine issue of material fact.

Summary Judgment of No Indefiniteness Is Affirmed

In its cross-appeal, Dow argues that "viscosity below 10 Pa.s" renders claims 1-8 indefinite because it fails to recite the temperature at which the viscosity measurement is to be taken. Second, Dow argues that "carried out at a temperature of from 5 to 150° C. above the melting point of the polymer" renders claims 2-6 indefinite as failing to specify which steps in the process occur at those elevated temperatures.

We first address the "viscosity below 10 Pa.s" limitation. The district court's determination that one of skill in the art would measure viscosity at room temperature in the absence of a specified temperature was based on extrinsic evidence. Because we see no clear error in that fact finding here, and it does not conflict with the intrinsic record, we affirm.

We next address the "carried out . . . of the polymer" limitation. Claim 1 recites a process "for producing a dispersion in an aqueous medium in which the polymer is dispersed in an aqueous medium in an extruder at a temperature above 100° C." The specification then teaches that the dispersing step necessarily takes place before the dispersion exits the extruder; it is during that dispersing step when the temperature exceeds the melting point of the polymer. Indeed, the specification describes a typical process where the polymer "is melted in the initial melt zone of the extruder at a temperature above the melting point of the polymer, preferably from 5 to 150° C, typically 10 to 130° C, above the melting point." Thus, as the district court found, "the specification supports a construction which indicates that the limitation in claim 2 refers to the elevated temperature phases and not to the stages that follow."

Dow suggests that, in affirming the district court's construction, we run afoul of the principle that courts may not redraft claims to sustain their validity. Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d 1371 (Fed. Cir. 2004). Dow's reliance on Chef America, however, is misplaced. In affirming the district court's construction, we are not redrafting the claims, but rather construing the claims to require the heightened temperature range to apply to the elevated temperature phases in accordance with the specification.

Avid Technology, Inc. v. Harmonic, Inc., Fed. Cir. Case 2015-1246
(January 29, 2016)

Avid asserted its '808 and '309 patents concerning data storage systems that allow users to store and retrieve large files such as movies. The systems include three categories of components of particular significance here: multiple storage units that store data; a client application that reads data from and writes data to the storage units; and a central controller that can perform various facilitative functions. A fourth component is an option: a centralized repository of addresses of data stored in particular units. When a client wishes to store ("write") a file, such as a movie, the system splits the file into "segments." The segments are distributed among various storage units and stored in duplicate at different units (one primary unit and one backup) chosen "from the list of storage units available for storing the selected segment." The client sends each segment to two storage units.

Claim 1 of the '808 patent is illustrative of the claims:

1. A distributed data storage system for allowing one or more client systems to access data, comprising:

a plurality of independent storage units for storing the data;

wherein the data is stored on the plurality of storage units in files, wherein each file includes segments of data and redundancy information for each segment, wherein each segment has an identifier, and wherein, for each file, the segments and the redundancy information for each segment are distributed among the plurality of storage units;

wherein each storage unit comprises:

means for maintaining information associating the identifier of each segment stored on the storage unit with the location of each segment on the storage unit;

means for receiving a request from one of the client systems for a segment of a file, wherein a request includes the identifier of the segment of the file; and

means, operative in response to a request from one of the client systems for a segment of a file, for retrieving the requested segment of the file from the storage unit using the information associating the identifier of each segment stored on the storage unit with the location of each segment on the storage unit; and

means for sending the requested segment to the client system.

The accused Harmonic system, called "MediaGrid," is a distributed data storage system in which various storage units (ContentServers) store data with redundancy. The system includes a central controller (ContentDirector), which keeps track of the storage units and what segments of a file (slices) are stored on them, and storage units keep track of segment addresses within their own memories. A client seeking to retrieve the segments must ask the ContentDirector to identify the relevant storage units. Once the client has that information, the client deals directly with the identified ContentServers to obtain the segments, with the ContentServers themselves finding the needed segments within their memories and without the ContentDirector acting as an intermediary for the data transfer.

In the prosecution history of Avid's patents, one piece of prior art played a role that is significant here—a '720 patent to Boll, which describes a client interface (i.e., a central controller) that receives a request from an application. The district court gave the jury a claim construction of the "independent storage unit" claim element, basing that construction on statements Avid made in the prosecution history. The second claim element at issue, the "in files" element, went to the jury without a clarifying construction, over neither party's objection. The jury rejected Harmonic's validity challenge to Avid's patents and found that Harmonic did not infringe.

Avid challenged the non-infringement judgment by post-trial motions. It argued that the claim construction regarding the "independent storage unit" element was incorrect and that under a correct claim construction, that claim element is met. And it argued that there was insufficient evidence to find noninfringement of the "in files" element. It sought at least a new trial on the first ground and judgment of infringement on the two grounds combined. Avid's post-trial motions were denied and Avid appeals.

There Is an Inadequate Showing That There Was a Disclaimer

The district court ruled that Avid had disclaimed a system in which the central controller tells the client which storage unit the client should deal with during read and write operations. On that basis, the court instructed the jury that "independent storage units" means "storage units which are not centrally controlled and whose memory addresses are not globally allocated" and that "systems with independent storage units cannot use a central controller to access data, and, in particular, cannot use a central controller that identifies the storage unit on which data is stored in response to client requests."

When the prosecution history is used solely to support a conclusion of patentee disclaimer, the standard for justifying the conclusion is a high one. "For prosecution disclaimer to attach, our precedent requires that the alleged disavowing actions or statements made during prosecution be both clear and unmistakable." Where the alleged disavowal is ambiguous, or even "amenable to multiple reasonable interpretations," we have declined to find prosecution disclaimer.

The district court relied on two passages from an Avid submission during the prosecution history:

[T]he claimed system, by virtue of the "independent" storage units, avoids using a central controller to access data. In particular, storage units "receiv[e] . . . request[s] from one of the client systems for a segment of a file." Clients do not issue requests to a central controller that in turn identifies storage units that store the data and issues requests to storage units.

In Boll, a client asks a centralized interface 24 to provide access to a server and receives from this interface an identity or connection data for a server to which the client is assigned. The client then performs its transactions with the assigned server. In contrast, the present invention relates to a distributed storage system in which data for a file is distributed among multiple independent storage units. Boll's assignment of a client to a server through a centralized interface for its transaction in [sic] contrary to the claim limitations noted above.

Those passages, however, are readily susceptible to a narrower reading than the one needed to support the district court's disclaimer conclusion. We conclude that there was no clear and unmistakable disclaimer of central controllers that provide storage-unit location information for retrieving segments. The jury instruction limiting "independent storage units" in that way was incorrect.

There Must Be a New Trial But Not as to All Infringement Issues

The foregoing error requires at least vacatur of the verdict and a remand for a new trial unless we can conclude that the error was not prejudicial, i.e., was harmless. Because there was no separate jury determination of non-infringement on a distinct ground, the error in the instruction governing this central dispute at trial would be harmless only if a reasonable jury would have been required by the evidence to find non-infringement even without the error.

But Harmonic does not argue for that conclusion. Harmonic argues only that the construction was correct and the non-infringement verdict was supported by substantial evidence. In short, Harmonic makes no argument under the proper legal standard to answer Avid's argument that the instructional error was prejudicial, requiring a new trial.

Avid actually takes its argument one step further. It contends that, once the legally erroneous narrowing of the claim construction is reversed, the evidence not only permits but requires a finding that the MediaGrid system meets the "independent storage units" claim element. Harmonic presents no argument to the contrary. Given that, in response to Avid's argument, Harmonic has simply not suggested an alternative claim construction on this point, or argued that any such alternative claim construction could be found not to reach MediaGrid, satisfaction of this claim requirement is now settled. While infringement as a whole is to be retried, Harmonic's assertion of noninfringement based on this claim element is not, thus narrowing the scope of issues for the new trial on remand.

What remains is Avid's argument that it is entitled to more than a new trial—that it should be granted judgment as a matter of law. Avid contends that, on the only other claim element in dispute, the "in files" element, the evidence does not allow a reasonable finding of non-infringement. We reject the contention. The case went to the jury without a construction of the key "in files" language, and Avid has not met its burden of showing that it has the only reasonable view of the claim element as long as it is un-construed. The case therefore must return to the district court for a new trial on infringement, within the limits already stated in this opinion.

Comment: There have been a number of other cases in the past two years in which the Circuit has reversed findings of disavowal either in the specification or in the prosecution history. See Tom Tom, Inc. v. Adolph, 790 F.3d 1315 (Fed. Cir. 2015) (prosecution history); Shire Dev., LLC v. Watson Pharms., Inc., 787 F.3d 1359 (Fed. Cir. 2015)‎ (prosecution history);Vederi, LLC v. Google, Inc., 744 F.3d 1376 (Fed. Cir. 2014) ‎(prosecution history); Hill-Rom Servs. v. Stryker Corp., 755 F.3d 1367 (Fed. Cir. 2014) (specification); ‎and Pacing Techs., LLC v. Garmin Int'l, Inc., 778 F.3d 1021 (Fed. Cir. 2015) (specification). Contrast, Openwave Systems, Inc. v. Apple, Inc., ‎808 F. 3d 509 (Fed. Cir. 2015) (specification); Golden Bridge Tech., Inc. v. Apple Inc., 758 F.3d 1362 (Fed. Cir. 2014)‎ (prosecution history); E2Interactive, Inc. v. Blackhawk Network, Inc., 561 Fed. Appx. 895 (Fed. Cir. 2014)‎ (prosecution history); and X2Y Attenuators, LLC v. ITC, 757 F.3d 1358 (Fed. Cir. 2014) (specification), where clear disavowals were found.

Agilent Technologies, Inc. v. Waters Technologies Corp.,
Fed. Cir. Case 2015-1280 (January 29, 2016)

Waters Technologies brought suit against Aurora for infringement of the '609 patent directed to using a pump as a pressure source for supercritical fluid chromatography. On March 27, 2012, Aurora filed a request for inter partes reexamination. Agilent allegedly acquired substantially all of Aurora's assets around August 2012. Agilent also allegedly agreed to be bound by the outcome of the '609 reexamination and the pending patent infringement litigation. At that point in time, nothing was filed identifying Agilent in the reexamination. In fact, after the Examiner issued its Action Closing Prosecution ("ACP") on September 24, 2012 and Waters filed its response, Aurora, not Agilent, submitted third-party comments.

The Examiner issued a Right of Appeal Notice ("RAN"), rejecting all claims of the '609 patent on various grounds. Waters filed a notice of appeal to the Patent Trial and Appeal Board, and Aurora cross-appealed on March 8, 2013. Aurora filed a request to change the real party in interest from Aurora to Agilent on April 26, 2013 and Agilent's counsel began participating in the proceedings along with counsel for Aurora. The Board reversed all of the Examiner's rejections, adopted new grounds of rejection for some claims, and allowed other claims. The Board's decision listed Aurora as the third-party requester and Aurora's counsel as counsel for the third-party requester.

Agilent appealed and Waters moved to dismiss the appeal for lack of standing.

The Legal Test to Be Applied

The parties originally framed the dispute as one relating to jurisdiction, but the Circuit framed the dispute as one relating to whether Agilent had a cause of action. The question raised was whether Agilent is a member of a class of litigants that may appeal under 35 U.S.C. § 141.

35 U.S.C. § 141 states:

A patent owner, or a third-party requester in an inter partes reexamination proceeding, who is in any reexamination proceeding dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.

This statutory provision on its face confers the right to appeal an adverse reexamination decision only on patent owners and third-party requesters.

Agilent claimed itself the successor-in-interest and therefore the true third-party requester. Agilent maintained it was the successor-in-interest because it bought substantially all of Aurora's assets before the reexamination concluded, including rights relating to the underlying reexamination. Agilent contends this fact alone is sufficient to allow it to substitute itself for Aurora as the third-party requester, both for purposes of participation in the reexamination and for purposes of § 141.

Title 35 U.S.C. § 100(e) defines the term "third-party requester" to mean "a person requesting ex parte reexamination under section 302 or inter partes reexamination under section 311 who is not the patent owner."

The Circuit determines that while the language of the statute does not explicitly forbid a change in the identity of the third-party requester over the course of the proceeding or on appeal, it similarly does not appear to address whether and under what circumstances a change in the identity of the third-party requester can occur. At best, it does not inform either way about how to resolve this issue.

Failure to Show Successor-in-Interest Results in No Cause of Action

The panel holds that Agilent failed to establish that it was Aurora's successor-in-interest. The Circuit therefore declines to decide whether a successor-in-interest becomes the third party requester for purposes of either § 100(e) or § 141.

Agilent allegedly acquired substantially all the assets of Aurora, including all rights relating to the reexaminations in August 2012 while the reexamination was still pending. However, Aurora remained a distinct, ongoing entity. And after the Examiner issued the ACP in September 2012, it was Aurora—not Agilent—who submitted third-party comments. That November 2012 submission—significantly post-dating any asset purchase agreement—belied Agilent's claim that it effectively stepped into Aurora's shoes as the third-party requester upon taking over Aurora's assets. It was not until April 26, 2013—approximately eight months after the asset transfer and one month after the cross-appeal to the Board was noticed—that Aurora filed a request to change the "real party in interest" from Aurora to Agilent.

Even then, Aurora still remained a party to the underlying district court litigation. Waters moved for leave to amend its complaint and add Agilent as a defendant in the district court litigation and Aurora filed an answering brief opposing the motion. While not dispositive, Agilent also never furnished the Circuit with a copy of the asset transfer agreement, while simultaneously relying on a portion of its contents as the basis for its right to appeal.

Because Aurora was still a party to and still bound by the judgment in the underlying infringement litigation, Agilent had not established itself as Aurora's successor-in-interest or otherwise stepped into the shoes of Aurora.

The burden of demonstrating a cause of action rests on Agilent, the party seeking relief. Agilent had ample opportunity to establish itself as Aurora's successor-in-interest, but failed to do so. For that reason, Agilent lacked a statutory cause of action to appeal the reexamination decision, so the appeal is dismissed.


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