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

April 14, 2017

Overview

In a continuing battle between NPE Core Wireless and Apple (in December, Core Wireless won a $7 ‎million verdict in the Northern District of California), the panel affirms a judgment of non-infringement ‎from the E. D. of Texas, where Apple’s iPad and iPhone were accused of infringement. Interestingly, this ‎is the same case that went up to the Circuit in 2014 on the denial of a motion to transfer, where a divided ‎panel denied a writ of mandamus over a stinging dissent by Judge Newman, who noted that the district ‎court “greatly mischaracterized Apple’s proffered evidence” and that the writ should issue to account for ‎the “extreme imbalance of convenience” as between California and Texas. See our report on that ‎decision. These are the issues now being debated in the Supreme Court in the Heartland case. Perhaps it ‎wasn’t so bad that Apple was forced to litigate in Texas.‎

In Novartis v. Torrent the Circuit rejects the Novartis contention that in invalidating a patent covering its ‎highly successful multiple sclerosis drug, the Board violated the Administrative Procedure Act by failing ‎to give Novartis an opportunity to address a particular reference.‎

Thanks to my colleague Karri Bradley, one of our pharmacologist Ph.D.‎s, for her help with this week’s ‎report.‎

Pete ‎

Core Wireless Licensing v. Apple, Inc., Fed. Cir. Case 2015-2037 (April 14, 2017)‎

The Circuit affirms a judgment of non-infringement of a patent directed to a system for sending data ‎from a cell phone to the network using a selected channel. The patent in suit is one of the ‎‎2,000 patents and applications that Core Wireless purchased from Nokia. ‎

Cell phones can transmit data packets to a cellular network (known as an uplink) in one of two ways—‎either by using a shared “common channel,” which carries transmissions from multiple mobile stations, or ‎by using a “dedicated channel,” which carries transmissions from a single mobile station or cell phone. ‎Dedicated channels permit faster and more reliable transmissions than common channels, but dedicated ‎channels are at a premium, as there are not enough dedicated channels to carry all cellular transmissions. ‎One aspect of this problem is whether the network or the cell phone should select the channel for the ‎uplink. In the prior art, the phone would send the network information about the data packet to be sent so ‎that the network could make the channel selection decision. But selection by the network wastes valuable ‎system resources, because it requires the phone to send a message to the network regarding the data ‎packet the phone wants to transmit, and then requires the network to make the channel selection ‎decision. ‎

The solution provided by the patent is to have the mobile station, not the network, make the uplink ‎channel selection decision. Because the mobile station makes the channel selection decision, it does not ‎use up traffic capacity by sending the message about the data packet to the network so that the network ‎may select a channel. ‎

The only claim that went to trial reads:‎

A mobile station connected with a cellular system, comprising means for sending uplink packet ‎data to the system using a selected channel, wherein the selected channel is either a common channel ‎‎(RACH) or dedicated channel (DCH), characterized in that it also comprises: ‎

means for receiving a threshold value of the channel selection parameter from the ‎system, ‎

means for storing said threshold value of the channel selection parameter, and ‎

means for comparing said threshold value of the channel selection parameter to a ‎current value of the channel selection parameter for basis of said channel selection. ‎

At trial, Apple showed that the network, not the cell phone, is responsible for selecting which channel to ‎use for uplink transmissions, and that its cell phones lack the capability to select between common and ‎dedicated channels for packet data transfer. Core Wireless contends that under the magistrate’s claim ‎construction, the cell phone need do no more than make a comparison, while Apple contends that the ‎phone must have the capability to select a dedicated channel when the relevant threshold conditions are ‎met. The problem with Core Wireless’s argument is that the premise is incorrect: The magistrate did not ‎clearly reject Apple’s position and adopt Core Wireless’s position. Instead, the magistrate focused ‎primarily on whether Apple’s control unit was a general purpose processor. Significantly, the magistrate ‎included in his construction references to the patent specification that indicate that channel selection can ‎be performed by the phone, consistent with the district court’s discussion of the claim construction issue ‎in its JMOL order. ‎

Core Wireless argued that the district court erred in its JMOL order, where it explicitly construed the ‎‎“means for comparing” limitation to require that the mobile station have the capability to make channel ‎selections. The panel concludes that the court was correct that the claim requires a showing that the ‎accused phones were capable of making channel selection decisions, and that the specification, ‎prosecution history and extrinsic evidence all support this construction. ‎

The panel therefore holds that a reasonable jury could find Apple’s devices non-infringing based on that ‎evidence, and that the district court correctly denied Core Wireless’s motion for JMOL. ‎

Read the full opinion

Novartis AG v. Torrent Pharmaceuticals Limited, Fed. Cir. Case 2016-1352 (April 12, 2017)‎

The panel rejects the Novartis contention that the Board should not have relied on an additional reference ‎‎(Sakai) in the Final Written Decision invalidating a patent covering its billion dollar Gilenya® drug used to ‎treat multiple sclerosis. Thus, the Circuit dismisses Novartis’s argument that it had been denied adequate ‎notice, that it would have submitted a “vastly different” record than it did if it had known Sakai was still a ‎live issue, and that the Board’s final decision therefore violated the APA. ‎

The panel affirms PTAB findings that the claims are invalid as obvious, holding that the PTAB can rely on ‎references which were not the grounds for institution of an IPR for supporting a finding of obviousness. ‎Moreover, if trying to establish nonobviousness by presenting objective indicia, specific arguments for ‎each relevant claim (independent and/or dependent) should be made to help establish nexus. If particular ‎arguments for each claim are not made during the PTAB proceedings, such are waived and can’t be ‎made on appeal.‎

In its IPR petition, Torrent alleged that the claims were obvious due to a combination of references ‎identified as Chiba and Aulton. However, Torrent also contended that some of the claims were ‎anticipated by Sakai, and that other claims were obvious in view of a combination of Sakai and Chiba. ‎The Board instituted the IPR based on the obviousness of Chiba and Aulton, and noted that Sakai ‎provided the motivation to combine these two references. ‎

The panel points out that the Board did not rule out Sakai in the Institution Decision, and the Board’s ‎discussion of Sakai in the Final Written Decision is not inconsistent with its review in the Institution ‎Decision. The panel also rejects Novartis’s complaints of “surprise” and its contention that, following the ‎Institution Decision, the parties “paid Sakai scant attention in subsequent proceedings.” In fact, the ‎parties debated Sakai at length throughout the proceeding and in the same context that it was discussed ‎by the Board in the Final Written Decision. Both parties’ experts went into significant detail in their post-‎institution declarations discussing Sakai and its applicability to the motivation to combine inquiry. ‎

The panel also rejects Novartis’s characterization of Sakai as the “missing link” in the Board’s ‎obviousness analysis. Contrary to Novartis’s contention, Sakai was discussed by the Board as one of ‎several independent grounds supporting the motivation to combine. This is not a case where Sakai ‎provided the linchpin of the Board’s analysis, as Novartis contends. Moreover, had Novartis believed the ‎Board eliminated Sakai from the proceeding, it had various procedural mechanisms at its disposal to ‎respond to any perceived impropriety with Petitioners’ continued reliance on the reference. For all these ‎reasons, the panel finds no violation of the APA. ‎

Read the full opinion

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