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

June 23, 2017

Overview

I am getting caught up on precedential cases after having been on vacation for a couple weeks. We’ll report on three cases today and another three early next week. In One-E-Way the Circuit reversed an ITC determination of indefiniteness based on the use of the phrase “virtually free from interference.”

In NexLearn the Circuit affirmed the dismissal of a patent infringement case for lack of personal jurisdiction even though a software provider had, among other things, offered a potential customer a free trial of the product at issue. In Storer v. Clark, a prior Merck patent is found to be nonenabling as to an invention claimed in a later Gilead patent application, thus giving Gilead priority.

Thanks to my Seattle colleague Vlad Raskin for his help with this week’s report.

Pete

One-E-Way, Inc. v. ITC, Fed. Cir. Case 2016-2105 (June 12, 2017)

A divided panel reverses a determination of indefiniteness by the ITC, ruling that under Nautilus, the claim language, in combination with the specification and the prosecution history, informs, with reasonable certainty, those skilled in the art about the scope of the invention.

The two One-E-Way patents at issue are directed to a wireless digital audio system claiming: “a module adapted to reproduce said generated audio output, said audio having been wirelessly transmitted from said portable audio source virtually free from interference from device transmitted signals operating in the portable wireless digital audio system spectrum.” The specification repeatedly highlights the private-listening feature of the claimed invention and makes clear that private listening is listening without interference from other users. During prosecution of the related parent patent, the applicant explained that the term “virtually free from interference” results in the ability to listen without eavesdropping.

Respondents argued that the term “virtually free from interference” did not inform one of ordinary skill as to how much interference is permitted. However, the majority concludes that, while One-E-Way did not define the scope of the term “virtually free from interference” in a technical sense, one in the art would understand that audio “free from interference” will be a bit better than audio “virtually free from interference,” in the same way something “free from defects” will be a bit better than something “substantially” or “virtually free from defects.” While “virtually” is a term of degree, one that slightly expands the scope of the term “free from interference,” the inclusion of “virtually” in these claims does not render them indefinite.

Comment: The opinion cites to a 2015 Apple v. Samsung decision that upheld the validity of claims including “substantially centered” due to expert testimony based on the specification. The opinion might also have cited to the case of Sonix Tech v. Publications Intl., decided by the Circuit earlier this year, where the Circuit found the specification helpful in determining the meaning of “visually negligible.” There the Circuit looked to the 2014 Enzo decision, where the clause “not interfering substantially” was found acceptable because the intrinsic evidence provided guidance as to the scope of the claims, including examples of noninterfering structures and criteria for their selection.

The Sonix panel distinguished Datamize, where the phrase “aesthetically pleasing” was found indefinite because the specification provided no guidance as to an “aesthetically pleasing” look and feel of an interface screen. Similarly, in Interval Licensing, the Circuit found indefinite a claim that recited the display of content “in an unobtrusive manner that does not distract a user.” The phrase was found to be a term of degree, purely subjective, with neither the claim language nor the intrinsic evidence offering an indication of the manner in which images were to be displayed to the user.

Read the full opinion

NexLearn v. Allen Interactions, Fed. Cir. Case 2016-2170, 2221 (June 19, 2017)

The Circuit affirms the dismissal of a patent infringement action for lack of personal jurisdiction despite NexLearn’s allegations of specific jurisdiction based upon pre-patent issuance activities and provisions in an NDA and a software license agreement (“EULA”) stating that forum (Kansas) law applies and that any dispute relating to the license agreement is to be litigated in Kansas. Nor is an interactive website sufficient in and of itself to support personal jurisdiction absent evidence that a website is specifically directed to customers in the forum, unless there is evidence that such customers actually used the website to transact business. While the panel disagrees with the district court in ruling that mass emails, including emails to Kansas residents about the accused software, and an offer of a free trial of the product, are irrelevant to the jurisdictional analyses, these contacts are found to be too attenuated to create the substantial connection necessary to support specific jurisdiction.  

To determine whether specific jurisdiction exists, the Circuit applies a three-part test, asking if: (1) the defendant purposefully directed its activities to the forum State; (2) the claims arise out of or relate to those activities (collectively, the minimum contacts prong); and (3) the assertion of jurisdiction is reasonable and fair. 

The Circuit determines that the afore-described contacts are insufficient to create specific jurisdiction. The panel also affirms the dismissal of NexLearn’s supplemental claim for breach of contract because a district court cannot exercise supplemental jurisdiction over a claim where original subject matter jurisdiction, such as a patent infringement claim, does not exist. 

Read the full opinion

Storer v. Clark, Fed. Cir. Case 2015-1802 (June 21, 2017)

The Circuit affirms a patent interference determination by the PTAB that a 2002 patent owned by Idenix, a Merck subsidiary, failed to enable the invention because it would have taken undue experimentation for one with ordinary skill in the art to practice the invention. This ruling thus gives a 2007 Gilead Pharmaceutical patent application priority.

At issue in this case is a patent application to methods of treating hepatitis C by administering compounds having a specific chemical and stereochemical structure. The interference was declared between an issued patent (Storer et al.) and a pending application (Clark), both of which were filed before the effective date of the AIA, which abolished the first-to-invent interference rule in favor of a first-to-file rule.

Storer initially filed suit in the District of Delaware, seeking review of the Board’s decision under 35 U.S.C. § 146. The district court dismissed the case, based on the Circuit’s 2015 ruling in Biogen v. Japanese Foundation for Cancer Research, that the AIA eliminated the option of district court review for interferences declared after September 15, 2012.

The issue on appeal is whether a Storer provisional, together with the prior art, enabled compounds having a particular substituent. Enablement is relevant to the issue of whether the provisional application is a constructive reduction to practice. Pursuant to 37 C.F.R. § 41.201, reduction to practice means a described and enabled anticipation under 35 U.S.C. 102(g)(1), in a patent application of the subject matter of a count. When a party to an interference seeks the benefit of an earlier-filed United States patent application, the earlier application must meet the requirements of 35 U.S.C. § 120 and 35 U.S.C. § 112 ¶ 1 for the subject matter of the count.

Whether undue experimentation is required is not a single, simple factual determination, but rather is a conclusion reached by weighing many factual considerations. Relevant factors may include (1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the claims.

The panel concludes that substantial evidence supports the Board’s finding that “a high amount of experimentation is necessary to synthesize” the target compound. The record before the Board showed sufficient variability and unpredictability to support the Board’s conclusion that Storer’s provisional application did not enable the interference subject matter.

Read the full opinion

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