Precedential Patent Cases From the Federal Circuit in the Past Week
Ethicon – This case includes an excellent discussion of indefiniteness of utility patents under the Nautilus "reasonable certainty" test and of functionality of design patents under L.A. Gear. As to the utility patents, the panel reverses the grant of invalidity for indefiniteness because the specification provides sufficient guidance to one in the art as to the scope of its asserted claims, and vacates the summary judgment of noninfringement because the district court resolved genuine disputes of material fact in favor of the moving party. As to the design patents, the panel reverses summary judgment of invalidity based on functionality because the district court did not follow the "stringent" test for invalidating design patents based on functionality and focused on the unclaimed utilitarian aspects of the underlying article instead of the claimed ornamental designs. However, the panel affirms summary judgment of noninfringement so the case is returned to the district court for a trial on the utility patents.
Suprema – A sharply divided en banc Circuit overturns a panel decision and rules that the ITC has authority to prevent importation of products that may induce infringement after they are imported, even though they do not infringe any U.S. patents at the time of import. The patents in this case are directed to a fingerprint-scanning technology. The hardware is fabricated abroad. After it enters the U.S., software is loaded, making a product that infringes the claimed method. The panel decision had held that in order to be excluded, the products must directly infringe a U.S. patent at the time of importation. The panel decision was seen as a serious limit in the ITC's decision-making authority and the majority opinion, written by Judge Reyna, who dissented in the panel decision, holds that the panel decision was inconsistent with the intent of the statute and provided an unintentional boon to foreign competitors. Key to both the majority and the four dissenting judges was the meaning of the phrase "articles that infringe" in section 337. In dissent, four judges agreed with the sentiments of the majority that foreign companies benefitted from the panel's interpretation, but think the statute is clear and does not provide the authority to ban products based on induced infringement.
Ethicon Endo-Surgery, Inc. v. Covidien, Inc., Fed. Cir. Case 2014-1370
(August 7, 2015)
The patents in suit are directed to surgical instruments that use ultrasonic energy created by blades vibrating at high frequencies to cut tissue and blood vessels. These surgical instruments also use the heat generated from the friction of the blade vibrating against the blood vessel to coagulate and seal those blood vessels in order to prevent bleeding.
The Panel Reverses the District Court's Summary Judgment as to Indefiniteness of the ‘501 Patent
The district court found that nothing in the specification or understanding in the art specified "a method of measurement, the location of measurement, and the type and amount of tissue used for the measurement of clamping forces and clamping pressures" recited by the claims.
Claim 17 of the '501 patent recites that the claimed ultrasonic surgical shears include a tissue pad and blade that define a clamping surface area. The specification explains that this "clamping surface area is the area where the blade and the tissue pad are in close proximity because the clamping arm is in a closed position." In the primary disclosed embodiment, the clamping surface area is about 0.033 square inches. The user operates the claimed shears to exert a clamping force of between two and seven pounds in order to close the clamping arm towards the blade. Thus, the clamping force on the clamping surface area—defined by the tissue pad and the blade—averages between two and seven pounds over 0.033 square inches, or between approximately 60 to 210 pounds per square inch.
Ethicon's expert explained that as a matter of physics, pressure measured by pounds per square inch is calculated by taking a force measurement at a point and dividing that force by the area, and that a skilled artisan would know that the recited average clamping pressures can be determined by measuring the average clamping force on the clamping surface area and dividing that average force by the clamping surface area.
The district court appeared to ignore this intrinsic evidence and the testimony in the record. It expressed concern that the claims did not specifically "refer to any particular point" on the clamping surface area at which to take the recited pressure measurements or "identify a location at which the clamping force is to be measured." The district court also expressed concern that there was no industry standard method for measuring clamping forces. The district court appears to have believed that in order for the claims of the '501 patent to satisfy the definiteness requirement of 35 U.S.C. § 112 ¶ 2, the intrinsic evidence needed to identify a specific method one of ordinary skill in the art would use to measure the recited clamping/coaptation pressures. But in the context of the dispute here, the definiteness requirement of 35 U.S.C. § 112 mandates only that one skilled in the art must be able to understand which pressures are relevant to the claims and how those pressures can be measured, so to discern the scope of the claimed average pressure range with reasonable certainty. See Nautilus. If such an understanding of how to measure the claimed average pressures was within the scope of knowledge possessed by one of ordinary skill in the art, there is no requirement for the specification to identify a particular measurement technique.
Summary Judgment of Noninfringement is Reversed as to the '275 patent
The '275 patent claims a particular configuration of an ultrasonic surgical shears device that generates and then propagates ultrasonic energy to the clamping end of the device, while dampening undesired vibrations. The specification explains that the device includes a generator, a grip, a semi-flexible acoustic transmission rod, and a sheath around that rod.
After the close of discovery, the court granted Covidien's motion for summary judgment of noninfringement, holding that there was no issue of fact that the accused shears are not "configured to loosely contact" the transmission rod or "adapted to absorb undesired vibrations." Ethicon's expert provided testimony on both of these points, which was disputed by Covidien's expert. Rather than evaluating the evidence in the light most favorable to the nonmoving party, the district court appears to have impermissibly resolved factual disputes in favor of Covidien in order to reach its conclusions.
Summary Judgment as to Functionality of the Design Patents is Reversed
The district court concluded that the claimed designs in the Design Patents (shown below) were all dictated by function and were therefore invalid. Of course, Covidien has the burden to prove invalidity of the Design Patents by clear and convincing evidence. We have described as "stringent" this standard as it applies to invalidating design patents on grounds of functionality. We review the district court's finding that the patented designs are dictated by their function for clear error.
In determining whether a claimed design is primarily functional, "the function of the article itself must not be confused with 'functionality' of the design of the article." Hupp v. Siroflex of Am., Inc., 122 F.3d 1456 (Fed. Cir. 1997). In Hupp, we separated the function inherent in a concrete mold—producing a simulated stone pathway by molding concrete—from the particular pattern of the stone produced by the mold itself—an aesthetic design choice.
We have also instructed that the overall appearance of the article—the claimed design viewed in its entirety is the basis of the relevant inquiry, not the functionality of elements of the claimed design viewed in isolation. For example, we acknowledged in L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993); that certain elements comprising the claimed design of an athletic sneaker each had a utilitarian purpose, including a "delta wing" supporting the foot and reinforcing the shoelace eyelets, side mesh paneling further supporting the foot, a "moustache" at the back of the shoe cushioning the Achilles tendon and reinforcing the rear of the shoe, and the particular positioning of each of these elements within the design of the shoe. Nevertheless, we explained that the utility of each of the various elements that comprise the design is not the relevant inquiry with respect to a design patent because whether a design is primarily functional or primarily ornamental requires viewing the claimed design in its entirety.
Here, the district court appeared to discount the existence and availability of alternative designs in determining that the claimed Design Patents were "primarily functional." Ethicon presented evidence of alternative ornamental designs that could provide the same or similar functionality of the underlying ultrasonic shears. Covidien responds that such designs cannot be considered true alternatives because they do not work "equally well" as the claimed designs.
First, the district court's determination that the designs did not work "equally well" apparently describes the preferences of surgeons for certain basic design concepts, not differences in functionality of the differently designed ultrasonic shears. Second, to be considered an alternative, the alternative design must simply provide "the same or similar functional capabilities." Here, there is no dispute that the underlying ultrasonic shears could still function in the same manner with differently-shaped components.
The district court found significant the fact that Ethicon applied for utility patents that included figures similar to those of the claimed designs. The district court noted that the utility patents described an "ergonomically formed" trigger with a proximal and distal portion having different lengths, a rounded button, and a fluted rotation knob. Again, however, the district court's analysis focuses on the concepts of an open trigger, button, and torque knob, rather than the specifically claimed design conceptions of those elements. Finally, the district court relied on Ethicon's advertisements for its commercial product touting the "intuitive controls" of the rounded button and torque knob that offered the "ergonomic benefit of 'minimal index finger repositioning'" and the "easy access" provided by the open trigger. These advertisements, however, tout the functional benefits of the general design concepts of the underlying elements rather than any functional benefits of the specific claimed designs.
Ethicon's Design Patents cover only the specific ornamental conceptions of the features shown in their figures, and not the general concepts of an open trigger, a rounded button, and a fluted torque knob oriented in some configuration as part of an ultrasonic surgical device. The district court performed its functionality analysis at too high a level of abstraction, focusing on the general concepts of an open trigger, torque knob, and activation button rather than the ornamental designs adorning those elements.
The District Court's Claim Construction that the Design Patents Cover "Nothing" is Erroneous
The district court found the claimed trigger, torque knob, and activation button elements of the Design Patents to be "based on functional considerations," and therefore construed the Design Patents to encompass "nothing," factoring out and removing every element from the scope of the claimed designs.
Because a claimed design is better represented by an illustration rather than a description, we have instructed that, unlike utility patents, "the preferable course ordinarily will be for a district court not to attempt to "construe" a design patent claim by providing a detailed verbal description of the claimed design." Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc). We have explained, however, that there are a number of claim scope issues which may benefit from verbal or written guidance, among them the distinction between features of the claimed design that are ornamental and those that are purely functional.
Here, the district court found that the "U"-shaped trigger, the torque knob, and the rounded button claimed in various combinations by the Design Patents are dictated by function. For example, the "U"-shaped trigger operates the clamping arm of the ultrasonic shears. Its "open" design allows the user to exert higher input forces by employing multiple fingers, thus lessening hand fatigue and strain. The torque knob and rounded button provide functional controls for the ultrasonic shears. Their placement relative to the trigger offers ergonomic access, and the fluted shape of the torque knob permits a user to operate the knob with one finger. We agree that the trigger, torque knob, and activation button elements of the underlying article have functional aspects. But the district court's construction of the Design Patents to have no scope whatsoever fails to account for the particular ornamentation of the claimed design and departs from our established legal framework for interpreting design patent claims. For example, for purposes of claim construction, the district court ignored the facts that the trigger has a particular curved design, the torque knob has a particular flat-front shape, and the activation button has a particular rounded appearance.
Unlike the functionality inherent in the underlying articles themselves, there is no evidence in the record, that any of the ornamental designs adorning those underlying articles are essential to the use of the article. Thus, although the Design Patents do not protect the general design concept of an open trigger, torque knob, and activation button in a particular configuration, they nevertheless have some scope—the particular ornamental designs of those underlying elements. The scope of the Design Patents, although limited, encompasses the ornamental aspects of certain combinations of the trigger, torque knob, and activation button elements of ultrasonic surgical shears, in specific relative positions and orientations.
Summary Judgment of Noninfringement of the Design Patents is Affirmed
Although the court construed the claims of the Design Patents to have no scope, it nonetheless performed an infringement analysis, which we can evaluate because the district court apparently performed this analysis using a correct construction of the claimed designs.
A design patent is infringed "if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other." Egyptian Goddess. Where the claimed and accused designs are "sufficiently distinct" and "plainly dissimilar," the patentee fails to meet its burden of proving infringement as a matter of law. If the claimed and accused designs are not plainly dissimilar, the inquiry may benefit from comparing the claimed and accused designs with prior art to identify differences that are not noticeable in the abstract but would be significant to the hypothetical ordinary observer familiar with the prior art.
The claimed and accused designs are depicted below:
D'804 patent, Fig. 1 Covidien's accused product
We agree with the district court that there is no genuine dispute the claimed and accused designs of an ultrasonic surgical device are plainly dissimilar. Both designs include an open trigger, a small activation button, and a fluted torque knob in similar positions within the underlying ultrasonic device. This conceptual level, however, is not sufficient to demonstrate infringement of the claimed designs. Because each of these components has a functional aspect, the underlying elements must be excluded from the scope of the design claims at this general conceptual level. And when the remaining ornamental features of those components are compared, as a whole, to the corresponding ornamental features of the accused ultrasonic surgical shears, the dissimilarities between the designs are plain. Therefore, we affirm the district court's grant of summary judgment of noninfringement of the Design Patents.
Suprema, Inc. v. Int'l Trade Comm'n, Fed. Cir. Case 2012-1170 (August 10, 2015)
Section 337 bars the importation of "articles that . . . infringe a valid and enforceable United States patent." The Commission interpreted this provision to cover importation of goods that, after importation, are used by the importer to directly infringe at the inducement of the goods' seller. A majority panel disagreed, reasoning that there are no "articles that infringe" at the time of importation when direct infringement does not occur until after importation. In doing so, the panel effectively eliminated trade relief under Section 337 for induced infringement and potentially for all types of infringement of method claims.
We granted en banc rehearing, hereby vacate the panel decision, and now uphold the Commission's position. We conclude that because Section 337 does not answer the question before us, the Commission's interpretation of Section 337 is entitled to Chevron deference. The Commission's interpretation is reasonable because it is consistent with Section 337 and Congress' mandate to the Commission to safeguard United States commercial interests at the border.
Suprema sells the scanners to Mentalix. To function, the scanners must be connected to a computer, and that computer must have custom developed software installed and running. Suprema ships each scanner with a "software development kit" ("SDK") that is used for developing custom programs that control the functions of its scanners. The SDK comes with an instruction manual that explains how programs can be written to take advantage of scanner functionality. Mentalix is an American company that purchases Suprema's scanners and imports those scanners into the U.S. It writes custom software, which uses Suprema's SDK to control and operate the scanners. Mentalix then bundles its software with the scanners and resells the bundle within the U.S.
Regarding direct infringement, the Commission found that record evidence demonstrated that Mentalix had already directly infringed claim 19 within the U.S. prior to the initiation of the investigation. As to indirect infringement, the Commission found that Suprema "'willfully blinded' itself to the infringing nature of Mentalix's activities," which Suprema "had actively encouraged." (citing Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011)). Specifically, the Commission found that Suprema subjectively believed in the high probability that Cross Match's scanner technology was patented and, therefore, that it was likely that Suprema's scanner products would be covered by Cross Match's patents.
Section 337 declares certain activities related to importation to be unlawful trade acts and directs the Commission generally to grant prospective relief if it has found an unlawful trade act to have occurred. Specifically, the statute provides:
(a)(1) . . . [T]he following are unlawful, and when found by the Commission to exist shall be dealt with . . . as provided in this section:
(B) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that-
(i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17
We are asked to decide whether goods qualify as "articles that infringe" when the Commission has found that such goods were used, after importation, to directly infringe by the importer at the inducement of the goods' seller. In other words, does the importation of such goods qualify as an unfair trade act under Section 337? If the answer is yes, the Commission has authority under § 1337(d)(1) to issue an exclusion order to prevent this act from occurring in the future.
We begin with our standard of review, and what deference, if any, is owed to the Commission's interpretation of Section 337. We review the Commission's interpretation pursuant to Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Chevron requires a court reviewing an agency's construction of a statute which it administers to answer two questions. The first is "whether Congress has directly spoken to the precise question at issue." If the answer is yes, then the inquiry ends, and we must give effect to Congress' unambiguous intent. If the answer is no, the second question is "whether the agency's answer to the precise question at issue is based on a permissible construction of the statute." The agency's "interpretation governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous."
A. Chevron Step One
Chevron's framework begins with the language of the statute. By using the word "infringe," Section 337 refers to 35 U.S.C. § 271, the statutory provision defining patent infringement. The word "infringe" does not narrow Section 337's scope to any particular subsections of § 271. As reflected in § 271 and the case law from before and after 1952, "infringement" is a term that encompasses both direct and indirect infringement, including infringement by importation that induces direct infringement of a method claim.
Section 337 refers not just to infringement, but to " articles that infringe." That phrase does not narrow the provision to exclude inducement of post-importation infringement. Rather, the phrase introduces textual uncertainty. Simply put, the phrase "articles that infringe" does not map onto the Patent Act's definition of infringement. In its amicus brief to us, the United States describes the disparity as one arising from the in rem language of Section 337 and the in personam language of § 271.
The relevant portions of § 271 define persons' actions as infringement. See, e.g., 35 U. S. C. § 271(a) ("[W] hoever without authority makes, uses, offers to sell, or sells any patented invention . . infringes the patent"); § 271(b) ("Whoever actively induces infringement of a patent shall be liable as an infringer."); § 271(c) ("Whoever offers to sell or sells . . . a component of a patented machine . . . shall be liable as an infringer."). An "article" cannot infringe under any subsection of § 271. The disparity between the language of Section 337 and the Patent Act's definitions of infringement presents uncertainty requiring resolution by the agency charged with Section 337's enforcement. Congress has not provided an unambiguous resolution, much less one that excludes the inducement at issue here.
Suprema argues that, because Section 337 refers to articles, the only bases for infringement under Section 337 come from §§ 271(a) and (c), which refer to "any patented invention" and "a component" of a patented machine, respectively. Suprema's argument fails to recognize that inducement, like contributory infringement, is commonly based on the provision of articles. See Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920 (2015); and Global Tech. Still, we need not decide whether Suprema's interpretation might be a reasonable resolution of the textual dilemma presented by mapping Section 337 onto § 271. We cannot find that Congress prescribed Suprema's view, and hence we cannot adopt such an interpretation at Chevron Step One. Under §§ 271(a) and (c), it is not articles that infringe, but actions that infringe. Moreover, Suprema has not shown that the phrase "articles that infringe" has a clearly established usage limited to product claims or to direct or contributory infringement, much less a usage that excludes induced infringement of a method claim. To the contrary, various forms of shorthand references to devices that infringe have often been used without such narrowed meaning.
Accordingly, we hold that Congress has not directly answered whether goods qualify as "articles that infringe" when the Commission has found that an importer used such goods, after importation, to directly infringe at the inducement of the goods' seller.
B. Chevron Step Two
Because Section 337 does not answer the precise question before us, we consider whether the Commission's interpretation of Section 337 is reasonable. For the reasons explained below, we find the Commission's interpretation consistent with the statutory text, policy, and legislative history of Section 337. We thus find the Commission's interpretation reasonable.
The Commission's interpretation is consistent with the statutory text, for reasons we have already suggested. The Commission's interpretation is also consistent with the text of Section 337 as a whole. The legislative history also supports this interpretation. Congress amended Section 337 in 1988, removing the requirement that a complainant must show injury to domestic industry before a violation is found. As a part of this effort, the 1988 Act inserted the phrase "articles that infringe." Congress declared its purpose to enhance Commission authority. The "fundamental purpose" of the 1988 amendment was to "strengthen the effectiveness of section 337" against the "importation of articles which infringe U.S. intellectual property rights." The Commission's interpretation is consistent with Congress' longstanding, broad policy, and with its broadening purpose in 1988.
This court has consistently affirmed the Commission's determination that a violation of Section 337 may arise from an act of induced infringement. See, e.g., Young Eng'rs Inc. v. Int'l Trade Comm'n, 721 F.2d 1305 (Fed. Cir. 1983) (affirming Section 337 violation based on contributory and induced infringement of process patents); Vizio, Inc. v. Int'l Trade Comm'n, 605 F.3d 1330 (Fed. Cir. 2010) (affirming Section 337 violation based on induced infringement of method claim); Emcore Corp. v. Int'l Trade Comm'n, 449 F. App'x 918 (Fed. Cir. 2011) (affirming without opinion Section 337 violation based on induced infringement of apparatus claim). Prior to this case, none of our reviews of the Commission's determinations have questioned the Commission's authority to investigate and find a violation of Section 337 predicated on an act of induced infringement.
Judges O'Malley, Prost, Dyk, and Lourie Dissent
The Commission's notion that it can nevertheless exclude all of the scanners imported by Suprema because the Exclusion Order allows the importer to certify that certain of the staple articles will not ultimately be used to infringe reads the statute exactly backwards. The statute covers only "articles that—infringe," and does not allow the Commission to enter an exclusion order directed to all of the subject articles, even those that ultimately may never be used to infringe, on the theory that some of the articles may be used in an infringing manner after importation.
The majority today authorizes the Commission to bar the importation of articles of commerce that may or may not be later used by third parties to infringe a method patent, based only on the putative intent of the importer. And, it does so in circumstances in which it is undisputed that the patented method cannot be practiced unless the imported article is used in combination with software neither embedded in the imported article nor sold by the importer. Because 19 U.S.C. § 1337 unambiguously fails to provide the Commission with the authority the majority endows on it, we respectfully dissent.
Comment: IP Law 360reports that yesterday, just one day after Suprema was published, Chief Judge Prost asked parties to a pending appeal to brief the issue of whether the ITC's authorization to ban articles that induce infringement might also extend to digital downloads. ClearCorrect has asked the Circuit to reverse an ITC decision holding that digital data related to the Invisalign teeth straightening system is an "article." The ITC ruling holds ClearCorrect responsible for infringing Invisalign patents by downloading design models transmitted by a vendor in Pakistan. Google and Apple filed amicus briefs claiming the ITC ruling would allow the use of patent law to inappropriately regulate online commerce, while, in an amicus brief in support of the ITC decision, the Motion Picture Association of America argued that the ruling could help protect copyright holders from piracy.