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