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Latest Federal Court Cases, 12/23/19

December 23, 2019



Blackbird Tech LLC v. Health in Motion LLC, Appeal No. 2018-2393 (Fed. Cir. Dec. 16, 2019)

In this week’s Case of the Week, the Federal Circuit affirmed a fee award against prevailing defendants, enumerating multiple supporting factors that should serve as notice against non-practicing entities engaged in “nuisance value settlement” litigation campaigns.  In this case, the parties had engaged in months of settlement negotiations in which plaintiff had successively lowered its demands, eventually offering a “walk-away” settlement with a license to defendants, but defendants had insisted that plaintiffs compensate them for fees incurred in defending the lawsuit.  After defendants’ motion for summary judgment was fully briefed, the plaintiff filed a notice of voluntarily dismissal with prejudice, executed a covenant not to sue, and moved (unsuccessfully) to have the case dismissed for lack of subject matter jurisdiction.

In affirming the subsequent fee award under 28 U.S.C. § 285, the Federal Circuit rejected each of the plaintiff’s arguments against the district court’s finding that the case “stood out” with respect to the substantive weakness of its litigation position.  The Court found that it was not necessary for the district court to construe the claims where non-infringement was apparent even accepting plaintiff’s proposed constructions; and that given the totality of the circumstances, it was not necessary for the court to certify plaintiff’s claims as “objectively baseless” (rather than “flawed,” “meritless,” and “frivolous”).

The Court also rejected plaintiff’s arguments that it was not given adequate notice of the supposed weakness of its position by the district court or defendants.  The Court found that the district court was not obliged to advise plaintiff of the weakness of its position, and that “even a modicum of [pre-suit] due diligence” by plaintiff should have revealed the weaknesses in its position.  The Court further found that because plaintiff waited until the eve of trial to dismiss its claims, despite being aware of defendants’ non-infringement contentions months before, it was unclear what effect detailed notice would have had on plaintiff’s conduct.

The Court also agreed with the district court’s determination that the manner in which plaintiffs litigated their claims “stood out.”  In support, the Court noted (1) plaintiff’s multiple “nuisance value” settlement demands for less than the anticipated cost of defense; (2) plaintiff’s unreasonable delays in producing documents, including attempting to withhold responsive documents without notice or excuse until after plaintiff learned about them in deposition; and (3) plaintiff’s attempts to dismiss the suit without notice on the same day pretrial submissions were due.

Finally, the Court held that the district court did not abuse its discretion by considering “the need to deter future abusive litigation” to support its fee award, noting that plaintiff had filed over one hundred patent infringement lawsuits, with none having been decided on the merits in plaintiff’s favor.  The Court affirmed the amount of the fee award as reasonable, resulting in an award to defendants of $363,243.80, approximating defendants’ full litigation costs and more than four times plaintiff’s initial settlement demand.

The opinion can be found here


Intellectual Ventures I LLC v. Trend Micro Inc., Appeal No. 2019-1122 (Fed. Cir. Dec. 19, 2019)

In this appeal from a district court decision to award fees pursuant to Section 285, the Federal Circuit reversed and remanded for reconsideration by the district court.  During trial, an expert for the plaintiff changed his opinions.  That resulted in post-trial motion practice concerning claim construction.  The claims were later found ineligible for patenting under Section 101, which decision was later affirmed by the Federal Circuit.  Trend Micro then asked for attorneys’ fees concerning circumstances of the expert’s changed opinion.  The Court granted fees with respect to that aspect of the case, amounting to more than $400,000.  On appeal, the Federal Circuit held that this piecemeal analysis under Section 285 was flawed.  Section 285 requires an assessment of whether “the case” was exceptional, not a mere portion of the case.  The Court remanded for consideration whether the changed testimony issue rendered “the case” exceptional.

The opinion can be found here.

Syngenta Crop Protection, LLC v. Willowood, LLC, Appeal Nos. 2018-1614, -2044 (Fed. Cir. Dec. 18, 2019)

In these appeals from the U.S. District Court for the Middle District of North Carolina, the Federal Circuit addressed issues relating to infringement of a patented process under 35 U.S.C. § 271(g) and infringement of a compound patent by a product sold in China.  As to § 271(g), the Court resolved a question of statutory interpretation and found that the statute does not require a single entity to perform all of the steps of a patented process for infringement liability to arise from the importation into the U.S. of a product made by a patented process.  As to the compound patent, the Court concluded that substantial evidence supported a jury verdict of non-infringement because the alleged infringer sold its product in China and did not import or sell it into the U.S.  The Court also addressed issues relating to the Copyright Act and potential conflict with FIFRA.

The opinion can be found here.

Fox Factory, Inc. v. SRAM, LLC, Appeal Nos. 2018-2024, -2025 (Fed. Cir. Dec. 18, 2019)

In an appeal from the Patent Office's determination in an inter partes review that petitioner had not established obviousness of the challenged claims, the Court reviewed whether the Patent Office correctly interpreted the coextensiveness requirement for weighing secondary considerations evidence. The Court held that the Patent Office improperly held that the coextensiveness requirement is met so long as the patent claim broadly covers the product that is the subject of the secondary considerations evidence.  Such an interpretation is inconsistent with Demaco's requirement that nexus between the product and the patent claim can only be presumed where the evidence of secondary considerations is tied to a specific product that "is the invention disclosed and claimed."  Accordingly, the Court vacated the Patent Office's obviousness determinations and remanded for reevaluation of the evidence of secondary considerations with the burden of proving nexus placed on the patent holder.

The opinion can be found here.

The Chamberlain Group, Inc. v. One World Technologies, Inc., Appeal No. 2018-2112 (Fed. Cir. Dec. 17, 2019)

The Chamberlain Group appealed the United States Patent and Trademark Office, Patent Trial and Appeal Board (PTAB) in No. IPR2017-00214 decision on the ground that the PTAB erred in finding all challenged claims anticipated.  The Federal Circuit held the PTAB erred in finding the Chamberlain Group waived its “responsive to” argument by raising it for the first time at the oral hearing.  Waiver was inappropriate as Chamberlain was not raising a new issue, but rather clarifying its earlier position. However, the Federal Circuit still affirmed the PTAB’s decision as it agreed with the PTAB that Chamberlain’s “responsive to” argument was unpersuasive on its merits and therefore, the anticipation findings were supported by substantial evidence.

The opinion can be found here.

Amgen Inc. v. Hospira, Inc., Appeal Nos. 2019-1067, -1102 (Fed. Cir. Dec. 16, 2019)

In appeals from the District of Delaware, the Federal Circuit affirmed the lower court’s refusal to grant the parties’ appeals for motions for JMOL and alternative motions for new trails, and upheld the jury’s verdict of infringement and damages award.  At issue was whether Hospira infringed upon two of Amgen’s patents directed toward a method of production of erythropoietin (EPO) isoforms, and, if so, whether Hospira’s practice of the claims was protected under the § 271(e)(1) Safe Harbor.  The jury returned a verdict of partial infringement and awarded Amgen with $70 million in damages, but found some of Hospira’s acts covered by the Safe Harbor.  Consequently, both parties appealed the verdict.  In a fact intensive analysis, the Court found that substantial evidence supported both the District Court’s denial of the parties’ cross motions for JMOL and new trials, and the jury’s verdict and damages award.  Accordingly, the Court affirmed verdict and award.

The opinion can be found here.

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