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Latest Federal Court Cases, 8/20/18

August 20, 2018

Overview

PATENT CASE OF THE WEEK

Click-to-Call Technologies, LP v. Ingenio, Inc., Appeal No. 2015-1242 (Fed. Cir. Aug. 16, 2018)

In an appeal of an inter partes review, the Federal Circuit reviewed for the first time the merits of whether a petition was time barred under 35 U.S.C. § 315(b) where a previously-filed complaint alleging infringement of the patent was voluntarily dismissed.

Section 315(b), provides that an IPR “may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  The PTAB had previously held that a petitioner is not barred from filing a petition for an IPR when the patent owner’s previously-filed suit was voluntarily dismissed.  The Federal Circuit, sitting en banc, reversed, holding that a voluntary dismissal does not reset the time bar clock.  A panel of the Court also held that a reexamination of the patent does not reset the time bar clock, and that all entities filing as a “petitioner” are affected even if only one of those entities is subject to the time bar.

In 2001, a predecessor of the petitioner, Ingenio, Inc., was served with a complaint alleging infringement of the patent in issue.  The case was subsequently voluntarily dismissed without prejudice in 2003.  In 2013, Ingenio and a host of other companies collectively filed the IPR petition.  The Board found that the patent owner had not established that the prior complaint barred Ingenio or the other entities from pursuing an inter partes review because the prior infringement suit was dismissed voluntarily without prejudice.  In coming to this conclusion, the Board relied on previous Federal Circuit decisions that held that a voluntary dismissal of an action without prejudice leaves the parties as though the action had never been brought.

In a portion of the opinion addressed by the en banc court, the Federal Circuit disagreed with this interpretation, holding that whether a complaint is subsequently voluntarily dismissed is irrelevant to whether the petitioner was “served with a complaint alleging infringement of the patent.”  The time bar is triggered once a party is served with a complaint, and service is not negated merely because the action is voluntarily dismissed.  The Court also found that its decision was consistent with its prior en banc decision in Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018) (en banc), in which it held § 315(b) was a “condition precedent to the Director’s authority to act.”

In a separate portion of the opinion, not addressed en banc, the Court held that the reexamination of the patent also did not negate the time bar.  The petitioners had argued that, because the patent had been reexamined between the filing of the litigation and the filing of the IPRs, it was not the same “patent,” in effect, and thus the petitioners had not been “served with a complaint alleging infringement of the patent.”  The Federal Circuit held that the “patent” was the same, even if the claims were not.

The court also addressed whether a “petitioner” composed of multiple parties filing collectively can be precluded under Section 315(b) when only a single entity within the group is time barred.  The Court held that, because the petitioners had filled collectively as a single “petitioner” as required under the statute, they were all precluded because a single entity within them was time barred.

Since the petition was time-barred, the Court vacated the Board’s decision and remanded with instructions to dismiss the IPR.

Judge Taranto issued a concurring opinion and Judge Dyk and Judge Lourie dissented from the en banc portion of the opinion because in their view “the use of traditional tools of statutory construction leads to a conclusion opposite to the en banc court.”

Opinion can be found here.

ALSO THIS WEEK 

In re Power Integrations, Inc., Appeal Nos. 2018-144, -145, -146, -147 (Fed. Cir. Aug. 16, 2018)

The Federal Circuit denied petitions for writs of mandamus directed to the PTAB.  Power Integrations filed four petitions for inter partes review, which were denied by the PTAB because the prior art references relied upon were not sufficiently shown to be printed publications under 35 U.S.C. § 102.  Importantly, 35 U.S.C. § 314(d) is a “no appeal” provision that prohibits appeals from institution decisions.  By filing writs of mandamus, Power Integrations sought to sidestep the appeal prohibition in § 314(d).  Power Integrations asserted that writs of mandamus were appropriate under the Administrative Procedures Act because the PTAB had failed to satisfy the notice requirements of 5 U.S.C. § 555(e) by providing a sufficiently detailed notice of its basis for denial of the petitions.  The Court held that the PTAB, by issuing 15-20 page written decisions denying institution of the petitions, had satisfied § 555(e)’s notice requirements.  The Court observed that what Power Integrations really wanted was not just a more detailed notice, but a decision on the merits.  Because delivering such a decision would conflict with § 314(d), the Court denied the petitions for writs of mandamus.

Opinion can be found here.

Core Wireless Licensing S.A.R.L. v. Apple Inc., Appeal No. 2017-2102 (Fed. Cir. Aug. 16, 2018)

In an appeal from a bench trial, the Federal Circuit held that the district court failed to properly examine whether the patent holder’s failure to disclose a patent application to a standards setting organization requiring such disclosures rendered the patent unenforceable due to waiver.  The Federal Circuit also affirmed a jury verdict of infringement and no invalidity of one patent and reversed the jury’s verdict with respect to a claim of a different patent relating to telecommunications.

Opinion can be found here.

Luminara Worldwide, LLC v. Andrei Iancu, Appeal Nos. 2017-1629, -1631, -1633 (Fed. Cir. Aug. 16, 2018)

In an appeal from IPR petitions, the Federal Circuit found that one of the petitions was time barred pursuant to 35 U.S.C. § 315(b), relying on the en banc decision in Click-To-Call Techs., LP v. Ingenio, Inc., No. 2015-1242 (Fed. Cir. Aug. 16, 2018) discussed as our Case of the Week, above.  With respect to a second IPR, the patent owner had argued that the petitioner changed its obviousness theories mid-stream, depriving the patent owner of the requisite notice under the Administrative Procedures Act.  The Court affirmed that the petition and the institution decision sufficiently identified the obviousness theory.  With respect to a third IPR, the Court affirmed the PTAB’s decision, holding that substantial evidence supported the Board’s decision.

Opinion can be found here.

In re Rembrandt Technologies LP Patent Litigation, Appeal No. 2017-1784 (Fed. Cir. Aug. 15, 2018)

In an appeal from a district court decision awarding fees pursuant to 35 U.S.C. § 285, the Federal Circuit affirmed the finding that the case was exceptional, but reversed the amount of fees.  Following extensive multi-district litigation concerning the cable industry, the district court found that Rembrandt had acted exceptionally in at least three ways.  First, it had engaged fact witnesses with agreements that provided the fact witnesses compensation based on the success of the litigation.  Second, it had spoliated evidence by destroying potentially thousands of boxes of documents relevant to the lawsuit as part of an acquisition after the suit had begun.  Third, Rembrandt had engaged in inequitable conduct.  The Federal Circuit affirmed all three findings, and further affirmed that Rembrandt was not entitled to an evidentiary hearing on the issue and that the case was exceptional.  The Court remanded, however, to ascertain whether the fees should have been apportioned, given that the case involved numerous patents and defendants, and not all issues may have been linked.

Opinion can be found here.

Diebold Nixdorf, Inc. v. International Trade Commission, Appeal No. 2017-2553 (Fed. Cir. Aug. 15, 2018)

In an appeal from the International Trade Commission’s (ITC) decision finding a violation of § 337 of the Tariff Act of 1930, the Federal Circuit reversed.  The Federal Circuit held that the term “cheque standby unit” was a means-plus-function term subject to 35 U.S.C. § 112 ¶ 6, and it lacked a corresponding structure disclosed in the written description.  Although the claim term did not recite the word “means,” Diebold overcame the presumption that § 112 ¶ 6 does not apply.  Therefore, the claims were invalid for indefiniteness under 35 U.S.C. § 112 ¶ 2.

Opinion can be found here.

BSG Tech LLC v. BuySeasons, Inc., Appeal No. 2017-1980 (Fed. Cir. Aug. 15, 2018)

The Federal Circuit affirmed the district court’s invalidity holding based on 35 U.S.C. § 101. BSG Tech LLC sued BuySeasons, Inc. for patent infringement, asserting patent claims related to systems and methods for indexing information stored in wide access databases.  The district court determined that the claims were invalid under Alice/Mayo framework because the asserted claims are “directed to the abstract idea of considering historical usage information while inputting data.” The appellate court rejected BSG Tech’s argument that the requirement that users are guided by summary comparison usage information supplied an inventive concept sufficient to transform the claims into a patent-eligible application.  Instead, the Federal Court held, that requirement simply restates the abstract idea in Alice step one.  Similarly, that BSG Tech narrowed its claims to specific database structures does not supply an inventive concept because the structures are well-understood and conventional.

Opinion can be found here.

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