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Latest Federal Court Cases, 2/10/20

February 10, 2020

Overview

PATENT CASE OF THE WEEK 

Samsung Electronics America, Inc. v. Prisua Engineering Corp., Appeal No. 2019-1169, -1260 (Fed. Cir. Feb. 4, 2020)

Our case of the week concerns issues particular to inter partes review proceedings and, in particular, how seemingly indefinite claim terms should be handled by the PTAB in an IPR.

Samsung filed an IPR concerning a patent directed to video streaming. Prior to the Supreme Court’s decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), the PTAB instituted review of claim 11, but declined to institute review as to claims 1-4 and 8 because it found those claims to be indefinite. The indefiniteness issue arose for two different reasons. First, the panel held that the term “digital processing unit” in claim 1 was a means plus function claim subject to 35 U.S.C. § 112 ¶ 6, but without corresponding structure. Second, the PTAB found that the claims were indefinite under IPXL Holdings, LLC v. Amazon.com, Inc., 430 F.3d 1377, 1384 (Fed. Cir. 2005). IPXL concerned claims that were ambiguous as to whether they covered a system or a method, and in that case the court held that they were indefinite because a member of the public would not know what acts constituted infringement. The PTAB held that the claims in the patent at issue here suffered the same problem—the claims appeared to cover both a device and a method of using the device within the same claim, leading to ambiguity.

As briefing was drawing to a close, the Supreme Court issued its decision in SAS, which required the Board to institute on all claims or none at all. The PTAB ended up instituting on all claims and all grounds. In its final written decision, the Board held that claims 1-4 and 8 were indefinite for the reasons stated above. Because, these claims being indefinite, the PTAB could not compare them to the prior art, it held that Samsung had failed to prove invalidity pursuant to Sections 102 and 103. The PTAB held 11 to be obvious.

On appeal, Samsung argued that the PTAB should have canceled claims 1-4 and 8 as indefinite. The Federal Circuit rejected this argument, holding that the PTAB has no authority to address indefiniteness in an IPR under the AIA. Samsung argued that the PTAB could do so pursuant to other sections in the statute, but the Federal Circuit held that this required an inconsistent reading of the statute.

That led to a question of what the PTAB should have done with these indefinite claims. The Court answered that question: “the proper course for the Board to follow, if it cannot ascertain the scope of a claim with reasonable certainty for purposes of assessing patentability, is to decline to institute the IPR or, if the indefiniteness issue affects only certain claims, to conclude that it could not reach a decision on the merits with respect to whether petitioner had established the unpatentability of those claims under sections 102 or 103.”

Returning to the facts of this case, the Federal Circuit then assessed the indefiniteness issue. With respect to the § 112 ¶ 6 issue, the Court held that the term “digital processing unit” was not a means plus function term at all. Invoking Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1348 (Fed. Cir. 2015) (en banc), the Court held that there was a presumption that the term was not subject to means-plus-function treatment because the term did not use the word “means.” Additionally, the Court held that “the term ‘digital processing unit’ clearly serves as a stand-in for a ‘general purpose computer’ or a ‘central processing unit,’ each of which would be understood as a reference to structure in this case, not simply any device that can perform a particular function.” Thus, the claim terms were not indefinite for this reason.

With respect to the IPXL issue, the Court noted, “The rationale of IPXL is that the claim conflates elements of both an apparatus and a method, rendering the claim indefinite for purposes of determining when infringement occurs.” The Court held that an IPXL-type claim is different from other types of indefinite claims to that extent, and that it can therefore be applied to the prior art, notwithstanding cases that hold that indefinite terms cannot be applied to the prior art. As the Court explained: 

The Board has previously held that IPXL-type indefiniteness does not prevent the Board from addressing patentability. See Vibrant Media, Inc. v. Gen. Elec. Co., No. IPR2013-00172, 2014 WL 3749773 (P.T.A.B. July 28, 2014), aff’d, 626 F. App’x 1010 (Fed. Cir. 2015). Although the Board in this case suggested that its decision in Vibrant Media might be inconsistent with this court’s decision in Enzo Biochem, Inc. v. Applera Corp., 599 F.3d 1325, 1332 (Fed. Cir. 2010), the statement in the Enzo case quoted by the Board—that “a claim cannot be both indefinite and anticipated”—did not involve IPXL-type indefiniteness and therefore did not resolve the question presented to the Board in this case. Our decision here is limited to IPXL-type indefiniteness and does not affect claims that are indefinite for other reasons. Moreover, our ruling in this case does not affect the disposition of cases in forums that are authorized to consider indefiniteness as a basis for invalidating a claim.

Thus, the Board held that if an IPXL-type indefiniteness issue arises, the claim can still be assessed against the prior art in an IPR, but suggested that for all other types of indefiniteness, the PTAB should decline to institute or should otherwise not reach a final written opinion about patentability under Sections 102 and 103.

Having found the claims not subject to Section 112 ¶ 6, and that the IPXL issue does not prevent the Board from assessing patentability under Sections 102 and 103, the Court remanded for the Board to reconsider claims 1-4 and 8.

With respect to the merits of claim 11, the Federal Circuit affirmed, holding that substantial evidence supported the Board’s position.

 The opinion can be found here

ALSO THIS WEEK  

Apple Inc. v. Andrea Elecs. Corp., Appeal Nos. 2018-2382, et al. (Fed. Cir. Feb. 7, 2020)

In this appeal from two IPR proceedings brought by Apple against a single patent, the PTAB concluded that all but four claims were invalid. With respect to those four claims, the PTAB refused to consider arguments raised by Apple in its reply brief, holding that its introduction of those arguments into the case was untimely. The Federal Circuit reversed, holding that Apple’s reply arguments, supported by a reply expert declaration, were in rebuttal to arguments raised by Andrea in its response brief. Andrea was given an opportunity to depose Apple’s witness a second time after the reply declaration was submitted. Andrea did not move to strike, nor did it move for a sur-reply. The Federal Circuit held that the Board abused its discretion in refusing to consider the new arguments. The Federal Circuit advanced the following test for resolving the appropriateness of reply evidence: “whether the petitioner’s reply brief is responsive to arguments originally raised in its petition; or whether the reply arguments are responsive to arguments raised in the patent owner’s response brief.” The Court found that both tests were met. The Court remanded for further consideration of Apple’s reply arguments, and otherwise affirmed its holding of unpatentability with respect to the remaining claims.

The opinion can be found here.

Cheetah Omni LLC v. AT&T Services, Inc., Appeal No. 2019-1264 (Fed. Cir. Feb. 6, 2020)

In this case, the Federal Circuit affirmed the summary judgment ruling of a district court that the plaintiff’s infringement suit was barred by a prior settlement and license agreement with an intervening defendant. At issue was whether the patent in suit, a continuation of a continuation of the parent of the previously-asserted patent, was covered by the license. The common parent was expressly licensed under the terms of the agreement. Relying on precedents holding that an express license to a patent presumably includes an implied license to its continuations, absent a clear indication of mutual intent to the contrary, the Federal Circuit found that the patent-in-suit was included in the previous license, barring the infringement suit. In so finding, the Federal Circuit rejected patentee’s argument that the precedents applied only to continuations issued after a license agreement is signed, holding that the timing of patent issuance is not material to the policy rationale underpinning the implied license presumption.

The opinion can be found here.

HVLPO2, LLC v. Oxygen Frog, LLC, Appeal No. 2019-1649 (Fed. Cir. Feb. 5, 2020)

In this appeal from the United States District Court for the Northern District of Florida, the Federal Circuit addresses issues relating to admissibility of lay opinion testimony on obviousness. Specifically, the Court held that opinion testimony on obviousness, given at trial from an unqualified witness and which was not provided in the defendant’s mandatory pre-trial expert disclosures, was inadmissible. Such testimony goes to the “central legal and technical question at trial,” and allowing the jury to hear it at trial was not harmless because there was no way to know whether the improper testimony provided some or all of the basis for the jury’s decision.

The opinion can be found here.

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