PATENT CASE OF THE WEEK

Grit Energy Solutions, LLC v. Oren Techs., LLC, Appeal No. 2019-1063 (Fed. Cir. April 30, 2020)

In this week’s Case of the Week, the Federal Circuit vacated and remanded an inter partes review determination that challenged claims had not been shown to be obvious. The Court found that the appellant had standing to pursue the appeal, and that the Patent Trial and Appeal Board’s non-obviousness determination was not supported by substantial evidence.

Concerning standing, the underlying infringement claims had been dismissed without prejudice after the defendant (petitioner in the IPR and appellant in this case) transferred ownership of all products accused of infringement, and appellant did not contend that it had any plans to engage in further potentially infringing activity. However, because the patent owner’s claims were dismissed without prejudice and the statute of limitations had not run, the patent owner was free to re-assert its claims as to appellant’s past activities, which the Federal Circuit found was sufficient to confer Article III standing to pursue the appeal.

On the merits, the challenged claims were directed to a system for storing and discharging sand or other particulates used in hydraulic fracturing operations. Specifically, the challenged patent claimed a movable storage container with a pin affixed to a sliding gate at the bottom, and a support structure with a hopper to receive its contents, wherein the support structure had an actuator with a receptacle to engage the pin attached to the gate and open it. One of the asserted prior art references, a French patent application, claimed a pair of containers with shutters mechanically connected to each other, wherein “the means for mechanical connection of the shutters are constituted by at least one stud (15) provided on one of the shutter blades (8) that lodges in a corresponding orifice (16) of the blade of the other shutter.” The parenthetical reference numerals in the claim referred to elements of a “non-limiting example” figure in the specification, wherein the shutter blade with a stud was connected to an actuator, and the non-actuated shutter blade had an orifice for receiving it—i.e., the opposite of the claimed configuration, wherein the actuator moved a receptacle engaged with a pin on a non-actuated gate.

At issue was whether the prior art application’s claim disclosed the challenged claims’ configuration. The Board found it did not, interpreting the reference numerals in the claim to be limiting. The Federal Circuit disagreed, finding that the claim plainly disclosed the stud “provided on one of the shutter blades” and the orifice provided on “the blade of the other shutter,” teaching both the challenged configuration and its opposite. The Court found that the mere fact that a non-limiting example was mapped to the claim did not detract from this clear disclosure.

In determining that the Board had offered no other rationale for affirmance, the Federal Circuit also noted the Board’s factual finding, based on expert testimony, that simply swapping the pin and receptacle components in the prior art would result in a more expensive system. The Court found that this was insufficient reason to reject appellant’s argument that such a modification amounted to nothing more than reorganizing familiar elements according to known methods to yield predictable results, and vacated and remanded for further consideration.

Judge Newman concurred in part and dissented in part, agreeing with the majority’s conclusion on standing, but arguing that the majority impermissibly removed express limitations in the prior art to broaden its disclosures.

The opinion can be found here.

ALSO THIS WEEK

Uniloc USA, Inc. v. LG Electronics USA, Inc., Appeal No. 2019-1835 (Fed. Cir. April 30, 2020)‎

In this appeal from the U.S. District Court for the Northern District of California, the Federal Circuit addresses issues relating to patent eligibility under 35 U.S.C. § 101. Specifically, the Court reversed the district court’s decision that the claims at issue were directed to ineligible subject matter. Rather than merely reciting generalized steps to be performed on a computer using conventional computer activity, the Court held that the claims at issue are directed to a patent-eligible improvement to computer functionality that overcame a problem specifically arising in the realm of computer networks. The claims need not articulate the advantages of the system nor define the improvement by reference to any physical component to be patent-eligible.

The opinion can be found here.

Hitkansut, LLC v. United States, Appeal No. 2019-1884 (Fed. Cir. May 1, 2020)

In an appeal from the United States Court of Federal Claims, the Court affirmed a fee award to Hitkansut under 28 U.S.C. § 1498(a). At issue was whether “the position of the United States was substantially justified.” The Court agreed with the United States “that ‘the position of the United States’ as used in § 1498(a) refers to the litigation positions taken by the United States in the civil action in which the attorneys’ fees were incurred.” However, the Court clarified that the United States’ litigation position must “have a reasonable basis both in law and fact.” Accordingly, a court is not prohibited “from looking to the facts of an individual case, including facts that occurred pre-litigation, when deciding whether those litigation positions were substantially justified.” The Court then affirmed the fees award because the United States’ litigation positions were not substantially justified based on the facts of record, including its pre-litigation conduct. The Court also affirmed the amount of the fees award, despite the United States’ contention that Hitkansut had only “limited success in litigation” because it did not receive the full damages award it sought, holding that the lower court has “broad discretion” to award full fees and Hitkansut prevailed on its infringement claim notwithstanding the reduced damages award.

Opinion can be found here.

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