Posts in Federal Circuit

In Part I of the interview we discussed Judge Linn’s early interest in patent law and how he found himself appointed to replace the recently deceased Judge Giles Sutherland Rich. We then discussed engaging as a lawyer with civility while still zealously representing clients. That brought us to a topic near and dear to the Judge’s heart — the Inns of Court and the many patent focused Inns across the country that together make up the Richard Linn Inn Alliance. In Part II of the interview we pick up with the discussion of the Inns of Court and further discuss civility and “Rambo style of lawyering,” which Judge Linn explains was really the genesis behind the forming of the Inns of Court.

Those in the industry know that Judge Linn is one of a small group of Judges who are patent attorneys. He is one of us in so many ways. He is a very real and genuine person, he is a great believer in the patent system, and he has long been a friend to patent groups and a mentor to many. Judge Linn started his a career as so many patent professionals have — as the newest patent examiner at the United States Patent and Trademark Office. We spent approximately 60 minutes on the record with my iPhone recorder on, meeting in his chambers at the Federal Circuit, which overlooking Lafayette Park. Judge Linn recently took senior status, and lives full-time in Florida. He returns approximately every other month, sometimes more frequent, to hear cases. He will soon be giving up this office once the President’s appointments to the Court are confirmed.

In January 2013, Taiwan’s InnoLux Corp. filed an appeal with the Federal Circuit, requesting the Court to overturn an award of enhanced post-judgment (“ongoing”) royalties that appeared to be enhanced, at least in part, because the trial judge took offense at an out-of-court remark made by the defendant’s CEO, after losing at trial. Following the verdict, the defendant’s CEO was quoted in a Taiwan newspaper as having said, “The issue of patent infringement is being taken too seriously sometimes.”

Semiconductor Energy Laboratory (“SEL”) appealed the decision of the District Court of California that dismissed with prejudice SEL’s complaint versus Yujiro Nagata (“Nagata”) due to a violation of Fed. R. Civ. P. 12(b)(1) –lack of subject matter jurisdiction. The CAFC also declined to exercise supplemental jurisdiction over a number of state law claims. Ultimately, the CAFC affirmed the decision of the district court stating in part: “[b]ecause the district court did not err in holding that there is no federal cause of action based on assignor estoppel and did not abuse its discretion in declining supplemental jurisdiction over the state law claims, we affirm.”

BB&B initially moved to dismiss Hall’s complaint in accordance with Federal Rule of Civil Procedure 12(b)(6) – failure to state a claim on which relief can be granted. The district court granted the dismissal of the complaint. In part, the district court stated that Hall’s complaint failed to contain “any allegations to show what aspects of the Tote Towel merit design patent protection, or how each Defendant has infringed the protected patent claim.” Order at 15-16. The CAFC cited Phonometrics, Inc. v. Hospitality Franchise Systems, Inc. as precedent for the requirements of patent infringement pleading. The five elements include (i) to allege ownership of the patent, (ii) name each defendant, (iii) cite the patent that is allegedly infringed, (iv) state the means by which the defendant allegedly infringes, and (v) point to the sections of the patent law invoked. The CAFC stated that Mr. Hall had presented a lengthy complaint outlining the merits of his case and, therefore, had satisfied the standards set forth in Phonometrics.

Earlier today President Barack Obama made two nominations for the United States Court of Appeals for the Federal Circuit. Nominated were Raymond T. Chen, who is currently the Solicitor for the United States Patent and Trademark Office, and Todd M. Hughes, who is currently Deputy Director of the Commercial Litigation Branch of the Civil Division at the United States Department of Justice. The Federal Circuit is the Court of Appeals charged with handling all patent appeals from the United States Patent and Trademark Office and the various Federal District Courts regardless of where they are located geographically.

When an element is claimed using language falling under the scope of §112, ¶6, the specification must be consulted to determine the structure, material, or acts corresponding to the function recited in means-plus-function element in the claim. As emphasized by the Federal Circuit, “the ‘broadest reasonable interpretation’ that an examiner may give means-plus-function language is that statutorily mandated in paragraph six…, the PTO may not disregard the structure disclosed in the specification corresponding to such language when rendering a patentability determination.” In re Donaldson, 16 F.3d 1189, 1194 (Fed. Cir. 1994)(en banc); see also, MPEP 2182, 8th Ed. (August 2012). But here, the Federal Circuit held that there was no error in the Board’s reliance on the broadest reasonable interpretation for language appearing in a seemingly means-plus-function claim element.

In contrast to the Federal Circuit’s 2012 decisions in the context of pharmaceutical litigation, its decisions with respect to appeals from the Board were much less favorable to those seeking patent protection. This is likely the result of the different standard applied to Board decisions – while the question of obviousness is one of law and reviewed de novo, it is based on factual findings, and the appellant must do more than simply demonstrate that the Board’s decision was wrong. Instead, the appellant will prevail only if he/she can show that the decision was not based on “substantial evidence.” Moreover, unlike in district court litigation, the Patent Office is not required to establish obviousness by a “clear and convincing” standard.

A few trends were readily apparent in 2012. First, pharmaceutical patent holders in litigation fared well – in a series of cases, the Federal Circuit rejected obviousness attacks in pharmaceutical patent challenges on appeal from the district courts. Second, patent holders appealing decisions from the Board of Patent Appeals and Interferences (whether it be an original application, a reexamination, or a reissue) fared poorly – the Federal Circuit affirmed several Board decisions finding chemical patent claims obvious. While these trends are not surprising, a third more subtle trend suggests chemical patents in district court litigation may be less susceptible to invalidation for obviousness post-KSR. In 2012, when the Federal Circuit reversed the obviousness decision below on a chemical patent, those reversals favored non-obviousness three to one.

Recently the Federal Circuit, sitting en banc, denied Nokia’s petition for rehearing. The Federal Circuit decision is nevertheless interesting for its treatment of Section 337’s “domestic industry” requirement as it is applied to NPEs. Under 19 U.S.C. §1337(a)(2), relief at the Commission is predicated on the existence or establishment of an industry in the United States “relating to the articles protected by the patent.” This is commonly known as the “domestic industry” requirement. In turn, section 1337(a)(3) provides that an industry is considered to exist if there is in the United States, “with respect to the articles protected by the patent,” significant investment in plant or equipment, significant employment of labor or capital, or “substantial investment in [the patent’s] exploitation, including engineering, research and development, or licensing” (emphasis added).

Do patent applicants appealing a rejection of their claims from the Patent Trial and Appeals Board have a chance of success at the Court of Appeals for the Federal Circuit? What about patentees appealing to the CAFC from rejections in reexamination proceedings? The candid answer is not much of a chance. Of course, every case is different and needs to be considered on its own merits. Yet, the standards for review of Board decisions, followed by the CAFC, significantly favor affirmance of those decisions.

the United States Court of Appeals for the Federal Circuit determined that the United States Federal District Court for the Southern District of California abused its discretion when it refused to award a victorious patent plaintiff a permanent injunction where the patentee directly competes with the infringer. The case is Presidio Components v. American Technical Ceramics. The opinion was authored by Chief Judge Rader and joined by Judge Plager and Judge Wallach. Perhaps this case will be a turning point, something of a Twisted Sister moment. You know — “we’re Not gonna take it, no, we ain’t gonna take it, we’re not gonna take it anymore…” I sure hope so!

This is very good news for defendants and for the patent system. If Rule 11 is actually enforced against those who sue without a reasonable basis the bad actors will be wiped out. It will also work to identify those who are REALLY the patent trolls compared with those who are patent owner who simply seek redress for rights that are being trampled. As long as the bad actors operate the patent system will remain in jeopardy because the popular press and critics of the patent system unjustifiably paint all non-practicing entities with the same brush. Meaningful and appropriate use of Rule 11 will deal with the bad actors, while distinguishing from those non-practicing entities that have reasonable grievances that deserve consideration rather that ridicule.

The brief addresses this issue in the context of patent infringement claims that Motorola, Inc. has filed against Apple, Inc. regarding technologies used in iPhones and iPads that allegedly are covered by Motorola’s SEPs. It concludes that a district court correctly applied the governing legal principles when it dismissed Motorola’s request for an injunction that could have blocked Apple from selling iPhones and iPads in the United States.