Wednesday, August 31, 2011

Monday, August 29, 2011

Thursday, August 11, 2011

Courts May Correct Obvious Errors in a Patent Claim

CBT Flint Partners, LLC. V. Return Path, Inc., No. 2010-1202 (Fed. Cir. Aug. 10, 2011):


An obvious and correctable error in the claim, the construction of which is not subject to reasonable debate does not render the claim indefinite. Slip op. at 8.

Relevant Facts:

One claim of the patent-in-suit contained a “drafting error” for which the district court found at least three reasonable and possible corrections. Slip op. at 5. The district court concluded itself unauthorized to rectify the error and therefore found the claim invalid on the ground of indefiniteness. Id. One of the defendants moved for a finding of an exceptional case, as well as an award of costs and attorney fees. Id. at 6. The district court awarded only costs. Id. Both sides appeal. Id. The Federal Circuit reversed the summary judgment and consequently the award of costs.


Note the Federal Circuit explained the correct rule with respect to whether a court may correct a claim error:

It is well-settled law that, in a patent infringement suit, a district court may correct an obvious error in a patent claim. I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 442 (1926) (“Essex”). In Novo Industries, we held that “[a] district court can correct a patent only if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a differ-ent interpretation of the claims.” 350 F.3d at 1357. We concluded that the enactment of 35 U.S.C. §§ 254 and 255 did not overrule Essex or deny authority to the district courts to correct a claim in appropriate circumstances. Id. at 1356. In Novo Industries, we declined to make the proposed corrections to the claim at issue because those corrections were substantively significant and required guesswork as to what was intended by the patentee in order to make sense of the patent claim. Id. at 1357.

Slip op. at 9.

Also note that claim indefiniteness rendered by claim drafting errors does not easily trigger a finding of an exceptional case under 35 U.S.C. § 285.

Scope of Patent Assignment Implicates a Patent Holding Company’s Standing to Bring Infringement Suits

MHL Tek, LLC v. Nissan Motors Corp., No. 2010-1287 (Fed. Cir. Aug. 10, 2011):


A patent holding company does not have standing to assert any of the patents-in-suit as none of the patent right was properly assigned. Slip op. at 15.

Relevant Facts:

MHL Tek filed infringement suits against numerous automobile manufacturers over U.S. Patent Nos. 5,663,496 (“the ’496 patent”), 5,741,966 (“the ’966 patent”), and 5,731,516 (“the ’516 patent”). The ’496 and the ’966 patents are divisionals of one parent application, to which the ’516 patent is not related. Slip op. at 4-5. Days after the parent application was filed, the inventors executed an assignment to Animatronics, Inc., granting “the entire right, title and interest, domestic and foreign, in and to the inventions and discoveries in [the Parent Application].” Id. at 10. A subsequent assignment by Animatronics, Inc. to McLaughlin Electronics granted “the entire right, title and interest, domestic and foreign, in and to the inventions and discoveries set forth in the [Parent] Application.” Id. at 10-11. The second assignment carved out rights to the parent application that concern the Animatronics Proprietary Inventions, which was defined separately in the assignment. Id. Prior to the infringement action, the inventors signed documents to assign the patents-in-suit to MHL Tek. During the trial, Animatronics, Inc. assigned MHL Tek the rights to the patents-in-suit as well. Id. at 11.


Note that the Federal Circuit explained the language of the assignment, not the patent specification, controls the scope of the assignment. Slip op. at 16. Further, a patent can be found covered under the broad assignment language “inventions and discoveries in [the parent application]” when the specification of the unrelated parent application supports the claims in the patent. Id. at 19.

New Federal Circuit Opinions - August 10, 2011

MHL Tek, LLC v. Nissan Motors Corp., No. 2010-1287 (Fed. Cir. Aug. 10, 2011).

CBT Flint Partners, LLC. V. Return Path, Inc., No. 2010-1202 (Fed. Cir. Aug. 10, 2011).

Insufficiently Corroborated Inventor Testimony Regarding Reduction to Practice Does Not Effectively Swear Behind a Critical Date

In re NTP, Inc., Nos. 2010-1243, -1254, -1263, -1274, -1275, -1276, -1278( Fed. Cir. Aug. 1, 2011)


None of NTP’s documents or software files sufficiently corroborates the inventors’ alleged actual reduction to practice prior to the critical date at issue under 37 C.F.R. § 1.131. Slip op. at 19, 21.

A multi-volumed publication received and catalogued at a foreign library under its general library practice remains a prima facie 35 U.S.C. § 102(b) prior art reference after the Patentee fails to carry the burden to prove either that the document was tampered with after the critical date at issue, or the document was not reasonably accessible despite the fact that library’s catalogue system is online and searchable by author, title, classification number, subject heading. Slip op. at 26-27.

Neither hindsight reasoning nor common sense argument constitutes proper grounds for claim rejection based on obviousness. Slip op. at 29-30, 32-33.
A prior art reference is sufficiently enabled for the purpose of anticipating by disclosing a protocol that can guide one of ordinary skill in the art to implement the disclosed system. Slip op. at 35.

Relevant Facts:

This is the companion opinion of the Federal Circuit addressing NTP’s appeals of the BAPI’s decision affirming the rejections of claims in the other seven of NTP’s patents, i.e., United States Patent Nos. 5,436,960 (’960 patent), 5,438,611 (’611 patent), 5,479,472 (’472 patent), 5,625,670 (’670 patent), 5,631,946 (’946 patent), 5,819,172 (’172 patent), and 6,067,451 (’451 patent). Slip op. at 3-4. After finding the BAPI’s construction of the term “electronic mail” unreasonably broad, the Federal Circuit remands in part for further proceedings. Id. at 42.


Note that the Federal Circuit lays out major rules for the purpose of antedating references under 37 C.F.R. § 1.131:

A party seeking to antedate a reference based on reduction to practice must present evidence of the actual reduction to practice of the invention prior to the effective date of the reference. 37 C.F.R. § 1.131(b). An inventor cannot rely on uncorroborated testimony to establish a prior invention date. Id. It has long been the case that an inventor’s allegations of earlier invention alone are insufficient – an alleged date of invention must be corroborated. Medichem S.A. v. Rolabo, S.L., 437 F.3d 1157, 1170 (Fed. Cir. 2006); Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1371 (Fed. Cir. 1998). “[E]vidence is assigned probative value and collectively weighed to determine whether reduction to practice has been achieved.” Medichem, 437 F.3d at 1170. “Sufficiency of corroboration is determined by using a ‘rule of reason’ analysis, under which all pertinent evidence is examined when determining the credibility of an inventor’s testimony.” Id.

Slip op. at 15.

For obviousness finding, note that the Federal Circuit emphasizes the importance of not to “rely on hindsight reasoning to piece together elements to arrive at the claimed invention.” Slip op. at 29, and frankly ignores the “mere common sense” argument advanced by the PTO. Id. at 32-33.

In rel Hall, 781 F.2d 897 (Fed. Cir. 1986), remaining a good law on qualifying printed publications as 35 U.S.C. 102(b) prior art, finds itself a Norwegian cousin.

Priority Determination During Reexamination Is Not Prohibited by 35 U.S.C. § 301 and Proper Under § 303(a) Absent Evidence that Priority Was Examined

In re NTP, Inc., No. 2010-1277 (Fed. Cir. Aug. 1, 2011):


The Board properly construed the term “destination processor” as not supporting the function to retransmit the contents of an electronic mail message in view of the written description, without abusing its discretion not to credit NTP’s expert declarations to the contrary. Slip op. at 11-12.

35 U.S.C. § 301 does not prohibit the examiner from undertaking a priority analysis under § 120 during a reexamination proceeding to ascertain whether a priority date is properly claimed in the original examination of the application. Slip op. at 15.

Priority determination during reexamination is not prohibited by § 303(a) as NTP failed to establish that the issues of priority and satisfaction of § 112 requirements were considered by the examiner during the original prosecution when neither rejection nor affirmative statements were issued by the examiner; and statements by an applicant does not constitute evidence of consideration or acceptance by the examiner. Slip op. at 18-19.

Relevant Facts:

Among other related seven appeals, the Patentee challenges the BPAI’s decision affirming the rejection of all 764 claims of its U.S. Patent No. 6,317,592 (“the ’592 patent”) during reexamination. Slip op. at 2. The BPAI held that all claims of the ’592 patent were anticipated by U.S. Patent No. 6,219,694 issued to Lazaridis (“Lazaridis”) on the ground that Lazaridis became qualified as a § 102(e) prior art reference upon the examiner’s conclusion that the ’592 patent cannot claim to an earlier priority date of its parent application, the written description of which was found not to support a “destination processor” performing claimed retransmission the contents of an electronic mail message. Id. at 5. NTP did not dispute the substantive merit of the anticipation based on Lazaridis but its availability as prior art. Id. at 7. Prior to this appeal, NTP sued RIM alleging infringement of the ‘592 patent among other NTP patents, after which the inter parte reexamination initiated by RIM was consolidated with the reexamination proceedings initiated by the PTO. NTP added dependent claims to the ‘592 patent during the reexamination. Id. at 4-5.


Note that the Federal Circuit stated that the examiner is not prohibited from determining a new priority date in context of newly available references during reexaminations:
Thus, when a patentee argues that its claims are entitled to the priority date of an earlier filed application, the examiner must undertake a priority analysis to determine if the patentee meets the requirements of § 120. There is no statutory limitation during a reexamination proceeding prohibiting the examiner from conducting a priority analysis. Otherwise, the examiner would be stripped of a critical legal tool needed in performing a proper reexamination. Nothing in §§ 301 et seq. prohibits an examiner from determining whether or not a priority date was properly claimed during the original examination of the application.

Slip op. at 15.

Also note that the Federal Circuit emphasized the context specific approach for finding a substantial new question of patentability under § 303(a) during reexaminations:

In 2002, Congress amended § 303(a) to explain that “[t]he existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.” 2002 Amendment. In Swanson, we explained that this amendment meant that “Congress . . . has now rejected this presumption of full consideration. Section 303(a) as amended . . . requires a more context-specific approach that is based on an analysis of what the PTO actually did.” 540 F.3d at 1380. Thus, there is no presumption that the examiner considered whether the written description of the Parent Application supports the claims of the ’592 patent simply because the MPEP requires it.

Slip op. at 16.

Further note that the Federal Circuit pointed out when an issue can be found as considered by the examiner under the context specific approach:

In cases where we have determined the examiner to have considered an issue during the original prosecution, the issue was squarely before the examiner. For example, in Recreative Technologies, the examiner used the same reference during the original prosecution and the reexamination proceedings to reject the patent’s claims for obviousness. In re Recreative Techs. Corp., 83 F.3d 1394, 1398 (Fed. Cir. 1996). This court found that the reexamination was improper because “[t]he question of patentability in view of the . . . reference was decided in the original examination, and thus it can not be a substantial new question.” Id.; cf. WMS Gaming, Inc. v. Int’l Game Tech., 184 F.3d 1339, 1355 (Fed. Cir. 1999) (“The burden on the party asserting obviousness is more easily carried when the references on which the assertion is based were not directly considered by the examiner during prosecution.” (emphasis added)). In contrast, in Swanson, this court found that a reference relied on in the original prosecution could create a substantial new question of patentability where the reference was used for a different purpose during reexamination. 540 F.3d at 1380-81.

Slip op. at 18.

The Federal Circuit Upheld Exceptional Case Finding Based on a Patent Holding Company’s Filing of Objective Baseless Patent Infringement Lawsuits

In re Eon-Net LP, No. 2009-1308 (Fed. Cir. July 29, 2011):


The claimed terms “document,” “file,” “extract,” and “template” are properly construed by the district court as limited to information originating from a hard copy document as the specification “unequivocally compels” the import of such limitation. Slip op. at 15-16.

The district court did not clearly err in its exceptional case finding under § 285 as the record below establishes Eon-Net’s litigation misconduct, the written description clearly refuting Eon-Net’s claim construction warrants the finding of a baseless infringement action, slip op. at 17-18, and the action was brought in bad faith for an improper purpose to extract a nuisance value settlement. Id. at 22.

The district court did not abuse its discretion imposing Rule 11 sanctions against both Eon-Net and its counsel under Ninth Circuit law on the ground that the alleged infringements were legally baseless and Eon-Net’s counsel failed to perform a reasonable pre-suit investigation. Slip op. at 25-26.

Relevant Facts:

Eon-Net appeals the district court’s finding of non-infringement of Eon-Net’s patents, an exceptional case under § 285, and violation of Federal Rule of Civil Procedure 11. Slip op. at 2. Alleging infringement of the patent-portfolio-in-suit, Eon-Net’s counsel had filed over 100 lawsuits on behalf of Eon-Net or its related entities, with almost all of these cases resulting in early settlements or dismissals. Id. at 7. Earlier in the case, Eon-Net appealed the district court’s grant of defendant’s motion of summary judgment of non-infringement and motion for sanctions under Rule 11, both of which were remanded by the Federal Circuit on the ground that the district court failed to afford Eon-Net notice and the opportunity to argue infringement and claim construction during the briefing on the motions. Id. at 8.

Eon-Net did not appeal the determination of the amount of attorney fees and costs awarded pursuant to § 285. Id. at 17.


Note that, in addressing Eon-Net’s claim differentiation argument regarding claim construction, the Federal Circuit applied the rationale that “claim differentiation is a rule of thumb that does not trump the clear import of the specification.” Edwards Lifesciences, LLC v. Cook Inc., 582 F.3d 1322, 1331 (Fed. Cir. 2009). Slip op. at 15.

Also note that the Federal Circuit reiterated the different standards of review with respect to a district court’s finding of an exceptional case:

A determination whether to award attorney fees under § 285 involves a two-step process. First, a district court must determine whether the prevailing party has proved by clear and convincing evidence that the case is exceptional. Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1327 (Fed. Cir. 2003). We review de novo whether the district court applied the proper legal standard, and we review the court’s exceptional case finding for clear error. Id. at 1328. Second, if the district court finds the case to be exceptional, the court must then determine whether an award of attorney fees is appropriate and, if fees are appropriate, the amount of the award. Cybor, 138 F.3d at 1460. We review that determination for an abuse of discretion. Id.

Slip op. at 16.

Further note that the Federal Circuit stated the general test for finding an exceptional case under 35 U.S.C. § 285:

Indeed, “[l]itigation misconduct and unprofessional behavior may suffice, by themselves, to make a case exceptional under § 285.” Rambus Inc. v. Infineon Techs. AG, 318 F.3d 1081, 1106 (Fed. Cir. 2003). Absent litigation misconduct or misconduct in securing the patent, sanctions under § 285 may be imposed against the patentee only if both (1) the patentee brought the litigation in bad faith; and (2) the litigation is objectively baseless. Brooks Furniture Mfg., Inc. v. Dutailer Int’l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005).

Slip op. at 17.

Finally, a claim construction position of a patent holding company, once found by the court as meritless, not only would lead to summary judgment of non-infringement, but also an automatically triggered finding of an objectively baseless lawsuit under the first prong of the Brooks Furniture test pursuant to § 285. Moreover, such an unwarranted claim construction would also most likely trigger the language of “legally and factually baseless” together with the absence of “reasonable and competent inquiry prior to the filing,” regardless of the wording difference of Rule 11.

Accordingly, it is imperative for a patent holding company and its counsel to conduct good faith pre-suit due diligence, including reviewing patent file histories and creating preliminary infringement claim charts, in order to fight off any later Rule 11 accusations. A low settlement offer dos not, by itself, establish a Rule 11 violation, as long as the patentee and its counsel take necessary steps to perform thorough pre-suit due diligence.

Monday, August 1, 2011

New Federal Circuit Opinions - August 1, 2011

In re NTP, Inc., No. 2010-1277 (Fed. Cir. Aug. 1, 2011).

In re NTP, Inc., Nos. 2010-1243, -1254, -1263, -1274, -1275, -1276, -1278( Fed. Cir. Aug. 1, 2011).