Joseph P. Lavelle Patent Law Developments PLI Oct. 18, 2021
Joseph P. Lavelle
Patent Law DevelopmentsPLI Oct. 18, 2021
www.dlapiper.com
I. Venue
II. CAFC Jurisdiction
III. Personal Jurisdiction
IV. Section 112 Issues
V. Equitable Intervening Rights
VI. Induced Infringement
VII. Noteworthy IPR Decisions
VIII. Expert Witness Fees in § 145 Actions
IX. Inequitable Conduct
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Topics
I. Venue in Patent Cases
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• In two cases this year, the CAFC addressed the timing question of
when a district court should resolve a motion to transfer venue.
• In In re SK Hynix Inc, the petitioners sought mandamus relief from
the CAFC after waiting nearly eight months for a ruling from the W.D.
Tex. on a motion to transfer that was fully briefed.
• Under Fifth Circuit law, district courts must give promptly-filed
transfer motions “top priority” before resolving the substantive issues
in the case. In re Horseshoe Entm’t, 337 F.3d 429, 433 (5th Cir.
2003). See also In re Apple, Inc., 979 F.3d 1332, 1337 (Fed. Cir.
2020).
In re SK Hynix Inc., 835 F. App’x 600 (Fed. Cir. 2021)
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• The CAFC stated that “the district court’s handling of the transfer
motion up until this point in the case has amounted to egregious
delay and blatant disregard for precedent.” Thus, the petition of a writ
of mandamus was granted.
• The CAFC directed the district court to stay all other proceedings,
including an upcoming Markman hearing, until the district court ruled
on the motion to transfer.
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In re SK Hynix Inc.
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• In In re: Tracfone Wireless, Inc. (unpublished), the same fact pattern
again resulted in a mandamus petition being granted.
• The CAFC’s order directed the same district court as in the Hynix
case (the W.D. Tex.) to issue its ruling on the motion to transfer within
30 days from the issuance of the mandamus order, and to provide a
reasoned basis for its ruling that is capable of meaningful appellate
review.
• Since that time, Judge Albright has issued a standing order regarding
the handling of transfer motions in his court.
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In re: Tracfone Wireless, Inc., No. 20-118 (Fed. Cir., Mar. 8, 2021)
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• Andra sued various affiliated entities that market Victoria’s Secret
branded products on a patent related to display of goods on a web
page.
• One defendant (“Stores”) operated retail stores in the ED Tex.
• The other defendants (“Non-Store Defendants”) were independent
companies, incorporated in Delaware, that maintained the Victoria’s
Secret web pages outside Texas, but did not own or operate any
stores in the ED Tex.
• Plaintiff argued that venue was proper over the Non-Store
Defendants either because Stores acted as their agent or because
the Non-Store defendants ratified the acts of Stores as their own.
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Andra Group, LP v. Victoria’s Secret Stores, LLC, No. 20-2009 (Fed. Cir. Aug. 3, 2021).
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• CAFC held venue not proper over Non-Store Defendants.
• The Store defendant was not an agent of the Non-Store defendants.
It was a separate company, observed its own corporate formalities,
and, the evidence showed, made the day-to-day decisions about its
business.
• While some aspects of the Store’s business, such as the refund
policy, were directed by Store’s affiliates, these one-time features
did not convert Store into an agent of the affiliates.
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Andra Group v. Victoria’s Secret
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• Likewise, Non-Store Defendants did not ratify the activities of Stores
in the district.
• While the Non-Store Defendants advertised the existence of VS
stores in the ED Texas and their web page had a “store locator”
function that would direct potential customers to VS stores in the
District, this did not constitute ratifications of the Stores actions as
actions of the Non-Store Defendants.
• Advertising the existence of stores in the district is not the same
thing as committing acts of infringement in the district.
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Andra Group v. Victoria’s Secret
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• This is mandamus case seeking an order directing the W.D. Tex to
transfer a case under §1404 to the N.D. Cal., where the defendants
reside and developed the accused products.
• One month before filing suit in the W.D. Tex, the Patentee, a N.C.
company, created a subsidiary, “Ikorongo Texas,” and gave it the
exclusive right to enforce the patents in certain counties in the W.D.
Texas.
• The CAFC held that this was a pre-suit effort to manipulate venue
and that it was insufficient to confer venue in the W.D. when the
plaintiff had no other connection with the district.
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In Re: Samsung Elec. Co., No. 21-139 (Fed. Cir., June 30, 2021)
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• While this fact pattern is uncommon, there is authority that pre-suit
acts to manipulate venue can be disregarded in the §1404
“convenience” analysis.
• E.g., VanDusen v. Barrack, 376 US 612, 623 (1964); In re
Microsoft Corp., 630 F.3d 1361(Fed. Cir. 2011); In re Zimmer
Holdings, Inc., 609 F.3d 1378 (Fed. Cir. 2010).
• Also note in personal jurisdiction cases, 28 USC § 1359 permits a
district court to disregard collusive acts to create subject matter
jurisdiction.
• Also In re Juniper Networks, No. 21-160 (Sept. 24, 2021) CAFC
granted another mandamus petition to transfer 6 cases to ND Cal.
under §1404.
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Samsung
II. CAFC Jurisdiction
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• This case concerns CAFC jurisdiction over so-called Walker-
Process antitrust claims predicated on the enforcement of a patent
procured by fraud on the PTO.
• Patent in this case was previously found unenforceable for fraud on
the PTO. Antitrust plaintiff asserted that the patentee’s continued
reliance on the patent in dealing with competitors rose to the level
of antitrust violation under the Walker Process theory.
• District court dismissed the complaint for failure to state a claim,
and plaintiff sought to appeal to the CAFC.
Chandler v. Phoenix Services, LLC,No. 20-1848 (Fed. Cir., June 6, 2021)
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• The CAFC has jurisdiction over the appeal of a final decision of a
district court “in any civil action arising under . . . any Act of Congress
relating to patents.” 28 U.S.C. § 1295(a)(1).
• In Xitronix Corp. v. KLA-Tencor Corp., 882 F.3d 1075, 1076(Fed. Cir.
2018) (Xitronix I), the CAFC held that a Walker Process claim does
not arise under the patent law, even though there may be patent
issues that have to be resolved. Case transferred to Fifth Circuit.
• Xitronix I was consistent with Supreme Court decision in Gunn v.
Minton, 568 U.S. 251, 259 (2013) (Malpractice claim under state law
for alleged malpractice by patent lawyer does not arise under §
1295(a)(1)).
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Chandler v. Phoenix Services, LLC
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• However, the Fifth Circuit refused to accept the transfer in Xitronics,
finding the CAFC’s jurisdictional conclusion not plausible and
returned the case to CAFC.
• On return of Xitronix from the Fifth Circuit, the CAFC accepted
jurisdiction as at least plausible, even if Fifth Circuit is ultimately
wrong on the jurisdiction question. Xitronix Corp. v. KLATencor Corp.,
757 F. App’x 1008, 1010 (Fed. Cir. 2019) (Xitronix III).
• The appellant in Chandler contended that the Xitronix III decision
support the exercise of jurisdiction in the Chandler case.
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Chandler v. Phoenix Services, LLC
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• CAFC disagreed.
• Xitronics I is the binding precedent here, not the transfer decision in
Xitronics III.
• In Chandler, the patent in suit is expired, making the nexus to the
patent laws even weaker.
• This not a patent case. It is an antitrust case that belongs in the
Fifth Circuit.
• Case transferred to Fifth Circuit.
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Chandler v. Phoenix Services, LLC
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• Article III standing to appeal decisions from PTAB.
• Qualcomm sued Apple on two patents and Apple in turn filed IPRs
against claims in both patents. Qualcomm prevailed in IPRs.
• Thereafter, the parties settled via a license of a portfolio of
Qualcomm patents to Apple.
• Apple nonetheless seeks to appeal the decisions in the IPRs.
• Held: No Article III standing to appeal.
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Apple, Inc. v. Qualcomm Incorporated, No. 20-1642 (Fed. Cir. April 7, 2021)
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• Apple argued it had standing under MedImmune, Inc. v. Genentech,
Inc., 529 U.S. 118, 120 (2007), based on the fact that it had to make
license payments under the license agreement it entered into to
settle the litigation.
• Apple also contended it had standing because it could be sued on
the same patents again in the future.
• The CAFC disagreed.
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Apple, Inc. v. Qualcomm Incorporated
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• In MedImmune, the Supreme Court held that held that MedImmune
was not required to break or terminate a license agreement
concerning the patent in suit before seeking a declaratory judgment
of noninfringement and invalidity.
• However, the CAFC concluded that MedImmune did not control this
case as there was no indication that the outcome of the appeal of the
Board’s decision would have any impact on Apple’s royalty
obligations to Qualcomm.
• The potential for future litigation between the parties on the two
patents in question was too speculative to support Article III standing.
• Thus, the CAFC dismissed the appeal.19
Apple, Inc. v. Qualcomm Incorporated
III. Personal Jurisdiction
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• Whether sending notices of infringement and offers to license into a
jurisdiction creates personal jurisdiction in the venue over a
declaratory judgment action filed by the recipient of the letters.
• In Red Wing Shoe Co. v. Hockerson-Halberstam, Inc., 148 F.3d 1355
(Fed. Cir. 1998), the Federal Circuit held that for reasons unique to
patent law, sending two letters into a forum informing the recipient of
suspected patent infringement was not sufficient support a finding of
personal jurisdiction.
• The case was controversial and the subsequent development of the
law in this area has seen consistent narrowing of the decision in Red
Wing Shoe.
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Trimble, Inc. v. Perdiemco LLC, No. 19-2164 (Fed. Cir. May 12, 2021)
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• The patentee, a patent assertion entity, corresponded for several
months with a company, Trimble, located in the N.D. Cal. seeking to
license the patent at issue
• When the discussions reached an impasse, Trimble filed a DJ action
in the N.D. Cal. seeking a declaration of non-infringement.
• The district court dismissed the complaint for lack of personal
jurisdiction, relying on Red Wing Shoe.
• The CAFC reversed.
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Trimble v. Perdiemco
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• At least two Supreme Court cases support the conclusion that
regularly sending letters and calls into a forum for purposes of
conducting business there can constitute purposefully availing
oneself of the jurisdiction for personal jurisdiction purposes.
• Quill Corp. v. North Dakota, 504 US 298, 308 (1992) and South
Dakota v. Wayfair, Inc., 138 S.Ct. 2080 (2018).
• See also Jack Henry & Assoc. v. Plano Encryption Techs, 910
F.3d 1199 (Fed. Cir 2018)(finding jurisdiction)
• CAFC panel says Red Wing Shoe is limited to its precise facts.
• District court fining of no personal jurisdiction is reversed.
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Trimble v. Perdiemco
IV. Section 112 Issues
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• Indefiniteness caused by inconsistent definitions of a term in the
prosecution history.
• The patents in suit related to using a fax machine as a scanner or
printer for a personal computer.
• The claims used the term “passive link” to describe the connection
between fax machine and the computer.
• The patent specification nowhere defined or used the term “passive
link.”
Infinity Computer Prods., Inc. v. Oki Data Americas, Inc., No. 20-1189 (Fed. Cir. Feb. 10, 2021).
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• In the PTO, the term “passive link” introduced to the claims in order
to define around prior art.
• During prosecution, applicant took arguably inconsistent positions
on what a passive link was.
• Sometimes “passive link” included a modem on the computer,
other times applicant argued “passive link” meant no modem was
present.
• District court found inconsistent use of the term “passive link” in
prosecution history rendered the claim indefinite.
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Infinity Computer Products
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• Under US Section 112 practice, can arguably inconsistent arguments
about a claim term not used or defined in specification result in the
claim being indefinite?
• A) Yes
• B) No or only in an extreme case
• C) No opinion or not sure.
Polling Question
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• CAFC affirmed that claim was indefinite.
• The CAFC agreed that the inconsistent definitions of the term
“passive link” rendered the claims indefinite.
• The court felt the case was similar to another 112 decision a few
years ago, Teva Pharms. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335,
1341 (Fed. Cir. 2015). (inconsistent use of term “molecular weight”
to cover different ways of measuring molecular weight rendered
claim indefinite).
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Infinity Computer Products
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• In the same vein, TVNGO likewise involves claim terms added to the
claims to define around prior art which are not used or defined in the
specification.
• The claim terms added were not used consistently between related
patents and in places seemed inconsistent with the specification.
• Again, the CAFC affirmed a decision that the claims were indefinite.
• Also see Corus Realty v. Zillow Group, No. 20-1775 (Fed. Cir. June
29, 2021) (Affirming summary judgment of non-infringement based
on claim construction narrowing the claim based on representations
in the prosecution history)
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TVNGO Ltd. v. LG Elec. Inc., No. 20-1837 (Fed. Cir. June 28, 2021)
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• Practitioners really need to be attuned to the Section 112 issues that
arise due to arguments make in the prosecution history to secure
allowance of the patent.
• This includes introducing claim terms not used in the specification to
define around prior art, as in TVNGO as well as to representations
made before the PTO regarding how the claimed invention differs
from the prior art, as is Corus and Infinity Computing.
• A recurring theme in this years CAFC claim construction and 112
cases.
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Comment
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• In this case, the CAFC found a means plus function limitation in a
method claim indefinite for failure to associate corresponding
structure with the means plus function element of the claim.
• Claim term at issue was “user identification module.” CAFC agreed
with district court that the term was a means plus function term.
• The court noted that the term “module” is a well-known nonce word
that can operate as a substitute for “means.” Slip op. at 5.
• The court agreed that the term module did not connote any structure
in this claim language and hence the term “user identification
module” should be interpreted as being in means plus function form.
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Rain Computing, Inc. v. Samsung Electronics Amer., Inc., No 20-1646 (Fed. Cir. March 2, 2021).
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• Patentee argued that the prosecution history demonstrated claimed
“user identification module” was not in means plus function form.
• During prosecution, the PTO examiners had taken the position that
the user identification module was not a means plus function element
in a brief to the PTAB.
• Often, this type of prosecution history is important to proper claim
construction.
• Here, however, the CAFC said this piece of prosecution history did
not change the conclusion that the term was in means plus function
form.
• CAFC said to the extent the examiners thought otherwise, they were
simply wrong. 32
Rain Computing
V. Equitable Intervening Rights
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• This decision is part of a long-running battle between two
competitors in the business of producing poultry chillers used to
process chicken for human consumption. The case has been in the
CAFC previously.
• John Bean has a patent on a poultry chiller.
• Back in 2002, Morris sent John Bean a letter asserting that the patent
was invalid over prior art and providing prior art.
• John Bean did not respond, and Morris proceeded to develop its own
poultry chiller.
John Bean Tech. Corp. v. Morris & Assoc., No. 20-1090 (Fed. Cir. Feb. 19, 2021).
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• In 2011, Morris sought ex parte reexamination of its patent and was
awarded a reexamination certificate after materially narrowing the
claims of the patent.
• After getting the reexamination certificate, John Bean sued Morris in
2014.
• The district court on summary judgment held that John Bean was
barred from securing relief under the doctrine of equitable intervening
rights, codified in 35 USC § 252 .
• On appeal the CAFC affirmed.
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John Bean Tech. Corp. v. Morris & Assoc.
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• Under 35 USC § 252, a court has discretion to permit a defendant to
continue what would otherwise be infringing activity after a narrowing
reissue or reexamination.
• The CAFC has stated that the rationale underlying equitable
intervening rights “is that the public has the right to use what is not
specifically claimed in the original patent.” Seattle Box Co. v. Indus.
Crating & Packing, Inc., 756 F.2d 1574, 1579 (Fed. Cir. 1985).
• Here, the district court cited the long period of delay on the part of
John Bean and the Morris’s reliance on that delay to grow and
develop its business and denied any relief to John Bean.
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John Bean Tech. Corp. v. Morris & Assoc.
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• On appeal, John Bean argued that Morris had already recouped its
investment in the business and that therefore it was an abuse of
discretion to deny all relief to patentee.
• CAFC disagreed.
• Recoupment is not the sole objective of § 252’s protection of
“investments made or business commenced” before the claims were
narrowed in reexamination.
• Rather, the Court ruled, determining entitlement to equitable
intervening rights is an analysis broader than merely determining
whether the defendant has fully recouped its monetary investment.
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John Bean Tech. Corp. v. Morris & Assoc.
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• In this case the district court weighed a number of additional factors,
including the length of delay and the patent owner’s bad faith in
deciding to deny relief.
• The CAFC was not prepared to set aside the district court’s equitable
analysis. Affirmed.
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John Bean Tech. Corp. v. Morris & Assoc.
VI. Induced Infringement
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• The patent owner, Glaxosmithkline (GSK) had a patent on the use of
a drug to treat patients with heart failure. The FDA had also
approved the drug for other indications.
• When Teva secured approval for its generic version of the drug, the
products labelling initially did not indicate that the drug was approved
for heart failure, but only listed another indication.
• The parties referred to this label as the “skinny label.”
• Question was could Teva be liable for induced infringement in heart
failure patients, when using the skinny label that did not describe that
indication.
• District court said Teva could be liable for inducement.
Glaxosmithkline, LLC v. Teva Pharma. USA, Inc., No. 18-1976 (Fed. Cir. Aug. 5, 2021).
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• CAFC affirmed jury verdict of inducement.
• While labelling is some evidence of intent to induce infringement, the
failure to list the heart failure indication did not absolve Teva of
liability for inducement.
• Teva was familiar with the heart failure indication, it advertised its
generic drug as equivalent to the GSK product, and Teva advertised
and promoted its generic product for the heart failure indication.
• Affirmed. Ample other evidence of intent to induce infringement.
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Glaxosmithkline, LLC v. Teva Pharma. USA, Inc.
VII. Noteworthy IPR Decisions
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• The case involves the question whether the joinder provisions of 35 USC §
315(c) allow an IPR filed after the one-year deadline to be joined to earlier, timely
filed IPRs and thus have the later-filed IPR be deemed timely.
• Windy City sued Facebook on four patents in N.C., without identifying the claims
at issue.
• Facebook filed IPRs on all four patents before the one-year deadline.
• The case got transferred to the N.D.Cal. However, Windy City did not have to
disclose the claims it was asserting until 14 days after the one-year deadline.
• When the claims were finally identified, Facebook filed an additional IPR and
asked to have it joined to the four timely ones under § 315 (c).
• The PTAB approved the request, following existing PTAB precedent.43
Facebook, Inc. v. Windy City Innovations, LLC, 953 F.3d 1313 (Fed. Cir. 2020)
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• The Federal Circuit ruled that under Thyrv, Inc. v. Click-to-Call
Technologies, LP, 140 S. Ct. 1367, 1370 (2020), it did not have
authority to review the Board’s decision to institute the late-filed IPRs.
• However, it found that the decision to join the two matters under
Section 315(c) was a separate matter that occurs after the IPRs were
instituted, and that the CAFC did have jurisdiction to review the
joinder decision.
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Facebook, Inc. v. Windy City Innovations, LLC
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• Section 315(c) provides in part
• “If the Director institutes an inter partes review, the Director, in his or her
discretion, may join as a party to that inter partes review any person who
properly files [another IPR petition] …
• The CAFC ruled that the language of Section 315(c) did not support joining
Facebook’s late filed IPR to the earlier IPRs Facebook timely filed.
• The Court basically said that since Facebook was already a “party” to the earlier
filed IPR, it could not be joined as a “party” through Section 315(c).
• Thus, the later-filed IPR was deemed untimely.
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Facebook, Inc. v. Windy City Innovations, LLC
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• Mandamus to the PTAB regarding failure to institute an IPR
• CAFC lacks jurisdiction to hear an appeal from the denial of
institution of an IPR. See St. Jude Medical, Cardiology Division, Inc.
v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014).
• Here, however, petitioner sought mandamus to compel the board to
institute an IPR.
• Court said it had authority to grant the writ of mandamus in
extraordinary cases even though it does not have jurisdiction over a
straight appeal.
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Mylan Laboratories, Ltd v. Janssen Pharmaceutica, NV, No. 20-1071 (Fed. Cir. Mar. 12, 2021).
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• In the past, when petitioners have sought mandamus to review a
denial of institution, the court has denied the writs finding the
entitlement to mandamus had not been shown, without reaching the
jurisdictional question. See, e.g., In re Power Integrations, Inc., 899
F.3d 1316, 1318 (Fed. Cir. 2018; In re Dominion Dealer, 749 F.3d
1379, 1381 (Fed. Cir. 2014)
• Here CAFC reached the jurisdictional question, but still denied the
writ on the merits.
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Mylan Laboratories, Ltd v. Janssen Pharmaceutica
VIII. Expert Witness Fees in § 145 Actions
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• Section 145 provides that in a district court action to procure a
patent, “all expenses of the proceeding shall be paid by the
applicant.” The question in this case was whether § 145 requires the
patent applicant to pay the PTO’s expert witness fees.
• In Peter v. NantKwest, Inc., 140 S.Ct. 365 (2019), the Supreme Court
held that § 145 did not require the applicant to pay the PTO’s
attorneys fees.
• The Court said that the reference to “all expenses” in §145 was not
specific enough to overcome the “American Rule’s” presumption
that each side pays its own fees and expenses.
Hyatt v. Hirshfeld, No. 20-2321 (Fed. Cir. Aug. 18, 2021)
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• Here, the CAFC basically followed NantKwest and said that § 145
likewise was not specific enough to shift the costs of expert witness
fees to the patent applicant.
• As the CAFC acknowledged, this is a closer case than NantKwest,
as many district courts had previously awarded expert witness fees
to the PTO under § 145.
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Hyatt v. Hirshfeld
IX. Inequitable Conduct
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• Inequitable conduct during patent prosecution can render a patent
unenforceable.
• Since the CAFC decision in Therasense, Inc. v. Becton, Dickinson &
Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011), to establish inequitable
conduct the defendant must prove:
• (a) that the withheld information or misstatement was “but for”
material, in the sense that the patent would not have issued if the
PTO had the accurate information, and
• (b) specific intent to mislead the PTO on the part of the applicant.
• Hard defense to establish.
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Belcher Pharm., LLC v. Hospira, Inc., No. 20-1799 (Fed. Cir. Sept. 1, 2021)
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• The Belcher case is notable as the CAFC affirmed a district court
finding that inequitable conduct was established at trial and barred
enforcement of the patent at issue.
• The patent related to a formulation for epinephrine having a
particular pH range.
• In its NDA the applicant told the FDA that the pH range was old and
known.
• In the PTO, the applicant told the PTO that the pH range was
“critical” to the invention and was not shown in the cited art.
• Same individual involved in both representations.
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Belcher Pharm., LLC v. Hospira, Inc.
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• The district court found the patent in suit invalid over the withheld
prior art, so materiality was established. See Aventis Pharma S.A. v.
Hospira, Inc., 675 F.3d 1324, 1334 (Fed. Cir. 2012).
• As to intent, the patentee argued that the patentee’s agent
subjectively believed the withheld art was immaterial do to other
(unclaimed) features of the art. District court rejected this both as not
credible and as inconsistent with the remainder of the evidence.
• CAFC affirmed finding of inequitable conduct.
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Belcher Pharm., LLC v. Hospira, Inc.
Questions?
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