In Intellectual Ventures v. Trend Micro, the Federal Circuit remanded a case to the district court to reconsider Trend Micro's attorney fees award under the proper legal standard.
Under 35 USC § 285, a court may award attorney fees to the prevailing party in "an exceptional case." An exceptional case stands out from others with respect to the (1) strength of a party’s litigating position (considering the law and facts) or (2) unreasonable manner in which the case was litigated.
Intellectual Ventures (IV) sued Trend Micro and Symantec for infringement of US patents, including US Patent No. 6,460,050, related to filtering data files (e.g., email messages).
The Symantec action proceeded first. During the claim construction and throughout pretrial IV's expert opined the "characteristic" of documents in claims should be interpreted as including "bulk email." After the court adopted the expert's opinion, the expert changed his opinion after he talked to IV's attorneys.
After the Symantec trial was complete, Trend Micro moved for clarification on claim construction and the IV attorney argued the expert's opinion had not changed. Trend Micro then moved for attorney fees due to the expert's changed opinion. The district court granted attorney fees of $444,051. It didn't appreciate the expert's last minute change and the attorney arguing nothing had changed.
The Federal Circuit vacated the attorney award stating the court must determine whether the case overall is exceptional not whether an isolated action is exceptional. Notably, the district court granted attorney fees, but conceded IV's case was not overall unreasonable. The district court relied on the circumstances surrounding the changed expert's opinion alone.
I agree that isolated mistakes must be viewed within the totality of the circumstances. Experts may change opinions and attorneys misstate their position, but the court must consider whether the overall case and manner of litigation is reasonable before granting attorney fees. Otherwise, it encourages parties to seek attorney fees for isolated acts that are "exceptional" with respect to the overall case.
Copyright © 2019 Robert Moll. All rights reserved.
Showing posts with label CAFC. Show all posts
Showing posts with label CAFC. Show all posts
Thursday, December 26, 2019
Friday, December 28, 2018
CAFC - In Re: Marco Guldenaar Holding B.V. - Dice Game Patent Ineligible under 35 USC 101
In Re: Marco Guldenaar Holding B.V., the Federal Circuit held a game with specially marked dice patent ineligible under 35 U.S.C. § 101.
Representative claim 1 recited:
A method of playing a dice game comprising:
providing a set of dice, the set of dice comprising a first die, a second die, and a third die, wherein only a single face of the first die has a first die marking, wherein only two faces of the second die have an identical second die marking, and wherein only three faces of the third die have an identical third die marking;
placing at least one wager on at least one of the following: that the first die marking on the first die will appear face up, that the second die marking on the second die will appear face up, that the third die marking on the third die will appear face up, or any combination thereof;
paying a payout amount if the at least one wager occurs.
The Federal Circuit held claim 1 was directed to the abstract idea of rules for playing a dice game. While a set of game rules may be patent-eligible if the claims contain an inventive concept sufficient to transform the abstract idea into a patent-eligible application, the claim recited placing a wager, rolling the dice, and paying a payout amount if at least one wagered outcome occurs none of which appellant disputes is conventional, either alone or in combination and special markings on the dice constituted printed matter outside the scope of § 101.
In an attempt to satisfy the second part of the Alice test, appellants argued the dice had markings on the die faces that were not conventional and their recitation in the claims amounted to "significantly more” than the abstract idea.
The Federal Circuit noted each die’s marking or lack of marking communicates information whether the player has won or lost a wager, similar to the markings on a typical die or a deck of cards. Further, the claim limitations are directed to information that is not functionally related to the substrate of the dice. In short, the markings constituted printed matter.
Just as the claimed steps of shuffling and dealing playing cards fell short in In re Smith, the Federal Circuit held the claims conventional and the markings insufficient to recite an inventive concept.
The Federal Circuit observed other games might be patent eligible, but I think games that are novel in the informational content may struggle to avoid that content being treated as "printed matter" and the game being held patent ineligible.
Copyright © 2018 Robert Moll. All rights reserved.
Representative claim 1 recited:
A method of playing a dice game comprising:
providing a set of dice, the set of dice comprising a first die, a second die, and a third die, wherein only a single face of the first die has a first die marking, wherein only two faces of the second die have an identical second die marking, and wherein only three faces of the third die have an identical third die marking;
placing at least one wager on at least one of the following: that the first die marking on the first die will appear face up, that the second die marking on the second die will appear face up, that the third die marking on the third die will appear face up, or any combination thereof;
paying a payout amount if the at least one wager occurs.
The Federal Circuit held claim 1 was directed to the abstract idea of rules for playing a dice game. While a set of game rules may be patent-eligible if the claims contain an inventive concept sufficient to transform the abstract idea into a patent-eligible application, the claim recited placing a wager, rolling the dice, and paying a payout amount if at least one wagered outcome occurs none of which appellant disputes is conventional, either alone or in combination and special markings on the dice constituted printed matter outside the scope of § 101.
In an attempt to satisfy the second part of the Alice test, appellants argued the dice had markings on the die faces that were not conventional and their recitation in the claims amounted to "significantly more” than the abstract idea.
The Federal Circuit noted each die’s marking or lack of marking communicates information whether the player has won or lost a wager, similar to the markings on a typical die or a deck of cards. Further, the claim limitations are directed to information that is not functionally related to the substrate of the dice. In short, the markings constituted printed matter.
Just as the claimed steps of shuffling and dealing playing cards fell short in In re Smith, the Federal Circuit held the claims conventional and the markings insufficient to recite an inventive concept.
The Federal Circuit observed other games might be patent eligible, but I think games that are novel in the informational content may struggle to avoid that content being treated as "printed matter" and the game being held patent ineligible.
Copyright © 2018 Robert Moll. All rights reserved.
Sunday, November 25, 2018
CAFC - Berkheimer v. HP, Inc. - 35 USC 101 Patent Eligibility & USPTO Memo
In Berkheimer v. HP, Inc., the Federal Circuit clarified step two of the U.S. Supreme Court's Alice test for patent eligibility under 35 U.S.C. § 101. It noted that Mayo requires consideration of the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent eligible application. It noted that will be satisfied when the claim involves more than performance of well understood, routine, and conventional activities previously known to the industry.
Moreover, the Federal Circuit stated the question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact and must be proven by clear and convincing evidence.
Note this decision is an important case in determination of patent eligibility under 35 U.S.C. § 101, because it gives patent applicants and patent owners a means to push back on purely subjective opinion that a claim lacks an "inventive concept."
See also the USPTO Memo Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.).
Copyright © 2018 Robert Moll. All rights reserved.
Moreover, the Federal Circuit stated the question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact and must be proven by clear and convincing evidence.
Note this decision is an important case in determination of patent eligibility under 35 U.S.C. § 101, because it gives patent applicants and patent owners a means to push back on purely subjective opinion that a claim lacks an "inventive concept."
See also the USPTO Memo Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.).
Copyright © 2018 Robert Moll. All rights reserved.
Wednesday, November 21, 2018
CAFC - Arista Networks, Inc. v. Cisco Systems, Inc. - No Assignor Estoppel in Inter Partes Review
In Arista Networks v. Cisco Systems, the Federal Circuit held that assignor estoppel has no place in inter partes review (IPR).
As background, assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent. Further, assignor estoppel prevents parties in privity with the assignor (e.g., a company founded by the assignor) from challenging validity. An IPR is a proceeding before the Patent Trial and Appeal Board for challenging the validity of any issued US patent.
Cisco had sued its competitor Arista for patent infringement of the claims of U.S. Patent No. 7,340,597 ("the '597 patent"), Method and Apparatus for Securing a Communications Device using a Logging Module, owned by Cisco. Arista petition for an IPR, and after instituting the IPR, the PTAB invalidated certain claims. Cisco argued assignor estoppel should prevent Arista challenging the validity in the IPR, because Dr. Cheriton the Arista co-founder had previously assigned the '597 patent to Cisco.
The Federal Circuit questioned did Congress intend for assignor estoppel to apply in IPR in the following manner:
"Cisco's primary argument in favor of applying assignor estoppel is that assignor estoppel is a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary. With this principle in mind, Cisco particularly takes issue with the Board's reasoning that Congress would have expressly provided for application of equitable defenses if it so desired.
There is some merit to Cisco's argument. In Westinghouse, the Court characterized assignor estoppel as "a rule well settled by 45 years of judicial consideration and conclusion" in the district and circuit courts, reaching back as early as 1880. Westinghouse, 266 U.S. at 349; see also Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 260 (1945) (Frankfurter, J., dissenting) ("The principle of fair dealing as between assignor and assignee of a patent whereby the assignor will not be allowed to say that what he sold as a patent was not a patent had been part of the fabric of our law throughout the life of this nation."). But, in Lear, Inc. v. Adkins, the Supreme Court appeared to cast some doubt on the doctrine's continued viability. 395 U.S. 653, 664-66 (1969). And although this court has held that the doctrine survived Lear, we did so recognizing that court decisions post-Lear "reveal[ed] some uncertainty about the continued vitality of the doctrine." Diamond Sci., 848 F.2d at 1223; see also id. ("Although Lear involved the licensing, rather than the assignment, of a patent, the opinion reviewed the history of `patent estoppel' in general, and indicated that the Court's previous decisions had sapped much of the vitality, if not the logic, from the assignment estoppel doctrine as well.").
With this history in mind, we recognize that "Congress is understood to legislate against a background of common-law adjudicatory principles." Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108 (1991). "Thus, where a common-law principle is well established, . . . the courts may take it as given that Congress has legislated with an expectation that the principle will apply except `when a statutory purpose to the contrary is evident.'" Id. (quoting Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783 (1952)); see also Impression Prods., Inc. v. Lexmark Int'l, Inc., 137 S.Ct. 1523, 1536 (2017). But see United States v. Craft, 535 U.S. 274, 288 (2002) ("The common-law rule was not so well established . . . that we must assume that Congress considered the impact of its enactment on the question now before us."). But even assuming that assignor estoppel could be considered such a well-established common law principle, we nonetheless conclude that, here, "a statutory purpose to the contrary is evident." Astoria, 501 U.S. at 108 (quoting Isbrandtsen, 343 U.S. at 783). In particular, we view § 311(a) as governing the question of whether Congress intended assignor estoppel to apply in the IPR context.13
Section 311(a) states, in relevant part: "(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. . . ." § 311(a) (emphasis added).
Arista contends that § 311(a) unambiguously leaves no room for assignor estoppel in the IPR context, given that the statute allows any person "who is not the owner of a patent" to file an IPR.14 We agree. Where "the statutory language is plain, we must enforce it according to its terms." King v. Burwell, 135 S.Ct. 2480, 2489 (2015); see also Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010). In our view, the plain language of this statutory provision is unambiguous.
Cisco contends that this statute does not directly speak to the question of assignor estoppel in IPRs. Instead, Cisco views § 311(a) as reflecting two principles: first, that an IPR must begin as an adversarial proceeding, rather than as a means for a patent owner to confirm the patentability of certain claims; and second, that there is no Article III-like standing requirement for filing an IPR. In our view, however, the statute, by its terms, does more—it delineates who may file an IPR petition. The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent.
This conclusion is consistent with Congress's express incorporation of equitable doctrines in other related contexts. For example, a statute governing International Trade Commission investigations states that "[a]ll legal and equitable defenses may be presented in all cases." 19 U.S.C. § 1337(c); cf. 15 U.S.C. § 1069 (providing in the Lanham Act context that "[i]n all inter partes proceedings equitable principles of laches, estoppel, and acquiescence, where applicable may be considered and applied"). And although such express inclusion of equitable defenses in other contexts is not dispositive of the issue presented in this case, it is further evidence of congressional intent.
Finally, Cisco contends that allowing assignor estoppel in other forums, such as in the ITC and in district court, while not allowing it in the IPR context creates an inconsistency that invites forum shopping. We, however, do not view this as an inconsistency, but rather as an intentional congressional choice. Such a discrepancy between forums—one that follows from the language of the respective statutes—is consistent with the overarching goals of the IPR process that extend beyond the particular parties in a given patent dispute. See Cuozzo, 136 S. Ct. at 2144 ("[I]nter partes review helps protect the public's `paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.'" (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945))). Moreover, any policy choices regarding forum shopping are better left to Congress than to this court. Cf. SAS Inst., 138 S. Ct. at 1358 ("Policy arguments are properly addressed to Congress, not this Court."); Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1350 (Fed. Cir. 2018) (Taranto, J., concurring) ("If there turns out to be a problem in the statute's application according to its plain meaning, it is up to Congress to address the problem.").
In sum, we conclude that § 311(a), by allowing "a person who is not the owner of a patent" to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings."
Copyright © 2018 Robert Moll. All rights reserved.
As background, assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent. Further, assignor estoppel prevents parties in privity with the assignor (e.g., a company founded by the assignor) from challenging validity. An IPR is a proceeding before the Patent Trial and Appeal Board for challenging the validity of any issued US patent.
Cisco had sued its competitor Arista for patent infringement of the claims of U.S. Patent No. 7,340,597 ("the '597 patent"), Method and Apparatus for Securing a Communications Device using a Logging Module, owned by Cisco. Arista petition for an IPR, and after instituting the IPR, the PTAB invalidated certain claims. Cisco argued assignor estoppel should prevent Arista challenging the validity in the IPR, because Dr. Cheriton the Arista co-founder had previously assigned the '597 patent to Cisco.
The Federal Circuit questioned did Congress intend for assignor estoppel to apply in IPR in the following manner:
"Cisco's primary argument in favor of applying assignor estoppel is that assignor estoppel is a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary. With this principle in mind, Cisco particularly takes issue with the Board's reasoning that Congress would have expressly provided for application of equitable defenses if it so desired.
There is some merit to Cisco's argument. In Westinghouse, the Court characterized assignor estoppel as "a rule well settled by 45 years of judicial consideration and conclusion" in the district and circuit courts, reaching back as early as 1880. Westinghouse, 266 U.S. at 349; see also Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 260 (1945) (Frankfurter, J., dissenting) ("The principle of fair dealing as between assignor and assignee of a patent whereby the assignor will not be allowed to say that what he sold as a patent was not a patent had been part of the fabric of our law throughout the life of this nation."). But, in Lear, Inc. v. Adkins, the Supreme Court appeared to cast some doubt on the doctrine's continued viability. 395 U.S. 653, 664-66 (1969). And although this court has held that the doctrine survived Lear, we did so recognizing that court decisions post-Lear "reveal[ed] some uncertainty about the continued vitality of the doctrine." Diamond Sci., 848 F.2d at 1223; see also id. ("Although Lear involved the licensing, rather than the assignment, of a patent, the opinion reviewed the history of `patent estoppel' in general, and indicated that the Court's previous decisions had sapped much of the vitality, if not the logic, from the assignment estoppel doctrine as well.").
With this history in mind, we recognize that "Congress is understood to legislate against a background of common-law adjudicatory principles." Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108 (1991). "Thus, where a common-law principle is well established, . . . the courts may take it as given that Congress has legislated with an expectation that the principle will apply except `when a statutory purpose to the contrary is evident.'" Id. (quoting Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783 (1952)); see also Impression Prods., Inc. v. Lexmark Int'l, Inc., 137 S.Ct. 1523, 1536 (2017). But see United States v. Craft, 535 U.S. 274, 288 (2002) ("The common-law rule was not so well established . . . that we must assume that Congress considered the impact of its enactment on the question now before us."). But even assuming that assignor estoppel could be considered such a well-established common law principle, we nonetheless conclude that, here, "a statutory purpose to the contrary is evident." Astoria, 501 U.S. at 108 (quoting Isbrandtsen, 343 U.S. at 783). In particular, we view § 311(a) as governing the question of whether Congress intended assignor estoppel to apply in the IPR context.13
Section 311(a) states, in relevant part: "(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. . . ." § 311(a) (emphasis added).
Arista contends that § 311(a) unambiguously leaves no room for assignor estoppel in the IPR context, given that the statute allows any person "who is not the owner of a patent" to file an IPR.14 We agree. Where "the statutory language is plain, we must enforce it according to its terms." King v. Burwell, 135 S.Ct. 2480, 2489 (2015); see also Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010). In our view, the plain language of this statutory provision is unambiguous.
Cisco contends that this statute does not directly speak to the question of assignor estoppel in IPRs. Instead, Cisco views § 311(a) as reflecting two principles: first, that an IPR must begin as an adversarial proceeding, rather than as a means for a patent owner to confirm the patentability of certain claims; and second, that there is no Article III-like standing requirement for filing an IPR. In our view, however, the statute, by its terms, does more—it delineates who may file an IPR petition. The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent.
This conclusion is consistent with Congress's express incorporation of equitable doctrines in other related contexts. For example, a statute governing International Trade Commission investigations states that "[a]ll legal and equitable defenses may be presented in all cases." 19 U.S.C. § 1337(c); cf. 15 U.S.C. § 1069 (providing in the Lanham Act context that "[i]n all inter partes proceedings equitable principles of laches, estoppel, and acquiescence, where applicable may be considered and applied"). And although such express inclusion of equitable defenses in other contexts is not dispositive of the issue presented in this case, it is further evidence of congressional intent.
Finally, Cisco contends that allowing assignor estoppel in other forums, such as in the ITC and in district court, while not allowing it in the IPR context creates an inconsistency that invites forum shopping. We, however, do not view this as an inconsistency, but rather as an intentional congressional choice. Such a discrepancy between forums—one that follows from the language of the respective statutes—is consistent with the overarching goals of the IPR process that extend beyond the particular parties in a given patent dispute. See Cuozzo, 136 S. Ct. at 2144 ("[I]nter partes review helps protect the public's `paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.'" (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945))). Moreover, any policy choices regarding forum shopping are better left to Congress than to this court. Cf. SAS Inst., 138 S. Ct. at 1358 ("Policy arguments are properly addressed to Congress, not this Court."); Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1350 (Fed. Cir. 2018) (Taranto, J., concurring) ("If there turns out to be a problem in the statute's application according to its plain meaning, it is up to Congress to address the problem.").
In sum, we conclude that § 311(a), by allowing "a person who is not the owner of a patent" to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings."
Copyright © 2018 Robert Moll. All rights reserved.
Monday, August 22, 2016
Federal Circuit - Comment on IP Watchdog - Rule 36 Judgment: The growing problem of one word affirmance
Have you noticed how often the US Supreme Court disagrees with the Federal Circuit on patent cases? Some years they never agree! For example, Bleich et al. The Federal Circuit Under Fire notes the Supreme Court disagreed with the Federal Circuit on all six cases in 2013. The disagreements have continued. Despite this unsettling fact patent attorneys primarily turn to the Federal Circuit for guidance, because it has had exclusive jurisdiction over all patent appeals in the US since 1982 so has published the vast majority of the US patent law decisions that matter today.
Gene Quinn's article Rule 36 Judgment: The growing problem of one word affirmance by the Federal Circuit highlights the Federal Circuit is increasingly giving no explanation to support affirmances in 43% of the trial court decisions and nearly 50% of the USPTO decisions. Perhaps the Federal Circuit should at least cite the court decision(s) and give a pithy analysis of the law to the key facts it considered in affirming the decision below. Otherwise, this high rate of Rule 36 affirmance is reducing the primary source of case law for many practitioners.
Copyright © 2016 Robert Moll. All rights reserved.
Gene Quinn's article Rule 36 Judgment: The growing problem of one word affirmance by the Federal Circuit highlights the Federal Circuit is increasingly giving no explanation to support affirmances in 43% of the trial court decisions and nearly 50% of the USPTO decisions. Perhaps the Federal Circuit should at least cite the court decision(s) and give a pithy analysis of the law to the key facts it considered in affirming the decision below. Otherwise, this high rate of Rule 36 affirmance is reducing the primary source of case law for many practitioners.
Copyright © 2016 Robert Moll. All rights reserved.
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