Source: https://www.fr.com/news/fish-federal-circuit-summary-service-issue-316/
Timestamp: 2019-04-20 01:06:05+00:00

Document:
Micron Tech., Inc. v. MOSAID Techs., Inc.
Summary: Fed Cir reverses district court’s determination that it lacked DJ jurisdiction over Micron’s declaratory judgment action. A day after Micron filed a DJ action in California, the patentee filed an infringement action in E.D. Texas. In response to the patentee’s motion, the California district court applied the pre-MedImmune “reasonable apprehension of suit” test, and found it lacked subject matter jurisdiction over Micron’s DJ action.
Requirements for DJ Jurisdiction: Applying the Supreme Court’s MedImmune ruling, the Fed Cir acknowledged that the “reasonable apprehension of suit” was no longer the proper test for DJ jurisdiction, and that the “standard for jurisdiction thus depends in part on the record evidence for a case or controversy within the meaning of the Declaratory Judgment Act, 28 U.S.C. § 2201(a).” Slip op. at 5. That is, a case satisfies the Declaratory Judgment Act’s “actual controversy” requirement if it the record shows a case or controversy between the parties within the meaning of Article III of the Constitution. In this case, Micron had received several threats from MOSAID four years ago, saw MOSAID successfully sue many other DRAM manufacturers, and noted recent MOSAID public statements and annual reports statements indicating that Micron would be the next litigation target of MOSAID’s aggressive licensing and litigation strategy. While four years had elapsed since MOSAID sent threatening letters to Micron, “[t]his lapse in time is unavailing because MOSAID, during this period, was busy negotiating with other leading DRAM manufacturers.” Id. Thus, “[t]he facts alleged under all the circumstances show a substantial controversy between parties with adverse legal interests of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. at 7-8. Recognizing that “the now more lenient legal standard facilitates or enhances the availability of declaratory judgment jurisdiction in patent cases,” the Fed Cir noted that “in cases such as this with competing forum interests, the trial court needs to consider the ‘convenience factors’ found in a transfer analysis under 28 U.S.C. § 1404(a).” Id. at 8.
Discretion to Refuse DJ Jurisdiction: While a district court has broad discretion in declining DJ jurisdiction, “that discretion is not absolute.” Id. at 9. The Fed Cir held that the district court’s three reasons for declining jurisdiction in this case were insufficient. First, the California district court applied a now-defunct test. Second, even though MOSAID’s suit in Texas was “broader” because the patentee sued additional defendants, this fact “carrie[d] little weight because a patent holder may often easily file an artificially broader infringement suit to avoid declaratory judgment jurisdiction… Accordingly, although the relationship between the two competing lawsuits remains a consideration, this consideration cannot be given undue weight because it is easily manipulated.” Id. at 10. Third, “the trial court perhaps overemphasized that neither court was yet vested in the case” where the competing cases were filed a day apart, because “[i]n light of the new more lenient standard for declaratory judgment jurisdiction, competing patent lawsuits may be filed within relatively short time frames.” Id. The proper standard for deciding whether to keep the DJ action should be the factors considered in section 1404 transfers: “Instead of relying solely on considerations such as tenuousness of jurisdiction, broadness of case, and degree of vestment, as in this case, or automatically going with the first filed action, the more appropriate analysis takes account of the convenience factors under 28 U.S.C. § 1404(a).” Id. at 10-11. “In other words, this court notes that when the discretionary determination is presented after the filing of an infringement action, the jurisdiction question is basically the same as a transfer action under § 1404(a).” Id. at 11. Applying the § 1404 test to the facts of the case, the Fed Cir concluded that the district court abused its discretion in declining DJ jurisdiction.
Regents of Univ. of Cal. v. Dakocytomation Cal., Inc.
Summary: Fed Cir affirms denial of preliminary injunction, affirms-in-part and reverses-in-part grant of summary judgment of noninfringement, and reverses summary judgment of no doctrine of equivalents based on prosecution history estoppel. The patents-in-suit relate to methods of identifying and classifying chromosomes to detect chromosomal abnormalities.
Construction of “mixture of labeled unique sequence nucleic acid fragments” phrase: The district court construed the phrase as excluding repetitive sequences, such as those used by the defendant, by reasoning that the patentee’s proposed construction would invalidate the claims for nonstatutory double-patenting. While noting that the filing of a terminal disclaimer had cured such invalidity concerns, the Fed Cir nonetheless affirmed the construction, reasoning that the patentee disclaimed embodiments using repetitive sequences because (i) the patentee added the phrase “unique sequence” to overcome a nonenablement rejection during prosecution, and not an anticipation rejection as the patentee argued; (ii) the patentee elected to pursue certain embodiments in the patent-in-suit while focusing on the repetitive sequences embodiment in a related application; and (iii) the prosecution history overcame the doctrine of claim differentiation’s rebuttable presumption arising from dependent claims requiring the inclusion of repetitive sequences.
Prosecution history estoppel: While Festo’s rebuttable presumption applied as a results of the patentee’s amendment to overcome the examiner’s rejections, the Fed Cir ruled that the amendment was tangential to the disputed equivalent because (i) the patentee narrowed the claims to facilitate prosecution, and (ii) the patentee did not amend the claim to distinguish the prior art on the basis of the disputed equivalent.
Preliminary injunction: Because the district court correctly construed the phrase “mixture … fragments,” the Fed Cir affirmed the denial of preliminary injunction on this issue. The Fed Cir then addressed the construction of another term raised as part of the preliminary injunction because “[w]hile we need not reach that issue in light of our affirmance of the denial of the preliminary injunction on the heterogeneous mixture ground, we will do so in the interest of judicial efficiency, as the issue has been fully briefed and that term will likely be at issue on remand.” Slip op. at 24. The Fed Cir construed “morphologically identifiable cell nucleus” broadly in light of the claim language and the prosecution history.
Dissent: In her partial dissent, Judge Prost disagreed with the ruling of tangentiality and the reversal of the district court’s application of prosecution history estoppel. She argued that, once a narrowing amendment occurs for reasons of patentability, the patentee is presumed to surrender all equivalents between the original and amended claim. The majority’s focus on the patentee’s possible alternative amendments was thus irrelevant to the inquiry, especially where the facts indicated that “the purpose for the amendment is not unrelated to the equivalent.” Dissent op. at 4. Judge Prost further discussed and distinguished the only two Fed Cir cases to have found an amendment to be tangential to the disputed equivalent.
Summary: Fed Cir affirms decision staying and then dissolving permanent injunction, affirms denial of relief from judgment arising from reexamination statements, and vacates per-unit damages award during stay of injunction. In a non-precedential opinion issued in 2006, the Fed Cir previously affirmed the jury verdict of infringement, non invalidity, a $0.04 reasonable royalty, and permanent injunction in this case. On remand for disposition of funds deposited in an escrow account pending resolution of the previous appeal, the district court dissolved its permanent injunction in light of eBay v. MercExchange, denied relief from the final judgment based on alleged disclaimers made during reexamination, and awarded the patentee $0.12 per unit from the escrow account where Microsoft had to deposit $2 for each sale of infringing products during the stay period.
Stay of injunction: In its order staying the injunction, the district court stated that its injunction would go into effect “[s]even days after the resolution or abandonment of any appeal.” Amado moved to enforce the injunction seven days after issuance of the mandate from the previous appeal, but the district court construed its stay as extending until resolution of any petition for certiorari and then decided to extend its stay pending resolution of additional motions. Rejecting Amado’s challenge to these rulings, the Fed Cir recognized that district courts’ “broad authority, coupled with the wide discretion to manage the order in which they address issues pending before them, necessarily vests district courts with the authority to extend the stay of an injunction, particularly under these circumstances where it is done to preserve the status quo while motions affecting that injunction are under advisement.” Slip op. at 7. “This principle holds true regardless of whether the order that originally set the terms of the stay is incorporated into an appellate mandate.” Id.
Dissolution of permanent injunction: Because the previous appeal’s mandate included the injunction issue, Amado argued that the district court abused the mandate rule by dissolving the injunction. The Fed Cir first ruled that the “intervening decision” exception to the mandate rule was inapplicable, because Microsoft had a reasonable opportunity to challenge the injunction in light of eBay in the previous appeal (eBay issued after the completion of briefing but before oral arguments in the previous appeal) but failed to raise the issue: “Because Microsoft failed to challenge that grant, it became a part of our mandate. Accordingly, the mandate rule operates as a bar to the district court’s reconsideration of the initial issuance of the injunction.” Slip op. at 10. The Fed Cir, however, held that “[w]hile the mandate rule would prevent the district court from dissolving the injunction ab initio, it does not preclude the district court from modifying, or dissolving, the injunction if it determines that it is no longer equitable.” Id. Because the district court’s application of the traditional four-factor test on remand led it to conclude that prospective application of the permanent injunction was no longer warranted, the Fed Cir found no abuse of discretion in the dissolution of the injunction.
When a district court concludes that an injunction is warranted, but is persuaded to stay the injunction pending an appeal, the assessment of damages for infringements taking place after the injunction should take into account the change in the parties’ bargaining positions, and the resulting change in economic circumstances, resulting from the determination of liability-for example, the infringer’s likelihood of success on appeal, the infringer’s ability to immediately comply with the injunction, the parties’ reasonable expectations if the stay was entered by consent or stipulation, etc.-as well as the evidence and arguments found material to the granting of the injunction and the stay.
Denial of relief from judgment: After losing at trial, Microsoft filed a reexamination petition, which the PTO granted. During reexamination, Amado then made certain statements during that Microsoft considered to be disclaimers of claim scope. The district court declined to set aside its judgment based on the reexamination, because it found that Microsoft was not diligent in filing its petition. The Fed Cir found no abuse of discretion in the district court’s ruling.
Adjustment of damages: Microsoft argued that the damages award should be adjusted in light of Microsoft v. AT&T. Ruling that Microsoft’s argument was not subject to the mandate rule because it focuses on the escrow account order, the Fed Cir further held that the Supreme Court opinion “must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate” the AT&T ruling. But the court of appeals noted it had insufficient facts to apply the AT&T ruling on appeal, and thus remanded the case to the district court.
Int’l Rectifier Corp. v. IXYS Corp.
Summary: Fed Cir reverses judgment of infringement resulting from a jury verdict, and dismisses the cross-appeal as moot.
Appellate jurisdiction: Although IXYS failed to timely file a notice of appeal, it moved to stay the permanent injunction pending appeal within the thirty-day time period for filing a notice of appeal. Construing FRAP 3 and 4, the Fed Cir found that the motion to stay met all three requirements of FRAP 3 by specifying the party taking the appeal, designating the judgment being appealed, and naming the court to which the appeal was taken. The recent Supreme Court opinion in Bowles v. Russell, 127 S. Ct. 2360 (2007), did not preclude this result because it dealt with the timing requirement of FRAP 4, and did not address the form requirements of FRAP 3. Here, the document meeting FRAP 3’s requirement was filed within the 30-day period allowed by FRAP 4.
Claims using term “adjoining”: In a previous appeal in this case, the Fed Cir construed the term “adjoining” in the context of summary judgment and remanded the case with instructions to enter judgment of noninfringement on the claims using the construed term. The district court interpreted the mandate as applying solely to literal infringement, and thus held a jury trial on the doctrine of equivalents. Declining to decide the scope of its prior mandate, the Fed Cir addressed the question of prosecution history estoppel because “its resolution may affect future cases.” Slip op. at 6. On this issue, the Fed Cir decided that the amendment adding the term “adjoining,” while broadening the claims by removing elements unsupported in the specification, nonetheless narrowed the claims by “exclud[ing] structures that might have been covered by the original claim language.” Id. at 9. Rejecting the patentee’s contention that the amendment was tangential to the asserted equivalent, the Fed Cir ruled that the “decision to claim that structure using the limiting term ‘adjoining,’ whether or not required to overcome the rejection, cannot be described as only tangentially related to the equivalency of a structure with non-adjoining regions.” Id. (underline in opinion).
Claims using “annular” term: In the previous appeal, the Fed Cir rejected the patentee’s argument (presented as an alternative basis for affirmance) that the judgment against IXYS constituted discretionary sanction for IXYS’s failure to contest the presence of these terms in its accused devices as required by the district court’s local rules. In this appeal, the patentee raised the same argument again. In vacating and remanding the case in the previous appeal, “although we did not discuss the issue explicitly, we necessarily rejected all of [the patentee]’s procedural arguments as to why the ‘annular’ limitation should be treated differently in the three patents-in-suit.” Id. at 11. The district court therefore violated the appellate mandate in precluding IXYS from disputing the presence of this limitation.

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