Source: https://theprincefirm.wordpress.com/tag/united-states-court-of-appeals-for-the-federal-circuit/
Timestamp: 2017-09-20 12:50:31
Document Index: 787204050

Matched Legal Cases: ['§251', '§251', '§ 251', '§ 251', '§ 271', '§ 271']

United States Court of Appeals for the Federal Circuit | The Prince Firm, LLC
June 20th, in what may be an ominous turn for biotech IP law, the Supreme Court granted cert. for the second time in Mayo Collaborative Services v. Prometheus Labs., Inc, Supreme Court No. 10-1150. Post-Bilski, the Supreme Court granted cert., vacated and remanded the Fed. Cir.’s decision, rendered December 17, 2010, (related posts are archived under “patentable subject matter”) that reaffirmed that claims involving methods of medical treatment coupled with determining the levels of metabolites of the administered drugs were directed to patentable subject matter, and were not directed to abstract ideas or phenomena of nature. 628 F.3d 1347 (Fed. Cir. 2010).
Adding Only Dependent Claims Is Error Correctible By Reissue
The U.S. Court of Appeals for the Federal Circuit held that patent applicants can file a reissue application that retains all original claims and adds only dependent claims. In re Yasuhito Tanaka (Fed. Cir., Apr. 15, 2011) (Linn, J.) (Dyk, J., dissenting).
Yasuhito Tanaka (Tanaka) appealed from the precedential decision of the Board of Patent Appeals and Interferences (the Board), holding that a reissue application that adds only dependent claims does not present the type of error correctible by reissue under 35 U.S.C. §251. Tanaka filed a reissue application seeking to broaden claim 1 of his patent and did so within two years of the patent issuance. Over the course of prosecuting the reissue application, Tanaka gave up on broadening claim 1 and presented original claims with a new dependent claim. The examiner rejected the claims, asserting that no error has been specified that broadens or narrows the scope of the claims. The rejection was made final. Tanaka appealed to the Board.
The Board held that §251 “disallow[s] reissue applications that simply add narrow claims to the reissue patent when no assertion of inoperativeness or invalidity for the reasons set forth in § 251 can be made by the patentee.” Therefore, the Board affirmed the examiner’s decision, whereupon Tanaka appealed to the Federal Circuit.
On appeal, Tanaka argued that the Board’s holding is inconsistent with long standing Court of Customs and Patent Appeals (CCPA) precedent such as In re Handel and In re Muller, as well as with Federal Circuit precedent such as Hewlett-Packard v. Bausch & Lomb. The Federal Circuit agreed, noting that § 251 provides “[w]henver any patent is … deemed wholly or partly inoperative or invalid … by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall…reissue the patent.” Referring to its precedent, the Federal Circuit noted that the term less means claiming fewer claims than patentee could have properly claimed rather than referring to the scope of protection. In In re Handel, it was stated that adding dependent claims as a hedge against possible invalidity of original claims is a proper reason for asking for a reissue to be granted.
Accordingly, the Federal Circuit concluded that patent applicants can file a reissue application for purposes of adding only additional dependent claims.
Judge Dyk, in dissent, cited an 1883 Supreme Court case, Gage v. Herring, that in his view prohibited a reissue applicant from returning his original claims without amendment.
Under section 271(b) of the Patent Act, a defendant in a patent infringement lawsuit may be held liable for inducing the infringement of a patent, i.e., causing another person to directly infringe a patent. However the language of the statute is not clear as to what conduct or intent is required for one to be liable for inducing infringement. Section 271(b) simply provides: “Whoever actively induces infringement of a patent shall be liable as an infringer.”
The U.S. Supreme Court recently grappled with the meaning of Section 271(b) in Global Tech Appliances, Inc. v. SEB S.A., U.S., No. 10-6, 5-31-2011, acknowledging that the statutory language regarding induced infringement is ambiguous, and attempting to clarify the requirements for liability under this section.
In Global Tech, defendant was accused of inducing infringement of a patent for an innovative deep fryer owned by SEB S.A. Defendant had purchased an SEB fryer in Hong Kong (thus it lacked U.S. patent markings), copied all of the fryer’s features except for cosmetics, retained an attorney to conduct a right-to-use study without telling the attorney that it had copied SEB’s design, and ultimately sold its fryers to companies that then resold them in the United States. A jury found defendant liable for inducing infringement and the Federal Circuit affirmed, stating that one may be liable for induced infringement where he “knew or should have known that his actions would induce actual infringements.” At issue before the Supreme Court was whether the standard applied for finding induced infringement (i.e., that defendant knew or should have known) was appropriate.
In considering Section 271(b), the Court explained that the phrase “induces infringement” could merely require that “the inducer lead another to engage in conduct that happens to amount to infringement,” (i.e., no knowledge that the induced act constitutes infringement) or “the inducer must persuade another to engage in conduct that the inducer knows is an infringement.” (Emphasis added.) In other words, as the Court pointed out, the statute fails to give any indication as to what, if any, intent is required for a defendant to be liable for inducing patent infringement.
After considering case law pre-dating enactment of the law on contributory patent infringement (including induced infringement) and finding it conflicting, the Court turned its attention to its decision in Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476 (1964) (“Aro II“). In Aro II, the Court determined the intent required for contributory infringement under Section 271(c). Under Section 271(c), a party is liable for patent infringement where it “offers to sell or sells . . . a component of a patented [invention] . . ., constituting a material part of the invention,knowing the same to be especially made or especially adapted for use in an infringement of such patent . . . .” In Aro II, the Court concluded that for contributory liability to attach under Section 271(c), knowledge of the existence of the patent that is infringed is necessary.
Based on the Aro II decision and the fact that Section 271(b) and 271(c) incorporate a similar ambiguity as to intent, the Court concluded in Global Tech that the same knowledge standard for contributory infringement under Section 271(c) is necessary for induced infringement under Section 271(b). Thus, the Court held that “induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement.” A “deliberate indifference to a known risk that a patent exists is not the appropriate standard under § 271(b).”
The analysis does not end there however. The next step is the determination of what constitutes “knowledge” for liability for inducing infringement. Despite finding a “deliberate indifference” insufficient to meet this knowledge requirement, Global Tech Court went on to affirm the lower court rulings against the defendant in this case finding that the evidence was sufficient to support a finding of knowledge based on the defendant’s “willful blindness.” The Court reviewed the history of the doctrine of willful blindness and concluded that for the doctrine to apply, two requirements must be met: “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” In justifying the imposition of liability based on a defendant’s willful blindness, the Court distinguished willful blindness from recklessness and negligence explaining: “a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known of the critical facts.”
In Global Tech, the facts that sufficed to amount to willful blindness for liability for inducing infringement included defendant’s decision to copy an overseas model of SEB’s fryer (lacking patent markings) and its failure to inform its attorney from whom it sought a right-to-use opinion of that fact. Based on these facts, the Court concluded that defendant “subjectively believed there was a high probability that SEB’s fryer was patented, that [defendant] took deliberate steps to avoid knowing that fact, and that it therefore willfully blinded itself to the infringing nature of [purchasers’] sales.”
In summary, under the Court’s Global Tech decision, one may be liable for inducing infringement if he knew that the acts induced constitute an infringement. While a deliberate indifference to a known risk that a patent exists is insufficient to demonstrate induced infringement, willful blindness is enough.
Federal Circuit Changes Law for Post-Injunction Contempt Proceedings Against Modified Products
In TiVo, Inc. v. EchoStar Corp., et al., No. 2009-1374 (Fed. Cir. Apr. 20, 2011), a recent en banc decision, the Federal Circuit vacated an Eastern District of Texas court’s ruling that EchoStar was in contempt of the district court’s permanent injunction. Because the Federal Circuit considered the case en banc, the Federal Circuit was able to reconsider the two-step test it adopted in KSM Fastening Systems v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed. Cir. 1985), for determining whether a district court should hold a contempt proceeding. The Federal Circuit concluded that the KSM test was unsound and clarified the standards governing contempt proceedings in patent infringement cases.
The TiVo/EchoStar patent battle has been raging in the courts for the better part of 10 years. Following a win by TiVo in a jury trial in the Eastern District of Texas, Judge Folsom entered an injunction prohibiting EchoStar from undertaking certain activities in connection with its accused DVR products. The court subsequently found EchoStar in violation of the injunction and imposed contempt sanctions on top of the damages awarded by the jury. EchoStar appealed to the Federal Circuit and ultimately persuaded the Federal Circuit to consider the case en banc to clarify the standard for imposing contempt sanctions in a patent case.
In a unanimous portion of the opinion, the Federal Circuit held that there is no “good faith” defense to a charge of contempt. The court also overruled an often-misunderstood portion of the 1985 KSM case, which had set out a two-part test for deciding whether contempt proceedings were appropriate. The Federal Circuit changed the two-part KSM inquiry into a single statement: “What is required for a district court to hold a contempt proceeding is a detailed accusation from the injured party setting forth the alleged facts constituting the contempt.”
With respect to the substantive standard applied to a contempt proceeding, the Federal Circuit reiterated that “the party seeking to enforce the injunction must prove both that the newly accused product is not more than colorably different from the product found to infringe and that the newly accused product actually infringes.” For the first portion of this analysis—determining whether there are more than “colorable differences”—the court clarified the appropriate comparison: “[O]ne should focus on those elements of the adjudged infringing products that the patentee previously contended, and proved, satisfy specific limitations of the asserted claims. Where one or more of those elements previously found to infringe has been modified, or removed, the court must make an inquiry into whether that modification is significant. If those differences between the old and new elements are significant, the newly accused product as a whole shall be deemed more than colorably different from the adjudged infringing one, and the inquiry into whether the newly accused product actually infringes is irrelevant. Contempt is then inappropriate.”
On the final key question—whether EchoStar’s conduct constituted contempt under the newly devised proper standard—two factions of the en banc court were sharply divided. EchoStar argued that the language of the injunction was too ambiguous to clearly proscribe the challenged conduct. The seven judge majority, in an opinion written by Judge Lourie, held that such an argument was unavailable as a matter of law because EchoStar never directly challenged the language of the injunction. According to the majority, “where a party has bypassed opportunities to present its asserted vagueness claim on appeal or through a motion to clarify or modify the injunction, the party cannot disregard the injunction and then object to being held in contempt when the courts conclude that the injunction covered the party’s conduct.” The five-member minority, in an opinion written by Judge Dyk, disagreed strenuously, on the grounds that “contempt cannot be based on an order susceptible to two reasonable readings, one of which does not cover the accused conduct.” Thus, the dissenting judges would have reversed the finding of contempt because “TiVo was obligated to show that the injunction clearly prohibited the substitution of new non-infringing software. It did not remotely satisfy this burden.”
One important message to take away from this case is that any defendant that is subject to an injunction in a patent case should immediately analyze the injunction to determine whether there is any potential ambiguity in its terms. If such ambiguity is present—or even potentially present—the defendant frequently may be well advised to raise any such issues immediately, through a motion to clarify/modify the injunction and/or an appeal to the Federal Circuit. Absent those protective measures, the ambiguity of an injunction will likely not provide the defendant with grounds to later oppose a contempt motion by the patentee.
A copy of the opinion can be found at http://www.cafc.uscourts.gov/images/stories/opinions-orders/09-1374.pdf.
Perils of Reissue – Recapture Doctrine Has Teeth!
Patent owners beware! Over the past year, the Federal Circuit has issued two major rulings1 which stand as a warning to patent owners that when requesting reissue of an arguably defective patent, if you attempt to broaden aspects of the claims relating to subject matter surrendered during prosecution of the defective patent,2 courts (and now likely the U.S. Patent Office as well) will extensively examine the “entire” prosecution history of the defective patent and its family to determine if you are attempting to recapture the surrendered subject matter.3 This means that the review will not only include the prosecution history of the “defective” patent undergoing reissue, but also the prosecution history of any and all “ancestor patent applications.”4 The warning is out. Improper recapture of surrendered subject matter will not be tolerated.
The unfortunate result of the Federal Circuit’s zealous desire to prevent improper recapture, however, is that: pursuit of claims of a broader or mixed scope through the reissue process can be tantamount to walking through a mine field that grows with the number of patent applications added to the patent’s family. If patent owners and portfolio managers desire to enlarge the scope of the claims of an issued patent,5 the reissue application must be applied for within two years from the grant date of the issued patent. Due to these broaden reissue difficulties, it may be prudent to make a determination of whether broader claims are desired much earlier in an application process and prior to patent grant/issuance to avoid the broaden reissue route.
One of the better available routes or strategies, for example, appears to be to pursue such broadened or mixed-scope claims through use of one or more continuation or divisional applications at some point prior to issuance/grant of the patent, e.g., after issuance of a notice of allowance. This continuation or divisional strategy can help patent owners avoid the reissue process, which under certain circumstances, arguably now seems to be best reserved for neutral or narrowing claim amendments6 such as: to account for newly discovered prior art, changes in the legal landscape7 or other impetus which may cause there to be a question as to the validity of the patented claims, to correct an error in the patent disclosure,8 to correct a foreign or domestic priority claim, or to add an additional non-surrendered species, thereby leaving broaden reissue reserved only as a procedure of last resort.
Section 251 of Title 35 of the U.S. Code allows patent owners to “enlarge the scope of the claims of the original patent” if “through error without any deceptive intention…the patentee claim[ed]…less than he had a right to claim in the [original] patent.” Deliberate withdrawal or amendment of claims or specific arguments limiting the scope of terms used in a claim to obtain a patent, however, are not considered to involve the type of “error” contemplated by Section 251.9 As such, in accordance with the statute, the patentee may not utilize the reissue process to broaden the claims of a patent to recapture subject matter surrendered10 through deliberate amendments or through specific arguments made during prosecution to overcome prior art.
Two recent court rulings out of the Federal Circuit, In re Mostafazadeh11 and MBO Laboratories Inc.12 further highlight and explain this requirement.
In re Mostafazadeh (“Mostafazadeh”)
In April 1998, inventors Mostafazadeh and Smith filed a patent application directed to semiconductor packaging, which issued as a patent in March 2000. During prosecution, the inventors amended the independent claims to add a claim element describing a “circular attachment pad” and argued that “circular” attachment pads were novel—no assertions were made that non-circular attachment pads were novel.13 The application was allowed as a result of the amendment and the patent issued as U.S. Patent No. 6,034,423 (“the ‘423 patent”). The inventors did not file a continuation application in order to pursue claims of a broader or different scope prior to the patent issuing.
In December 2001, the inventors filed a reissue application, deleting the “circular” shape requirement and declaring that the original claims of the ‘423 patent were partially inoperative because the “circular” shape feature of the attachment pad limitation was unduly limiting. The examiner rejected the reissue claims as violating the recapture doctrine, noting that the circular attachment pad limitation was argued during prosecution of the ‘423 patent “to be both critical to the invention and distinguishing over the prior art.” The inventors appealed to the Board of Patent Appeals and Interferences (“Board”), which affirmed the examiner’s rejection. Having been rebuffed by the Board, the inventors appealed to the Federal Circuit, asserting, in essence, that the reissue claims were materially narrower than the pre-amended version of the patent claims because they retained the “attachment pad” limitation.14
The Federal Circuit, however, disagreed, finding that the inventors failed to demonstrate material narrowing because use of a non-circular attachment pad was “well known in the prior art.”15 The court also found that additional narrowing features unrelated to the surrendered subject matter were insufficient to avoid recapture.16 In other words, to avoid the effects of the recapture doctrine, the reissue claims must retain at least material portions of the surrendered subject matter, and the remaining portions must serve the purpose of the addition of the original surrendered subject matter – i.e., to differentiate the reissue claims from the prior art. Even substantial material narrowing to other elements of the reissue claims will not allow patent owners to avoid this requirement.
MBO Laboratories Inc. (“MBO”)
Beginning in November 1990, MBO’s inventors submitted a series of patent applications covering a hypodermic safety syringe designed to minimize needle-stick injuries through the use of a needle positioned within a guard sleeve. These patent applications included a continuation-in-part application (“the ‘013 application”) which issued as U.S. Patent No. 5,395,347 (“the ‘347 patent”), and a continuation application (“the ‘772 application”) claiming priority to the ‘013 application filed one day prior to issuance of the ‘347 patent. After receiving a notice of allowance for the ‘772 application, MBO subsequently abandoned it and filed a new continuation application (“the ‘803 application”) with additional claims, which issued as U.S. Patent No. 5,755,699 (“the ‘699 patent”) without objection. MBO did not file a continuation application in order to pursue claims of a broader or different scope prior to the patent issuing, and no other applications in the application chain or family were pending.17
Slightly more than one year after issuance of the ‘699 patent, MBO requested a broadening reissue of the ‘699 patent, apparently fearing that the claims could be interpreted to cover only a retractable needle that retracts into a fixed guard, and not the arguably equivalent feature of a fixed needle and slidable guard. Surprisingly, in spite of the fact that during prosecution of the ‘772 application, MBO distinguished its invention from cited prior art, in essence, by arguing that MBO’s invention included the retractable needle limitation, the USPTO allowed the reissue without objection, which resulted in U.S. Patent No. RE 36,885 (“the RE ‘885 patent”).18
In 2003, MBO filed suit against Becton, Dickinson & Co. (“Becton”) asserting infringement of various claims of the RE ‘885 patent, which included three original claims copied without amendment from the ‘699 patent and four claims added during the reissue process. During the course of the litigation, Becton challenged the four reissue claims as being invalid under the recapture rule—arguing that the reissue claims recaptured subject matter surrendered during patent prosecution. The District Court agreed, holding that the four added claims were invalid. The District Court, however, also held that all claims including the original claims were invalid.19 MBO in an appeal to the Federal Circuit requested clarification.20
In discussing whether the patentee surrendered any subject matter, which necessarily requires a review of prosecution history, the Federal Circuit clarified that the determination of the existence of surrender of a claim’s scope, includes surrendered subject matter made not only while prosecuting the original application directly resulting in the original patent (i.e., the ‘699 patent), but also subject matter surrendered in any precedent divisional, continuation, or continuation-in-part application (here both the ‘722 and ‘013 applications).21 The original claims, however, remain unaffected by the recapture rule.22
As shown by these recent Federal Circuit cases, violation of the recapture rule results in invalidity of the offending reissue claims, but does not result in invalidity of claims that are not subject to the rule (i.e., original and non-violating amended claims). Depending upon the outcome of a review of the file history of the patent application that would result in the original patent (if still pending), any pending child, ancestor, or sister applications, and issued patents, as well as a determination of whether or not either of the pending ancestor or sister patent applications have a written description that would adequately support claims having the desired scope,23 there often is a likelihood that a broaden reissue would not provide the ability to achieve the same claim scope as could be achieved through the filing of one or more continuation or divisional applications or by amending the claims of the respective pending application. As such, one can surmise that had there been a child, ancestor, or sister patent application pending at the time the respective patent owners in these cases determined that their respective issued patents had insufficient claim scope, the claims of any such pending patent application could have been amended; or additional claims could have been added, or an additional continuation or divisional application claiming priority to the respective patent application strategically could have been filed, to provide broader scope of coverage. Accordingly, these recent Federal Circuit cases highlight the perils of the reissue process, show that the Recapture Doctrine still has teeth, emphasize the importance and benefits of strategic use of continuation or divisional applications and other actions by applicants prior to patent grant/issuance, and of course, warn of the potential hazards lurking in patent prosecution file histories.