Court Opinion

ID: 4271706
Source: CourtListenerOpinion
Date Created: 2018-05-02 15:00:31.206403+00
Date Added: 2024-06-11T14:33:06.697972
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

           SHFL ENTERTAINMENT, INC.,
                 Plaintiff-Appellant

                           v.

            DIGIDEAL CORPORATION,
                     Defendant
               ______________________

                      2016-2705
                ______________________

    Appeal from the United States District Court for the
District of Nevada in No. 2:12-cv-01782-GMN-VCF, Judge
Gloria M. Navarro.
                 ______________________

                 Decided: May 2, 2018
                ______________________

    KIMBALL RICHARD ANDERSON, Winston & Strawn
LLP, Chicago, IL, argued for plaintiff-appellant. Also
represented by GEOFFREY P. EATON, Washington, DC;
HOWARD I. SHIN, New York, NY.
               ______________________

   Before DYK, TARANTO, and HUGHES, Circuit Judges.
2        SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION

HUGHES, Circuit Judge.
    SHFL Entertainment, Inc. sued DigiDeal Corporation
in the U.S. District Court for the District of Nevada for
infringement of U.S. Patent Nos. 6,651,982 and 7,523,935.
While the litigation was pending, the U.S. Patent and
Trademark Office reexamined the patents, cancelling all
originally asserted claims of the ’935 patent and confirm-
ing a new claim as patentable, and confirming all origi-
nally asserted claims of the ’982 patent in their amended
form and two new claims as patentable. Based on the
results of the reexaminations, the court found the entire
suit moot and entered summary judgment against SHFL.
    The district court correctly found the case moot as to
the cancelled claims of the ’935 patent. Suits based on
cancelled claims must be dismissed for lack of jurisdiction,
however. We thus vacate the entry of summary judgment
as to the cancelled claims, and remand for the court to
dismiss that part of the action for lack of jurisdiction.
    In addition, the court failed to determine whether the
new and amended claims that emerged from the reexami-
nations of the two patents are substantially identical to
the claims originally asserted in the action. We therefore
vacate the grant of summary judgment as to those claims,
and remand for the court to make that determination.
                             I
    SHFL supplies gaming products, such as automatic
card shufflers used in casinos. It owns the ’935 and ’982
patents, which share a common specification that disclos-
es card shuffling devices and methods of randomizing
cards using the shuffling devices. DigiDeal similarly
manufactures and markets gaming equipment, including
an automatic single deck card shuffler known as the
DigiShuffleTM (DigiShuffle).
    On October 10, 2012, SHFL sued DigiDeal for patent
infringement, alleging that DigiDeal infringed and con-
SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION         3

tinued to infringe the ’935 and ’982 patents by “using and
offering to sell” the DigiShuffle. On March 12, 2013,
SHFL served a “Disclosure of Asserted Claims and In-
fringement Contentions” on DigiDeal, disclosing that it
was asserting claims 1–2, 9–11, and 14 of the ’935 patent
and claims 1–3, 42–44, and 46 of the ’982 patent in the
action. On March 14, 2013, the district court entered a
stipulated scheduling order, which, among other things,
retroactively provided that “Initial Disclosures pursuant
to Fed. R. Civ. P. 26(a)(1)” be completed by March 12,
2013 and separately that “Plaintiff’s disclosure of asserted
claims and infringement contentions (LR 16.1-6) and
accompanying production (LR 16.1-7)” also be completed
by the same deadline. The scheduling order also provided
that “[t]he deadline for filing motions to amend the plead-
ings or to add parties shall be July 11, 2013.”
     On August 26, 2013, SHFL filed a motion for leave to
amend its complaint, asserting that it has discovered that
in addition to “using and offering for sale” the DigiShuffle,
DigiDeal also infringes by “manufacturing” the product in
the United States. On September 20, 2013, the court
granted that motion. On September 25, 2013, SHFL
amended its operative complaint, alleging that DigiDeal
infringed and continued to infringe the asserted claims by
“manufacturing, using, and offering to sell” the DigiShuf-
fle.
    While the litigation was pending, the PTO granted
DigiDeal’s requests for ex parte reexaminations of the
’935 and ’982 patents. On April 17, 2014, the district
court entered an order granting a stipulation by the
parties staying the litigation pending the final disposition
of the ex parte reexaminations. As part of that stipula-
tion, DigiDeal also agreed to a preliminary injunction,
which provided that “[d]uring the pendency of the stay of
this action” it “shall not manufacture, market, lease, offer
to sell, sell, or place with any customer the accused
DigiDeal card shuffler (i.e., the DigiShuffle), or any sub-
4         SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION

stantially similar automatic card shuffler, including the
manufacture of the components of the DigiShuffle for
assembly outside of the United States” and also “shall
immediately take steps to remove any DigiShuffle card
shuffler that is currently operating and/or has been
installed for any customer.” Appx 226. 1
    The PTO initially found all asserted claims of the ’935
patent invalid as obvious, see Appx 455, 457, 469–72, and
all asserted claims of the ’982 patent invalid as anticipat-
ed or obvious, see Appx 421, 423, 433–48. In response,
SHFL cancelled all asserted claims of the ’935 patent and
added a new claim 15 to the patent, and amended all
asserted claims of the ’982 patent and added two new
claims 52 and 53 to the patent. The PTO then issued
reexamination certificates for the ’935 patent after cancel-
ling asserted claims 1–2, 9–11, and 14 as requested and
confirming new claim 15 as patentable, Appx 78–80, and
for the ’982 patent after confirming asserted claims 1–3,
42–44, and 46 in their amended form and new claims 52
and 53 as patentable, Appx 72–75.
    On December 18, 2015, the district court lifted the lit-
igation stay and directed the parties to file “an appropri-
ate request for dispositive adjudication based on the
results of the reexamination” of the patents. Appx 22–23.
    On January 7, 2016, SHFL served a “First Amended
Disclosure of Asserted Claims and Infringement Conten-
tions” on DigiDeal, disclosing that it continues to assert
the originally asserted claims of the ’935 and ’982 patents,
and additionally asserts claim 15 of the ’935 patent and
claims 1–3, 42–44, 46, and 52–53 of the ’982 patent—
claims that emerged from the reexaminations. Rather
than amend the operative complaint to assert post-

    1    “Appx” refers to Appendix, attached to SHFL’s
brief.
SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION       5

reexamination accused infringing activities against
DigiDeal, SHFL opted to assert such allegations through
the amended disclosure served on DigiDeal. 2
    On January 8, 2016, DigiDeal filed a motion for sum-
mary judgment, arguing that the case was moot as to all
asserted claims. Appx 23, 232–33. In support, DigiDeal
declared that “[it] has not made, used, offered to sell, or
sold any automatic card shuffler, including without limi-
tation DigiDeal’s DigiShuffle device” subsequent to the
stay entered on April 17, 2014 or since the issuance of the
reexamination certificates for the ’935 and ’982 patents.
Appx 234. DigiDeal also moved the district court to
vacate the preliminary injunction entered on April 17,
2014, when the court had stayed the matter pending the
reexaminations. Id.
     On March 30, 2016, the district court granted the mo-
tions, entering summary judgment against SHFL and
vacating the preliminary injunction entered on April 17,
2014. Appx 25–26; see also Appx 23 n.1. The court first
noted that we have held in Fresenius USA, Inc. v. Baxter
Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2013), that “‘if the
original claim is cancelled or amended to cure invalidity
[in a reexamination], the patentee’s cause of action is
extinguished and the suit fails.’” Appx 25 (quoting Frese-
nius, 721 F.3d at 1340). The court then observed that as
a result of the reexaminations, the asserted claims of the
’935 patent “were cancelled in their entirety” and the
asserted claims of the ’982 patent “were either amended
to cure invalidity or dependent on an amended claim.”
See id. (citations omitted). Applying “the binding holding
in Fresenius” to the undisputed fact that “the asserted
claims were either cancelled or amended to cure invalidity

   2     SHFL also appears to have presented such activi-
ties as hypothetical scenarios amounting to infringement.
6        SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION

during reexamination,” the court then found SHFL’s
entire “cause of action . . . extinguished.” Id.
    SHFL appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1). 3
                             II
    We apply the law of the regional circuit when review-
ing a district court’s grant of summary judgment. Synop-
sys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1146
(Fed. Cir. 2016). Summary judgment in the Ninth Circuit
is appropriate when, after drawing all reasonable infer-
ences in favor of the non-moving party, there remains no
genuine issue of material fact precluding the grant of
summary judgment. See Comite de Jornaleros de Redon-
do Beach v. City of Redondo Beach, 657 F.3d 936, 942 (9th
Cir. 2011).
     We review a district court’s dismissal for mootness
de novo. Ford Motor Co. v. United States, 688 F.3d 1319,
1323 (Fed. Cir. 2012) (citing King Pharms., Inc. v. Eon
Labs, Inc., 616 F.3d 1267, 1282 (Fed. Cir. 2010)). “[T]o
avoid dismissal for mootness, an actual controversy must
remain at all stages, not merely at the time the complaint
is filed.” Gerdau Ameristeel Corp. v. United States, 519
F.3d 1336, 1340 (Fed. Cir. 2008) (citing Steffel v. Thomp-
son, 415 U.S. 452, 460 n.10 (1974)).
                             A
    We first turn to the cancelled claims of the ’935 pa-
tent. The originally asserted claims of the patent were
cancelled as a result of the reexamination, and the district
court found the action moot as to those claims. We agree
with that determination.

    3   DigiDeal has not participated in this appeal.
SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION        7

    Fresenius makes clear that “when a claim is cancelled,
the patentee loses any cause of action based on that claim,
and any pending litigation in which the claims are assert-
ed becomes moot.” 721 F.3d at 1340. It is undisputed
that claims 1–2, 9–11, and 14 of the ’935 patent, the
originally asserted claims of the patent, were all cancelled
during the reexamination. The district court, therefore,
correctly found the case moot as to those cancelled claims.
     Suits based on cancelled claims must be dismissed for
lack of jurisdiction, however. Foster v. Carson, 347 F.3d
742, 745 (9th Cir. 2003) (“Mootness is a jurisdictional
issue, and federal courts have no jurisdiction to hear a
case that is moot, that is, where no actual or live contro-
versy exists. If there is no longer a possibility that an
appellant can obtain relief for his claim, that claim is
moot and must be dismissed for lack of jurisdiction.”
(citations and quotation marks omitted)); see also Target
Training Int’l, Ltd. v. Extended Disc N. Am., Inc., 645 F.
App’x 1018, 1023 (Fed. Cir. 2016) (upholding the district
court’s dismissal for lack of jurisdiction because Fresenius
rendered the suit moot as to the claims cancelled after
reexamination). Accordingly, we vacate the entry of
summary judgment as to the cancelled claims of the ’935
patent, and remand for the district court to dismiss the
claims from the action for lack of jurisdiction.
                             B
    We next turn to the new claim 15 of the ’935 patent,
and the new claims 52–53 and amended claims 1–3, 42–
44, and 46 of the ’982 patent, claims that emerged from
the reexaminations of the two patents. The district court
merely addressed the originally asserted claims of the
’982 patent. Relying on Fresenius, the court found the
case moot as to those claims because the claims were
amended to cure invalidity. Appx 25. SHFL argues that
the court erred by failing to determine whether the new
and amended claims that emerged from the reexamina-
8        SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION

tions are substantially identical to the originally asserted
claims of the patents. We agree.
    As an initial matter, the court’s reliance on Fresenius
is misplaced. Fresenius involved only cancelled claims.
721 F.3d at 1336. SHFL also asserted in the action the
new and amended claims that emerged from the reexami-
nations. 4 The district court failed to consider the effect of
those claims before finding the action moot.
    Relevant statutory provisions set forth the essential
inquiry relevant to the new and amended claims. Section
307(b) makes clear that “[a]ny proposed amended or new
claim determined to be patentable and incorporated into a
patent following a reexamination proceeding will have the
same effect as that specified in section 252 for reissued
patents on the right of” any accused infringer. 35 U.S.C.

    4    Local Rules effective at the time permitted a party
to amend its infringement contentions for good cause at
any time before the discovery cut-off date. See D. Nev.
L.R. 16.1-12 (effective Aug. 1, 2011, through Apr. 30,
2016) (“Amendment of initial disclosures required by
these Rules may be made for good cause without leave of
Court anytime before the discovery cut-off date. Thereaf-
ter, the disclosures shall be final and amendment of the
disclosures may be made only by order of the Court upon
a timely showing of good cause.”) (currently D. Nev.
Patent L.R. 1-12, effective May 1, 2016). Because discov-
ery never closed in this action, SHFL properly amended
its initial disclosure of the asserted claims when it served
a “First Amended Disclosure of Asserted Claims and
Infringement Contentions” on January 7, 2016. Indeed,
service on the parties, without filing with the court,
appears to suffice. See D. Nev. L.R. 16.1-6 (“[A] party
claiming patent infringement shall serve on all parties a
‘Disclosure of Asserted Claims and Infringement Conten-
tions.’”) (currently D. Nev. Patent L.R. 1-6).
SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION           9

§ 307(b). Section 252 in turn provides that “in so far as
the claims of the original and reissued patents are sub-
stantially identical, such [reissue of the original patent]
shall not affect any action then pending nor abate any
cause of action then existing . . . .” Id. § 252. Read con-
junctively, amended or new claims incorporated into
reexamined patents do not automatically abate—let alone
moot—any pending action against the accused infringer
based on the patents if the amended or new claims are
“substantially identical” to the original claims. See also
Bloom Eng’g Co. v. N. Am. Mfg. Co., 129 F.3d 1247, 1250
(Fed. Cir. 1997) (“Unless a claim granted or confirmed
upon reexamination is identical to an original claim, the
patent can not be enforced against infringing activity that
occurred before issuance of the reexamination certifi-
cate.”). Fresenius itself required this, stating that “the
reexamination statute restricts a patentee’s ability to
enforce the patent’s original claims to those claims that
survive reexamination in ‘identical’ form.” 721 F.3d at
1339. To determine whether a claim change is substan-
tially identical, “it is necessary to analyze the claims of the
original and the reexamined patents in light of the par-
ticular facts, including the prior art, the prosecution
history, other claims, and any other pertinent infor-
mation.” Laitram Corp. v. NEC Corp., 952 F.2d 1357,
1362–63 (Fed. Cir. 1991) (emphasis added); see also R+L
Carriers, Inc. v. Qualcomm, Inc., 801 F.3d 1346, 1350
(Fed. Cir. 2015) (indicating that whether the scope of the
reexamined claim is “substantially identical” to the scope
of the original claim is “based on a normal claim construc-
tion analysis”).
     The question of whether SHFL’s case is moot as to the
new and amended claims that emerged from the reexami-
nations of the two patents, therefore, necessarily depends
on whether those claims are substantially identical to the
originally asserted claims. The district court, however,
failed to undertake that evaluation. Accordingly, we
10        SHFL ENTERTAINMENT, INC.   v. DIGIDEAL CORPORATION

vacate the grant of summary judgment as to those claims,
and remand for the court to make that determination in
the first instance.
                            III
    We have considered SHFL’s remaining arguments
and find them unpersuasive. Based on the foregoing, we
vacate the district court’s grant of summary judgment
against SHFL and remand for further proceedings con-
sistent with this opinion.
                 VACATED AND REMANDED
     No costs.