Court Opinion

ID: 4256727
Source: CourtListenerOpinion
Date Created: 2018-03-21 16:00:54.546574+00
Date Added: 2024-06-11T14:18:35.949929
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

             SARIF BIOMEDICAL LLC,
                 Plaintiff-Appellee

                           v.

  BRAINLAB, INC., BRAINLAB AG, BRAINLAB
  MEDIZINISCHE COMPUTERSYSTEME GMBH,
             Defendants-Appellants
            ______________________

                      2017-1103
                ______________________

    Appeal from the United States District Court for the
District of Delaware in No. 1:13-cv-00846-LPS, Chief
Judge Leonard P. Stark.
                ______________________

               Decided: March 21, 2018
               ______________________

    PAUL ANTHONY KROEGER, Russ August & Kabat, Los
Angeles, CA, argued for plaintiff-appellee. Also repre-
sented by MARC AARON FENSTER, JEFFREY ZHI YANG LIAO.

    JAY CAMPBELL, Tucker Ellis LLP, Cleveland, OH,
argued for defendants-appellants. Also represented by
MARISSA MEGAN ENNIS, JOSHUA MICHAEL RYLAND; SANDRA
J. WUNDERLICH, St. Louis, MO.
                ______________________
2                         SARIF BIOMED. LLC   v. BRAINLAB, INC.

    Before REYNA, WALLACH, and HUGHES, Circuit Judges.
WALLACH, Circuit Judge.
     Appellee Sarif Biomedical LLC (“Sarif”) sued Appel-
lants Brainlab, Inc., Brainlab AG, and Brainlab
Medizinische Computersysteme GmbH (collectively,
“Brainlab”) in the U.S. District Court for the District of
Delaware (“District Court”), alleging infringement of,
inter alia, claims 1–9 of U.S. Patent No. 5,755,725 (“the
’725 patent”). Following an order on claim construction
adverse to Sarif, see Sarif Biomed. LLC v. Brainlab, Inc.
(Sarif I), No. 13-846-LPS, 2015 WL 5072085, at *10 (D.
Del. Aug. 26, 2015), the parties jointly stipulated to final
judgment of invalidity and noninfringement, and Brainlab
filed a motion for attorney fees pursuant to 35 U.S.C.
§ 285 (2012). The District Court denied Brainlab’s Motion
for Attorney Fees. Sarif Biomed. LLC v. Brainlab, Inc.
(Sarif II), No. 13-846-LPS, 2016 WL 5422479, at *1 (D.
Del. Sept. 27, 2016) (Order on Attorney Fees).
     Brainlab appeals the denial of attorney fees. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2012). We
affirm.
                       BACKGROUND
                     I. The ’725 Patent
     Entitled “Computer-Assisted Microsurgery Methods
and Equipment,” the ’725 patent “relates to an installa-
tion for computer-assisted stereotactic microsurgery” that
includes, inter alia, the use of a microsurgery tool-support
and an image data base. ’725 patent col. 1 ll. 7–8; see id.
col. 2 l. 62–col. 3 l. 2. The ’725 patent purports “to assure
a correlation between the digital images obtained by
means of a medical imaging system with the patient so as
to provide the surgeon with the data intended to guide his
operative strategy in real time.” Id. col. 2 ll. 42–46.
SARIF BIOMED. LLC   v. BRAINLAB, INC.                       3

    Claim 1, from which claims 2–9 directly or indirectly
depend, is the only independent claim on appeal. It
relates to “[a] computer-assisted microsurgery installa-
tion,” which, relevant here, includes “(e) means for deter-
mining coordinates of the tool in the fixed reference
system Rc based on data from the image data base” (“limi-
tation (e)”). Id. col. 10 l. 62, col. 11 ll. 18–20. 1
               II. The Relevant Proceedings
     On May 14, 2013, Sarif filed its complaint in the Dis-
trict Court. J.A. 988. While the District Court litigation
was pending, Brainlab petitioned the U.S. Patent and
Trademark Office (“USPTO”) for inter partes review of
Sarif’s ’725 patent. See Brainlab, AG v. Sarif Biomed.
LLC, No. IPR2014-00753, 2014 WL 5788571, at *1
(P.T.A.B. Nov. 4, 2014). The USPTO’s Patent Trial and
Appeal Board (“PTAB”) declined to institute inter partes
review for claims 1–9 on the basis that claim 1, and
therefore attendant claims 2–9, were indefinite because
the specification lacked a supporting structure. See id. at
*1, *6. Sarif ultimately disclaimed remaining claims 10
and 11, thereby terminating the PTAB proceedings, but
Sarif continued to pursue claims 1–9 in the District Court
litigation.

    1    The District Court construed limitation (e) as a
means-plus-function limitation, see Sarif I, 2015 WL
5072085, at *9, and the parties do not dispute that limita-
tion (e) is a mean-plus-function limitation, see, e.g., Appel-
lants’ Br. 7; Appellee’s Br. 4; see also 35 U.S.C. § 112 ¶ 6
(2006) (“An element in a claim for a combination may be
expressed as a means or step for performing a specified
function without the recital of structure, material, or acts
in support thereof, and such claim shall be construed to
cover the corresponding structure, material, or acts de-
scribed in the specification and equivalents thereof.”
(emphases added)).
4                         SARIF BIOMED. LLC   v. BRAINLAB, INC.

     On August 26, 2015, the District Court issued Sarif I
and determined that the specification lacked a supporting
structure, such that limitation (e) was indefinite. See
2015 WL 5072085, at *9. The District Court explained
that, “[w]hile . . . the specification teaches detailed formu-
las for transitioning from one frame to another, there is
no clear structural link for the cameras to use the image
database to determine the coordinates of the tool—which
is the disclosed function.” Id. at *10. On October 1, 2015,
Sarif and Brainlab filed a joint stipulation of judgment of
invalidity and noninfringement, stipulating that, in light
of the District Court’s claim construction order, “claims 1
through 9 of the [’]725 patent are invalid due to indefi-
niteness.” J.A. 983. The District Court entered judgment
of invalidity and noninfringement. J.A. 999.
     On October 19, 2015, Brainlab moved for attorney fees
pursuant to § 285. J.A. 7. The District Court denied
Brainlab’s Motion for Attorney Fees and determined that
the case was not “exceptional,” “find[ing] no basis to
conclude that this case should not have been brought.”
Sarif II, 2016 WL 5422479, at *1. The District Court
found that “[Sarif] had a good faith, though ultimately
incorrect, belief that its claims were not indefinite,”
noting that, “[a]t each stage of the litigation, [Sarif]
provided detailed arguments, grounded in the intrinsic
evidence, in support of its proposed constructions” and
“obtained expert opinion which supported its construc-
tions.” Id. at *2 (footnote omitted). The District Court
rejected Brainlab’s arguments that “[Sarif]’s conduct
following the PTAB proceeding constituted an unreasona-
ble approach to litigation or demonstrate[d] that [Sarif]’s
case was extraordinarily weak.” Id.
                        DISCUSSION
        I. Standard of Review and Legal Standard
    We review “all aspects of a district court’s § 285 de-
termination for abuse of discretion.” Highmark Inc. v.
SARIF BIOMED. LLC   v. BRAINLAB, INC.                      5

Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1747
(2014). A district court abuses its discretion where, inter
alia, it “bases its ruling on an erroneous view of the law or
on a clearly erroneous assessment of the evidence.”
Rothschild Connected Devices Innovations, LLC v. Guard-
ian Prot. Servs., Inc., 858 F.3d 1383, 1387 (Fed. Cir. 2017)
(quoting Highmark, 134 S. Ct. at 1748 n.2). “A factual
finding is clearly erroneous if, despite some supporting
evidence, we are left with the definite and firm conviction
that a mistake has been made.” Id. (internal quotation
marks and citation omitted).
     “We apply Federal Circuit caselaw to the § 285 analy-
sis, as it is unique to patent law.” Digeo, Inc. v. Audible,
Inc., 505 F.3d 1362, 1366 (Fed. Cir. 2007) (citation omit-
ted); see, e.g., AdjustaCam, LLC v. Newegg Inc., 861 F.3d
1353, 1359 (Fed. Cir. 2017) (relying on Federal Circuit
precedent). By statute, a district court “in exceptional
cases may award reasonable attorney fees to the prevail-
ing party.” 35 U.S.C. § 285. “An ‘exceptional’ case is
simply one that stands out from others with respect to the
substantive strength of a party’s litigating position (con-
sidering both the governing law and the facts of the case)
or the unreasonable manner in which the case was liti-
gated.” Octane Fitness, LLC v. Icon Health & Fitness,
Inc., 134 S. Ct. 1749, 1756 (2014). The Supreme Court
has instructed that a district court should consider “the
totality of the circumstances,” including a party’s “motiva-
tion.” Id. at 1756, 1756 n.6 (internal quotation marks and
citation omitted).
  II. The District Court Did Not Abuse Its Discretion in
       Making Its Exceptional-Case Determination
    Brainlab argues the District Court abused its discre-
tion in failing to award attorney fees. See Appellants’ Br.
34–56. Brainlab contends that Sarif’s unmeritorious
construction of limitation (e) and modifications to its
construction throughout the course of the proceedings
6                         SARIF BIOMED. LLC   v. BRAINLAB, INC.

demonstrate that the District Court erred in evaluating
the strength and reasonability of Sarif’s litigating posi-
tion. Id. at 37–49. Brainlab also claims the District
Court failed to account for the totality of the circumstanc-
es, including Sarif’s improper motivations in maintaining
this suit against Brainlab. See id. at 49–56. We disagree.
                  A. Substantive Strength
     The District Court properly evaluated the substantive
strength of Sarif’s case. The District Court found that
Sarif acted in “good faith” in part because, “[a]t each stage
of the litigation, [Sarif] provided detailed arguments,
grounded in the intrinsic evidence, in support of its pro-
posed constructions” and “obtained expert opinion which
supported its constructions.” Sarif II, 2016 WL 5422479,
at *2 (footnote omitted). 2 Supporting its constructions
with citations to the specification and expert testimony,
Sarif identified two supporting structures for limitation
(e)—“a computer . . . using algorithms,” J.A. 750 (citing
J.A. 777–79 (Sarif’s expert declaration)), 1009–10 (joint
claim construction chart) (citing ’725 patent col. 7 l. 66–
col. 9 l. 60); see J.A. 898, 913–14 (Sarif’s expert testimo-
ny), and the specification’s recital of “at least two acquisi-
tion cameras,” J.A. 750 (citing J.A. 776–77 (Sarif’s expert
declaration)), 1009–10 (joint claim construction chart)
(citing ’725 patent col. 3 ll. 39–43); see J.A. 898 (Sarif’s
expert testimony). The District Court’s ultimate disa-
greement with Sarif’s proposed construction does not, on

    2   Brainlab attempts to impugn the District Court’s
finding of good faith by arguing that a declaration provid-
ed by Sarif’s counsel is conclusory. See Appellants’
Br. 39–40. Whether Brainlab is correct, the District
Court never relied on the contested declaration. See
generally Sarif II, 2016 WL 5422479. We will not find an
abuse of discretion based on purportedly insufficient
evidence that was not considered below.
SARIF BIOMED. LLC   v. BRAINLAB, INC.                     7

its own, render Sarif’s case substantively weak. See SFA
Sys., LLC v. Newegg Inc., 793 F.3d 1344, 1348 (Fed. Cir.
2015) (distinguishing Octane’s “substantive strength of
the party’s litigation position” standard from “the correct-
ness or eventual success of that position” (internal quota-
tion marks and citation omitted)).
     Moreover, the District Court properly determined
that, “as a whole,” Sarif’s claim construction arguments
were not “inconsistent with those [it] took before the
PTAB.” Sarif II, 2016 WL 5422479, at *2. Before the
PTAB, Sarif proffered a similarly well-supported con-
struction. Sarif identified as a supporting structure for
limitation (e) “an algorithm or software running on a
computer system.” J.A. 90; see J.A. 91 (citing ’725 patent
col. 10 ll. 52–55). Although Sarif modified its position
before the District Court by also relying on the specifica-
tion’s “at least two acquisition cameras,” Sarif consistent-
ly relied on the algorithms on the computer system as a
supporting structure in both constructions and justified
its change in construction through reliance on its expert’s
testimony and the ’725 patent’s specification, as detailed
above.       Compare J.A. 90–91, with J.A. 750, and
J.A. 1009–10.
    Brainlab’s counterarguments are ultimately unper-
suasive under our standard of review. First, Brainlab
avers that the PTAB’s decision not to institute an inter
partes review for claims 1–9, after stating these claims
“cannot be construed” based on a likelihood that they are
indefinite, Brainlab, 2014 WL 5788571, at *5, demon-
strates the weakness of Sarif’s position, as it is an im-
portant “objective indicator[] of the invalidity of the ’725
patent,” Appellants’ Br. 42. Brainlab places too much
significance on the PTAB’s determination. The PTAB
does not have authority to institute an inter partes review
under § 112. See 35 U.S.C. § 311(b). Therefore, as Brain-
lab admitted, any conclusion regarding indefiniteness is
dicta. See Oral Arg. at 27:31–40, http://oralarguments.
8                         SARIF BIOMED. LLC   v. BRAINLAB, INC.

cafc.uscourts.gov/default.aspx?fl=2017-1103.mp3 (“Claims
1–9 were found to be indefinite . . . [by] the PTAB, in its
dicta, . . . .”); see also id. at 28:58–31:06.
    Second, Brainlab argues Sarif’s proposed construction
is weak because portions of Sarif’s expert testimony
appear to undermine its ultimate construction. See
Appellants’ Br. 42–44 (citing, inter alia, J.A. 876–77, 898).
However, the District Court is entitled to weigh the
credibility of an expert’s testimony, see Celsis In Vitro,
Inc. v. CellzDirect, Inc., 664 F.3d 922, 929 (Fed. Cir. 2012)
(“The district court has wide discretion to weigh expert
credibility.” (citation omitted)), and these isolated state-
ments are insufficient to demonstrate that the District
Court abused its discretion in finding that, on balance,
the “expert opinion . . . supported [Sarif’s] constructions,”
Sarif II, 2016 WL 5422479, at *2 (footnote omitted); see
J.A. 898–900 (providing full expert testimony, which
defends Sarif’s construction); see also Romag Fasteners,
Inc. v. Fossil, Inc., 866 F.3d 1330, 1341 (Fed. Cir. 2017)
(requiring, under § 285, a party’s position to be “objective-
ly unreasonable,” rather than merely “weak,” for an
award of attorney fees).
     Third, throughout its brief, Brainlab argues the Dis-
trict Court “fail[e]d to make findings of fact in support of
its conclusion that Sarif’s case was not unusually weak”
and “ignored . . . overwhelming evidence.”       Appellants’
Br. 37; see id. at 37–42. However, we have recognized
that “[t]he trial judge [i]s in the best position to under-
stand and weigh the[] issues,” and the District Court
“ha[d] no obligation to write an opinion that reveals [his]
assessment of every consideration.” Univ. of Utah v. Max-
Planck-Gesellschaft zur Foerderung der Wissenschaften
e.V., 851 F.3d 1317, 1323 (Fed. Cir. 2017). Upon our
review of the record, we find the District Court adequately
considered the facts, and we are not left with a “definite
and firm conviction that a mistake has been made.”
SARIF BIOMED. LLC   v. BRAINLAB, INC.                      9

Rothschild, 858 F.3d at 1387 (internal quotation marks
and citation omitted).
   B. Unreasonable Manner and Other Considerations
     The District Court also did not clearly err in consider-
ing the reasonableness of the manner in which Sarif
litigated this case or any other circumstances of this case.
Although Sarif modified its claim construction position
from the PTAB to the District Court, the District Court
correctly explained that
    [i]t can . . . be reasonable for a party to propose
    different constructions in PTAB and District
    Court proceedings, as the PTAB must give claims
    terms their “broadest reasonable construction,”
    whereas District Courts give them the meaning
    they would have to a “person of ordinary skill in
    the art at the time of the invention.”
Sarif II, 2016 WL 5422479, at *2 (citing Cuozzo Speed
Techs., LLC v. Lee, 136 S. Ct. 2131, 2142 (2016)). Brain-
lab claims the District Court committed legal error be-
cause it did not consider whether this stated standard
applies to a means-plus-function clause such as limitation
(e). See Appellants’ Br. 45–46 (citing In re Donaldson Co.,
16 F.3d 1189, 1194–95 (Fed. Cir. 1994) (“[T]he ‘broadest
reasonable interpretation’ that an examiner may give
means-plus-function language is that statutorily mandat-
ed in [35 U.S.C. § 112 ¶ 6].”)). Brainlab fails to appreciate
that claim construction for means-plus-function limita-
tions is no different in terms of the standard used than for
non-means-plus-function terms. See In re Donaldson, 16
F.3d at 1194 (“[O]ur holding [that § 112 ¶ 6 applies to
means-plus-function terms regardless of forum] does not
conflict with the principle that claims are to be given their
‘broadest reasonable interpretation’ during prosecution.”).
The District Court’s reliance on the general legal princi-
ples of claim construction, therefore, was not misplaced.
10                        SARIF BIOMED. LLC   v. BRAINLAB, INC.

     Brainlab also has failed to demonstrate that Sarif’s
motivations and actions as a whole were improper. See
Appellants’ Br. 53–56. Although we have stated “that a
pattern of litigation abuses characterized by the repeated
filing of patent infringement actions for the sole purpose
of forcing settlements, with no intention of testing the
merits of one’s claims, is relevant to a district court’s
exceptional[-]case determination under § 285,” SFA Sys.,
793 F.3d at 1350, the District Court considered Brainlab’s
evidence and concluded Brainlab “ha[d] not demonstrated
that this is a ‘nuisance suit’” because “[Sarif]’s status as a
non-practicing entity, the language of the press releases
directed toward its investors, its decision to allege in-
fringement against several other entities, and its decision
to settle other cases, do not combine to establish that this
case was always ‘meritless’ or ‘predatory,’” Sarif II, 2016
WL 5422479, at *2 (emphasis added). Importantly, Sarif
did not delay in its litigation tactics. For instance, the
District Court acknowledged that Sarif disclaimed claims
10–11, soon after the PTAB instituted an inter partes
review of those claims, and Sarif decided not to pursue
those claims in the District Court litigation. See id. at *1.
Moreover, Sarif stipulated to judgment of invalidity and
noninfringement a mere six days after the District Court
found claims 1–9 indefinite. See J.A. 983. In sum, the
District Court did not abuse its discretion. See SFA Sys.,
793 F.3d at 1352 (finding no abuse of discretion where
“[appellant] failed to proffer sufficient evidence of a pat-
tern of litigation misconduct by [appellee]”).
     Brainlab claims the District Court erred “[b]y limiting
itself to comparing Sarif’s conduct only to the cases ‘with
which [the District Court] has been involved.’” Appellants’
Br. 49 (emphasis added) (quoting Sarif II, 2016 WL
5422479, at *3). As we have explained above, the District
Court properly determined that this case is not exception-
al, grounding its reasoning in the correct legal standards
and a proper assessment of the facts. Therefore, we
SARIF BIOMED. LLC   v. BRAINLAB, INC.                    11

decline Brainlab’s invitation to find legal error “based
upon [this] isolated statement stripped from its context.”
Waymo LLC v. Uber Techs., Inc., 870 F.3d 1350, 1361
(Fed. Cir. 2017) (internal quotation marks and citation
omitted).
                         CONCLUSION
    We have considered Brainlab’s remaining arguments
and find them unpersuasive. Accordingly, the Order on
Attorney Fees of the U.S. District Court for the District of
Delaware is
                         AFFIRMED