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The Top Patent Cases of 2018

Posted on Jan 2, 2019 in Articles

As we start the new year, let’s look back at the most important patent law opinions of 2018.

Patentable Subject Matter

Federal Circuit opinions that find software claims to be patent-eligible continue to be essential to a patent attorney’s “toolkit.” The key to success in many of these cases is claiming an invention that solves a technological problem and improves the functionality of a computer.

Core Wireless Licensing S.A.R.L. v. LG Electronics Inc.[1] upheld a patent that claimed a user interface particularly suitable for small-screened telephones.

Berkheimer v. HP Inc.,[2] while not deciding whether claims were patent-eligible, established helpful guidelines for determining whether patent eligibility existed. The Berkheimer opinion resulted in the U.S. Patent and Trademark Office publishing the Berkeheimer memo, which requires examiners to follow specific guidelines when analyzing whether a software claim is patent-eligible.

Ancora Technologies Inc. v. HTC America Inc.[3] determined that there was patentable subject matter because a “verification structure” was stored in a computer’s basic input/output system, and thus computer security was improved. Each of these cases provided some guidance on how to satisfy patent eligibility requirements for software claims. However, the issue of the patentability of claims involving software still is uncertain, possibly requiring additional statutory clarification.

Obviousness

DSS Technology Management v. Apple Inc.[4] evolved from an inter partes review proceeding at the Patent Trial and Appeal Board that determined claims to be obvious, and thus unpatentable over the prior art. The PTAB relied on a prior art reference that had many features in common with the patent subject to IPR, but with one significant difference — the prior art reference pertained to a mobile unit while the asserted claim was related to a base unit. The PTAB concluded that the claim was obvious over the prior art because applying the teachings of the reference to a base unit “would have been within the skill of the ordinarily skilled artisan to do so” and there was no evidence in the record “that it would have been uniquely challenging or difficult for one of ordinary skill in the art to do so.”

The Federal Circuit reversed, because the PTAB’s decision “fail[ed] to provide sufficient explanation for its obviousness finding.” The court stated that “common sense” is not to be invoked “to supply a missing claim limitation.” Furthermore, the PTAB had “relied on ordinary creativity as a wholesale substitute for reasoned analysis and evidentiary support” to deal with “a limitation missing from the prior art references specified.” The court concluded that without “a reasoned explanation that avoids conclusory generalizations” a finding of obviousness was improper.

Inequitable Conduct

In Energy Heating LLC v. Heat On-The-Fly LLC,[5] the patent holder failed to disclose to the USPTO commercial sales of the claimed invention that occurred more than one year prior to the earliest filing date. The trial court concluded that the patent in suit was unenforceable for inequitable conduct. While experimental use does not start the one-year clock (by the end of which a U.S. patent application must be filed to preserve rights), the trial court found that the patent holder’s actions could not be considered experimental use.

Citing Therasense,[6] the Federal Circuit noted that a finding of inequitable conduct requires “clear and convincing evidence … that the applicant made a deliberate decision to withhold a known material reference.” Furthermore, inequitable conduct requires that “the single most reasonable inference” that can be drawn from the evidence is that the applicant had a specific intent to deceive the PTO (citing Star Scientific v. R.J. Reynolds Tobacco Co.).[7]

The Federal Circuit reviewed the record and concluded that, based on the patent holder’s failure to disclose commercial sales to the USPTO (that occurred more than one year prior to the earliest filing date), “the single most reasonable inference … requires a finding of deceitful intent” and “intent to deceive was proven by clear and convincing evidence.” Thus, the Federal Circuit affirmed the district court in holding that the failure to disclose the commercial sales constituted inequitable conduct. The patent in suit was thus held unenforceable.

Domestic Damages

Exmark Manufacturing Co. v. Briggs & Stratton Power Products Group[8] is an important opinion on the subject of damages, because, although the patent described an improvement in the baffle of a lawnmower, the asserted claim was directed to an entire lawnmower, including the improved baffle. Citing AstraZeneca AB v. Apotex Corp.,[9] the Federal Circuit stated, “When a patent covers the infringing product as a whole, and the claims recite both conventional elements and unconventional elements, the court must determine how to account for the relative value of the patentee’s invention in comparison to the value of the conventional elements recited in the claim, standing alone.” The court held that such apportionment can be done “through a thorough and reliable analysis to apportion the royalty rate.” Furthermore, the court noted that one way to perform this analysis is through an analysis of the Georgia-Pacific factors (one of the more widely cited cases on how patent damages are calculated).

Foreign Damages

U.S. patent holders are now eligible to recover lost profits — that were lost outside of the United States — for domestic infringement of a U.S. patent. This was the holding of WesternGeco LLC v. ION Geophysical Corp.[10]

35 U.S.C. § 271(f)(2) states that a company “shall be liable as an infringer” if it “supplies” certain components of a patented invention “in or from the United States” with the intent that they “will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States.” The statute thus focuses on the act of exporting components from the U.S. When patent infringement occurs by supplying components from the United States, the Federal Circuit held that a lost profit award for overseas lost profits is proper.

Patent Trial and Appeal Board

The U.S. Patent and Trademark Office has the authority to declare a patent invalid in an inter partes proceeding, the U.S. Supreme Court held[11] in Oil States Energy Services LLC v. Greene’s Energy Group LLC: “[T]he decision to grant a patent is a matter involving public rights — specifically, the grant of a public franchise. Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration. Thus, the PTO can do so without violating Article III [of the U.S. Constitution].” Thus, reconsideration of a patent grant by non-Article III judges is permissible.

Sovereign Immunity

Selling a patent to a Native American tribe will not preclude an inter partes review of that patent, according to St. Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc.[12] Native American tribes possess “inherent sovereign immunity,” and suits against them generally are barred — unless Congress or the tribe has agreed upon a clear waiver. Allergan PLC sold its patent for the tearproducing medication Restasis, to the Saint Regis Mohawk Tribe, with an agreement that the tribe provide an exclusive license for the patent back to Allergan.

When Mylan requested that the USPTO conduct an inter partes review of the Restasis patent, the tribe argued that sovereign immunity prevented an IPR from being invoked. But the Federal Circuit disagreed, explaining that “IPR is neither clearly a judicial proceeding instituted by a private party nor clearly an enforcement action brought by the federal government. It is a hybrid proceeding with adjudicatory characteristics similar to court proceedings, but in other respect it is less like a judicial proceeding and more like a specialized agency proceeding.” On that basis, the Federal Circuit concluded that tribal immunity did not apply to IPR.

Sovereign immunity of a different kind is currently before the Federal Circuit. In University of Minnesota v. LSI Corporation,[13] the court is expected to rule on whether state sovereign immunity extends to reviews by the Patent Trial and Appeal Board of patents owned by state universities.

Inter Partes Review Procedure

35 U.S.C. § 315(b) states that an IPR “may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or an entity in PRIVY with the petitioner is served with a complaint alleging infringement of the patent.”

In Wi-Fi One LLC v. Broadcom Corp.,[14] Broadcom (not a party to an original suit) filed an IPR request more than one year after the suit was filed, and plaintiff Wi-Fi asserted [10] that the IPR was prohibited because Broadcom was in privity with the defendants that has been served with the complaint. The USPTO disagreed with Wi-Fi; finding no privity between Broadcom and the original defendants, and therefore instituted the IPR.

Wi-Fi appealed the USPTO’s decision to institute the IPR, but the Federal Circuit rejected Wi-Fi’s argument based on 35 U.S.C. § 314: “The determination by the Director [of the USPTO] whether to institute an inter partes review under this section shall be final and nonappealable.”

Sitting en banc, however, the Federal Circuit decided that 35 U.S.C. § 314 did not apply to 35 U.S.C. § 315, and USPTO decisions to institute an IPR based 35 U.S.C. § 315 were indeed appealable. The opinion overrules previous holdings that decisions to institute or prohibit an IPR, based on the 35 U.S.C. 315 “one year” rule, were not appealable.

After deciding in Wi-Fi “that the time-bar determinations under § 315(b) are appealable” the Federal Circuit considered Click-To-Call Technologies LP v. Ingenio Inc.,[15] to determine whether the “one year” rule applies if infringement is asserted but the suit is dismissed. The PTAB noted that “the Federal Circuit consistently has interpreted the effect of such dismissals as leaving the parties as though the action had never been brought.”

On that basis the PTAB concluded that the “one year” clock had not been started because the prior suit had been dismissed. But the Federal Circuit disagreed: “A defendant served with a complaint as part of a civil action that is voluntarily dismissed without prejudice remains ‘served’ with the ‘complaint.’ This remains true even if that action becomes a ‘nullity’ for other purposes.” Because more than one year had passed since the assertion of infringement, PTAB review was barred, and the PTAB should not have instituted an IPR. Therefore, the court held that the USPTO should not have invalidated the patent in suit.

As a result of SAS Institute Inc. v. Iancu,[16] the PTAB is now required to decide the patentability of all challenged claims during IPR. Under prior IPR procedure, the PTAB had the authority to review some challenged claims and deny review of others. When SAS successfully brought a petition for IPR, and review of several claims was denied, SAS appealed to the Federal Circuit; but the appeal was unsuccessful. The U.S. Supreme Court, however, reversed: “[W]hen [35 U.S.C.] § 318(a) says the Board’s final written decision ‘shall’ resolve the patentability of ‘any patent claim challenged by the petitioner,’ it means the Board must address every claim the petitioner has challenged.”

On-Sale Bar

Helsinn Healthcare SA v. Teva Pharmaceutical USA Inc.[17] appeared in this author’s analysis of 2017 issues, and this case remained a hot issue in 2018 because it is before the U.S. Supreme Court.

Helsinn had agreed to a supply and purchase agreement with confidential terms more than one year before its patent application was filed. The Federal Circuit concluded that the patent was invalid under 35 U.S.C. § 102 because, despite the confidential terms of the agreement, a “sale” had occured: “[A]n invention is made available to the public when there is a commercial offer or contract to sell a product embodying the invention and that sale is made public. Our cases explicitly rejected a requirement that the details of the invention be disclosed in the terms of the sale.”

Helsinn appealed to the U.S. Supreme Court, arguing that a “sale” under 35 U.S.C. § 102 requires public disclosure of the terms. Oral argument took place in December of 2018, and a decision is expected this year.

Printed Publications as Prior Art

When is a reference a “printed publication” under 35 U.S.C. § 102(b)? In GoPro Inc. v. Contour IP Holding LLC,[18] the Federal Circuit reviewed a PTAB opinion, which concluded that a catalog distributed at a wholesale trade show (not open to the general public) was not a “printed publication.”

The court disagreed with the PTAB: “a reference will be considered publicly accessible if it was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it.” As the reference was available to “a person ordinarily skilled and interested in” the technology disclosed by the reference, and because the reference was “disseminated with no restrictions and was intended to reach the general public” the Federal Circuit concluded that the PTAB should have considered the catalog a printed publication, and therefore a reference to be considered under 35 U.S.C. 102(b).

By Lawrence E. Ashery

[1] Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc. , 880 F.3d 1356 (Fed. Cir. 2018)

[2] Berkheimer v. HP Inc. , 881 F.3d 1360 (Fed. Cir. 2018)

[3] Ancora Technologies, Inc. v. HTC America, Inc. , 2018-1404 (Fed. Cir. 2018)

[4] DSS Technology Management, Inc. v. Apple Inc. , 2016-2523, (Fed. Cir. 2018)

[5] Energy Heating, LLC v. Heat On-The-Fly, LLC, 889 F.3d 1291 (Fed. Cir. 2018)

[6] Therasense v. Becton, Dickinson & Co. , 649 F. 3d 1276 (Fed. Cir. 2011)

[7] Star Scientific, Inc. v. RJ Reynolds Tobacco Co. , 537 F. 3d 1357 (Fed. Cir. 2008)

[8] Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., LLC , 879 F. 3d 1332 (Fed. Cir. 2018)

[9] AstraZeneca AB v. Apotex Corp. , 782 F. 3d 1324 (Fed. Cir. 2015)

[10] WesternGeco LLC v. ION Geophysical Corp. , 138 S. Ct. 2129 (2018)

[11] Oil States Energy Services, LLC v. Green’s Energy Group, LLC , 584 U.S. _____ (2018)

[12] Saint Regis Mohawk Tribe v. Mylan Pharms. Inc. , 896 F. 3d 1322 (Fed. Cir. 2018)

[13] Regents of the University of Minnesota v. LSI Corp., 18-1559 (Fed. Cir.)

[14] Wi-Fi One, LLC v. Broadcom Corp. , 878 F.3d 1364 (Fed. Cir. 2018)

[15] Click-To-Call Technologies LP v. Ingenio Inc. et al. , 15-1242 (Fed. Cir. 2018)

[16] SAS Institute Inc. v. Iancu , 584 U.S. _____ (2018)

[17] Helsinn Healthcare S.A., v. Teva Pharmeceuticals USA, Inc. , 2016-1284 (Fed. Cir. 2017)

[18] GoPro, Inc., v. Contour IP Holding LLC , 2017-1894 (Fed. Cir. 2018)

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