Lack of Advance Notice Vacates District Court’s Orders
In ABC Corporation I v. Partnership And Unincorporated Associations, Appeal No. 22-2150, the Federal Circuit held that failure to provide advance notice under Federal Rule of Civil Procedure 65(a) required vacatur of a preliminary injunction.
ABC Corporation (“ABC”) asserted four design patents against several business entities selling hoverboards online. ABC identified the defendants through a Schedule A (which changed over time) attached to the original and amended complaints. On November 24, 2020, the district court entered a preliminary injunction against the then-named defendants, which included Gyroor-US, a party that had not yet been served with process. On May 24, 2020, the district court granted ABC’s motion to amend Schedule A to add GaodeshangUS, Fengchi-US, and Urbanmax as defendants bound by the preliminary injunction. None of these entities had been served with process or received a Rule 65(a) notice. These entities (collectively, “Defendants”) sought relief from the preliminary injunction, citing inadequate notice under Rule 65(a). The district court denied relief and the defendants appealed.
On appeal, the Federal Circuit vacated the 2020 Preliminary Injunction from its issuance and as well as the May 24 Order insofar as it added defendants to the 2020 Preliminary Injunction. After finding no jurisdictional obstacles, the court noted that Defendants, before the entry of the 2020 Preliminary Injunction, received no advance notice or opportunity to oppose. ABC argued that there was advance notice to Gyroor-US when Amazon “froze” Gyroor-US’s accounts. However, the court concluded that Amazon’s action did not provide notice of the pendency of a motion for a preliminary injunction. The court then turned to the May 24 Order. ABC argued GaodeshangUS received notice through counsel representing both GaodeshangUS and Gyroor-US based on an electronic notice of ABC’s May 6 motion to amend Schedule A. The court found that GaodeshangUS was (1) not a party at the time of the May 24 Order and (2) counsel did not enter an appearance for GaodeshangUS until May 24. Thus, any notice to counsel did not meet the required notice to GaodeshangUS. The court also found that Fengchi-US and Urbanmax were not provided advance notice or an opportunity to oppose the May 24 Order. The Court therefore vacated the 2020 Preliminary Injunction and May 24 Order for violating Rule 65(a).
Duplicative-Litigation Doctrine: Proper Motion Practice is Essential to Avoid Dismissal of Duplicative Complaints
In Arendi S.A.R.L. v. LG Electronics Inc., Appeal No. 21-1967, the Federal Circuit held that under the duplicative-litigation doctrine, a party cannot maintain two separate actions involving the same subject matter, at the same time, in the same court, and against the same defendant.
Arendi S.A.R.L. (“Arendi”) sued LG Electronics (“LG”) for infringement of various patents. Pursuant to the Local Patent Rules, Arendi served its initial infringement contentions. However, Arendi provided a claim chart for only one product – LG’s Rebel 4 phone. LG informed Arendi that the singular claim chart failed to comply with the Local Patent Rules, which required a claim chart for each accused product. Arendi never supplemented its contentions to include additional products or explained how the Rebel 4 was representative of other LG products. LG moved to strike portions of Arendi’s expert report that included infringement allegations for non-Rebel 4 products. The district court granted LG’s motion because Arendi did not timely disclose those contentions. Arendi filed a second complaint, asserting that non-Rebel 4 products infringed the same patent. LG moved to dismiss the second complaint as duplicative. The district court granted LG’s motion and Arendi appealed.
Applying the Third Circuit’s standard of review, the Federal Circuit affirmed. The Federal Circuit held that the district court did not abuse its discretion in finding that Arendi’s second case was improperly duplicative. Under the duplicative-litigation doctrine, a party cannot bring two separate actions involving the same subject matter, at the same time, in the same court, and against the same defendant. Patent cases involve the same subject matter when the same patent is asserted and the accused products are at least essentially the same or identical. Arendi argued that the there is no overlap between the accused products because the district court granted LG’s motion to strike portions of Arendi’s expert report. The Federal Circuit disagreed, noting that the district court granted the motion to strike due to Arendi’s failure to fulfill its discovery obligations. The Federal Circuit held that Arendi litigated the non-Rebel 4 products in the first case, noting that Arendi listed the accused products in its infringement contentions, served interrogatories about the accused products, and received discovery related to those products.
Patent Term Adjustment Under 35 U.S.C. 154(b)(1)(C)(iii) Requires Reversal of Adverse Determination of Patentability
In Sawstop Holding LLC v. Vidal, Appeal No. 21-1537, the Federal Circuit held that when a patent claim is subject to adverse determinations of patentability first before the PTO and again after appeal, the claim is not entitled to patent term adjustment for the period of the appeal even if the claim eventually issues after post-appeal prosecution and amendment.
SawStop filed two patent applications with the PTO. After the Examiner rejected claims from both patents, SawStop appealed the rejections to the Patent Trial and Appeal Board. For the first patent, the Board held that the Examiner did not make initial fact findings required to demonstrate a prima facie case of obviousness, but ultimately affirmed rejection of the relevant claim on a new ground. For the second patent, the Board affirmed rejection of the relevant claim on grounds of anticipation and double patenting.
SawStop appealed to the district court, challenging rejection of the second patent based on anticipation. SawStop did not address rejection of the first patent or the double patenting rejection of the second patent. The district court reversed the challenged anticipation rejection. Claims from both patents were further amended and eventually issued.
SawStop requested a patent term adjustment for each patent under 35 U.S.C. 154(b)(1)(C)(iii). The PTO denied the request for one claim of each patent. SawStop appealed those denials in district court. After cross-motions for summary judgement, the district court found that neither patent claim was entitled to patent term adjustment, reasoning that neither application issued after an adverse determination of patentability was reversed. SawStop appealed the district court’s ruling.
The Federal Circuit affirmed. It held the portion of the patent term adjustment statute at issue, 35 U.S.C. 154(b)(1)(C)(iii), requires that the patent issue under a decision reversing an adverse determination of patentability. The Federal Circuit held that there was no such reversal for either patent. With regard to the first patent, the claims were held unpatentable both before and after review by the Board, even though the Board’s reasoning for unpatentability differed from the Examiner’s. With regard to the second patent, the claims were still unpatentable even after review by the district court because that review did not address the PTO’s double-patenting rejection.