Prior Art Affected by a Claim Construction Should Be Either Admitted Into Evidence or Specifically Identified to Meet the Requirements of FRCP 46
In Omega Patents, LLC v. CalAmp Corp., Appeal No. 2018-1309, the Federal Circuit held the defendant failed to satisfy the requirements of Federal Rule of Civil Procedure 46 by not seeking admission into evidence of, or at least specifically identifying, the additional prior art that would have been applicable under the defendant’s proposed claim construction.
Omega sued CalAmp for patent infringement. The jury found willful infringement and found all asserted claims were not invalid. The district court awarded treble damages, attorney’s fees, damages for post-verdict sales, and pre-judgment interest. CalAmp appealed.
In support of its invalidity position, CalAmp argued the district court’s claim construction had prevented CalAmp from including additional prior art. The Federal Circuit rejected this argument because CalAmp failed to identify the art that may have been impacted by the claim construction ruling. Specifically, CalAmp failed to satisfy FRCP 46 by failing to seek admission into evidence of, or specifically identify, the additional prior art. Thus, the Federal Circuit affirmed on validity. However, the Federal Circuit found only a subset of products infringed a subset of the claims. The Federal Circuit also vacated the willfulness finding because the jury verdict did not specify which claims CalAmp willfully infringed, and vacated the enhanced damages and attorney’s fees awards because they were based on the willfulness finding. The Federal Circuit also held that the district court abused its discretion in excluding CalAmp testimony regarding its mental state for willfulness. While such testimony could have confused the jury to believe it was relevant for determining infringement and validity, it was nevertheless important for determining willfulness.
An Advertisement Merely Providing an Informational Telephone Number May Be Insufficient to Show That the Advertisement Is a Display Associated With Goods Under the Lanham Act
In In Re: Siny Corp., Appeal No. 2018-1077, the Federal Circuit held that in evaluating whether a webpage printout is an acceptable specimen of use for a trademark in connection with goods, the USPTO may look for information on the webpage essential to purchasing decisions such as price for the goods, minimum quantities one may order, accepted methods of payment, and shipping information. If the webpage simply provides a phone number or email address to contact for sales information, this is likely not enough to show the specimen is a point-of-sale display and thus an acceptable specimen of use.
Siny Corp. (“Siny”) applied to register the mark CASALANA for fabric for use in the manufacture of apparel. The trademark application was based on use in commerce. Siny submitted a specimen of use consisting of a webpage printout. The Examining Attorney initially refused registration because the specimen was “mere advertising material,” and did not include a means for ordering the goods. Siny responded by arguing that the webpage specimen included a means to purchase the goods, namely, language at the bottom of the webpage stating “For sales information:” followed by a phone number and email address. The Examining Attorney rejected this argument, and found that this text alone was insufficient for consumers to make a purchase. Siny appealed to the TTAB, and the TTAB affirmed the refusal.
Siny appealed again, and the Federal Circuit affirmed. The issue on appeal was whether the specimen qualifies as a display associated with the goods under the Lanham Act. The Federal Circuit stated that “mere advertising is not enough to qualify as such a display,” and an important consideration is whether the display is at a point-of-sale location. In its decision, the Board noted the absence of information essential to a purchasing decision, such as (1) price or range of prices for the goods, (2) minimum quantities one may order, (3) accepted methods of payment, or (4) how the goods would be shipped. The Board assumed the phone number listed in the specimen would connect a potential customer to sales personnel, but found that “if virtually all important aspects of the transaction must be determined from information extraneous to the web page, then the web page is not a point of sale.” Siny argued on appeal that the Board applied “overly rigid requirements” in determining whether the webpage specimen qualified as a display associated with the goods. The Federal Circuit disagreed and determined that the Board had carefully considered the webpage’s contents and “the specimen did not cross the line from mere advertising to an acceptable display associated with the goods.”
Reasonably Continuous Diligence Is Not Negated If an Inventor Works On Improvements or Evaluates Alternatives to the Claimed Invention
In ATI Technologies ULC v. IANCU, Appeal Nos. 2016-2222, -2406, -2608, the Federal Circuit held that diligence requires “reasonably continuous diligence,” and that diligence is not negated if the inventor works on improvements and evaluates alternatives while developing an invention.
LG Electronics, Inc. (LGE) requested an Inter Partes Review of patents owned by ATI Technologies ULC (ATI). ATI argued it conceived of its invention—a computer-implemented system that specified how a three-dimensional image is generated and presented on a two-dimensional screen—and constructively reduced it to practice before the asserted prior art. ATI presented a declaration purporting to show evidence of conception, reduction of practice, and diligence for its patents. The PTAB agreed with ATI that the date of conception was established before the primary reference dates. However, the PTAB nevertheless invalidated ATI’s patents, finding that ATI did not establish actual reduction to practice and diligence. The PTAB noted that ATI’s work included designing an optional unclaimed feature, and that ATI did not provide a way for the PTAB to determine whether unexplained lapses had not occurred.
The Federal Circuit reversed, finding that the PTAB erred in its application of the law of diligence when it required “continuous reasonable diligence” rather than “reasonably continuous diligence,” the established standard. Noting ATI’s almost 1300 pages of records, including metadata, document logs, and folder histories, the Federal Circuit noted that the documents corroborated reasonably continuous diligence. The Federal Circuit added that working on improvements and evaluating alternatives while developing an invention does not negate diligence. The purpose of the diligence requirement is to assure that the invention was not abandoned or unreasonably delayed. The PTAB did not cite or provide any evidence supporting a conclusion that ATI had abandoned or unreasonably delayed the invention.
Federal Circuit Affirms Reliance on Parent Patent as Intrinsic Evidence to Support Construction of Claim Terms in a Continuation-in-Part Child
In E.I. Du Pont De Nemours & Company v. Unifrax I LLC, Appeal No. 2017-2575, the Federal Circuit held that a parent patent specification of a continuation-in-part child patent constitutes intrinsic evidence for the purpose of claim construction with respect to statements involving common subject matter with the claim terms at issue.
DuPont sued Unifrax I LLC for infringing its ’926 patent covering a flame barrier product. The parties disputed whether the claim term “100% by weight” in the limitation “wherein the inorganic refractory layer comprises platelets in an amount of 100% by weight” allowed for the presence of residual dispersant materials. The district court construed the term to allow for the presence of residual dispersant. A jury found the ’926 patent infringed and not invalid and the district court denied Unifrax’s motions for judgment as a matter of law of non-infringement and invalidity. Unifrax appealed, but the Federal Circuit affirmed.
On appeal, Unifrax argued that, in accordance with the plain and ordinary meaning, “100% by weight” does not allow for any organic additives in the inorganic refractory layer and that platelets must comprise 100% of the refractory layer. The Federal Circuit disagreed, affirming the district court’s construction. In reaching its conclusion, the Federal Circuit upheld the district court’s finding that a statement in the parent specification explicitly allowing for residual dispersant in the inorganic platelet layer constituted intrinsic evidence. Though the patent at issue was a continuation-in-part of the parent, the Federal Circuit found the relevant excerpt from the parent specification related to common subject matter. According to the Federal Circuit, statements from a parent that relate to “common subject matter” are relevant to the construction of claims in a CIP child. The Federal Circuit rejected Unifrax’s argument that reliance on a parent patent as intrinsic evidence requires an identity of claim terms between the parent and child.
Upon consideration of the claims, specification, and alleged disclaimers, the Federal Circuit adopted the district court’s claim construction, found that substantial evidence supported the jury verdict, and affirmed the district court’s denial of judgment as a matter of law.
Federal Circuit Upholds PTAB’s Ineligible Subject Matter Determination for Graphical User Interface that Aided Human Traders, But Did Not Improve Computer Functionality
In Trading Technologies Int’l, Inc. v. IBG LLC, Appeal No. 2017-2257, the Federal Circuit held that a graphical user interface that allows users to place orders for items (such as shares of stock) by moving icons onto displayed item prices is not patent eligible subject matter.
IBG and Interactive Brokers petitioned for Covered Business Method (“CBM”) review of claims from three patents owned by Trading Technologies. The patents covered graphical user interfaces (“GUIs”) for electronic trading. The Board held all of the challenged claims ineligible under 35 U.S.C. § 101. Trading Technologies appealed.
The Federal Circuit agreed that the challenged claims were ineligible. The claims covered various ways to initiate trades from GUIs in which market information is displayed on a graph. For example, the claims of one patent required (1) displaying bids and offers for an item on a graph, (2) allowing a user to move an icon onto the graph in order to (3) place an order for the item. Trading Technologies argued the claims recited eligible subject matter because the invention improved computer functionality compared to prior GUIs. The Federal Circuit disagreed, finding that the invention helped the human trader—not the computer—process information more quickly. The claimed GUI lacked an inventive concept because receiving and graphing price information was conventional, as was selecting and moving an icon on a screen. The Federal Circuit also declined to address the merits of Trading Technologies’ argument that CBM review violated the Seventh Amendment because Trading Technologies did not adequately brief the issue.
Federal Circuit Clarifies the Scope of “Use” and “Use in Commerce” for Purposes of the Trademark Infringement Analysis
In Versatop Support Systems v. Georgia Expo, Inc., Appeal No. 2018-1208, the Trademark Act’s definition of “use in commerce” as a requirement for obtaining a federal trademark does not limit the scope of the “uses” that may constitute trademark infringement.
VersaTop and Georgia Expo both produce and sell systems of modular rod and pole structures for assembly to form sectional spaces such as trade show booths. Georgia Expo distributed advertising and brochures containing VersaTop’s trademarks and pictures of a VersaTop product, and VersaTop filed a complaint against Georgia Expo for trademark and patent infringement. The district court granted Georgia Expo’s motion for summary judgment of no trademark infringement, holding that because Georgia Expo had not affixed the VersaTop trademarks to goods sold or transported in commerce, Georgia Expo had not violated VersaTop’s trademark rights. VersaTop appealed the judgment of no trademark infringement.
The Trademark Act prohibits the use in commerce of a trademark by anyone other than the trademark owner when use of the mark would be likely to cause confusion as to the source or origin of goods. The Federal Circuit explained that “use in commerce” for purposes of trademark registration is different—and more limited—than “use” in the context of trademark infringement. The Federal Circuit found that the district court’s decision was contrary to precedent because it incorrectly applied the “use in commerce” definition for a trademark registration in its trademark infringement analysis. Applying the correct analysis, the Federal Circuit reversed the judgment of the district court, finding infringement because Georgia Expo’s use of VersaTop’s marks in its advertising and brochures was likely to cause confusion.
Federal Circuit Upholds PTAB’s Finding of Nonobviousness Based on Evidence of Skepticism
In Neptune generics, LLC, Fresenius kabI USA, LLC v. Eli Lilly & Co., Appeal Nos. 2018-1257, 2018-1258, the Federal Circuit held that industry skepticism is a question of fact that weighs in favor of non-obviousness and can range on a scale, with the most weight afforded to skepticism based on notions that the subject matter is technically infeasible, unworkable, or impossible.
Neptune and Fresenius (“Petitioners”) requested three Inter Partes Reviews (“IPR”) of a patent owned by Eli Lilly for the administration of chemotherapy to cancer patients. Before administering the chemotherapy agent, the patent claims require administering folic acid and a methylmalonic acid (“MMA”) lowering agent, such as vitamin B12, in order to reduce the toxic effects of the chemotherapy agent. The Board found that the Petitioners did not establish that the claims at issue were unpatentable for obviousness. The Board cited secondary considerations in support of its non-obviousness finding, including skeptical communications from the FDA regarding the clinical trials.
On appeal, the Federal Circuit affirmed the Board’s finding that the prior art did not provide a motivation for a skilled artisan to administer an MMA lowering agent. In support, the Federal Circuit found that the Board did not err in its consideration of Eli Lilly’s FDA communications. During clinical trials, the FDA stated that it did “not support adding vitamins to the ongoing . . . trial” and that “the addition of vitamins . . . is risky.” The Petitioners argued that the FDA’s concerns did not support a finding of skepticism because the FDA allowed the trials to continue. Petitioners argued that secondary considerations of “skepticism must be premised on whether it is ‘technically infeasible,’ ‘unworkable,’ or ‘impossible’ that the claimed subject matter would work for its intended purpose.” However, the Federal Circuit found that Petitioners’ argument was not consistent with case law, which “recognize[d] a range of third-party opinion that can constitute skepticism.” The Court held that “while evidence that third parties thought the invention was impossible might be entitled to more weight, that does not mean the Board erred in giving weight to the skepticism evidence here.”
Federal Circuit Affirms Patent-Ineligibility of Claims Directed to Displaying Financial Information on a Known Device
In Trading Technologies Intl v. IBG LLC, Appeal No. 2017-2323, the Federal Circuit held that claims directed to providing additional trading information on a prior art display, without more, are patent-ineligible under 35 U.S.C. § 101.
IBG and Interactive Brokers petitioned for CBM review of a Trading Technologies (TT) patent directed to providing new or different trading information via a trading screen. The Board held the patent met the statutory definition of a “covered business method” (CBM) patent and held all claims were patent-ineligible under 35 U.S.C. § 101. TT appealed both issues.
The Federal Circuit agreed that the patent met the definition of a CBM patent because the claims failed to provide a technical solution to a technical problem. In particular, the Federal Circuit held that providing new or different information to traders on a prior art trading screen “focuses on improving the trader, not the functioning of the computer.”
The Federal Circuit also affirmed the claims were patent-ineligible under § 101. Regarding step one of the Alice analysis, the claims were directed to an abstract idea because their “purported advance” was gathering, analyzing, and displaying market information without solving a technological problem. Regarding step two, the claims failed to amount to “significantly more” than an abstract idea because they merely added conventional information to a prior art trading screen.