Fresh From the Bench: Precedential Patent Cases From the Federal Circuit
Core Wireless v. LG affirms the denial of summary judgment as to unpatentable subject matter, ruling that the asserted claims are directed to an improved user interface for computing devices, not to the abstract idea of an index. In MaxLinear v. CF CRESPE, the panel vacates an IPR decision finding claims nonobvious where, subsequent to the final written opinion of the IPR being appealed, another IPR involving the same patent found the independent claims invalid. Because the IPR being appealed did not separately discuss the patentability of the dependent claims, the panel remands to the Board to consider the patentability of the dependent claims. In re Janssen Biotech and New York University affirms the ex parte reexamination rejection of claims covering Johnson & Johnson’s most successful drug called Remicade, clearing the way for biosimilar drugs from Pfizer and others. In Arthrex v. Smith & Nephew, a divided panel affirms an IPR invalidation of patent claims even though before the institution decision, the patentee disclaimed the claims that were the subject of the petition.
Thanks to our newest colleague Reg Ratliff for his help with this week’s report. Reg is an experienced EE prosecutor who recently joined our growing Mountain View, CA office.
After five years of writing Fresh from the Bench, I have decided to turn over the reins of the weekly reports to my colleagues Scott Eads and Nika Aldrich so I can spend more time on my practice. I look forward to seeing how Scott and Nika address the Federal Circuit’s handling of the issues of the day. I think you will enjoy the new format focusing on a “Case of the Week.”
Core Wireless Licensing v. LG Electronics, Fed. Cir. Cases 2016-2684, 2017-1922 (January 25, 2018)
A divided panel of the Circuit affirms the denial of summary judgment as to unpatentable subject matter, and denial of judgments as a matter of law that the asserted claims are anticipated and are not infringed.
The ’476 and ’020 patents disclose improved display interfaces, particularly for electronic devices with small screens like mobile telephones. The improved interfaces allow a user to more quickly access desired data stored in, and functions of applications included in, the electronic devices. Core Wireless sued LG, alleging LG infringed, among others, dependent claims 8 and 9 of the ’476 patent. Claims 8 and 9 of the ’476 patent depend from claim 1, which recites:
1. A computing device comprising a display screen, the computing device being configured to display on the screen a menu listing one or more applications, and additionally being configured to display on the screen an application summary that can be reached directly from the menu, wherein the application summary displays a limited list of data offered within the one or more applications, each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and wherein the application summary is displayed while the one or more applications are in an un-launched state.
The jury found all asserted claims infringed and not invalid, and LG’s post-trial motions were denied.
As to patentable subject matter, the panel first applies step one of Alice, noting that similar claims were upheld in the Circuit’s recent Enfish, Thales, Visual Memory and Finjan decisions. The asserted claims in this case are directed to an improved user interface for computing devices, not to the abstract idea of an index. Although the generic idea of summarizing information certainly existed prior to the invention, these claims are directed to a particular manner of summarizing and presenting information in electronic devices. The limitations of claim 1 disclose a specific manner of displaying a limited set of information to the user, rather than using conventional user interface methods to display a generic index on a computer. Like the improved systems claimed in Enfish and the other Circuit cases, these claims recite a specific improvement over prior systems, resulting in an improved user interface for electronic devices. Because the panel holds that the asserted claims are not directed to an abstract idea, there is no need to proceed to the second step of the Alice inquiry.
With respect to anticipation, the panel begins its inquiry by stating that every patent is presumed valid, and the burden of establishing invalidity of a claim rests on the party asserting invalidity by clear and convincing evidence. 35 U.S.C. § 282. An alleged infringer asserting a defense of invalidity also has the initial burden of going forward with evidence to support its invalidity allegation. Once that evidence has been presented, the burden of going forward shifts to the patentee to present contrary evidence and argument. Ultimately, however, the outcome of an alleged infringer’s invalidity defense at trial depends on whether the alleged infringer has carried its burden of persuasion to prove by clear and convincing evidence that the patent is invalid. Because the burden rests with the alleged infringer to present clear and convincing evidence supporting a finding of invalidity, granting judgment as a matter of law for the party carrying the burden of proof is generally reserved for extreme cases, such as when the opposing party’s witness makes a key admission. The majority holds that this is not one such extreme case.
LG presents two noninfringement arguments on appeal. First, LG argues the correct construction of “un-launched state” is “not running,” rather than “not displayed,” and the accused devices do not infringe under its proposed construction. Second, LG argues that no reasonable jury could find that the accused devices satisfy the “reached directly from the [main] menu” limitations in the claims because the accused application summary window is reached from the status bar, which is not part of the menu. The majority rejects both arguments.
While this is a close case for which the intrinsic evidence could plausibly be read to support either party, the majority sees no error in the district court’s construction of “un-launched state” to mean “not displayed.” Looking at the claims and the specification, the majority agrees with the district court, and rules that the patentee’s statements during prosecution do not amount to a clear and unmistakable disclaimer restricting the meaning of “un-launched state” only to those applications that are not running any processes.
Second, the majority rules that substantial evidence supports the jury’s verdict of infringement based on the “reached directly from the [main] menu” claim limitation. The parties’ dispute boils down to whether the status bar is part of the accused “home screen.” This is a fact question that the majority presumes the jury resolved in favor of Core Wireless, and substantial evidence supports the jury’s finding.
Judge Wallach dissents only as to the construction of the “un-launched state” limitation. He would find the term “un-launched state” to mean “not running,” as proposed by LG, and would remand the case for review of whether this construction alters its findings on infringement and anticipation.
MaxLinear, Inc. v. CF CRESPE LLC, Fed. Cir. Case 2017-1039 (January 25, 2018)
In the IPR from which the present appeal arises, all of the claims had been determined to be patentable. However, in a co-pending IPR involving the same patent, the Board determined and the Circuit affirmed that independent claims 1 and 17 were invalid. The IPR from which the present appeal is taken did not determine the patentability of the dependent claims but instead based its validity ruling on what it saw to be patentable features in the independent claims. Because the Board did not address arguments concerning patentability of the dependent claims separately from the now-unpatentable independent claims, the panel vacates the decision and remands to the Board, with instructions to consider the patentability of the dependent claims 4, 6-9, and 21, in light of the Circuit’s decision holding claims 1 and 17 unpatentable.
The parties agree that those prior decisions, having been affirmed by the Circuit, are binding in this proceeding, as a matter of collateral estoppel. It is well established that collateral estoppel, also known as issue preclusion, applies in the administrative context. Furthermore, it is undisputed that as a result of collateral estoppel, a judgment of invalidity in one patent action renders the patent invalid in any later actions based on the same patent. That MaxLinear was not a party to the other IPR is irrelevant since Cresta, the predecessor-in-interest to CRESPE, was party to the original determination.
The panel notes that the collateral estoppel effect of an administrative decision of unpatentability generally requires the invalidation of related claims that present identical issues of patentability. However, precedent does not limit collateral estoppel to patent claims that are identical. If the differences between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity, collateral estoppel applies. On remand, the Board must therefore decide whether the remaining claims present materially different issues that alter the question of patentability, making them patentably distinct from claims 1 and 17.
In re Janssen Biotech and New York University, Fed. Cir. Case 2017-1257 (January 23, 2018)
The Circuit affirms an ex parte reexamination rejection of claims 1-7 of a Janssen Biotech and NYU (collectively “Janssen”) patent as unpatentable under the doctrine of obviousness-type double patenting. Janssen is a Johnson & Johnson company. The patent in suit covers its autoimmune disease drug Remicade, which has sales of more than $4 billion per year. This decision clears the way for Pfizer’s Inflectra and other biosimilars.
The Circuit’s 2015 Searle case defined the doctrine of obviousness-type double patenting as being intended to prevent the extension of the term of a patent by prohibiting the issuance of the claims of a second patent that are not patentably distinct from the claims of the first patent. Janssen’s principal argument on appeal is that obviousness-type double patenting is not applicable because the safe-harbor provision of 35 U.S.C. § 121 protects the ’471 patent claims. If the safe harbor applies, then the reference patents cannot be used as references against the ’471 patent in a double-patenting rejection. Conversely, the reference patents are available as references against the ’471 patent if the safe harbor does not apply.
The safe-harbor provision of § 121 provides as follows:
A patent issuing on an application with respect to which a requirement for restriction under this section has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them, if the divisional application is filed before the issuance of the patent on the other application.
The § 121 safe harbor, “by its literal terms, protects only divisional applications (or the original application) and patents issued on such applications.” Accordingly, patents issued on CIP applications are not within the scope of § 121. Nor are patents issued on continuation applications. Circuit precedent is clear: aside from the original application and the original patent, the protection afforded by § 121 is limited to divisional applications and patents issued on divisional applications.
This case presents the question of whether, several years after a challenged patent issues on a CIP application, a patent owner can retroactively bring the challenged patent within the scope of the § 121 safe harbor by amending the CIP application during a reexamination proceeding to re-designate it as a divisional application. In Searle, the Circuit answered this question in the reissue context, holding that the patent owner could not take advantage of the safe-harbor provision simply by designating the CIP as a divisional application in a reissue application years after the fact. This case extends such holding to reexaminations.
Arthrex, Inc. v. Smith & Nephew, Inc., Fed. Cir. Case 2017-1239 (January 24, 2018)
A divided panel affirms an IPR invalidation of patent claims even though before the institution decision, the patentee disclaimed the claims that were the subject of the petition.
Smith & Nephew filed an IPR petition challenging claims 1–9 of Arthrex’s ’541 patent directed to a system for attaching soft tissue to bone. Arthrex then disclaimed claims 1–9 and filed a Preliminary Response, arguing that an IPR should not be instituted because 37 C.F.R. § 42.107(e) states “no inter partes review will be instituted based on disclaimed claims.” At that point, Arthrex confronted 37 C.F.R. § 42.73(b), which provides:
A party may request judgment against itself at any time during a proceeding. Actions construed to be a request for adverse judgment include:
1. Disclaimer of the involved application or patent;
2. Cancellation or disclaimer of a claim such that the party has no remaining claim in the trial;
3. Concession of unpatentability or derivation of the contested subject matter; and
4. Abandonment of the contest.
In order to avoid the entering of an adverse judgment pursuant to § 42.73(b), Arthrex’s Preliminary Response stated that “by filing the statutory disclaimer, Arthrex, Inc. is not requesting an adverse judgment.” Despite this, the Board entered an adverse judgment against Arthrex, concluding that “our rules permit the Board to construe a statutory disclaimer of all challenged claims as a request for adverse judgment, even when the disclaimer occurs before the Board has entered a decision on institution.”
When the Board entered an adverse judgment, an estoppel effect attached, as 37 C.F.R. § 42.73(d)(3)(i) precludes a patent owner “from taking action inconsistent with the adverse judgment, including obtaining in any patent . . . [a] claim that is not patentably distinct from a finally refused or canceled claim.” This may create a future problem for Arthrex, because at the time of the adverse judgment, Arthrex had two pending continuation patent applications that this estoppel provision would impact. Those two applications have since issued as patents. Arthrex recently filed another continuation application, which remains in prosecution and therefore is affected by the adverse judgment.
The principal issue on appeal is whether the Board properly entered an adverse judgment pursuant to 37 C.F.R. § 42.73(b). Arthrex argued that the regulation is inapplicable because Arthrex specifically stated that it was not requesting an adverse judgment. However, the majority rules that if the Board’s authority to enter an adverse judgment depended on whether the patent owner requested an adverse judgment, a patent owner could always avoid an adverse judgment by simply stating that it is not requesting one, even with respect to the specific instances articulated in 37 C.F.R. § 42.73(b). This would render the rule a nullity.
Arthrex alternatively points out that subsection 2 of 37 C.F.R. § 42.73(b) refers to the cancellation of claims such that there is “no remaining claim in the trial.” Arthrex argues that this means that subsection 2 only applies if an IPR proceeding has been instituted. The majority rules that the Board’s contrary interpretation is consistent with the rule. While the rules define “trial” as requiring “a contested case instituted by the Board based upon a petition,” the language relating to remaining claims “in the trial” can be interpreted as meaning that there is no claim remaining for trial, which occurs when, as here, all of the challenged claims have been cancelled. The purpose of 37 C.F.R. § 42.73(b) is to define the circumstances in which the estoppel provision of 37 C.F.R. § 42.73(d) applies. The purpose of the estoppel provision is to “provide estoppel against claims that are patentably indistinct from those claims that were lost.” For this purpose, there seems to be no meaningful distinction between claims that are cancelled before an IPR proceeding is instituted and claims that are cancelled after an IPR proceeding is instituted.
Written by Peter E. Heuser, Schwabe, Williamson & Wyatt, P.C.
This article was originally published on Schwabe, Williamson & Wyatt's Ideas Fuel Industries Section.