FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING May 25, 2018

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1 P+S FEDERAL CIRCUIT SUMMARIES VOL. 10, ISSUE 18 FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING May 25, 2018 Artrip v. Ball Corp., Case No (May 23, 2018) (non-precedential) Patent Nos. 5,660,516, 6,022,179, 7,063,492, 7,234,907, 7,237,998, 7,237,999, and 7,344,347 Where a party repeatedly fails to cure defects in its pleadings, a court does not abuse its discretion by refusing to allow further amendments. Facts/Background: In 2014, Mr. Artrip filed a complaint accusing Alcoa and Ball of infringing patents covering a press assembly and method for opening beverage cans. Later, Mr. Artrip filed an amended complaint asserting that Alcoa induced infringement by supplying material in knowing aid of direct infringement of the patents at issue. However, the district court held that Mr. Artrip s claims for direct infringement did not specifically identify the infringing Ball equipment or explain how Ball s use of the equipment infringed any of the asserted claims. The district court dismissed Mr. Artrip s claims without prejudice, and granted leave to Mr. Artrip to amend the complaint. The district court also held that Mr. Artrip s indirect infringement claims were deficient and dismissed Mr. Artrip s claims against Alcoa with prejudice. Mr. Artrip later filed an amended complaint, but the district court found that the amended complaint was again deficient for failing to state a plausible claim and dismissed Mr. Artrip s claims against Ball with prejudice, denying further leave to amend the complaint. Holding: Affirmed. First, Alcoa argued that the appeal court does not have jurisdiction to review the district court s order dismissing Mr. Artrip s complaint against Alcoa. The Federal Circuit agreed because Mr. Artrip s notice of appeal identified only the complaint against Ball. Mr. Artrip later filed a letter requesting Alcoa s addition to the case but that letter was filed after the deadline for appeal. Nevertheless, the appellate court stated that even if it were to consider Mr. Artrip s arguments, it would affirm the district court s holding that the allegations by Mr. Artrip s were insufficient to state a plausible claim against Ball. Mr. Artrip s complaint, even after several amendments, merely alleged that Ball infringed patents in conclusory terms such as by use of one or more of the machines at least at the Bristol Plant, without specifically identifying the accused machines. The appellate court also affirmed the district court s denial of leave to amend the complaint, holding that when a party repeatedly fails to cure defects in its pleadings, a district court does not abuse its discretion by refusing to allow further amendments. Here, Mr. Artrip was given notice as to the deficiencies of the complaint and given several opportunities to amend the complaint, but failed to state a plausible claim. Therefore, the Federal Circuit affirmed the district court s denial of leave to amend the complaint.

2 Page 2 ViaTech Technologies v. Microsoft Corporation, Case No (May 23, 2018) (nonprecedential) Patent No. 6,920,567 Where an asserted claim requires the presence of a structure corresponding to a claim element, the mere capability by an allegedly infringing product to generate the claim element is insufficient to show infringement. Facts/Background: The 567 patent claims a file that contains the license to the content of the file as part of the file itself. ViaTech sued Microsoft for infringement of the 567 patent. The district court adopted Microsoft s proposed construction for dynamic license database as a database that resides in the digital content file and that is programmed to accept modifiable licenses. The district court construed the term file as a collection of data that is treated as a unit by a file system. Based on those constructions, the district court granted summary judgment of non-infringement of ViaTech s 567 patent by Microsoft s Windows software. ViaTech appealed. Holding: Affirmed. ViaTech challenged the district court s construction of the two claim terms. The Federal Circuit agreed with ViaTech that the district court s construction of dynamic license database was unsupported by the 567 patent specification because the 567 specification has multiple examples of a database residing outside of the digital content file. The appellate court disagreed with the district court s conclusion that dynamic in dynamic license database defines the license rather than the database since the specification describes the dynamic license database as a modifiable database. The Federal Circuit also clarified that the claimed file may be a collection of files. Nevertheless, the Federal Circuit affirmed the grant of summary judgment. ViaTech asserted infringement based on certain files ( Stores ) in Windows correspond to the claimed dynamic license database. However, in the pre-installation disk image file of Windows, there is only code for the Stores and separate data files containing the licenses, and the Stores themselves are created after installation. Thus, the Federal Circuit ruled that pre-installation version of Windows lacks a database. ViaTech argued that the presence of executable code with the capability of becoming the Stores upon installation met the database element for the pre-installation product. However, the appellate court held that the claim language of the 567 patent requires the presence of a database, as opposed to merely the capability of producing a database, and thus, a product having the capability of producing a database is not enough. The district court had ruled that post-installation version of Windows existed as a collection of files after installation. While the appellate court disagreed with the district court that a collection of files cannot be the claimed file, the Federal Circuit nevertheless agreed with the district court that ViaTech failed to articulate a clear argument that post-installation Windows is a file.

3 Page 3 UCB, inc. v. Accord Healthcare, Inc., Case Nos , , , , , (May 23, 2018) (precedential) (2-1) Patent No. RE38,551 Obviousness-type double patenting inquiry requires consideration of the differences, as opposed to commonalities, between the claims of the reference and the claims of the patent at issue. Facts/Background: The 551 patent discloses and claims lacosamide, the active ingredient in Vimpat. Lacosamide belongs to a class of compounds known as functionalized amino acids ( FAAs ) having a structure including variable positions R, R 1, and R 3, allowing many different chemical groups that can be placed at each position resulting in a vast number of possible FAA compounds. UCB sued Accord for patent infringement. The Accord defendants ( Accord) asserted that claims of the 551 patent were invalid for obviousness-type double patenting distinct over Patent No. 5,654,301 that did not otherwise qualify as prior art due to common ownership. Accord also claimed that prior art renders the claims of the 551 patent anticipated and obvious. After fact findings, the district court concluded that the asserted claims of the 551 patent were not invalid. Holding: Affirmed. Accord argued that only the differences between the 331 patent and the claims of the asserted 551 patent are to be considered for obviousness-type double patenting. UCB argued that the claims as a whole should be considered, including the commonalities between the claims and whether a person of ordinary skill in the art would have been motivated to also modify any of those commonalities. For example, UCB argued that the court should consider whether a commonly shared R 3 methoxymethyl group in the 301 and 551 patents would have been substituted with another substituent when considering which substituents to place at the R and R 1 positions. The Federal Circuit agreed with Accord and held that the obviousness-type double patenting inquiry requires consideration of the differences, as opposed to the commonalities, between the claims of the reference and the claims of the 551 patent. However, the Federal Circuit also held that proving a claim to be invalid for obviousness-type double patenting requires identifying some reason that would have led a chemist to modify the earlier compound to make the later compound with a reasonable expectation of success. The reviewing court then concluded that the district court s fact finding of no reasonable expectation of success was sufficiently supported by the evidence. Accord argued that the district court erred by using a lead compound analysis because this case merely involves purification of a known compound. The reviewing court disagreed and indicated that it was not aware of any authority holding that a lead compound analysis is or is not required in cases involving purifying mixtures. The LeGall reference disclosed a compound 107e. Compound 107e is a racemate of the lacosamide compound claimed in the 551 patent. The Federal Circuit held that the district court did not clearly err in finding that a person of ordinary skill in the art would not have selected compound 107e as a lead compound. It also determined there was no clear error in the district court s finding of no anticipation by LeGall.

4 Page 4 XY, LLC v. Trans Ova Genetics, L.C., Case Nos , (May 23, 2018) (precedential) (2-1) Patent Nos. 6,149,867, 6,524,860, 7,820,425, 8,569,053, 7,713,687, and 7,771,921 An affirmance of an invalidity finding, whether from a district court or the PTAB, may have collateral estoppel effect on all pending or co-pending actions. The calculation of a post-judgment royalty rate should focus on the post-verdict economic circumstances of the parties involved. Facts/Background: XY s patents relate to the sorting of X- and Y- chromosome-bearing sperm cells. XY and Trans Ova entered into a licensing agreement. In November 2007, XY sent a letter to terminate the agreement because of alleged breaches by Trans Ova. In March 2012, XY sued Trans Ova for patent infringement, breach of contract and unjust enrichment. Trans Ova asserted patent invalidity, monopolization, and breach of contract. XY moved for summary judgment that Trans Ova s antitrust claims were barred by the statute of limitations. Trans Ova argued that the continuing conspiracy exception effectively restarted the limitations period with each new and independent act that inflicted new and accumulating injury. The district court granted summary judgment on these claims, ruling that Trans Ova had not identified any new injury so the continuing conspiracy exception did not apply. The jury found that both parties had breached the agreement. The jury found that Trans Ova materially breached prior April 2009, and as a result, found that the agreement terminated in April 2009, and found Trans Ova s posttermination use of XY s patented technology was infringing. The jury also found that XY violated the agreement by attempting to terminate the license in November The district court set an ongoing royalty as an equitable remedy for Trans Ova s future infringement. This appeal followed. Holding: Affirmed in part, dismissed in part, vacated in part and remanded. The Federal Circuit held that Trans Ova bore the burden to identify new and accumulating injury resulting from any of XY s acts after the termination of the licensing agreement for the continuing conspiracy exception to apply, which Trans Ova failed to do. Thus, the Federal Circuit agreed with the district court that the continuing conspiracy exception did not apply. The Federal Circuit refused to address Trans Ova s invalidity arguments as to some of the claims at issue because of an affirmance in a separate appeal that invalidated these claims. The Federal Circuit held that an affirmance of an invalidity finding has a collateral estoppel effect on all pending actions since a defendant should not have to continue defending a suit for infringement of an adjudged invalid patent. The Federal Circuit also held that a remand for briefing was not a required before applying estoppel when the patent owner has had a full and fair opportunity to litigate the validity of its patent in the separate appeal. XY argued that the district court neglected to focus on the post-verdict economic circumstances of the parties when calculating the ongoing royalty rates. The district court awarded an ongoing royalty based on an average between the jury s reasonable royalty for past infringement and the rate established in the parties pre-suit license agreement. The appeal court agreed and held that the royalty rate was determined based on the parties pre-suit bargaining positions, and remanded with instructions to recalculate the rate.

5 Page 5 D Three Enterprises, LLC v. SunModo corp., Case Nos , (May 21, 2018) (precedential) (3-0) Patent Nos. 8,689,517, 9,068,339, and 8,707,655 Claims are not entitled to priority from an earlier application if the claims are broader than the invention disclosed in the earlier application, such that the broadened claims do not meet the written description requirement using the priority application. Facts/Background: The patents at issue are directed to roof mount sealing assemblies. To avoid invalidity, D Three needed to establish that the asserted claims were entitled to priority of a 2009 application. The district court determined that the claims were not entitled to priority from the 2009 application because they were broader than the invention disclosed in the 2009 application, and thus, did not meet the written description requirement. The district court divided the claims into two categories, claims that recited a washer and claims that did not recite a washer. The district court held that the 2009 application only disclosed a washerless assembly that required a W-pronged attachment bracket, but the claims at issue recited broader configurations of washerless assemblies. The district court also held that the 2009 application s assemblies with washers only disclosed washers that were above a flashing, but the claims at issue covered assemblies with washers below the flashing. The district court invalidated all claims as being anticipated by intervening art. Holding: Affirmed. Instead of washers, the washerless claims recite attachment bracket having a third attachment element disposed on an upper portion of said attachment bracket for attaching an object to said attachment bracket. The Federal Circuit held that washerless assemblies using attachments other than W-shaped prongs were not adequately disclosed. The 2009 application did not disclose or contemplate the use of other types of attachment brackets in a washerless assembly. D Three relied on a statement in the 2009 application that [PHOSITAs] will recognize certain modifications, permutations, additions and sub-combinations therefore. However, the Federal Circuit held that this boilerplate language is not sufficient to show adequate disclosure of the attachments used in the washerless claims. The asserted claims that include a washer either recite a washer be located below the flashing or a washer be either above or below the flashing. But the 2009 application only disclosed a washer above the flashing. D Three argued that the 2009 application provided adequate written description because it disclosed a washerless system as well as a system in which a washer is shown above the flashing, and that the specification did not require the washer to be on top of the flashing as opposed to below. However, the Federal Circuit opined that adequate written description does not ask what is permissible, rather, it asks what is disclosed. The appellate court held that due to a lack of any disclosure of an assembly with a washer below the flashing, or a statement on the flexibility of the position of the washer, the asserted claims lacked sufficient written description in the 2009 application.