FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING June 19, 2015

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1 P+S FEDERAL CIRCUIT SUMMARIES VOL. 7, ISSUE 24 FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING June 19, 2015 Williamson v. Citrix Online, LLC, (June 16, 2015) (en banc) (precedential) (11-1) Patent No. 6,155,840 There is now an ordinary presumption that an element not using the word means is not governed by 112 6, overruling panel precedent requiring a strong presumption and a strict requirement that the limitation was essentially devoid of anything that can be construed as structure. The new standard is whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name of structure. Facts/Background: Williamson holds the 840 patent, which is directed towards a virtual classroom environment wherein a presenter and audience members can interact on remote computers as if they are within the same room. The district court construed graphical display representative of a classroom and first graphical display comprising a classroom region to require a pictorial map illustrating an at least partially virtual space in which participants can interact, and that identifies the presenter(s) and the audience member(s) by their locations on the map. The district court also found that the limitation of claim 8, a distributed learning control module, was to be construed under 112, 6, and was invalid because the specification did not disclose the necessary corresponding algorithms for performing the claimed function. Holding: The Federal Circuit reversed the district court s construction of graphical display as requiring a pictorial map, stating that the specification merely provides preferred embodiments and not required claim limitations. The appellate court affirmed that the term distributed learning control module was governed by 112 6, as well as that the specification did not disclose an algorithm that was corresponding structure. In doing so, the appellate court changed the test for non- means language that can trigger application of 112, 6. The previous characterization of the presumption against application of 112, 6 as strong has shifted the balance struck by Congress in passing 112, para. 6 and has resulted in a proliferation of functional claiming untethered to 112, para. 6 and free of the strictures set forth in the statute. The new (lower) presumption can be overcome and 112, para. 6 will apply if the challenger demonstrates that the claim term fails to recite sufficiently definite structure or else recites function without reciting sufficient structure for performing that function. The Federal Circuit held that module is a well-known nonce word that can operate as a substitute for means in the context of 112, para. 6. In addition to module, the Court held that [g]eneric terms such as mechanism, element, device, and other nonce words that reflect nothing more than verbal constructs may be used in a claim in a manner that is tantamount to using the word means because they typically do not connote sufficiently definite structure. And therefore may invoke 112, para. 6.

2 Page 2 GTNX, Inc. v. INTTRA, Inc. (June 16, 2015) (precedential) (3-0) The PTAB may not institute a proceeding to review a covered business method patent if, before the date on which the petition for review is filed, the petitioner or real party in interest has filed a civil action challenging the validity of the claims. Facts/Background: GTNX s parent company filed suit against INTTRA seeking to have INTTRA s patents invalidated. The PTAB subsequently granted GTNX s later-filed petitions to institute covered business method proceedings for the same INTTRA patents. Two months after the CBM proceedings were instituted, INTTRA moved to dismiss the proceedings because institution of those proceedings violated a statutory bar against filing of CBM proceedings by a party which has filed a district court challenge to validity of the patents. Ordinarily, a motion to dismiss must occur within 14 days of the institution of the CBM proceedings, as stated in 37 C.F.R (d). Despite being outside of the 14 day window, the PTAB granted the motion, vacated the decisions to institute and terminated the proceedings. GTNX appealed. Holding: INTTRA moved to dismiss the appeal. The Federal Circuit granted the motion and dismissed the appeal because 35 U.S.C. 141 and 329 authorize appeal only after a final written decision of the PTAB. Here, the proceedings were terminated because GTNX did not initiate the covered business method patent review until after GTNX s parent company had filed suit challenging validity. The Federal Circuit noted that the Board made no decision with respect to the patentability of any claim and thus the Board decision was outside of 35 U.S.C. 141(c), 329. The appellate court noted that even though the Board reconsidered INTTRA s motion to dismiss outside of the 14 day window specified in 37 C.F.R (d), this rule only restricts rehearing requests made as of right and does not prohibit the PTO from allowing a party to file a later request for rehearing from an institution decision. The Federal Circuit concluded that, as the proceedings ended without addressing the validity of the patents, no final written decision was reached and thus the appeal was outside of the Court s jurisdiction. Appeal dismissed. Noting that GTNX invoked the All Writs Act, 28 U.S.C. 1651, which allows the appellate court to treat the appeal as, in the alternative, a request for mandamus relief, the Federal Circuit concluded that mandamus relief was unavailable. There was nothing preventing the Board from reconsidering an initial institution decision or invoking the 325(a)(1) bar on its own, or inviting a patentee to file a motion more than 14 days after institution.

3 Page 3 Alexsam, Inc. v. The Gap, Inc. (June 16, 2015) (nonprecedential) Patent Nos. 6,000,608 and 6,189,787 A system can qualify as prior art under 35 U.S.C. 102, when the system was reduced to practice and used in a successful pilot program under actual working conditions. Testimony of an inventor, by itself, is insufficient to establish prior conception. Facts/Background: The patents in suit disclose a multifunctional card system which provides a multifunctional card capable of serving as a system for activating various types of pre-paid cards, such as phone card, debit card, or loyalty card, at a point-of-sale device, such as a cash register. Alexsam, who holds the patents, filed suit against Gap, who is a customer of SVS, a gift card service provider. Gap asserted non-infringement and invalidity counterclaims, arguing that the patents (filed July 10, 1997) were anticipated by the SVS system. The jury found that the patents were conceived prior to the SVS system, and found that they were therefore valid. After the invalidity trial, the court held a separate infringement trial, and the jury found that Gap did not infringe the asserted claims. Gap appealed the invalidity decision and Alexsam appealed the infringement decision. Holding: Reversed and remanded. The Federal Circuit held that the clear and convincing evidence showed that the SVS system ran a successful pilot program under working conditions, prior to the filing date of Alexsam s patents. This was sufficient to prove that the invention was reduced to practice before the patents filing date. Alexsam s only evidence of prior conception was the testimony of the patent inventor, and the Federal Circuit explained that such evidence, by itself, is insufficient to establish prior conception. The appellate court noted that Alexsam also failed to show actual reduction to practice before the priority date of the SVS system. Thus, Alexsam s patents were anticipated by the SVS system and, therefore, invalid. Because the patents were held to be invalid, the Federal Circuit did not reach the issue of infringement.

4 Page 4 Microsoft Corporation v. Proxyconn, Inc. (June 16, 2015) (precedential) (3-0) Patent No. 6,757,717 Before a motion to amend in an IPR can be granted, the moving party must establish patentability for the proposed amendments over all prior art of record, and not just over the reference(s) relied on when instituting review of the particular claims being amended. The PTAB did not err in applying the broadest reasonable interpretation rule of claim construction. Facts/Background: Proxyconn owns the 717 patent. Microsoft filed an IPR petition on the 717 patent. During the proceedings, Proxyconn filed a motion to amend, seeking to substitute two new claims 35 and 36 in place of claims 1 and 3. Although the Board did not rely on a DRP reference when instituting the review, it did rely on DRP to institute the review of six other claims within the 717 patent. Microsoft argued that the proposed claims 35 and 36 would be invalid as anticipated by DRP. Proxyconn did not make any arguments in support of validity over DRP, but instead argued that the Board was precluded from relying on DRP when analyzing the new claims. The Board denied Proxyconn s motion to amend. The Board construed the terms of the claims and found that all of the claims except claim 24 were invalid. Microsoft appealed the determination that claim 24 was valid. Proxyconn cross-appealed, challenging the Board s use of the broadest reasonable interpretation standard, the invalidity determinations, and the denial of its motion to amend. Holding: The Federal Circuit affirmed the Board s denial of Proxyconn s motion to amend, because Proxyconn failed to establish patentability over the prior art of record. The appellate court noted Proxyconn sought to amend the 717 patent by replacing the challenged claims 1 and 3 and [i]n its opposition, Microsoft argued, inter alia, that the substitute claims were unpatentable for anticipation by DRP. While DRP was not one of the references originally used in the PTO s review of claims 1 and 3, DRP was used in both an anticipation and an obviousness rejection in 6 other claims in the 717 patent. Proxyconn did not argue that the substitute claims were patentable over DRP, but merely argued that the Board was barred by (2)(a)(i) from using DRP in analyzing the proposed amendments because the Board had not relied on DRP in instituting the review. The Federal Circuit, reviewing the Board s decision under the arbitrary and capricious standard, affirmed the denial of the amendments. The reviewing court explained that nothing in the Board s interpretation of 42.20(c) in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR , 2013 WL (PTAB June 11, 2013), which requires the patentee to show patentable distinction [of the substitute claims] over the prior art of record, was plainly erroneous. In response to Proxyconn s argument that the Board s reliance on DRP was fundamentally unfair, the Court noted that Proxyconn was informed of the requirement to demonstrate patentability of the claims over DRP during the proceedings before the Board and Proxyconn simply failed to do so. Accordingly, the appellate court affirmed the Board s denial of Proxyconn s motion to amend the claims. The Federal Circuit further affirmed the Board s use of the BRI standard for claim construction, but then reversed the Board s constructions of some PTAB claim constructions under BRI as being impermissibly broad and/or in contradiction to the specification/prosecution history.

5 Page 5 Cephalon, Inc. v. Abraxis Bioscience, LLC, No , , June 17, 2015 (nonprecedential) Patent No. RE40,493 A definition need not be universally accepted to form a proper basis for claim construction. Expert testimony, dictionaries, treaties, and other extrinsic evidence that shed light on the commonly understood meaning of a technical term are less significant than the intrinsic record in determining the legally operative meaning of claim language. Facts/Background: Acusphere, Inc. and its exclusive licensee Cephalon, Inc., asserted the RE40,493 patent against several defendants. The 493 patent addresses the solubility problem of the anti-cancer drug, paclitaxel, by integrating paclitaxel into a porous matrix form. The matrix forms nanoparticles and microparticles of paclitaxel when the matrix is put into contact with an aqueous medium. The district court construed the term nanoparticles to mean particles that have a mean diameter of between 1 to 1000 nanometers and less than that of microparticles, and construed microparticles to mean particles that have a diameter of between 1 to 1000 microns and greater than that of nanoparticles. Upon the district court s construction of nanoparticles and microparticles, Acusphere stipulated to noninfringement. This appeal followed. Holding: Affirmed. The Federal Circuit initially noted that review of the district court s claim construction is de novo, but factual findings that underlie the district court s claim construction are reviewed for clear error. Acusphere argued that the definitions construed were widely accepted, but not the universally agreed-upon definitions. However, the Federal Circuit explained that a definition need not be universally accepted to form a proper basis for claim construction. The Federal Circuit held that it was not clear error for the district court to credit Acusphere s other patents in the field or a textbook for these definitions. Acusphere further argued that the inventors of the 439 patent acted as their own lexicographers for the terms nanoparticles and microparticles by reciting in the claim itself wherein nanoparticles and microparticles have a mean diameter about.01 and 5 µm. However, the Federal Circuit responded that the claim language required the mean diameter of both nanoparticles and microparticles without providing an independent definition of each term. Furthermore, the prosecution history precluded assigning the two terms the same meaning. Acusphere argued that the district court s construction of microparticles was inconsistent with a dependent claim, but the Federal Circuit stated that the dependent claim sets forth a definition that is different from the definition in claim 1. Furthermore, for the patent drafters to be their own lexicographer, they must clearly set for a definition, and not multiple inconsistent definitions. Therefore, the Federal Circuit did not find clear error in the factual findings that underlie the district court s claim construction.

6 Page 6 eplus, Inc. v. Lawson Software, Inc. (June 18, 2015) (precedential) (2-1) Patent Nos. 6,023,683 and 6,505,172 If an injunction is non-final, civil contempt fines must be vacated when the underlying patent is held invalid. Facts/Background: eplus, assignee of the patents in suit, sued Lawson for infringement. The jury found two system claims and three method claims to be infringed, and an injunction was granted. On appeal, the systems claims were found to be invalid, and the finding of infringement of two of the method claims was reversed. While the appeal was pending, Lawson modified its product in an attempt to differentiate it from the claims found to be infringed. The case was remanded to modify the injunction to reflect that only claim 26 of the 683 patent was found to be both valid and infringed. On remand, the district court modified the injunction and held Lawson in civil contempt, finding that Lawson s modified product was not colorably different from infringed claim 26. Lawson appealed, and while this appeal was pending, the PTO completed a reexamination of claim 26 of the 683 patent, determining the claim was invalid and in a separate appeal, the Federal Circuit affirmed the invalidity ruling. Holding: The issues before the Federal Circuit were (1) whether an injunction can continue after the PTO has cancelled the claim on which it was based, and (2) whether civil contempt remedies are appropriate when the injunction has been overturned on direct appeal. Both sides agreed that the injunction must be set aside because the underlying legal basis for it claim 26 had been cancelled by the PTO. The only debate was whether civil contempt remedies should be sustained despite the cancellation. The Federal Circuit explained that while criminal contempt is meant to punish and remains in place regardless of the cancellation of the underlying injunction, civil contempt is meant to compensate an injured party. Thus, when the underlying claim is found to be invalid, there is no legal right that was infringed and no compensation is owed. The majority held that this injunction was non-final because there remained a substantial question of whether an injunction against sales and manufacturing could be justified on a theory of inducement [of a method claim] which was left undecided after the first appeal.

7 Page 7 Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., No , June 18, 2015 (Precedential) (2-1) Patent Nos. 5,800,808; 5,981,589; 6,048,898; 6,054,430; 6,342,476; 6,362,161; 6,620,847; 6,939,539; and 7,199,098 Determining the meaning or significance to ascribe to the legal writings which constitute the intrinsic record is a legal analysis; a party cannot transform legal analysis into a question of fact by having an expert offer an opinion on it. Facts/Background: Teva sued Sandoz for infringement after Sandoz submitted an ANDA to the FDA. The district court found the undefined term, molecular weight, was not indefinite based on the claims, specification, prosecution history and extrinsic evidence in the form of expert testimony. The Federal Circuit, reviewing the construction of molecular weight de novo, reversed the holding that claims with molecular weight were not indefinite. The Supreme Court vacated the Federal Circuit s decision, concluding that Teva identified at least one factual finding by the district court that had not been reviewed for clear error. This case came back to the Federal Circuit on remand. Holding: Affirmed in part, reversed in part. The Federal Circuit concluded that the molecular weight claims at issue were invalid as indefinite because the patent record did not convey with reasonable certainty the measure of molecular weight to be used. The Federal Circuit noted there was no express definition of molecular weight in the specification or in the prosecution history of patents with similar specifications, and that when overcoming an indefiniteness rejection on two different patents with similar specifications, molecular weight was in one case defined as weight average molecular weight and in the other case was defined as peak average molecular weight. The Federal Circuit held that the district court made no clear error in finding that one skilled in the art could discern a peak average molecular weight definition from the specification rather than weight or number average molecular weight, and that there was no clear error when the district court relied on expert testimony to reach the conclusion that the patent referred to peak average molecular weight. Teva argued that the district court s determination based on expert testimony should be given deference, but the appellate court explained that determining the meaning given to the legal writing is legal analysis and stated that the district court should not defer to an expert s ultimate conclusion about claim meaning in the context of a patent. Therefore, the Federal Circuit affirmed the district court s findings of fact, but reversed on the legal question of indefiniteness based on the inconsistent definitions used to obviate indefiniteness rejection in two patents having similar specifications.

8 Page 8 TomTom, Inc. v. Michael Adolph (June 19, 2015) (precedential) (3-0) Patent No. 6,356,836 Limitations in the preamble may be construed to provide antecedent basis, without requiring the entire preamble to be construed. The preamble is generally not a limitation unless language in the preamble provides necessary structure to the body of the claim. Facts/Background: Adolph owns the 836 patent. Claim 1, the only claim at issue, involved generating and storing traveled distance data of a mobile unit over a predetermined series of intervals, and creating section data which constitutes a series of contiguous intervals. After Adolph filed suit in Germany against one of TomTom s customers, TomTom filed a declaratory judgment action alleging claim 1 of the 836 patent was invalid as obvious and anticipated. The district court held that if any part of the preamble must be construed in order to provide antecedent basis, then the entire preamble must be construed as providing limitations. The district court also construed claim 1 to include a limitation that it did not contain existing mapping information, although the prosecution history merely stated that the invention did not require existing map information. The district court also construed node to be restricted to an intersection, origin, destination, or point at which the vehicle changes direction by more than a given predetermined value in a grid or road network, although the specification did not define a node as being any more narrow than a geographic location. Finally, the district court construed storage device to require that each of the types of data involved in the claim are stored in different storage devices. On these constructions, the parties stipulated to a final judgment of non-infringement and this appeal followed. Holding: Reversed and remanded. The Federal Circuit held that construing a portion of the preamble in order to provide antecedent basis does not require construing the entire preamble, explaining that preamble language should not be construed unless the preamble language provides necessary structure to the body of the claim. The Federal Circuit went on to construe the remainder of the preamble language as an intended use, rather than a substantive limitation. With regard to the mapping information, the Federal Circuit explained that while Adolph argued during prosecution that his system did not require preexisting mapping data, it was incorrect to construe the claim as requiring an absence of mapping data. With regard to the claimed node, the Federal Circuit explained that claims should be construed in accordance with the ordinary meaning of the terms in light of the specification and prosecution history, unless a different definition is given by the patentee or there is an express disavowal the full scope of the claim term. As there was no such definition or disavowal in the present case, the appellate court held that node should be given its ordinary definition within the scope of the specification, namely that the term refers to any geographic location. Finally, the Federal Circuit explained that specific embodiments do not define the limitations of a claim, and the specification considered embodiments with both separate storage devices as well as embodiments with a single unified storage device. As the claim explicitly refers to the storage device, the Federal Circuit held that the district court erred in construing the claims as requiring multiple storage devices.

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