FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING 1/17/2014

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1 P&S FEDERAL CIRCUIT SUMMARIES VOL.6, ISSUE 2 FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING 1/17/2014 Proveris Scientific Corporation v. Innovasystems, Inc., No (1/13/2014) (precedential) (3-0) Patent No. 6,785,400 Admitted infringement of a previous device cannot form the basis of a decision to refuse claim construction in a subsequent infringement case for a newly modified device. Facts/Background: Proveris owns patent no. 6,785,400, which relates to an invention for evaluating aerosol spray plumes. Provseris sued Innova for selling a device named an Optical Spray Analyzer (OSA). Innova admitted infringement of claims 3-10 and 13, and a permanent injunction was entered against it. Innova then modified the device and began selling the modified device under the name Aerosol Drug Spray Analyzer ( ADSA ). Proveris filed a motion for contempt for violating the permanent injunction based on Innova s sale of the ADSA. Innova opposed that motion by arguing that the ADSA was different from the OSA because the OSA product allowed a user to identify a range of images he wanted to analyze before activating the spray plume, while the ADSA device requires the user to first activate the spray plume and then later determine what range of images he or she would like to analyze. The district court scheduled a Markman hearing, but canceled it because, in its view, Innova could have raised claim construction issues in the underlying infringement action. The district court then entered a contempt order against Innova, implicitly finding that the OSA and ADSA were no more than colorably different. Innova appealed. Holding: The Federal Circuit began with the procedure to be followed for purposes of determining whether a party is in contempt of an injunction by offering a modified product. The trial court is first to determine whether a modification from the old product is significant. If not, the court must then determine whether the accused product infringes the asserted claims. The Federal Circuit agreed that the OSA and ADSA products were functionally identical (i.e., the modification contained in the ADSA was not significant) based on the fact that the products had identical user manuals. Then, turning to the infringement analysis, the appellate court observed that the district court must first determine the meaning of any disputed claim terms and then compare the accused device to the claims as construed. A district court is bound by any prior claim construction that it had performed in the case. Here, however, there had been no claim construction because Innova admitted infringement. Consequently, the Federal Circuit held that the district court erred in not performing claim construction analysis relating to the contempt proceedings. The contempt order was vacated, and the case was remanded for further consideration.

2 Page 2 In re Raymond Giannelli, Appeal No (1/13/2014) (precedential) (3-0) Patent App. No. 10/378,261 Physical capability alone does not render obvious that which is contraindicated. An examiner should determine whether it would have been obvious to modify the prior art apparatus to arrive at the claimed invention Facts/Background: Giannelli filed the 261 application, entitled Rowing Machine, in March The 261 application discloses an exercise machine on which a user can perform a rowing motion against a selected resistance, thereby strengthening the back muscles. In response to an anticipation rejection, Giannelli amended claim 1 to include the limitation by a pulling force exerted by a user on the first handle portion in a rowing motion. The examiner then finally rejected the 261 application as obvious in view of the same patent. Giannelli appealed to the PTAB. The Board characterized the issue as whether a chest press in the prior art patent was capable of being used by exerting a pulling force on the handles in a rowing motion. The Board found that it was reasonable to infer that a user could face the handles of the prior art chest press machine and exert a pulling force on its handles in a rowing motion. Consequently, the rejection was affirmed and this appeal followed. Holding: Reversed. The Federal Circuit held that the Board had erred in concluding that the claims of the 261 application would have been obvious in view of the prior art patent. The appellate court explained that the mere capability of pulling the handles is not the inquiry that the Board should have made. Instead, the Board should have determined whether it would have been obvious to modify the prior art apparatus to arrive at the claimed rowing machine. Because the Board determined that the machine claimed in the 261 application would have been obvious by merely showing that a rowing exercise could be performed on the prior art machine, and not whether it was obvious to modify the chest press machine to contain handles adapted to perform the rowing motion by pulling on them, the Board had erred.

3 Page 3 In re Enhanced Security Research, LLC, Appeal No (1/13/2014) (precedential) (2-1) Patent No. 6,119, C.F.R 41.37, the rule governing the briefing requirements in ex parte appeals, requires applicants to articulate more substantive arguments if they wish for individual claims to be treated separately. A non-complete prior art reference may be acceptable since the MPEP only requires the submission of the pertinent parts of a non-english translation. Facts/Background: The 236 patent claims a computer security device and method for preventing unauthorized individuals from gaining access to a local computer network. A third party requested reexamination and submitted, among other prior art references, a manual of a software product called NetStalker and a scholarly article authored by Liepens. The examiner rejected claims 1-19 as obvious in light of various prior art references. In so doing, the examiner rejected the patent owner s arguments that NetStalker was not publically-available prior art. In response to a final rejection, ESR sought to amend claims 1-5 and The examiner entered those claim amendments, reasoning they would place the application in better form for appeal. On appeal, the Board affirmed the rejection of the amended claims 1-5 and This appeal followed. Holding: ERS argued, in pertinent part, that NetStalker was not prior art and that the Board failed to address the limitations contained in dependent claims 9, 15, and 17. The Federal Circuit agreed with the Board that the combination of Netstalker and Liepens met the limitations of most of the claims. The Federal Circuit noted that ESR did not contest that a person of ordinary skill in the art would have been motivated to combine the references or present any secondary indicia of non-obviousness for consideration. ESR s arguments regarding the dependent claims were rejected as improper because ERS did not argue the dependent claims under separate subheadings as Rule (2012)[] required. With respect to the public availability of NetStalker, the panel explained that even relatively obscure documents qualify as prior art so long as the public has a means of accessing them and upheld the finding that NetStalker was publicly available. Finally, the Federal circuit rejected ESR s argument that NetStalker should not be considered because it was missing pages. The MPEP only requires the submission of the pertinent parts of a non-english translation. The Board s decision was affirmed.

4 Page 4 Hemphill v. Johnson & Johnson, Appeal No (1/14/2014) (precedential) (3-0) Patent No. 4,557,720 A reexamination certificate does not alter the term of a patent. 35 U.S.C. 286 precludes recovery for any act of infringement committed more than six years prior to the filing of the complaint. Facts/Background: Hemphill first filed suit for patent infringement against Johnson & Johnson ( J&J ) in 1999, alleging that J&J s Stayfree, Carefree, and Serenity sanitary napkins and adult incontinence products infringed claim 2 of United States Patent No. 4,557,720 ( the 720 patent ). The district court construed the claim and determined that the accused products did not infringe the 720 patent, either literally or under the doctrine of equivalents. The Federal Circuit affirmed in a prior appeal. The 720 patent expired on December 10, Nonetheless, in February 2012, Hemphill again filed suit against J&J, alleging that J&J s Stayfree and Carefree brand feminine care products directly infringed two independent claims of the 720 patent, and that J&J induced infringement of the 720 patent. After the district court granted J&J s motion to dismiss, Hemphill filed a Motion for Relief from Judgment, arguing, (1) upon re-examination, the [ ]720 Patent reissued; and (2) the District of Maryland court that first construed the [ ]720 patent erred in construing the term swab. The district court denied the Rule 60(b) motion, and granted J&J s motion for Rule 11 sanctions. Hemphill appealed the denial of her Rule 60(b) motion and the award of sanctions against her to the District of Columbia Circuit, which transferred the appeal to the Federal Circuit. Holding: Affirmed. The district court correctly ruled that reexamination certificates do not alter the term of a patent. Therefore, the issuance of the certificate did not change the fact that even if J&J had, arguendo, infringed the 720 patent before its expiration in 2002, recovery was time-barred when Hemphill sued in The Federal Circuit also determined that the district court correctly held that Hemphill s continued disagreement with the claim construction of the Hemphill I court is not a basis for relief under Rule 60(b). Hemphill has not shown any grounds for relief under Rule 60(b). Finally, the Federal Circuit affirmed the award of sanctions.

5 Page 5 Novartis v. Michelle K. Lee, Appeal No (1/15/2014) (precedential) (3-0) Under (b)(1)(B), the patent term adjustment is calculated by determining the time between application filing date and patent issuance, subtracting any continued examination time, and determining the extent to which the result exceeds three years. 35 U.S.C. 154(b)(3) governs all patent term adjustment determinations. Facts/Background: Novartis filed four lawsuits seeking additional time for patent terms of twenty-three of its patents because the Director allegedly had improperly determined the adjusted patent terms. After consolidating the cases, the district court dismissed Novartis s claims with respect to 19 patents as untimely and granted Novartis relief on its remaining claims. The district court held that the applicable limitation was the 180-day rule of 154(b)(4) and that nineteen of Novartis s patents those filed more than 180 days after the PTO denied reconsideration of its adjustment determination were filed too late. Novartis asserted that a determination of the final patent term adjustment, announced upon issuance of the patent, is not made under 154(b)(3), which, it says, addresses only the provisional adjustment announced upon allowance of claims (when the PTO process is not complete, so that the final adjustment cannot yet be calculated). Therefore, Novartis argued that the 180-day period of 154(b)(4) is not applicable to its challenges to the final patent term adjustment determinations because the Director did not make those determinations under paragraph (b)(3). For three patents that the district court found timely, Novartis challenged the Director s interpretation of 35 U.S.C. 154(b)(1)(B). The district court ruled that the PTO s interpretation of 154(b)(1)(B) was contrary to law. Both parties agreed that for one patent, the patent term adjustment was correctly calculated. This appeal followed. Holding: Novartis argued that it timely filed the lawsuits for the 19 patents because 154(b)(3) only applies to provisional time adjustments, and that the Director improperly calculated the adjustment time for the four other patents. The Federal Circuit found that the only reasonable construction is that the (b)(3)(b)(i) command regarding transmittal with a notice of allowance is itself implicitly limited to determinations that can be transmitted at that time. The applicable version of paragraph (b)(3) the whole of which subparagraph (b)(4)(a) refers to addresses all patent term adjustment determinations, not just some. This reading is reinforced by the breadth of at least clause (b)(3)(b)(ii) and subparagraph (b)(3)(d), both of which plainly cover the final adjustment announced at issuance, not just a provisional adjustment announced at allowance. The 154(b)(1)(B) arguments turned on whether all time consumed by continued examination does not count toward depleting the allotment of three years. The Federal circuit held that view runs counter to the textual fact that there is no time-of-initiation restriction on the processes identified in the exclusions, including continued examinations. The better reading is that the patent term adjustment time should be calculated by determining the length of time between application and patent issuance, then subtracting any continued examination timeand determining the extent to which the result exceeds three years. This reading ensures that applicants recover for any delays due to the failure of the PTO without allowing recovery for time consumed by continued examination. The calculations for three of Novartis patents needed to be redone. Affirmed in part, reversed in part, and remanded.

6 Page 6 Superior Industries, Inc. v. Masaba, Appeal No (1/16/2014) (non-precedential) (3-0) Patent Nos. 7,470,101, 7,618,213, 7,424,943, 7,607,529, and 7,845,482 An appealed claim construction is remanded for further clarification if the district court fails to provide adequate explanation for the construction or resulting grant of summary judgment of noninfringement. Facts/Background: Superior asserted five patents against Masaba. The patents relate to bulk material handling equipment and fall into two categories, referred to by the parties as the undercarriage patents and the unloader patents, respectively. The district court held Marksman hearings and construed several terms. Superior conceded that it could not prevail on its infringement claims under the district court s claim constructions and moved for summary judgment of noninfringement subject to the right to appeal the constructions. Superior also moved to dismiss Masaba s invalidity counterclaims, and Masaba cross-moved for summary judgment of non-infringement. The district court granted Superior s motions and dismissed Masaba s motion as moot. The opinion and order included no analysis of Superior s infringement claims and no discussion of how the court s construction of any given term affected the infringement analysis. Holding: Vacated and remanded for further clarification. The Federal Circuit found that two ambiguities were present in this case. First, it would be impossible to determine from district court s opinion which of the thirteen contested claim constructions would actually affect the infringement analysis. Second, it is unclear for several disputed terms whether a revised construction would have any effect on the infringement analysis. Thus, the Federal Circuit vacated the district court s order granting summary judgment of non-infringement and remanded for further proceedings.