Federal Circuit Review - December 2017

Claims Directed to Methods for Streaming Audiovisual Data Held Unpatentable Under § 101

In Two-Way Media Ltd v. Comcast Cable Communications, Appeal Nos. 2016-2531, 2016-2532, the Federal Circuit affirmed the district court’s finding that claims using generic result-based functional language, and directed to methods for streaming data over the internet, were not patent-eligible.

The patents at issue claimed IP multicasting methods for distributing packets of information to multiple recipients. The district court granted Comcast’s motion for judgment on the pleadings that the four asserted patents were ineligible under 35 U.S.C. § 101. The Federal Circuit affirmed the district court’s decision.

At the Federal Circuit, Patentee Two-Way Media argued that Comcast’s motion was premature because claim construction was necessary to determine subject-matter eligibility under § 101. However, the Federal Circuit noted that the district court had expressly considered Two-Way media’s proposed claim constructions and found that they recited only conventional computer components.

In applying Alice step one, the Federal Circuit found that the claims were directed to an abstract idea, noting that the claims relied on result-based functional language but failed to describe how to achieve the claimed results in a non-abstract way. Proceeding to Alice step two, the Federal Circuit considered whether the elements of the claims, considered both individually and as an ordered combination, transformed the nature of the claim into a patent-eligible application of the abstract idea. However, the Federal Circuit failed to find a saving inventive concept; the claims recited a conventional order of steps, using conventional technology to achieve the desired result, while failing to describe a specific, discrete implementation of the abstract idea which might have been patent-eligible. The Federal Circuit also affirmed the exclusion of evidence from prior novelty and nonobviousness determinations by other tribunals as irrelevant to the § 101 analysis.

The Federal Circuit Affirms an Award of No Damages, Even Though Some Infringement Occurred, Where the Evidence Failed to Show That All Worldwide Sales Infringed

In Promega Corp. v. Life Technologies Corp., Appeal Nos. 2013-1011, -1029, -1376, the Federal Circuit held that evidence of worldwide sales that is not broken down to specify the amount of U.S. sales versus the amount of foreign sales does not provide sufficient evidence to support a damages award under §271(a).

Life Technologies (“Life”) manufactured DNA analysis kits in the United Kingdom. At least one of several components in each kit was supplied from the U.S. Some kits were sold in the U.S. and others were sold abroad. At trial, Promega relied on a single worldwide sales figure as the damages base for infringement. Promega did not break down the amount of damages attributable to (1) infringement under § 271(a) for kits sold in the U.S., and (2) infringement under § 271(f)(1) for kits with a substantial portion of components supplied from the U.S. The jury awarded damages based on the worldwide sales figure.

Life moved for JMOL, which the district court granted. The district court determined that Promega’s trial evidence was insufficient to support a finding that all accused kits contained a substantial portion of components supplied from the U.S. under § 271(f)(1). The district court found that Promega had waived any argument that the evidence at trial could support a damages calculation based on any subset of total sales. The district court held that no reasonable jury could have found that all accused products infringed under § 271(f)(1) and/or § 271(a) to support the damages award.

Promega I (Fed. Cir. 2014):
The 2014 Federal Circuit panel reversed the district court, holding that a single component supplied from the U.S. could qualify as a substantial portion of an infringing product, and a reasonable jury could conclude that all of Life’s worldwide sales were attributable to infringement under §271(f)(1).

Promega II (U.S. 2017):
The Supreme Court reversed and remanded, holding that “a single component does not constitute a substantial portion of the components that can give rise to liability under §271(f)(1).”

Promega III (Fed Cir. 2017 – this opinion):
On remand, the Federal Circuit explained that the Supreme Court’s holding nullified the panel’s previous determination that all accused products could have infringed under §271(f)(1). The panel affirmed the district court’s grant of Life’s JMOL motion because Promega presented insufficient evidence to show that all worldwide sales infringed under §271(a) or §271(f)(1), and further because Promega waived any argument that a portion of worldwide sales were attributable to infringement under §271(a) or §271(f)(1).

TC Heartland May Apply to Cases Filed Pre-TC Heartland

In In Re: Micron Tecnology Inc, Appeal No. 2017-138, the Federal Circuit held that the defendant had not waived its venue objections under Rule 12(h)(1)(A), as TC Heartland was a change in law, and thus the defendant did not waive its venue objections under Rule 12 by failing to raise a venue defense prior to the TC Heartland decision; however, the Federal Circuit also suggested that district courts could use their inherent authority to find that a defendant forfeited its venue defense.

After the Supreme Court’s decision in TC Heartland, Defendant Micron moved to dismiss or transfer its pending litigation from the District of Massachusetts for improper venue. The district court denied the motion, finding that Micron failed to raise its venue defense in its first Rule 12 motion, and thus the defense was waived under 12(h)(1)(A). Micron petitioned for a writ of mandamus, arguing that there was no waiver under Rule 12(h)(1)(A) because the decision in TC Heartland resulted in a change in law.

The Federal Circuit held that TC Heartland was a change in law and thus Micron’s venue defense was not previously “available” under the Federal Rules of Civil Procedure. Accordingly, there was no waiver under Rule 12(h)(1)(A). However, the Federal Circuit also found that district courts have an inherent power to find forfeiture of a venue objection apart from Rule 12. The Federal Circuit left to future cases the task of elaborating the bounds of this inherent power, but suggested that an exercise of this authority “may rest on determinations of untimeliness or consent.” The Federal Circuit vacated the district court’s order and remanded for further proceedings.