Federal Circuit Review - January 2021
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January 2021 Federal Circuit Newsletter (Japanese)
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Grammar School: District Court Erred in Departing from Claim Language to Adopt Construction that Encompassed All Disclosed Embodiments
In Simo Holdings Inc. v. Hong Kong Ucloudlink Network, Appeal No.19-2411, the Federal Circuit held that a claim construction that excludes an embodiment disclosed in the specification is proper where the claim language and intrinsic evidence sufficiently indicate that the disclosed embodiment is not within the scope of the claim.
SIMO Holdings Inc. (SIMO) sued Hong Kong uCloudlink Network (uCloudlink) for patent infringement, asserting claims directed to apparatuses and methods for reducing roaming charges on cellular networks. The parties cross-moved for summary judgment on infringement. The district court granted summary judgment of infringement and denied uCloudlink’s cross-motion based on its conclusion that one of the device components recited in the claims (a “non-local calls database”) was not required to establish infringement. The district court reasoned that the contrary construction advanced by uCloudlink “although grammatically appealing, would contradict the specification,” which characterized the non-local calls database as an optional component of the invention. Following a jury determination that infringement had been willful, the district court entered a final judgment awarding SIMO $8.2 million in damages. uCloudlink appealed.
The Federal Circuit reversed the summary judgment rulings, concluding that the district court erred in its claim construction. The Federal Circuit explained that the district court’s construction departed from traditional principles of grammar and was based on a misunderstanding of Federal Circuit precedent. While construing claims to encompass disclosed embodiments is generally favored, the Federal Circuit emphasized that this rule is not absolute and must give way where the claim language and intrinsic evidence demonstrate that a particular embodiment is excluded from the scope of the claim. The Federal Circuit determined that, under the correct claim construction, uCloudlink was entitled to summary judgment of noninfringement. The Federal Circuit rejected SIMO’s request for remand, finding that SIMO had failed to identify a triable issue of fact with respect to infringement.
In Abs Global, Inc. v. Cytonome/St, LLC., Appeal No. 19-205, the Federal Circuit held that in 2017, Cytonome sued ABS for infringement of U.S. Patent No. 8,529,161. In response, ABS petitioned for inter partes review of the ’161 patent. The PTAB issued a final written decision that invalidated some, but not all, of the challenged claims. After the final written decision issued, the district court granted ABS’s motion for summary judgment of non-infringement. ABS appealed the portion of the PTAB’s final written decision holding some claims not unpatentable. In response, Cytonome filed a brief that included an affidavit disclaiming any appeal of the district court’s judgment of non-infringement of the ’161 patent, and argued ABS’s appeal was moot.
The Federal Circuit applied the doctrine of voluntary cessation and agreed that Cytonome’s affidavit mooted ABS’s appeal. The court held Cytonome’s affidavit demonstrated the Cytonome could not reasonably be expected to resume its enforcement efforts. Thus, the Federal Circuit held, there was no present injury in fact to ABS because ABS’s only alleged injury was the threat of infringement in the parallel district court proceeding. Moreover, there was nothing in the record suggesting a substantial risk of future ABS infringement. The Federal Circuit ruled that it was not enough for ABS to allege that Cytonome could conceivably reassert the ’161 patent against a future product without concrete evidence the product was at least in development. Because Cytonome’s affidavit encompassed all of ABS’s allegedly unlawful conduct, and because ABS did not rebut Cytonome’s showing that the Cytonome’s conduct was not reasonably likely to recur, the doctrine of voluntary cessation eliminated any case or controversy and mooted the IPR appeal.
The Federal Circuit rejected ABS’s argument that Fort James Corp. v. Solo Cup Co., 412 F.3d 1340 (Fed. Cir. 2005), created an exception to the mootness doctrine. The court held that Fort James stood for nothing more than the principle that a district court had the power to decide both questions posed in alternative grounds for relief when its decree was subject to review by a court of appeal. Fort James was therefore inapplicable because no determination in the IPR proceeding could provide an alternative ground for judgment in the district court proceeding.
In Quiktrip West, Inc. v. Weigel Stores, Inc. ,Appeal No. 20-1304, the Federal Circuit held that when comparing marks under the Dupont factors, the Board may give less weight to shared terms that are highly suggestive if not descriptive. Further, a party’s willingness to alter its mark multiple times to prevent customer confusion demonstrates a lack of bad faith.
In 2014, Weigel Stores, Inc. began using the stylized mark W KITCHENS in connection with food and beverages sold in its stores. The mark as originally used by Weigel appeared as follows:
QuikTrip West, Inc. sent Weigel a cease and desist letter requesting that Weigel cease using the W KITCHENS mark on the basis that it was confusingly similar to QuikTrip’s registered QT KITCHENS mark, shown below:
In response, Weigel modified its mark twice before applying to register the third and final iteration of its mark, shown below:
QuikTrip then filed an opposition to Weigel’s mark under 15 U.S.C. § 1052(d), alleging that it would create a likelihood of confusion with its QT KITCHENS mark. The Board dismissed QuikTrip’s opposition, finding that there was no likelihood of confusion under the DuPont factors. QuikTrip appealed.
On appeal, QuikTrip challenged the Board’s analysis of two DuPont factors: the similarity of the marks and Weigel’s alleged bad faith. Regarding the similarity of the marks, the Federal Circuit found that the Board properly determined that, when comparing the marks, it should give less weight to the shared term KITCHEN(S) because “kitchen” is a highly suggestive if not descriptive word. Further, the Board correctly gave more weight to the dominant, distinct portions of the marks, namely, Weigel’s encircled W and QuikTrip’s QT. Regarding Weigel’s alleged bad faith, QuikTrip argued that the Board failed to meaningfully consider evidence of Weigel’s intentional copying of elements of QuikTrip’s mark, including Weigel’s alleged photographing of QuikTrip’s stores and its review of QuikTrip’s marketing materials. In response, Weigel argued that its willingness to alter its mark multiple times to prevent customer confusion should negate any inference of bad faith. Both the Board and the Federal Circuit agreed with Weigel and the Federal Circuit affirmed the decision of the Board.