Federal Circuit Review - January 2023

| Irfan LateefDaniel Kiang

January 2023 Federal Circuit Newsletter (Japanese)

January 2023 Federal Circuit Newsletter (Chinese)

Inventor’s Testimony Regarding Actual Reduction to Practice Was Sufficiently Corroborated

In Dionex Softron GmbH v. Agilent Technologies, Inc., Appeal No. 21-2372, the Federal Circuit held that the PTAB did not err in considering evidence corroborating actual reduction to practice when determining priority in an interference proceeding.

Dionex provoked an interference proceeding by copying claims from an Agilent patent application into Dionex’s own patent application. In the proceeding, Dionex moved for judgment that Agilent’s claims were invalid for lack of written description support. The PTAB adopted Agilent’s specification as the “originating specification” that controlled the inquiry, construed disputed claim terms, and found adequate written description support for the claims in Agilent’s specification. Agilent later moved for judgment that it was entitled to priority. The PTAB granted Agilent’s motion, finding that Agilent proved conception and reduction to practice before Dionex’s earliest conception date. Dionex appealed.

Regarding written description, the Federal Circuit found that the PTAB properly treated Agilent’s specification as the “originating specification” because Agilent’s claims were copied to provoke the interference. The Federal Circuit found no error in the PTAB’s claim construction and conclusion that Agilent’s specification provided adequate written description support for the claims.

Regarding priority, the Federal Circuit found no error in the PTAB’s finding for Agilent. The court examined a document, expert testimony, and lay testimony on which the PTAB relied to corroborate Agilent’s inventor testimony regarding reduction to practice. While the cited document was last modified after the purported reduction to practice, the Federal Circuit noted non-inventor testimony stating that the document depicted the limitations of the claim by the pertinent date. According to the Federal Circuit, the expert opined that the document disclosed a configuration that was designed to achieve the claimed result. The court noted that two lay witnesses both observed a successful working prototype during the relevant time. The Federal Circuit concluded that, taken as a whole, there was substantial evidence to corroborate that Agilent’s actual reduction to practice occurred before Dionex’s earliest conception date. Accordingly, the Federal Circuit affirmed the judgment of the PTAB.

The Choice Is Not Yours: Foreign Defendants Cannot Avoid Personal Jurisdiction by Post-Suit, Unilateral Forum Designation

In Re: Stingray IP Solutions, LLC, Appeal No. 23-102, the Federal Circuit held that a defendant’s post-suit, unilateral consent to suit in another state cannot defeat personal jurisdiction under Fed. R. Civ. P. 4(k)(2).

Stingray sued TP-Link, a group of affiliated foreign businesses, for patent infringement in the Eastern District of Texas. TP-Link argued the Eastern District of Texas did not have personal jurisdiction and moved to dismiss for lack of personal jurisdiction or, alternatively, to transfer the case to the Central District of California under 28 U.S.C. § 1406. Typically Rule 4(k)(2) provides personal jurisdiction in any district when the defendant is not subject to personal jurisdiction in any individual state but has sufficient contacts with the United States as a whole. TP-Link argued, Rule 4(k)(2) did not apply because TP-Link would consent to personal jurisdiction in the Central District of California. After jurisdictional and venue discovery, the district court accepted TP-Link’s representation that “CDCA has both proper jurisdiction and venue” and transferred the cases. Stingray petitioned for a writ of mandamus.

The Federal Circuit granted mandamus to correct the basic and undecided legal question of whether under Federal Circuit law, a defendant’s post-suit consent to suit in a different district can unilaterally defeat personal jurisdiction under Rule 4(k)(2). The Federal Circuit explained that Rule 4(k)(2) does not allow a defendant to avoid jurisdiction under Rule 4(k)(2) via unilateral, post-suit consent in a different district. In particular, the Federal Circuit noted Rule 4(k)(2) was introduced to prevent defendants who had sufficient contact with the United States from escaping federal jurisdiction altogether, and not to allow a defendant the unilateral ability to compel transfer via post-suit consent to a different forum. Accordingly, the Federal Circuit vacated the district court's transfer orders and remanded the case for consideration of whether TP-Link could establish that the case should be transferred for other reasons.

Raise It or Lose It! The Federal Circuit Will Not Address Obviousness Arguments First Raised by the PTO on Appeal

In Re Google LLC, Appeal No. 22-1012, the Federal Circuit held that the PTO’s arguments on appeal did not reflect the record below.

Google filed an application claiming methods for filtering the results of an internet search query such that only results appropriate for the user (e.g., age appropriate) are displayed. The claimed method uses a predetermined threshold based on the number of words in the search query to identify whether the search should return relatively more or less content suitable for children. The examiner rejected the claims as obvious over two prior art references: Parthasarathy and Rose. The rationale for the examiner’s rejection was that Rose’s query-length-dependent value could be substituted for Parthasarathy’s user-selected threshold. The PTAB affirmed the Examiner’s rejection. Google appealed.

On appeal, the PTO argued that the PTAB’s decision should be affirmed because there are only two ways to predictably modify Parthasarathy’s threshold to incorporate query length as taught by Rose, and both would have been obvious to try. However, the Federal Circuit found that, meritorious or not, the PTO’s arguments did not reflect the PTAB’s articulated substitution theory of obviousness. The Federal Circuit explained that its review of a patentability determination is confined to the grounds upon which the PTAB actually relied, and therefore it could not consider the argument the PTO made for the first time on appeal. The PTO conceded that Rose does not disclose a predetermined threshold based on a number of words and instead discloses calculating scores only implemented after the query results are retrieved. As a result, the court concluded that the Board’s reasoning did not support the rejections. Accordingly, the Federal Circuit vacated the PTAB’s decision and remanded for further proceedings.

It’s Not the Size of the Chamber That Matters, It’s How You Describe It in the Intrinsic Record

In Grace Instrument Indus. v. Chandler Instruments Co., Appeal No. 21-2370, the Federal Circuit held that terms of degree were not indefinite because the specification provided guidance as to their meaning.

Grace Instrument Industries (“Grace”) brought an infringement claim against Chandler Instruments for infringement of its patent for a viscometer, a device used by oil and gas drillers to test the viscosity of a drilling fluid sample in a lab setting before it is used downhole. The district court held that the term “enlarged chamber” was indefinite based, in part, on dictionary definitions, because it necessarily required a comparison against some baseline that was not provided in the specification.

The Federal Circuit overturned the indefiniteness finding for “enlarged chamber,” instead adopting a construction that required the chamber to be “large enough” to perform a function. The court reasoned that the intrinsic record explained that the size of the enlarged chamber was determined based on whether it was “large enough to accomplish a particular function,” not whether it was “larger than some [undefined] baseline object.” Thus, the intrinsic record provided sufficient guidance to the skilled artisan as to the meaning of “enlarged chamber,” and the term was not indefinite.

The parties also disputed the construction of certain means-plus-function terms, and specifically the structure required to perform the claimed function. Here, the Federal Circuit affirmed the district court’s construction, agreeing that the district court’s construction was consistent with the language of the claim and the intrinsic record as a whole. The Federal Circuit also found Grace’s arguments for an alternative construction relied on unpersuasive circular logic.

Patent Affirmed as Unenforceable Due to Prosecution Laches

In Personalized Media Communications, LLC v. Apple Inc., Appeal No. 21-2275, the Federal Circuit held that the district court did not abuse its discretion by holding that Personalized Media Communication’s patent was unenforceable based on prosecution laches.

Personalized Media Communications, LLC (PMC) sued Apple in the U.S. District Court for the Eastern District of Texas for patent infringement. At trial, a jury found that Apple infringed at least one of the claims and awarded PMC over $308 million in reasonable-royalty damages. The district court held a bench trial on remaining issues and found PMC’s patent unenforceable based on prosecution laches. The district court concluded that “the only rational explanation for PMC’s approach to prosecution is a deliberate strategy of delay,” determining that PMC successfully employed an inequitable scheme to extend its patent rights.

The Federal Circuit affirmed the lower court’s ruling, concluding that the district court did not abuse its discretion by finding that PMC’s delay in prosecution was unreasonable and inexcusable under the totality of the circumstances, and that Apple suffered prejudice attributable to the delay. The Federal Circuit affirmed the district court’s analysis that PMC’s patent prosecution strategy was unreasonable and inexcusable under the totality of the circumstances by considering, among other facts: PMC’s institutional abuse of the patent system by filing 328 applications in the months leading up to the patent term change from 17 to 20 years; the establishment of a Consolidation Agreement with the USPTO to prosecute PMC’s patents over time; and PMC’s decision to wait 16 years after the patent’s priority date to introduce specific claim limitations into the claims. The Federal Circuit also ruled that the district court properly held that Apple established prejudice by showing it had invested in the development and launch of an infringing product during the period of PMC’s prosecution delay.