Federal Circuit Review - September 2022
September 2022 Federal Circuit Newsletter (Japanese)
September 2022 Federal Circuit Newsletter (Chinese)
Duplicative-Litigation Doctrine: Proper Motion Practice is Essential to Avoid Dismissal of Duplicative Complaints
In Arendi S.A.R.L. v. LG Electronics Inc., Appeal No. 21-1967, the Federal Circuit held that under the duplicative-litigation doctrine, a party cannot maintain two separate actions involving the same subject matter, at the same time, in the same court, and against the same defendant.
Arendi S.A.R.L. (“Arendi”) sued LG Electronics (“LG”) for infringement of various patents. Pursuant to the Local Patent Rules, Arendi served its initial infringement contentions. However, Arendi provided a claim chart for only one product – LG’s Rebel 4 phone. LG informed Arendi that the singular claim chart failed to comply with the Local Patent Rules, which required a claim chart for each accused product. Arendi never supplemented its contentions to include additional products or explained how the Rebel 4 was representative of other LG products. LG moved to strike portions of Arendi’s expert report that included infringement allegations for non-Rebel 4 products. The district court granted LG’s motion because Arendi did not timely disclose those contentions. Arendi filed a second complaint, asserting that non-Rebel 4 products infringed the same patent. LG moved to dismiss the second complaint as duplicative. The district court granted LG’s motion and Arendi appealed.
Applying the Third Circuit’s standard of review, the Federal Circuit affirmed. The Federal Circuit held that the district court did not abuse its discretion in finding that Arendi’s second case was improperly duplicative. Under the duplicative-litigation doctrine, a party cannot bring two separate actions involving the same subject matter, at the same time, in the same court, and against the same defendant. Patent cases involve the same subject matter when the same patent is asserted and the accused products are at least essentially the same or identical. Arendi argued that the there is no overlap between the accused products because the district court granted LG’s motion to strike portions of Arendi’s expert report. The Federal Circuit disagreed, noting that the district court granted the motion to strike due to Arendi’s failure to fulfill its discovery obligations. The Federal Circuit held that Arendi litigated the non-Rebel 4 products in the first case, noting that Arendi listed the accused products in its infringement contentions, served interrogatories about the accused products, and received discovery related to those products.
Judicial Review: The PTAB Must Offer Reasonably Discernible Logic
In Provisur Technologies, Inc. v. Weber, Inc., Appeal No. 21-1942, the Federal Circuit held that the PTAB has an obligation to ensure the PTAB’s logic is reasonably discernible from the record.
Weber petitioned for inter partes review of Provisur’s patent, arguing that the claims were invalid as obvious over multiple references. In its reply brief, Weber also submitted evidence that the digital camera disclosed in Weber’s references was the same type of camera claimed by Provisur’ patent.
Provisur asked the Board to exclude this evidence as untimely. In the Final Written Decision, the PTAB found that Weber’s reply evidence was properly submitted rebuttal evidence and found that the digital camera limitation was disclosed by Weber’s references. The PTAB also found that Provisur Technologies did not dispute that Weber’s references taught all the other limitations of the claims. Rather than providing its own analysis on these limitations, however, the PTAB simply adopted Weber’s arguments and evidence as its own.
On appeal, the Federal Circuit found that Provisur Technologies had argued that the references did not teach an additional limitation of the independent claims and that the PTAB erred by not addressing Provisur’s other arguments. The Federal Circuit also found that the PTAB’s adoption of Weber’s arguments and evidence precluded the Federal Circuit from engaging in meaningful appellate review. However, the Federal Circuit affirmed the PTAB’s decision that Weber’s reply evidence was properly submitted, explaining that reply evidence did not change Weber’s invalidity theories or fill any holes in Weber’s petition. The Federal Circuit then remanded back to the PTAB for the PTAB to consider
rovisur’s remaining arguments.
Plausible Factual Allegations Concerning Inventive Concepts Preclude Motion to Dismiss
In Cooperative Entertainment, Inc. v. Kollective Technology, Inc. Appeal No. 21-2167, the Federal Circuit held that plausible allegations of an inventive concept in a complaint precluded a motion to dismiss for lack of patent eligibility because determining whether such a concept was well-understood, routine, or conventional was a question of fact that could not be resolved at the Rule 12(b)(6) stage.
Cooperative patented a system and method of structuring a peer-to-peer network for distributing large files and accused Kollective of infringement. Kollective moved to dismiss under Rule 12(b)(6), alleging that all claims were ineligible under § 101. Cooperative filed an amended complaint, which led Kollective to refile its motion to dismiss, which the district court granted. On appeal, the Federal Circuit reversed the district court’s dismissal and remanded for further proceedings.
Applying the Supreme Court’s two-step Alice framework to analyze patent eligibility, the Federal Circuit proceeded directly to step two to determine if the amended complaint plausibly alleged that the claims recited an inventive concept. The Federal Circuit concluded that there were at least two alleged inventive concepts that should have precluded dismissal for lack of eligibility: (1) the use of peer nodes to communicate outside of a content distribution network and (2) the use of trace routes in data content segmentation. Without determining whether these concepts were actually inventive, the Federal Circuit noted that Cooperative’s complaint alleged that these concepts were distinctions and improvements over the prior art and provided benefits to the technical field. The Federal Circuit also reasoned that the determination of whether the claimed network was well-understood, routine, or conventional was a question of fact that could not be resolved at the Rule 12(b)(6) stage. Accordingly, the Federal Circuit held that plausible factual allegations regarding inventive concepts precluded dismissal for lack of patent eligibility and remanded for further proceedings.
Federal Circuit Denies Mandamus Regarding Venue Dispute with Remote Workers
In Re: Monolithic Power Systems, Inc. Appeal No. 22-153, the Federal Circuit denied mandamus for a factual-laden dispute on whether remote work employees met the requirement of a “regular and established place of business.”
Bel Power Solutions Inc. (“Bel Power”) sued Monolithic in the Western District of Texas for patent infringement by selling power modules to original equipment manufacturers. Monolithic moved to dismiss or transfer for lack of venue, arguing that as a Delaware corporation, it did not reside in the Western District. Monolithic further argued it did not own or lease any property in the district, and that the presence of four fulltime remote employees in the Western District was not sufficient to constitute a “regular and established place of business” under Section 1400(b).
Judge Albright denied the motion to transfer, finding that Monolithic had a “regular and established place of business” under Section 1400(b), noting that (1) Monolithic solicited employment in the Western District to serve local customers and (2) Monolithic provided and stored property in the Western District at the homes of remote employees that was used to service Monolithic customers in the Western District.
The Federal Circuit denied mandamus, holding that “the district court’s ruling does not involve the type of broad, fundamental, and recurring legal question or usurpation of judicial power that might warrant immediate mandamus review.” Finding that venue analysis is necessarily a fact-specific inquiry, and that “this case may present an idiosyncratic set of facts,” the Federal Circuit held that Monolithic did not demonstrate the type of concerns that warranted mandamus review. Judge Lourie dissented, reasoning the Federal Circuit should have granted mandamus to prevent confusion regarding the significance of employee homes in the “regular and established place of business” analysis, particularly in view of the increased prevalence of remote work.
