Invisible But Invalidating: Undisclosed Functionality Still Triggers On-Sale Bar
In Definitive Holdings, LLC v. Powerteq LLC, Appeal No. 24-1761, the Federal Circuit held that a third-party sale of a product embodying the claimed invention before the critical date can trigger the on-sale bar even if the product’s functionality was not publicly disclosed.
Definitive Holdings sued Powerteq alleging infringement of a patent directed to upgrading engine controller software. Powerteq moved for summary judgment of invalidity under the pre-AIA on-sale bar (35 U.S.C. § 102(b)), arguing that a third party, Hypertech, sold a device embodying the asserted claims more than one year before the patent’s priority date. The district court granted summary judgment, and Definitive appealed.
The Federal Circuit affirmed. The Federal Circuit agreed that the factual record, which Definitive did not dispute, established clear and convincing evidence Hypertech’s device was sold before the critical date and embodied every limitation of the asserted claims. The Federal Circuit also rejected Definitive’s argument that the on-sale bar requires public disclosure of the invention’s functionality. The court explained a commercial sale need not disclose how the invention works so long as the product sold embodies the claimed invention. Because Hypertech’s device was publicly sold and enabled users to perform the claimed methods, the on-sale bar applied.
Standing Still? Only if Injury-in-Fact Is Tied to the Claims at Issue
In Ironsource Ltd. v. Digital Turbine, Inc., Appeal No. 24-1831, the Federal Circuit held that an appellant seeking to establish Article III standing based on an injury-in-fact flowing from the appellee’s challenged patent must link its own product to the claims at issue.
ironSource Ltd. (“ironSource”) petitioned the Patent Trial and Appeal Board (the “Board”) for post-grant review (PGR) of certain claims of a patent owned by Digital Turbine, Inc. (“DT”). After the Board instituted PGR (and had denied DT’s initial motion to amend), DT filed a revised motion to amend. The substitute claims introduced, inter alia, two limitations that were not present in the original claims. In its final written decision, the Board granted that motion. ironSource appealed.
On appeal, DT argued ironSource lacked Article III standing. The Federal Circuit agreed, finding the declaration on which ironSource relied insufficient to establish an injury in fact. While the declaration “establishe[d] that ironSource previously developed and released a product,” the Federal Circuit explained, “it fail[ed] to demonstrate concrete plans to reintroduce th[at] product with features that are implicated by the substitute claims at issue.” ironSource argued that DT had made veiled threats of infringement, but ironSource erred by focusing on the original patent claims, rather than the claims as narrowed in the PGR. At oral argument, ironSource argued for the first time that, under General Electric Co. v. Raytheon Techs. Corp., 983 F.3d 1334 (Fed. Cir. 2020), “oblique references” to the asserted claims can suffice to show an injury in fact. The Federal Circuit found General Electric inapposite because the declaration in that case had “still linked the appellant’s potential product to the claim limitations” at issue. Thus, the Federal Circuit dismissed the appeal for lack of jurisdiction.
No Notice, No Fix: Failure to Satisfy § 256(b) Renders Patent Invalid
In Fortress Iron, LP, v. Digger Specialties, Inc., Appeal No. 24-2313, the Federal Circuit held that omitted coinventor is a “party concerned” under 35 U.S.C. § 256(b), and inventorship cannot be corrected without providing that inventor notice and an opportunity to be heard.
Fortress sued Digger Specialties for infringement of patents directed to pre-assembled railing panels. During the litigation, Fortress acknowledged that two individuals had been omitted as coinventors on the patents. Fortress could not locate one of the coinventors and therefore sought to correct inventorship in district court under § 256(b). The district court denied Fortress’s request because the omitted co-inventor qualified as a “party concerned” entitled to notice and an opportunity to be heard under the statute. Because Fortress could not locate the coinventor, it could not satisfy this statutory requirement, and the district court held the patents invalid for incorrect inventorship.
The Federal Circuit affirmed. The Federal Circuit held that an omitted inventor is a “party concerned” under § 256(b) and must be afforded notice and opportunity to be heard. The court rejected Fortress’s attempts to limit “party concerned” to coinventors with adverse economic interests or constitutional standing. Accordingly, because Fortress could not meet § 256(b)’s procedural requirements, it could not correct the inventorship error. The court further held that a patent is invalid if it incorrectly lists its inventors and cannot be lawfully corrected.
A Cure for Written Description and Enablement Headaches: Prior Art
In Teva Pharmaceuticals International Gmbh v. Eli Lilly And Company, Appeal No. 24-1094, the Federal Circuit held that a functionally defined genus recited in a method of treatment claim may be adequately described and enabled by a single example if, at the priority date, the members of the genus were well-known.
Teva sued Eli Lilly for infringing several patents claiming the use of humanized anti-CGRP antagonist antibodies (“Antibodies”) to treat headaches. A jury found that Eli Lilly willfully infringed Teva’s valid patents. Eli Lilly moved for JMOL of invalidity due to failure to satisfy the written description and enablement requirements. The district court granted Eli Lilly’s motion on both grounds. Teva appealed.
On appeal, the Federal Circuit reversed and remanded. The specification disclosed one Antibody as well as prior art anti-CGRP antagonist antibodies and humanization methods. The court found that the claimed invention was the use of a well-known, albeit functionally defined, genus; the claimed invention was not a new genus of antibodies. The court also relied upon the jury’s verdict and noted that the jury could have found, in support of its verdict, that a POSITA would have understood from the specification that the class of anti-CGRP antagonist antibodies and techniques for humanizing antibodies were well-known. The jury also could have found, in support of its verdict, that all Antibodies could be used to treat headaches. Accordingly, the court found that the disclosure of a single Antibody was, under these circumstances and based on this record, sufficiently representative to describe and enable the functionally defined genus recited in the claimed method of treatment.
Implant Trade Secrets Are Not Protectable Due To Disclosure in Patents
In International Medical Devices, Inc. v. Cornell, Appeal No. 25-1843, the Federal Circuit held under CUTSA that a purported trade secret is not protectable if it is generally known due to disclosure in a patent.
International Medical Devices (“IMD”) sued Dr. Robert Cornell for various causes of action related to cosmetic penile implants, including misappropriation of four trade secrets, breach of contract, counterfeiting; and to invalidate two of Cornell’s patents due to failure to name the correct inventors. At trial, the jury found Cornell liable on all claims. After the district court denied its JMOL motion, Cornell appealed.
The Federal Circuit reversed the district court’s denial of JMOL on the trade secret misappropriation claim. The court found that two trade secrets were generally known after being disclosed in patents, and that a third was generally known due to the combination of a patent and the general knowledge in the art. The Federal Circuit found that IMD disclosed its fourth trade secret without proper confidentiality labels. Thus, the Federal Circuit held that there was not substantial evidence that any of IMD’s trade secrets were protectible under California law. The Federal Circuit reversed the denial of JMOL on the breach of contract claim and patent invalidity claims for related reasons, but affirmed the denial of JMOL on the counterfeiting claim.
Jeremiah Helm and Sean Murray Discuss Federal Circuit Decision on Patent Claim Language in Law360 Article
Knobbe Martens partners Jeremiah Helm and Sean Murray explored the Federal Circuit’s opinion on patent claim construction in Netflix Inc. v. DivX LLC in their latest Law360 column on the court’s recent noteworthy decisions.
The decision relates to the nuances of patent claim language and claim construction, specifically in instances where two interpretations of claim language are equally plausible. In this case, the Federal Circuit’s interpretation rested on the meaning of the modifier “within”, prompting the court to consult English grammar conventions and claim-drafting principles to determine the appropriate claim construction for the patent at issue.
Helm and Murray offer several takeaways for patent prosecutors and patent litigators based on the outcome of Netflix. For instance, they suggest adhering as closely as possible to the “nearest-available-modificand” grammatical rule in patent claim drafting to avoid ambiguity. They also emphasized that a patent’s specification may not be able to overcome the grammatical construction approach announced in the opinion.
Read the full article here.
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