Inequitable Conduct Found Based on Rule 131 Declaration
In Intellect Wireless, Inc. v. HTC Corp., Appeal No. 12- 1658, the Federal Circuit affirmed the district court’s judgment of unenforceability of the asserted patents due to inequitable conduct.
Intellect Wireless sued HTC for infringing two patents related to wireless transmission of caller identification information. The district court held the patents unenforceable due to inequitable conduct by the inventor. The district court found that the inventor submitted a Rule 131 declaration containing false statements to overcome a prior art rejection. The district court further found that a specific intent to deceive was the single most logical inference based on the inventor’s numerous false assertions.
The Federal Circuit affirmed. Applying the standard set forth in Therasense, Inc. v. Becton, Dickson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), the Federal Circuit held that the district court did not clearly err in finding that the inventor (1) misrepresented information material to patentability, and (2) did so with specific intent to deceive. Regarding the materiality prong of the analysis, the Federal Circuit found that the inventor submitted an “unmistakably false” declaration and failed to cure the falsehoods. The inventor’s attempts to cure the falsehoods served to obfuscate the truth rather than openly and expressly correct the misrepresentations of facts. Therasense states that submitting a false affidavit is an “affirmative act of egregious misconduct” sufficient to establish materiality. Regarding the intent prong of the analysis, the Federal Circuit found that the inventor made numerous false statements in this and related patent prosecution to the point that the inventor established a pattern of misleading and false statements. The Federal Circuit found the single most logical inference given the inventor’s prior behavior was that he submitted the false affidavit with the specific intent to deceive the Patent Office. Accordingly, the district court did not abuse its discretion in holding the patents unenforceable due to inequitable conduct.
Patent Rights Exhausted
In Keurig, Inc. v. Sturm Foods, Inc., Appeal No. 13-1072, the Federal Circuit affirmed the district court’s finding that the sale of a patented apparatus that practiced a claimed method exhausted patent rights.
Keurig sued Sturm for infringing method claims related to brewing beverages from a disposable cartridge. Keurig alleged that use of Sturm coffee cartridges in certain Keurig coffee brewers directly infringed these method claims and that Sturm induced infringement by selling its coffee cartridges.
The district court granted summary judgment of noninfringement to Sturm on the basis of patent exhaustion. The district court did not, however, apply the Supreme Court’s “substantial embodiment” test, under which method claims are deemed exhausted by an authorized sale of an item that substantially embodies the method if the item has no reasonable noninfringing use and includes all inventive aspects of the claimed method. Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008). Rather, the district court held that exhaustion was triggered by the initial sale of the patented brewer: a patented item that completely practiced the claimed method.
The Federal Circuit affirmed. The Federal Circuit has interpreted patent exhaustion to exhaust patent rights as a whole, rather than on a claim-by-claim basis. Here, Keurig sought both apparatus claims to the brewer and method claims to brewing. To allow Keurig to assert method claims, which use the brewer from the apparatus claims, would vitiate the doctrine of patent exhaustion. Keurig sold its patented brewers without any restrictions. A consumer’s potential use of the brewing method with non-Keurig cartridges could not save the method claims from exhaustion.
Judge O’Malley concurred in the judgment, but further stated that the method claims would be exhausted regardless of which patent(s) contain the apparatus and method claims.
“Computational Means” Found to Be Indefinite
In Ibormeith IP, LLC v. Mercedes-Benz USA, LLC, Appeal No. 13-1007, the Federal Circuit affirmed the grant of summary judgment on indefiniteness based on the term “computational means.”
The Ibormeith patent recited a “computational means” for determining the likelihood that a driver is sleepy. The district court ruled that, while the specification described the function for the computational means, it did “not disclose the algorithm” by which this function was accomplished. Therefore, it ruled that claims were indefinite under 35 U.S.C. § 112(f).
The Federal Circuit affirmed. The Federal Circuit held that, although the specification “identifie[d] factors” related to drowsiness, it did not explain how to weigh those factors to compute an outcome. The Federal Circuit further relied on Ibormeith’s expert’s statements—made in attempt to achieve broad claims—that the specification was not limited to a specific method of weighting the various factors. Taking “Ibormeith and its expert at their word in insisting on the breadth, rather than specificity,” of what the specification disclosed, the Federal Circuit held that the “description of an algorithm that place[d] no limitations on how values are calculated, combined, or weighted [wa]s insufficient to make the bounds of the claim understandable.”