CAFC Issues Non-Precedential Claim Construction with a Dissent

The Federal Circuit recently issued a non-precedential opinion in Vehicle IP, LLC v. AT&T Mobility, LLC. Perhaps the most interesting aspect of this decision was that it was a non-precedential opinion with a dissent, which to some extent seems a bit contradictory.

The tale begins back on December 31, 2009, when Vehicle IP filed a patent infringement action against the Appellees in the United States District Court for the District of Delaware. The patent infringement lawsuit asserted that Appellees infringed U.S. Patent No. 5,987,377 (“the ’377 patent”). On December 12, 2011, the district court issued an order construing the disputed claim terms of the ’377 patent, including “expected time of arrival” and “way point(s).” The district court construed “expected time of arrival” as “time of day at which the vehicle is expected to arrive somewhere (and not remaining travel time).” The district court construed “way point(s)” as “intermediate point(s) on the way to the final destination (and not the final destination itself).”

After the district court construed the claims, Appellees filed two motions for summary judgment. The district court granted both motions. On April 19, 2013, the district court entered judgment in favor of Appellees. Vehicle IP appealed the entry of judgment, challenging the district court’s claim constructions and summary judgment rulings.

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Collateral Estoppel Prevents Reexam Claim from being Enforced

On November 19, 2014, the United States Court of Appeals for the Federal Circuit issued a decision in e.Digital Corporation v. Futurewei Technologies, Inc. e.Digital appealed from a judgment of non-infringement made by the U.S. Federal District Court for the Southern District of California. The district court based its determination of non-infringement on the fact that e.Digital was collaterally estopped from seeking a construction of a claim limitation in e.Digital’s U.S. Patent Nos. 5,491,774 and 5,839,108 different from another court’s previous construction of the same limitation in the ’774 patent.

The Federal Circuit, with Judge Moore writing and joined by Judges O’Malley and Reyna, held that the district court correctly applied collateral estoppel to the ’774 patent, but improperly applied the doctrine to the unrelated ’108 patent.

To understand the ruling in this case one must first look at the prior case that construed the critical claim. Previously, in a litigation in the United States Federal District Court for the District of Colorado, e.Digital asserted claims 1 and 19 of the ’774 patent. The ’774 patent discloses a device with a microphone and a removable, interchangeable flash memory recording medium that allows for audio recording and playback. Asserted claims 1 and 19 recited “a flash memory module which operates as sole memory of the received processed sound electrical signals.” The district court construed the sole memory limitation to require “that the device use only flash memory, not RAM or any other memory system” to store the “received processed sound electrical signals.” The district court based its construction on the written description of the ’774 patent and its determination that the use of RAM had been disclaimed during prosecution. With this claim construction decided, the parties stipulated to a dismissal of the case with prejudice.

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Willful Infringement Center Stage at Federal Circuit

The United States Court of Appeals for the Federal Circuit recently issued a unanimous panel decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. This decision may have more far-reaching implications for patent reform than any other decision reached by any court in recent memory. The issue of particular interest in this case was willful infringement, and in a concurring opinion, Judges O’Malley and Hughes wrote that the majority was constrained by the Federal Circuit’s precedent in In re Seagate and Bard Peripheral Vascular v. W.L. Gore, but that recent Supreme Court decisions call into question the continued viability of that precedent. As such, Judges O’Malley and Hughes urged the Federal Circuit to reconsider en banc the standard for awarding enhanced damages under 35 U.S.C. 284.

The case came to the Federal Circuit on an appeal by Halo Electronics, Inc. (“Halo”), who appealed from multiple decisions of the United States District Court for the District of Nevada. First, Halo appealed the granting of summary judgment that Pulse Electronics, Inc. and Pulse Electronics Corp. (collectively “Pulse”) did not sell or offer to sell within the United States the accused products they manufactured for delivery to buyers outside the United States. Second, Halo also appealed the granting of summary judgment that Pulse did not directly infringe Halo’s U.S. Patents 5,656,985 (the “’985 patent”), 6,297,720(the “’720 patent”), and 6,344,785 (the “’785 patent”) (collectively “the Halo patents”). Finally, Halo appealed the holding that Pulse’s infringement of the Halo patents with respect to certain accused products that Pulse sold and delivered in the United States was not willful.

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Failure to Argue Waives Infringement on Proper Claim Construction

Recently, the Federal Circuit issued a decision in CardSoft v. Verifone, in which the Court overturned the district court’s claim construction. Overturning a district court’s claim construction is hardly unusual, and perhaps more typical than it really should be. What was unique about this particular case was that the Federal Circuit also went on to rule that CardSoft had waived any argument that the defendants had infringed under the correct claim construction, as a matter of law.

CardSoft filed this patent infringement suit in March 2008 against VeriFone, Inc., VeriFone Systems Inc., and Hypercom Corp. (collectively, “Defendants”), asserting infringement of U.S. Patent Nos. 6,934,945 (“the ’945 patent”) and 7,302,683 (“the ’683 patent”). The district court held a Markman hearing in July 2011 and conducted a jury trial in June 2012. The jury determined that certain of the Defendants’ devices infringed claim 11 of the ’945 patent and claim 1 of the ’683 patent and that these claims were not invalid. The Defendants moved for a new trial and for judgment as a matter of law, but the district court denied both motions.

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Federal Circuit Affirms Inequitable Conduct Against Apotex

Apotex Inc. and Apotex Corp. (collectively, “Apotex”) appealed the decision of the United States District Court for the Southern District of Florida finding that Apotex’s U.S. Patent No. 6,767,556 (“the ’556 patent”) is unenforceable due to inequitable conduct. Apotex likewise appealed the district court determination that the asserted claims were indefinite, that they disclaimed coverage of the accused products from the scope of the ’556 patent’s claims, and any recovery of pre-suit damages was barred by laches. In an opinion authored by Judge Reyna (with Judges Wallach and Hughes joining), the United States Court of Appeals for the Federal Circuit determined that the district court did not abuse its discretion in finding inequitable conduct, and on that basis alone, affirmed the district court’s judgment. See Apotex, Inc. v. UCB, Inc. (August 15, 2014).

The ’556 patent is generally directed to a process for manufacturing moexipril tablets. Moexipril is an angio-tensin-converting enzyme (“ACE”) inhibitor used to treat hypertension. To improve stability, the ’556 patent discloses a process of making moexipril tablets consisting mostly of moexipril magnesium obtained by reacting moexipril, or its acid-addition salts, with an alkaline magnesium compound.

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