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Posts Tagged ‘Federal Circuit’

Patent Glory Days Limited for East Texas

April 1st, 2017 Alexander No comments

East Texas has a long-standing reputation as a “patent hotspot.” Judges in the Eastern District of Texas are familiar with patents as they have ruled over numerous cases. Likewise, many potential jurors also have some type of experience with patents. In 1999, the amount of patent cases in East Texas was less than 100, but by 2007, this number skyrocketed to 369. By 2011, East Texas was recognized as a favorable patent location.

Patent holders favor the Eastern District of Texas because of the benefits and advantages that it offers for plaintiffs. To begin with, the discovery process happens fairly quickly and the judges in the district are less susceptible than judges in other districts to summary judgment motions. In addition, there are methods which permit the first parts of a suit to advance predictably without a lot of court involvement.

A high-profile case is putting East Texas at risk of losing its long-established dominance. This Monday, the Supreme Court will hear oral arguments in a case regarding where patent suits can be filed, specifically Section 1400(b) of the U.S. Code. This statute states that patent suits can be brought “in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”

Kraft Foods Group Brands brought suit against TC Heartland LLC in the District of Delaware, alleging infringement of its concentrated liquid dispenser patents. After TC Heartland unsuccessfully moved the case to the Southern District of Indiana, it filed a petition for a writ of certiorari with the Supreme Court. TC Heartland asserts that this statute is allowing patent holders to forum-shop, leading to inequitable results. TC Heartland contends that patent suits should only be allowed be to be filed where a company is incorporated, citing Fourco Glass Co. v. Transmirra Products Corp.

However, if this were to happen, a large number of patent plaintiffs would be forced out of Texas and into Delaware, where numerous companies are incorporated. While a number of people think that limiting where patent suits can be filed would create impediments for nonpracticing entities and reduce the number of lawsuits, others believe that it would have little impact.

For more information, see Law360.

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Fed. Circ. Refuses To Restrict Venue In Patent Cases

May 8th, 2016 Alexander No comments

The Federal Circuit recently denied liquid sweetener company TC Heartland LLC’s request for new restrictions on where patent suits can be filed. TC Heartland was sued by Kraft Foods Group Brands LLC in the District of Delaware and was seeking to have the case moved to the Southern District of Indiana, where it is based.

TC Heartland’s petition for a writ of mandamus, which urged the court to cast aside a 1990 ruling that patent suits can be filed in any district where the defendant makes sales, was denied.

TC Heartland argued that the 1990 decision known as VE Holding was overruled by a 2011 federal law, and that under that statute, patent suits can be filed only in places where the defendant is incorporated or has an established place of business and has allegedly infringed. The Federal Circuit rejected that argument, calling it “utterly without merit or logic.”

“The 2011 amendments to the general venue statute relevant to this appeal were minor,” the court wrote, adding that the statute was in fact “a broadening of the applicability of the definition of corporate residence, not a narrowing. This change in no manner supports Heartland’s arguments.”

“Boy, doesn’t this feel like something a legislature should do rather than something we should be asked to do?” U.S. Circuit Judge Kimberly A. Moore said at oral arguments.

Although the case did not actually involve the Eastern District of Texas, where the most patent suits are filed, it has been closely watched because a decision restricting venue in the way TC Heartland requested would have kept most suits out of the district, since few patent defendants are based there.

According to statistics compiled by Law360, there were 2,523 new patent complaints filed in the Eastern District of Texas last year, accounting for 45.5 percent of all cases nationwide. The collection of small cities 100 miles east of Dallas saw nearly 2,000 more new suits than the next-busiest court, the District of Delaware.

For more information, see Law360.



Fed. Circ.’s Lexmark Ruling Good Sign for Patent Owners

February 23rd, 2016 Alexander No comments

The Federal Circuit’s recently decided to retain limits on patent exhaustion, which is good news for patent owners like Lexmark, allowing them to exert control over products after they’re sold.

The Federal Circuit’s Lexmark opinion sends a mixed message for patent owners.

In the 10-2 en banc decision, the Federal Circuit decided not to disturb two of its longstanding rules: that overseas sales of a product don’t exhaust a patent owner’s right to sue in the U.S. and that patent owners can impose restrictions on the use of patented items after they are sold in order to keep the sale from exhausting their rights.

The court decided to take the case en banc to determine whether those rules remained good law following recent U.S. Supreme Court decisions that printer cartridge reseller Impression Products Inc., which Lexmark International Inc. accused of infringement, cast doubt on the prior holdings. The court found that the rulings don’t require it to change its precedent.

“On its face, this is a win for patent owners because it allows them to maximize their protection through contractual restrictions or where they sell their products geographically,” said Derek Dahlgren of Rothwell Figg Ernst & Manbeck PC.

A decision that either foreign sales or post-sale restrictions exhausted the rights of patent owners would have diminished their ability to use patents to protect their market, he said.

While the Lexmark case involves printer cartridges, the issue of patent exhaustion has broad ramifications across a wide range of industries, including technology, pharmaceuticals and medical devices. Patent owners have relied on the limitations on patent exhaustion to restrict post-sale uses of patented products, a strategy that would have been disrupted had the Federal Circuit overruled its precedent.

“It’s a pro-patent owner decision that reaffirms Federal Circuit precedent,” said Jeffrey Fisher of Farella Braun & Martel LLP. “It’s a less welcome decision for consumers and those who may potentially be accused of infringement down the road.”

The en banc Federal Circuit also gave its blessing to the practice of imposing post-sale restrictions on patented products. It held that as long as those restrictions, such as a requirement that a product can only be used once, are lawful and clearly communicated to buyers, they do not exhaust patent rights.

The issue of post-sale restrictions is particularly important to medical device makers as they use them as a way to protect patient safety, said Joseph Re of Knobbe Martens Olson & Bear LLP, whose firm filed an amicus brief in the case on behalf of the Medical Device Manufacturers Association.

Since reusing medical devices like syringes can lead to the transmission of infection diseases, “single patient use restrictions are critical in a hospital setting,” Re said.

Such restrictions can protect patients, as well as the reputation and sales of device makers. If a product is reused and leads to complications, the original manufacturer will likely be blamed, and “you want people to think highly of your products, and you don’t want them to be the cause of a medical disaster.”

For more information, see Law360.



Fed. Circ. Affirms Attys’ $200K Sanction In Patent Case

July 18th, 2015 Alexander No comments

Two law partners were hit with a $200,000 sanction over their client’s deposition testimony in a patent infringement case against Citrix Inc.

In a one-line order, a three-judge panel affirmed the $200,000 in sanctions U.S. District Judge William J. Zloch ordered attorneys David Fink and Timothy Johnson pay Citrix in September. In his ruling, Judge Zloch held that the two law partners and their client, had acted “unreasonably and vexatiously” and multiplied the proceedings.

The issues boiled down to the client’s deposition testimony in 2002, which Citrix alleged Fink and Johnson, of Houston-based Fink & Johnson, knew was false and unnecessarily extended the proceedings. The sanctions award was a “reasonable approximation” of the money Citrix spent as a result of their conduct.

The client initially filed a lawsuit in 2002 accusing various Citrix products of infringing two of his patents.  When he was subsequently deposed, the client testified, that he couldn’t name a single Citrix product and authorized the filing of the lawsuit without knowing whether Citrix had actually infringed his patents.

Citrix said Fink later conceded that the client’s deposition testimony was false and that he had discussed Citrix and a prefiling investigation with the client before filing the complaint.

Citrix attorney Timothy Rousseau of Goodwin Procter LLP stated that if the testimony had been corrected immediately, as opposed to seven months later, the lawsuit would have been in a very different place. At least, he said, the company would have known that a prefiling investigation had been done.

Instead, he said Citrix pursued frivolous discovery and court motions to get to the bottom of a deposition from the client that seemingly offered no reason for the suit.

“This was all part of Citrix trying to find out why the suit was filed,” he said. “We were rebuffed by a false answer and had to pursue further proceedings.”

For more information, see Law360.



Bad Lawyering Is Not Misconduct

June 30th, 2015 Alexander No comments

The Federal Circuit recently vacated a ruling that Cincinnati Sub-Zero Products Inc. was not entitled to attorneys’ fees after it defeated allegations that it infringed a patent for temperature-controlled blankets.

A three-judge panel reversed a portion of U.S. District Judge William Skretny’s denial of Sub-Zero’s motion for attorneys’ fees from Gaymar Industries Inc. that was based on purported misconduct by Sub-Zero. The Federal Circuit stated that a lower court incorrectly determined that sloppy lawyer work qualified as litigation misconduct that barred the award.  Specifically, the Federal Circuit concluded that the instances of Sub-Zero’s supposed litigation misconduct were merely poorly presented arguments.

The lower court had ruled that although Gaymar’s suit asserted a patent that the U.S. Patent and Trademark Office ultimately found to be invalid, it was not objectively baseless. The lower court then cited Sub-Zero’s own litigation misconduct as a basis for concluding that the case wasn’t so exceptional as to warrant fees under the framework established by the U.S. Supreme Court’s April 2014 Octane Fitness ruling.

“The examples cited by the district court — whether considered in isolation or in the aggregate — amount to sloppy argument, at worst,” the Federal Circuit said. “While such sloppiness on the part of litigants is unfortunately all too common, it does not amount to misrepresentation or misconduct.”

“In view of the serious consequences of a finding of misconduct, it is important that the district court be particularly careful not to characterize bad lawyering as misconduct,” they added.

The Federal Circuit said the examples cited by the lower court “without question … could be properly characterized as overstatements,” but they never rose to the level of misrepresentation or litigation misconduct.

Because none of the examples constituted litigation misconduct, the Federal Circuit said, the case needs to be remanded for reconsideration of Sub-Zero’s fee request under Octane Fitness. In April 2014, the U.S. Supreme Court issued its decision in Octane Fitness LLC v. ICON Health & Fitness, which made it easier for courts to order losing parties in patent suits to pay the prevailing party’s attorneys’ fees.

For more information, see Law360.



Apple Gets Partial Fed. Circ. Win In Sony-Nokia Patent Case

March 19th, 2015 Alexander No comments

The Federal Circuit recently cleared Apple Inc. of infringing three smartphone patents held by a company formed by Sony Corp. of America and Nokia Corp., but sent the case back to the district court for further proceedings on another patent.

In a complex, mixed ruling, the appeals court sided with Apple on some issues, while agreeing on other issues with plaintiff MobileMedia Ideas LLC, a patent licensing firm formed by Sony, Nokia and MPEG LA LLC.

MobileMedia accused Apple’s iPhone of infringing four patents related to camera phone and phone call technology. The Federal Circuit reversed both of the district court’s findings that Apple infringed and affirmed that the third patent was invalid. However, it agreed with MobileMedia that the district court’s noninfringement finding on the fourth patent was based on an incorrect claim construction and vacated that ruling.

The Federal Circuit said that the district court wrongly found infringement of two patents. The two patents are U.S. Patent Numbers 6,427,078, which covers a notebook computer that includes a camera unit, and 6,070,068, which covers the display of call handling options like “hold” and “disconnect” on a mobile phone display.

With regard to the ’078 camera phone patent, the appeals court said that because the iPhone’s camera module has no internal memory for storing data, it does not infringe the patent, which describes a “means for processing and for storing” information.

“Although MobileMedia contends that the ‘main memory of the iPhone’ is the camera unit’s means for storing, this ‘main memory’ is not located within the iPhone camera module, which is what [the patent] requires,” the Federal Circuit wrote. “Therefore, we reverse the district court’s judgment that Apple infringes.”

With regard to the ’068 call handling patent, the appeals court held that it was invalid as obvious and reversed the finding that Apple infringed.

The two patents that the district court found Apple did not infringe are U.S. Patent Numbers 6,253,075, which covers a way of rejecting an incoming call when the user is already on a call, and RE 39,231, which covers a way of permitting a user to stop a ringtone for an incoming call without notifying the caller.

The Federal Circuit held that the lower court correctly found that the ’075 call rejection patent was obvious. However, it found that the judge misconstrued the claims of the ’231 ringtone patent.

For more information, see Law360.