Thursday, January 18, 2018

CAFC finds that CD Cal failed to provide a “full and fair opportunity to ventilate the issues.”


The opinion begins


Defendant Zinus, Inc., appeals from a summary
judgment entered in favor of plaintiff Cap Export, LLC,
and third-party defendants Abraham Amouyal and
4Moda Corp. (collectively, “Cap Export”) by the United
States District Court for the Central District of California.
The district court ordered Zinus, the owner of U.S. Patent
No. 8,931,123 (“the ’123 patent”), to file a motion for
summary judgment of validity of that patent. Following
briefing, the court held two of the asserted claims of
Zinus’s patent invalid for obviousness. The court then
dismissed all of Zinus’s counterclaims with prejudice. We
vacate the district court’s summary judgment and remand
for further proceedings.




Of the issues leading to decision to vacate:


On appeal, Zinus raises a number of objections to the
district court’s summary judgment ruling. Three of
Zinus’s arguments are persuasive.

First, the district court improperly granted summary
judgment for Cap Export sua sponte, without proper
notice to Zinus. “It is well established that a district court
has ‘the power to enter summary judgment[] sua sponte,
so long as the losing party was on notice that she had to
come forward with all of her evidence.’” Mikkelsen Graphic
Eng’g, Inc. v. Zund Am., Inc., 541 F. App’x 964, 972
(Fed. Cir. 2013) (quoting Celotex Corp. v. Catrett, 477 U.S.
317, 326 (1986)); see also Albino v. Baca, 747 F.3d 1162,
1176 (9th Cir. 2014) (“Even when there has been no crossmotion
for summary judgment, a district court may enter
summary judgment sua sponte against a moving party if
the losing party has had a full and fair opportunity to
ventilate the issues involved in the matter.”). Rule 56(f)
of the Federal Rules of Civil Procedure provides that
district courts may grant summary judgment for a nonmovant
only after “giving notice and a reasonable time to
respond.” See Mikkelsen, 541 F. App’x at 972–73.




AND


When it ordered Zinus to make a motion for summary
judgment of validity, the district court provided no notice
that the court was contemplating entering summary
judgment of invalidity. Normally, if a patent holder were
to lose a motion for summary judgment of validity, the
result would be a trial, not a judgment of invalidity. In
fact, because a patent carries a presumption of validity
and a challenger must prove invalidity by clear and
convincing evidence, a patentee need not present any
factual evidence to prevail on a motion for summary
judgment of validity. Massey v. Del Labs., Inc., 118 F.3d
1568, 1573 (Fed. Cir. 1997). The district court gave no
notice that it might grant summary judgment against
Zinus.
Furthermore, Zinus lacked a “full and fair opportunity
to ventilate the issues.” Gospel Missions of Am. v. City of
Los Angeles, 328 F.3d 548, 553 (9th Cir. 2003). Because of
the unusual sequence of briefs and evidence, Zinus did not
have an opportunity to depose Cap Export’s expert, whose
declaration was first presented as part of Cap Export’s
sur-reply filed on November 11, 2016. Nevertheless, the
district court relied on the expert’s testimony and found it
“credible.” Zinus was also denied an opportunity to
present evidence of objective indicia of nonobviousness,
which could have supported its position that the claims of
the ’123 patent were not obvious. See, e.g., Cheese Sys.,
Inc. v. Tetra Pak Cheese & Powder Sys., Inc., 725 F.3d
1341, 1353 (Fed. Cir. 2013). Although Zinus stated in its
reply brief in support of its motion for summary judgment
of validity that it was not “at this time asking the Court to
consider any objective evidence of nonobviousness,” Zinus
was entitled to present evidence of nonobviousness,
including objective evidence of nonobviousness, in defending
against a motion for summary judgment of invalidity.
Under these circumstances, Zinus lacked both notice
that the district court would enter summary judgment of
invalidity sua sponte and an opportunity to present evidence
and argument as to why summary judgment should
not be entered against it. Accordingly, the district court’s
entry of summary judgment in Cap Export’s favor was
procedurally improper.




Of the second point



As neither party raised arguments regarding the validity of
claim 2, the district court erred in dismissing that claim
with prejudice. In addition, although a district court may
decline to exercise supplemental jurisdiction over state
law claims after dismissing federal claims pursuant to 28
U.S.C. § 1367(c)(3), any such dismissal must be without
prejudice. Davila v. Smith, 684 F. App’x 637, 638 (9th
Cir. 2017) (citing Gini v. Las Vegas Metro. Police Dep’t, 40
F.3d 1041, 1046 (9th Cir. 1994)). Accordingly, the district
court erred in dismissing claim 2 of the ’123 patent and
Zinus’s state law claims with prejudice.


Of the third point


Third, the district court improperly relied on the “bed
in a box” prior art reference despite a factual dispute
regarding whether the reference predated the ’123 patent.
Cap Export alluded to the “Amazing Bed in a Box” website
only in its April 2016 letter to Zinus’s counsel; it did
not assert the website as prior art in any of its briefs to
the district court in connection with Zinus’s motion for
summary judgment of validity. In its opening brief on
that motion, Zinus argued that the website does not
predate the priority date of the ’123 patent, which is
September 25, 2013, because the website appears to have
been posted in November 2014.2 It appears that Cap
Export may have abandoned the reference altogether, as
Cap Export did not address that reference in its opposition
brief before the district court. See Shakur v. Schriro,
514 F.3d 878, 892 (9th Cir. 2008) (holding that a party
abandons claims by not defending them in opposition to a
motion for summary judgment); Stichting Pensioenfonds
ABP v. Countrywide Fin. Corp., 802 F. Supp. 2d 1125,
1132 (C.D. Cal. 2011) (“[I]n most circumstances, failure to
respond in an opposition brief to an argument put forward
in an opening brief constitutes waiver or abandonment in
regard to the uncontested issue.”).
Nevertheless, the district court relied on that reference
in concluding that claims 1 and 3 would have been
obvious. The court explained that “someone with ordinary
skill in the art would view the Tiffany Bed (with a
headboard compartment), the Aspelund bed (with legs
attached to the footboard), and the Bed in a Box (where
all pieces of the bed fit in one compartment), and combine
these references . . . .” At best, the disputed fact regarding
the publication date of the “bed in a box” reference
precludes reliance on that reference for purposes of summary
judgment. See Tennison v. City & Cty. of San
Francisco, 570 F.3d 1078, 1087 (9th Cir. 2009); Lamle v.
Mattel, Inc., 65 F. App’x 293, 295 (Fed. Cir. 2003).

Tuesday, January 16, 2018

LIQWD, INC./OLAPLEX LLC win appeal at CAFC against L’ORÉAL: context is central in claim construction




Olaplex moved for a preliminary injunction, and in
July 2017, the district court denied the motion. The
court’s dispositive basis for denying the motion was its
construction of the claim requirement that the mixture
not contain a “hair coloring agent.” Because the adopted
construction excluded L’Oréal’s products, the court concluded,
Olaplex had failed to show a likelihood of success
on the merits of its infringement claims and therefore a
preliminary injunction was inappropriate. Id. at *7.
Olaplex timely appealed. We have jurisdiction under
28 U.S.C. § 1292(a)(1) and (c)(1). We now conclude that
the district court erred in its claim construction, and we
therefore vacate the denial of the preliminary injunction
and remand for further proceedings.





Within the case:


Context is central in claim construction, see,
e.g., Atlas IP, LLC v. Medtronic, Inc., 809 F.3d 599, 608
(Fed. Cir. 2015); Phillips v. AWH Corp., 415 F.3d 1303,
1321 (Fed. Cir. 2005) (en banc), and here the method
claims’ focus on producing results suggests a focus on
whether “hair coloring” results from the mixture actually
applied to hair. Cf. Cox Commc’ns, Inc. v. Sprint
Commc’n Co. LP, 838 F.3d 1224, 1232 (Fed. Cir. 2016)
(“All of the asserted claims are method claims, so it makes
sense to define the inventive method as a series of functions.”).
It is beyond dispute that not only the chemical
identity of molecules in the mixture, but the quantity of
such molecules, matters to whether the mixture contains
a constituent that in fact produces the result of hair
coloring. Accordingly, it is one natural interpretation of
the claim language, in context, to focus on what is actually
present in the mixture, considering both chemical
identity and quantity. In short, it is natural to say that a
particular mixture “does not contain a hair-coloring
agent,” despite the presence of certain identified molecules
that if greatly increased in number could change
hair color, if there are not enough of those molecules to
actually change hair color.





The case illustrates "what can happen" when a district court does
not address all arguments:


The district court did not rest its denial of the requested
preliminary injunction on any of the other bases
advanced by L’Oréal for denying the injunction.

Plagiarism at The Daily Beast leads to resignation


The New York Post reported on a plagiarism incident at The Daily Beast, which led to a quick resignation by the offender



John Avlon, the Daily Beast’s editor-in-chief, confirmed to The Post in a statement Tuesday that Crocker’s article was deleted and replaced with an editor’s note after the outlet learned of the allegations and confirmed them.

“Lizzie Crocker offered to resign and her resignation was accepted,” Avlon said in a statement. “When a second instance of plagiarism emerged, that story was deleted as well. A larger investigation of her work at The Beast is underway. We take plagiarism seriously, and will not allow the hard-earned trust we’ve built with our millions of loyal readers to be compromised.”

Crocker’s story on Roiphe — a writer for Harper’s Magazine who reportedly intends to name the author of the so-called “Sh—y Men in Media” list of male journalists accused of sexual misconduct — has now been replaced by an editor’s note.

“The story published about author Katie Roiphe violated The Daily Beast’s Code of Ethics and Standards and has been removed,” the statement reads.



link: https://nypost.com/2018/01/16/daily-beast-reporter-resigns-after-plagiarism-revealed/

The "crass edge"?


Tom Porter of Newsweek had text on Joe Biden in the post --This Is Who Trump Is Afraid of Facing in 2020, and It's Not Bernie Sanders --:



“What we can’t let voters do is think they can get the same policies with someone they like better, like Joe Biden—someone who would fight for them but who doesn’t have the crass edge,” one former White House staffer told Politico.


As to "crass," recall Biden's IQ remark, as mentioned for example within IPBiz:


See also E.J. Dionne's 1987 piece Biden Admits Errors and Criticizes Latest Report , which includes text about an outburst by Biden on April 3, 1987 in Claremont, NH:

The tape, which was made available by C-SPAN in response to a reporter's request, showed a testy exchange in response to a question about his law school record from a man identified only as "Frank." Mr. Biden looked at his questioner and said: "I think I have a much higher I.Q. than you do."

He then went on to say that he "went to law school on a full academic scholarship - the only one in my class to have a full academic scholarship," Mr. Biden said. He also said that he "ended up in the top half" of his class and won a prize in an international moot court competition. In college, Mr. Biden said in the appearance, he was "the outstanding student in the political science department" and "graduated with three degrees from college."

IPBiz notes that, even if what Biden said were true (i.e., graduated in top half of class at Syracuse Law School and had three (undergrad) degrees from the University of Delaware), such credentials probably should not be used to assert "I think I have a much higher I.Q. than you do." In fact, what Biden said wasn't true. He graduated well-into the bottom half of his class at Syracuse Law (76th in a class of 85). Anybody who has any familiarity with law school knows how grade-conscious law students (and potential employers of law students) are. When Biden later said: "I did not graduate in the top half of my class at law school and my recollection of this was inaccurate", it was an unbelievable understatement. Law students do not have inaccurate memories of their final grade point average, or whether they were in the "top half" or "bottom half" of their class. Biden is a legend in his own mind, and an overachiever trying to compensate for less than stellar credentials.




from Went to a garden party: does Joe Biden hide in your shoes?

From the 1987 Dionne piece in the NY Times:


WASHINGTON, Sept. 21— Senator Joseph R. Biden Jr. issued a formal statement today acknowledging that he had misstated several facts about his past last April in a campaign appearance in New Hampshire.

But the Delaware Democrat insisted today, as he had Sunday night in an interview with The New York Times, that some of the disputed statements were true and that his misstatements were the product of a faulty memory and the fact that he lost his temper.

Mr. Biden, whose Presidential campaign has been shaken by news reports about his unattributed use of speeches from other politicians and a plagiarism incident while he was in law school, said in The Times interview that he was ''frustrated'' and ''angry as hell'' over the reports.

(...)

Mr. Biden's campaign staff met this weekend in Wilmington, Del., in an effort to come up with a strategy in face of the building controversy. A senior adviser to the Biden campaign dismissed speculation that he would withdraw from the contest. ''Of course he's going to stay in,'' the adviser said, dismissing the recent reports on Mr. Biden as ''random press frenzy.''

The adviser said the latest troubles might ''free'' Mr. Biden to ''get into being himself'' and to campaign as an aggressive ''populist, anti-Establishment'' candidate and a defender of the interests of the American middle class.




from http://www.nytimes.com/1987/09/22/us/biden-admits-errors-and-criticizes-latest-report.html

See also post at Yelp:

In this clip from 1988, Joe Biden becomes irate with an interviewer, interrupts him and proceeds to boast about his intelligence and academic achievements. He mentions how he was the only one in his class in law school with a full academic scholarship and boost about his awards and degrees. youtube.com/watch?v=D1j0…

Sunday, January 14, 2018

The CAFC in Exmark v. Briggs & Stratton: "While this argument seems facially logical, it fails nonetheless."

The opinion of Chief Judge Joseph F. Bataillon of D. Nebraska did not fare well at the CAFC, which began its opinion:



Exmark Manufacturing Company filed suit against
Briggs & Stratton Power Products Group, LLC in the
United States District Court for the District of Nebraska,
alleging infringement of, inter alia, claim 1 of U.S. Patent
No. 5,987,863. The district court entered summary judgment
that claim 1 was not invalid because the claim
survived multiple reexaminations involving the same
prior art. The district court also denied summary judgment
of indefiniteness with respect to claim 1.1 The case
proceeded to a jury trial, where the jury found that Briggs
willfully infringed Exmark’s patent. The jury awarded
$24,280,330 in compensatory damages, which the district
court doubled as enhanced damages for Briggs’ willful
infringement.

Briggs appeals several of the district court’s orders,
including the district court’s: (1) summary judgment that
claim 1 is not anticipated or obvious, (2) denial of summary
judgment that claim 1 is indefinite, (3) denial of a
new trial on damages, (4) evidentiary rulings related to
damages, (5) denial of a new trial on willfulness, and
(6) denial of Briggs’ laches defense.

We conclude the district court erred by basing its
summary judgment of no invalidity solely on the fact that
claim 1 survived multiple reexaminations. Accordingly,
we vacate the district court’s summary judgment of no
invalidity. We remand to the district court for it to make
an independent determination of whether genuine issues
of material fact preclude summary judgment that claim 1
is not anticipated or obvious in view of the prior art. We
also hold that the district court erred in denying a new
trial on damages because Exmark’s damages expert failed
to provide an adequate explanation as to how she arrived
at a 5% royalty rate for the patented feature relative to
other conventional features of the accused products. We
also conclude that the district court abused its discretion
by limiting the evidence relevant to damages to prior art
that had been commercialized. Likewise, we conclude
that the district court abused its discretion by excluding
from the willfulness trial evidence relating to patent
validity based on its determination that Briggs’ invalidity
defenses were objectively unreasonable. The district
court’s evidentiary ruling does not comport with the
Supreme Court’s recent decision in Halo Electronics, Inc.
v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016), mandating
that willfulness is to be determined by the jury regardless
of whether Briggs’ defenses were objectively
reasonable. Accordingly, we vacate the jury’s finding of
willfulness, vacate the jury’s damages award, vacate the
district court’s enhanced damages award, and remand for
proceedings consistent with this precedent. We also
affirm the district court’s denial of summary judgment
that claim 1 is indefinite, and affirm its denial of Briggs’
laches defense.



The lack of an independent analysis by the district court
was found to be problematic:


Briggs argues that the district court erred by granting
summary judgment that claim 1 is not invalid as anticipated
or obvious based solely on the fact that claim 1
survived multiple reexaminations involving the same
prior art. We agree.
The district court’s summary judgment decision was
limited to a single paragraph containing a single basis.

(...)

Though the district court stated that
it gave the reexaminations “some, though not determinative,
weight,” id. (emphasis added), it appears from its
cursory decision that, in fact, the court granted summary
judgment based on the claim surviving multiple reexaminations.
No other explanation for granting summary
judgment was provided. The question thus presented is
whether a reexamination confirming patentability of a
claim can form the sole basis for granting summary
judgment that a claim is not invalid based on the same
prior art.
We hold that a reexamination confirming patentability
of a patent claim alone is not determinative of whether
a genuine issue of fact precludes summary judgment of no
invalidity. Surviving a reexamination does not warrant
ipso facto summary judgment that a patent is not invalid.
Holding otherwise would improperly give complete deference
and preclusive effect to the PTO’s patentability
determination, foreclosing challenges to patent validity in
district court based on the same prior art.



The CAFC went on to say:



Our holding is supported by our prior decisions stating
that a district court “is never bound by an examiner’s
finding in an ex parte patent application proceeding.”
Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1359 (Fed. Cir.
2007) (citing Fromson v. Advance Offset Plate, Inc.,
755 F.2d 1549, 1555 (Fed. Cir. 1985)). We have said the
same regarding an examiner’s findings during reissue
proceedings. See Fromson, 755 F.2d at 1555 (“The Examiner’s
decision, on an original or reissue application, is
never binding on a court.”); Interconnect Planning Corp. v.
Feil, 774 F.2d 1132, 1139 (Fed. Cir. 1985) (“IPC’s view is
incorrect that the PTO’s [reissue] decision must be given
controlling weight . . . .”). While the PTO’s findings
during reexamination are “evidence the court must consider
in determining whether the party asserting invalidity
has met its statutory burden by clear and convincing
evidence,” they are not dispositive. Fromson, 755 F.2d at
1555.
Instead, the “deference [owed] to the decisions of the
USPTO takes the form of the presumption of validity
under 35 U.S.C. § 282. That is, by statute a patent is
valid upon issuance and included within the presumption
of validity is a presumption of non-obviousness.” Pfizer,
480 F.3d at 1359 (emphases added) (citations omitted).
This presumption also follows a patent claim surviving
reexamination. See Superior Fireplace Co. v. Majestic
Prods. Co., 270 F.3d 1358, 1367 (Fed. Cir. 2001) (“Challenges
to the validity of claims, whether regularly issued,
issued after a reexamination . . . or issued after a reissue
. . . must meet the clear and convincing standard of
persuasion. This requirement is based on the presumption
of validity.” (emphasis added) (citations omitted)).
The presumption of validity, however, is just that—a
presumption—which can be overcome by the patent
challenger who meets its high burden of proving the
factual elements of invalidity by clear and convincing
evidence. Id. We recognize the district court must consider
reexaminations as evidence “in determining whether
the party asserting invalidity has met its statutory burden
by clear and convincing evidence.” Pfizer, 480 F.3d at
1360 (quoting Fromson, 755 F.2d at 1555). But just as an
original examination resulting in patent issuance does not
foreclose an invalidity attack in district court, so too does
a reexamination confirming a claim not preclude a patent
challenger from meeting its burden of proving invalidity.
We thus “affirm the obligation of the district court to
reach an independent conclusion.” Interconnect, 774 F.2d
at 1139.




The same could be said of a district court's obligation
of de novo review of a magistrate's conclusions of law.

**Of interest:


Finally, Exmark asserts that Briggs’ strategic decision
to challenge validity through reexamination at the
PTO gave Briggs advantages that it would not get in
district court, including a lack of a presumption of validity
and the ability to rely on the broadest reasonable interpretation.
Therefore, Exmark argues, Briggs cannot
ignore the result of reexamination having chosen its
forum and lost. Exmark seems to suggest that because
Briggs was unable to invalidate the claims under a lower
standard of patentability and a broader claim construction
standard, Briggs cannot establish invalidity by clear
and convincing evidence. While this argument seems
facially logical, it fails nonetheless.

It is important to consider the substantive and procedural
differences between challenging patentability in an
ex parte reexamination and challenging patent validity in
federal court. Notably, unlike challenging validity in
district court, in an ex parte reexamination, the claims
are construed under the broadest reasonable interpretation,
the patent challenger does not participate beyond its
initial request for reexamination, the admission of evidence
is not governed by the Federal Rules, and the
burden of proving unpatentability is merely a preponderance
of evidence. Such differences, however, are material
in district court litigation. For example, the scope of the
construed claims, particularly to the extent there are
differences between the PTO’s and district court’s construction,
must be considered in determining whether a
genuine issue of material fact exists as to whether a prior
art reference anticipates or renders a claim obvious.
In this case, the district court adopted the parties’
agreed-to construction of “first flow control baffle” as “a
front structure within the walls of the mower deck that
controls the flow of air and grass clippings.” Exmark Mfg.
Co. v. Briggs & Stratton Power Prods. Grp., LLC, No.
8:10CV187, 2011 WL 5976264, at *4 (D. Neb. Nov. 29,
2011); see also J.A. 1558 at 105:14–18. On appeal of the
reexamination before the Board, in which Briggs did not
participate, Exmark and the examiner disagreed about
the proper interpretation of “baffle” and “flow control
baffle.” Exmark argued that “the entire first flow control
baffle must be a baffle, and thus, the individual baffle
portions must also be baffles,” and that “a ‘baffle’ needs to
control the flow of air and grass clippings.” J.A. 3708.
The Board agreed with Exmark and construed “baffle”
and “flow control baffle” as “an element that ‘controls’ the
flow of air and grass clippings within the mower deck in a
‘meaningful way.’” J.A. 3707.




***Of previously reviewed prior art, note a previous
post on IPBiz, including text:


Beecham's '639 patent on nabumetone (RELAFEN) was found invalid
over prior art that had been examined by the PTO.

There were separate issues of unenforceability (inequitable conduct).
Curiously, in a parallel application to that leading to the '639 patent,
Beecham told the PTO that the prior art did not even disclose the compound nabumetone.

I had written in Intellectual Property Today in July 2001 ("A Tale of Conflicting Models - The Coming Skirmish on the IP Frontier"): (...)



See
GlaxoSmithKline settles RELAFEN case


See also
http://ipbiz.blogspot.fr/2008/08/patent-attorneys-should-not-assume-peer.html

Values learned from Gettysburg


Back in October 2017, there was some flutter about a Twitter posting by James Comey, which included a photograph from
Gettysburg National Military Park.
See James Comey might be pondering 'leadership and values' at Gettysburg .

A bit of detective work had preceded this. See This Is Almost Certainly James Comey’s Twitter Account by
Ashley Feinberg.

LBE includes here a photo at Little Round Top at Gettysburg taken in January 2018 showing a soaring hawk against a cloud framed by the statue of Brigadier General Gouverneur Kemble Warren.

Warren was a significant hero at Gettysburg, for recognizing the significance of Little Round Top. HOWEVER, after Five Forks, Warren was removed from command of V Corps, and spent the rest of his life trying to clear his name.

As to the hawk, cross-reference to the opening and closing scenes of the movie "Bridge on the River Kwai."

Photo by LBE:


Thursday, January 11, 2018

Darrell Issa of California's 49th congressional district not running for re-election

Although known in IP circles for his patent positions, Issa was involved in the recall of then Governor Gray Davis; from wikipedia:


Issa came to national prominence in 2003 when he contributed more than $1.6 million to help fund a signature-gathering drive for the petition to recall California Governor Gray Davis. At the time he made the contribution, it was widely believed that Issa intended to place himself on the ballot to replace Davis. However, following the entrance of fellow Republican Arnold Schwarzenegger into the race, two days before the filing deadline, Issa announced that he would not run.



And, about one year ago in January 2017:


President-elect Donald Trump has decided to keep former Google executive Michelle Lee on as director of the U.S. Patent and Trademark office, according to Rep. Darrell Issa, who informed tech industry organizations gathered in Washington Thursday for a breakfast event.

Issa's comments were confirmed by two sources in attendance and a congressional aide.




link: https://www.politico.com/blogs/donald-trump-administration/2017/01/michelle-lee-patent-office-chief-to-stay-on-233847

From USInventor:


US Inventor’s Paul Morinville, along with other passionate inventors, took to the streets this weekend to protest Congressman Darrell Issa and his views on Intellectual Property policy.

Paul writes: “Issa bullied through the America Invents Act to ingratiate his friends and contributors at the CTA. While Issa is weakening our patent system, China, Europe and other countries are strengthening theirs. It is today better to patent in China than it is to patent here. If Issa is allowed to continue, we will not only be buying goods manufactured in China, but they will be invented there as well.”

Wednesday, January 10, 2018

Mixed result in Finjan case


The outcome:


A jury found Blue Coat Systems, Inc. (“Blue Coat”) liable
for infringement of four patents owned by Finjan,
Inc. (“Finjan”) and awarded approximately $39.5 million
in reasonable royalty damages. After trial, the district
court concluded that the ’844 patent was patent-eligible
under 35 U.S.C. § 101 and denied Blue Coat’s post-trial
motions for judgment as a matter of law (“JMOL”) and a
new trial. Blue Coat appeals.

We find no error in the district court’s subject matter
eligibility determination as to the ’844 patent and agree
that substantial evidence supports the jury’s finding of
infringement of the ’844 and ’731 patents. However, we
conclude that Blue Coat was entitled to JMOL of noninfringement
for the ’968 patent because the accused
products do not perform the claimed “policy index” limitation.
On appeal, Blue Coat does not challenge the verdict
of infringement for the ’633 patent.

With respect to damages, we affirm the award with
respect to the ’731 and ’633 patents. We vacate the damages
award for the ’968 patent, as there was no infringement.
With respect to the ’844 patent, we agree with Blue
Coat that Finjan failed to apportion damages to the
infringing functionality and that the $8-per-user royalty
rate was unsupported by substantial evidence.

We therefore affirm-in-part, reverse-in-part, and remand
to the district court for further consideration of the
damages issue as to the ’844 patent.





Blue Coat, represented by Mark Lemley, prevailed on the
'968 patent matter.

From the decision:


Blue Coat also argues that it was entitled to JMOL of
non-infringement with respect to the ’968 patent because
Finjan failed to introduce substantial evidence that the
accused products implement the claimed “policy index.”
We agree.

The ’968 patent is directed to a “policy-based” cache
manager that can efficiently manage cached content
according to a plurality of security policies. The patentee
agrees that a “policy” is a rule or set of rules that determines
whether a piece of content can be accessed by a
user. Different policies can apply to different users, and
the decision of whether to let a user access content is
made by comparing the content’s security profile with the
policy governing the user’s access. Thus, the policy based
cache manager in the ’968 patent is a data structure that
keeps track of whether content is permitted under various
policies. Claim 1, the sole asserted claim, is reproduced
below, with key language underlined:

1. A policy-based cache manager, comprising:

a memory storing a cache of digital content,
a plurality of policies, and a policy
index to the cache contents, the policy index
including entries that relate cache
content and policies by indicating cache
content that is known to be allowable relative
to a given policy, for each of a plurality
of policies;

(...)

the results of which are
saved as entries in the policy index.




The CAFC noted:


As Finjan’s expert
expressly acknowledged, however, Proxy SG does not save
final decisions about whether content can be accessed by
users subject to a given policy. It simply stores the evaluation
of each individual rule that goes into making an
ultimate policy decision. This is not what the claim language
requires. The policy index claimed in the ’968
patent must store the “results” of a content evaluator’s
determination of “whether a given digital content is
allowable relative to a given policy.”




How Blue Coat prevailed at the CAFC is of interest:



At summary judgment, the district court agreed that
this claim language requires the policy index to store final
allowability determinations and noted that “Defendant’s
argument would likely prevail if all policies consist of
multiple rules or conditions.” Finjan, Inc. v. Blue Coat
Sys., Inc., No. 13-CV-03999-BLF, 2015 WL 3630000, at *9
(N.D. Cal. June 2, 2015). The court nevertheless declined
to grant summary judgement because “the ’968 patent
specifically provides that a policy can be just one rule.” Id.
If Proxy SG saved the results of applying each rule that
makes up a one-rule policy, it would be saving final allowability
determinations for a plurality of policies and
thus infringing. The district court therefore gave Finjan
the opportunity to prove at trial that “the Proxy SG policy
cache contains a number of condition evaluations, each of
which is determinative of whether a file is allowable
relative to one of a plurality of single condition policies.”
Id.

At trial, Finjan made no such showing. There was no
evidence indicating that the condition determinations
stored by Proxy SG are final allowability decisions for
users governed by single-rule policies. Indeed, Finjan’s
expert acknowledged that Proxy SG never saves final
allowability determinations and must instead re-evaluate
the allowability of content each time it is requested. It is
therefore clear that the jury’s infringement verdict was
not supported by substantial evidence.

Because Finjan failed to present evidence that the accused
product ever stores final allowability determinations,
Blue Coat was entitled to JMOL of noninfringement.




Of damages


Two categories of compensation for infringement are the
patentee’s lost profits and the “reasonable royalty he
would have received through arms-length bargaining.”
Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324
(Fed. Cir. 2009).
The only measure of damages at issue in this case is a
reasonable royalty, which “seeks to compensate the patentee
. . . for its lost opportunity to obtain a reasonable
royalty that the infringer would have been willing to pay
if it had been barred from infringing.” AstraZeneca AB v.
Apotex Corp., 782 F.3d 1324, 1334 (Fed. Cir. 2015) (citing
Lucent Techs., 580 F.3d at 1325).



An issue



We agree with Blue Coat that the $8-per-user royalty
rate employed in Finjan’s analysis was unsupported by
substantial evidence. There is no evidence that Finjan
ever actually used or proposed an $8-per-user fee in any
comparable license or negotiation. Rather, the $8-per-user
fee is based on testimony from Finjan’s Vice President of
IP Licensing, Ivan Chaperot, that the current “starting
point” in licensing negotiations is an “8 to 16 percent
royalty rate or something that is consistent with
that . . . like $8 per user fee.” J.A. 40409. Mr. Chaperot
further testified that the 8–16% figure was based on a
2008 verdict obtained by Finjan against Secure Computing.
On this basis, Finjan’s counsel urged the jury to use
an $8-per-user royalty rate for the hypothetical negotiation
because “that’s what Finjan would have asked for at
the time.” J.A. 41654.
While any reasonable royalty analysis “necessarily involves
an element of approximation and uncertainty, a
trier of fact must have some factual basis for a determination
of a reasonable royalty.” Unisplay, S.A. v. Am. Elec.
Sign Co., 69 F.3d 512, 517 (Fed. Cir. 1995). Mr. Chaperot’s
testimony that an $8-per-user fee is “consistent with”
the 8–16% royalty rate established in Secure Computing
is insufficient. There is no evidence to support Mr. Chaperot’s
conclusory statement that an 8–16% royalty rate
would correspond to an $8-per-user fee, and Finjan fails to
adequately tie the facts of Secure Computing to the facts
in this case.
See LaserDynamics, 694 F.3d at 79
(“[A]lleging a loose or vague comparability between different
technologies or licenses does not suffice.”).
Secure Computing did not involve the ’844 patent, and
there is no evidence showing that the patents that were at
issue are economically or technologically comparable.

Tuesday, January 09, 2018

Post at Politico on Alex Azar highlights possible line of questioning of HHS nominee

The post at Politico begins


The drugmaker [Lilly, employer of Azar] believed the erectile dysfunction drug [Cialis] might
help a rare and deadly muscle-wasting disease that afflicts boys. The drug didn’t work
— but under a law that promotes pediatric research,
Lilly was able to extend the Cialis patent anyway for six months —
and that’s worth a lot when a medication brings in over $2 billion a year.

Critics say the brand-name drugmakers are “gaming” the patent system,
finding all sorts of ways to protect monopolies and delay competition from generics.
And Alex Azar — the former president of Eli Lilly's U.S. operations, now poised
to become the top U.S. health official — professes to oppose such tactics.




See How Trump’s HHS nominee’s drug company ‘gamed’ a patent

Pediatric extensions, which allow for testing of known drugs on young patients, are commonplace. Politico did state


The pediatric exclusivity law — the one that eventually encouraged Lilly to give kids a sex drug
— was enacted about 20 years ago with the best of intentions. Drugs don’t work the same in children
as they do in adults, and companies needed incentives to do costly studies. In addition,
the law encouraged drugmakers to do more research on rare disorders.

Lilly tested Cialis on Duchenne muscular dystrophy. Its competitor Pfizer tested Viagra
in children with a lung disorder. Neither found a cure — Viagra was more likely
to harm children than to help them — but both boosted their bottom line.

PTAB cites 37 CFR 11.802(a) in St. Regis Mohawk. Contemplate history of ABA Model Rule 8.2

The PatentDocs blog includes the PTAB decision in Mylan v. St. Regis Mohawk Tribe [ Paper 124
Entered: January 4, 2018. ORDER Denying Request for Oral Hearing and Denying Renewed Request for Authorization to File Motion for Additional Discovery
37 C.F.R §§ 42.5, 42.70(a), 42.51
]

See Patent Docs post The PTAB Strikes Back

Of discovery into PTAB related to alleged bias:


But nowhere has the Tribe offered anything other than gross speculation as to any of its assertions of alleged
impartiality. See Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, Case
IPR2012-00001, Paper No. 26, slip op. at 6 (PTAB Mar. 5, 2013)
(precedential) (“The mere possibility of finding something useful, and mere
allegation that something useful will be found, are insufficient to
demonstrate that the requested discovery is necessary in the interest of
justice.”). Seeking, for example, “[t]he methodology used to determine the
annual bonuses (or other merits based compensation) for each member of
our merits panel” and “[t]he annual reviews of all members of our merits
panel” (id. at 6) serves no purpose in these proceedings and amounts to a
fishing expedition that is a waste of our time and resources.



Rule 11.802(a) appears in footnote 4:


4 We note the USPTO Rules of Professional Conduct state that “[a]
practitioner shall not make a statement that a practitioner knows to be false
or with reckless disregard as to its truth or falsity concerning the
qualifications or integrity of a judge.” 37 C.F.R. § 11.802(a). Failure to
abide by those rules amounts to professional misconduct and may justify
disciplinary proceedings. 37 C.F.R. §§ 11.804, 11.901.


37 CFR 11.802(a) states:


11.802 JUDICIAL AND LEGAL OFFICIALS.
(a) A practitioner shall not make a statement that the practitioner knows to be false
or with reckless disregard as to its truth or falsity concerning the qualifications
or integrity of a judge, adjudicatory officer or public legal officer, or of a candidate
for election or appointment to judicial or legal office.



This text relates to ABA Model Rule 8.2. The case IN RE: Christine M. MIRE. contains a relevant footnote:


The applicable rule in Louisiana is Rule 8.2 of Louisiana's Rules of Professional Conduct, which tracks Model Rule of Professional Conduct 8.2. Model Rule 8.2 was promulgated by the American Bar Association (ABA), after the Supreme Court, in Garrison v. Louisiana, 379 U.S. 64 (1964), held that statements critical of judges made by a district attorney could only be “the subject of either civil or criminal sanctions” if the statements were “false” and “made with the high degree of awareness of their probable falsity demanded by New York Times [v. Sullivan, 376 U.S. 254, 270 (1964) ].” See Margarett Tarkington, Comment, The Truth Be Damned: The First Amendment, Attorney Speech, and Judicial Reputation, Geo. L.J., 97, 1567, 1568–69 nn. 1–5 and accompanying text (2009) (which contains the history of Model Rule 8 .2). The commentator further notes there is a significant disconnect between the ABA's originally intended standard and the application of Model Rule 8.2 by courts across the country. See Id., 1569 nn. 5–6 and accompanying text.



In Maryland:


MLRPC 8.2(a). To establish a violation of this rule, three things must be
proven by clear and convincing evidence: (1) that the lawyer made a false statement;
(2) that the statement concerned the qualifications or integrity of a judge or a
candidate for judicial office; and (3) that the lawyer made the statement with
knowledge that it was false or with reckless disregard as to its truth or falsity.6 In
this case, the parties have focused on the third element – whether the statement in
Mr. Stanalonis’ campaign flyer was made with knowledge that it was false or with
reckless disregard as to its truth or falsity.7


Footnote 6:



6 The rule is based on a model rule proposed by the American Bar Association.
See American Bar Association, Annotated Model Rules of Professional Conduct 651
(8th ed. 2015). Courts in other states that have adopted the rule have also recognized
that it requires proof of these three elements. See In re Charges of Unprofessional
Conduct Involving File No. 17139, 720 N.W. 2d 807, 813 (Minn. 2006).


link: http://www.mdcourts.gov/opinions/coa/2015/74a13ag.pdf

**Of a University of Chicago matter, see Al Alschuler on Judge Easterbrook

**See the article by Richard Undeerwood What Gets Judges in Trouble

**In the Ninth Circuit Court of Appeals:


A modified version of the New York Times standard applies in the context of attorney discipline. In the recent case of United States District Court v. Sandlin, 12 F.3d 861 (9th Cir.1993), the Ninth Circuit considered a disciplinary sanction under Washington Rule of Professional Conduct 8.2, which is identical to ABA Model Rule 8.2. The Court of Appeals stated:


The Supreme Courts of Missouri and Minnesota have determined that, in light of the compelling interests served by RPC 8.2(a), the standard to be applied is not the subjective one of New York Times, but is objective. [Matter of] Westfall, 808 S.W.2d [829] at 837 [1991]; In re Disciplinary Action Against Graham, 453 N.W.2d 313, 322 (Minn.), cert. denied, 498 U.S. 820 [111 S. Ct. 67, 112 L. Ed. 2d 41] (1990). We agree. While the language of WSRPC 8.2(a) is consistent with the constitutional limitations placed on defamation actions by New York Times, "because of the interest in protecting the public, the administration of justice, and the profession, a purely subjective standard is inappropriate." Westfall, id. at 837. Thus, we determine what the reasonable attorney, considered in light of all his professional functions, would do in the same or similar circumstances.
Sandlin, 12 F.3d at 867.

Under this objective standard, a statement is reckless if made without any reasonable basis in fact. Id. Ignorance is not bliss; an attorney has an obligation to conduct a factual inquiry prior to speaking. See id. (without first deposing court reporter, attorney told FBI that judge ordered reporter to alter transcript); Westfall, 808 S.W.2d at 838 (without investigation, attorney made publicly televised statement accusing judge of purposefully dishonest conduct); In the Matter of Elizabeth Holtzman, 78 N.Y.2d 184, 573 N.Y.S.2d 39, 577 N.E.2d 30 (1991) (prior to obtaining trial minutes and without making any effort to interview witnesses, district attorney accused judge of requiring witness to demonstrate the position she was in when sexually assaulted), cert. denied, ___ U.S. ___, 112 S. Ct. 648, 116 L. Ed. 2d 665 (1991).


link: https://law.justia.com/cases/federal/district-courts/FSupp/856/1384/1681047/
[ BUT also Yagman, 55 F.3d 1430 (9th Cir. 1995)]



Monday, January 08, 2018

DuPont prevails over Monsanto at CAFC in matter involving US 7,790,953


Inherent anticipation arises in Monsanto v. DuPont :


It is well established that such reliance on extrinsic evidence
is proper in an inherency analysis. See Telemac, 247 F.3d
at 1328 (“[R]ecourse to extrinsic evidence is proper to
determine whether a feature, while not explicitly discussed,
is necessarily present in a reference.” (citation
omitted)). Moreover, extrinsic evidence need not antedate
the critical date of the patent at issue, Schering Corp. v.
Geneva Pharm., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003)
(“[T]his court rejects the contention that inherent anticipation
requires recognition in the prior art.”), nor have
contemporaneous recognition by a PHOSITA, id.
(“[R]ecognition by a [PHOSITA] before the critical
date . . . is not required to show anticipation by inherency.”).




Of the distinction between obviousness and anticipation:


“[A]lthough anticipation can be proven inherently,
proof of inherent anticipation is not the same as proof of
obviousness.” Cohesive Techs., Inc. v. Waters Corp., 543
F.3d 1351, 1364 (Fed. Cir. 2008). “Though less common,
in appropriate circumstances, a patent can be obvious in
light of a single prior art reference if it would have been
obvious to modify that reference to arrive at the patented
invention.” Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355,
1361 (Fed. Cir. 2016), cert. denied sub nom. Google Inc. v.
Arendi S.A.R.L., 137 S. Ct. 1329 (2017). This court has
“repeatedly held that the motivation to modify a prior art
reference to arrive at the claimed invention need not be
the same motivation that the patentee had.” Alcon Research,
Ltd. v. Apotex Inc., 687 F.3d 1362, 1368 (Fed. Cir.
2012).





AND


The PTAB did not base its obviousness finding solely on its inherent
anticipation analysis.17 The PTAB explained that a
PHOSITA would have been motivated to modify Booth to
produce plants having more variable seed oil fatty acid
characteristics, as found in claim 2 of the ’953 patent,
because Booth “only represents the ‘[s]ingle plants and
family means that were both lowest in linolenic acid
content and highest in oleic acid content.’” E.I. DuPont,
2016 WL 4255131, at *9 (quoting Booth col. 25 ll. 61–65)).
The PTAB then “f[ou]nd this evidence sufficiently teaches
[a PHOSITA] that the progeny results also include[]
plants that have higher linolenic acid content and/or
lower oleic acid content.” Id. Monsanto points to no
statement or suggestion in Booth that it would be undesirable
to produce progeny having low seed oil levels of
linolenic acid and 65% to 80% oleic acid (i.e., the composition
recited in claim 2). See generally Appellant’s Br.
Accordingly, we uphold the PTAB’s conclusion that claim
2 would have been obvious over Booth.



Footnote 17:


Given the Examiner did not reject claim 2 on
grounds of anticipation, the PTAB could not independently
adopt this ground of rejection without following the
procedures required for a new ground of rejection. See
Honeywell Int’l Inc. v. Mexichem Amanco Holding S.A. de
C.V., 865 F.3d 1348, 1357 (Fed. Cir. 2017) (explaining
that the PTAB’s “ability to rely on different grounds [of
rejection] than the examiner” is limited (internal quotation
marks and citation omitted)).



The en banc Federal Circuit in Wi-Fi One reverses the panel decision of Achates

The question presented to the CAFC for en banc review:


The question presented for en banc rehearing is:
Should this court overrule Achates Reference Publishing,
Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir.
2015) and hold that judicial review is available for
a patent owner to challenge the PTO’s determination
that the petitioner satisfied the timeliness
requirement of 35 U.S.C. § 315(b) governing the
filing of petitions for inter partes review?
Wi-Fi One, LLC v. Broadcom Corp., 851 F.3d 1241, 1241
(Fed. Cir. 2017).



The outcome in Wi Fi One:


The question before us is whether the bar on judicial
review of institution decisions in § 314(d) applies to timebar
determinations made under § 315(b). In Achates
Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658
(Fed. Cir. 2015), a panel of this court held in the affirmative
that a § 315(b) time-bar determination is final and
nonappealable under § 314(d). Today, the court revisits
this question en banc.

We recognize the strong presumption in favor of judicial
review of agency actions. To overcome this presumption,
Congress must clearly and convincingly indicate its
intent to prohibit judicial review. We find no clear and
convincing indication of such congressional intent. We
therefore hold that the time-bar determinations under
§ 315(b) are appealable, overrule Achates’s contrary
conclusion
, and remand these cases to the panel for
further proceedings consistent with this opinion.




The issue, 314 vs, 315:


In § 314, subsection (a) prescribes the threshold “determin[ation]”
required for the Director to institute: a
“reasonable likelihood” that the petitioner will succeed in
its patentability challenge to at least one of the challenged
patent claims. Subsections (b) and (c) prescribe
the timing of and notice requirements for the institution
decision. And § 314(d) addresses judicial review of the
Director’s IPR institution determination under § 314.
Specifically, § 314(d) provides that “[t]he determination
by the Director whether to institute an inter partes review
under this section shall be final and nonappealable.”2
(emphasis added).
(...)
The remainder of the IPR-related provisions of the
AIA go beyond the preliminary procedural requirements
and the preliminary determination regarding likely
unpatentability. Section 315, for example, governs the
relationship between IPRs and other proceedings conducted
outside of the IPR process. The provision at issue
in this appeal, § 315(b), provides that “[a]n inter partes
review may not be instituted if the petition requesting the
proceeding is filed more than 1 year after the date on
which the petitioner, real party in interest, or privy of the
petitioner is served with a complaint alleging infringement
of the patent.” This one-year time bar does not
apply to a request for joinder under § 315(c).



The CAFC found that the "strong presumption" favoring review,
in the absence of an explicit negation of review, required
reversal of Achates:


Accordingly, if a statute is “reasonably susceptible” to an
interpretation allowing judicial review, we must adopt
such an interpretation. Kucana v. Holder, 558 U.S. 233,
251 (2010); Gutierrez de Martinez, 515 U.S. at 434.
In view of this strong presumption, we will abdicate
judicial review only when Congress provides a “clear and
convincing” indication that it intends to prohibit review.
Cuozzo, 136 S. Ct. at 2140; see Lindahl v. Office of Pers.
Mgmt., 470 U.S. 768, 778 (1985); Block, 467 U.S. at 349–
50; Return Mail, Inc. v. U.S. Postal Serv., 868 F.3d 1350,
1357 (Fed. Cir. 2017).
We find no clear and convincing indication in the specific
statutory language in the AIA, the specific legislative
history of the AIA, or the statutory scheme as a whole
that demonstrates Congress’s intent to bar judicial review
of § 315(b) time-bar determinations. See Cuozzo, 136 S.
Ct. at 2140. The parties have not cited, nor are we aware
of, any specific legislative history that clearly and convincingly
indicates congressional intent to bar judicial
review of § 315(b) time-bar determinations. We review
the statutory language and the statutory scheme in turn.