Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, No. 2010-1382 (Fed. Cir. Jun. 1, 2011) (Judges Dyk, Friedman, and Prost) (nonprecedential)

The Federal Circuit thought that these training pants patents have validity issues and vacated a preliminary injunction (for three of four patents) because of those issues.  Kimberly-Clark accused First Quality of infringing patents that cover methods of folding, aligning and fastening, inspecting, and preparing disposable training pants for packaging and requested a preliminary injunction.  The district court held a two-day hearing on the injunction request and found that Kimberly-Clark had established a likelihood of success in showing infringement and overcoming the invalidity challenges for all four patents at trial.

Stating the rule that “a preliminary injunction should not issue if an alleged infringer raises a substantial question regarding either infringement or validity,” slip op. at 5 (quoting AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1050 (Fed. Cir. 2010)), the Federal Circuit concluded that First Quality’s obviousness and anticipation defenses raised substantial questions of validity with respect to three of the asserted patents.  The Federal Circuit noted that the district court had applied and relied on an improper claim construction in two instances in its injunction order, constructions that were inconsistent with its later formal claim construction order.  The broader construction of these terms at the claim construction phase of the case strengthened First Quality’s invalidity positions.

As for the fourth patent, the Federal Circuit determined that Kimberly-Clark’s evidence and testimony showing “unexpected difficulties” in developing a process for folding the side seam of the training pants for packaging and the patent’s strong focus on solving the problems associated with this folding process (both secondary indicia of nonobviousness) sufficiently outweighed First Quality’s obviousness defense.  So the court affirmed the preliminary injunction for that patent.

Read the original opinion here.


Advanced Software Design Corp. v. Fiserv, Inc., Nos. 2009-1585, 2010-1011 (Fed. Cir. Jun. 2, 2011) (Judges Bryson, Dyk, and Prost)

This case demonstrates that the Federal Circuit may determine that a patent claim preamble “defines the environment” in which the steps of the claim must be performed but does not become a limitation or step that must be performed by the accused infringer.  Here, Advanced Software appealed a summary judgment ruling of noninfringement relating to a patent that discloses check products used to prevent fraud and forgery by encrypting selected information on the check.  When someone tries to cash the check, the information is decrypted and compared to corresponding unencrypted information.  If the decrypted and unencrypted information differ, the validator may refuse to honor the check.  The preambles of both asserted patent claims include three steps: encrypting the information, printing a control code on the financial instrument, and validating the authenticity of the information.

Although both parties agreed that the preambles’ encrypting and printing steps limit the claims, Fiserv contended that the accused infringer must perform all of the preamble steps.  Advanced Software, however, argued that the encrypting and printing steps “merely describe the environment in which the accused infringer must practice the validating limitation.”  Slip op. at 7.  In other words, Advanced Software maintained that the asserted independent claims recite a process and a system for validating the checks in which encryption and printing are a part.  Under Advanced Software’s interpretation, Fiserv would directly infringe by using a validation system, even though it did not encrypt or print checks (as described in the preamble).

The district court agreed with Fiserv and construed the asserted claims as requiring that that accused infringer practice all steps (including the preamble steps of encrypting and printing).  Based on this construction, the district court concluded that Fiserv did not directly infringe because it did not direct or control the encrypting or printing steps.

The Federal Circuit, however, agreed with Advanced Software’s construction and view of the preamble’s effect on the claims.  The court relied on its recent decision in Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011) to explain that a system or method claim can be directed at a single party, even if a part of the claim that “defines the environment in which an accused infringer must act” might be performed by a third party.  Slip op. at 9.  Thus, it seems that the court was attempting to avoid the divided infringement issue that is currently being considered by the court en banc, in the Akamai and McKesson cases.  In Uniloc, the Federal Circuit held that Uniloc’s claim reciting a “remote registration station incorporating remote licensee unique ID generating means” was directed to a single party’s actions.  Id. (citations omitted).  The court held that the rest of the claim, “said station forming part of a registration system . . . including local licensee unique ID generating means,” only “defined the environment in which that [remote] registration station must function.”  Id. (citations omitted).  Microsoft therefore infringed Uniloc’s claim even though Microsoft’s customers were the ones “using” the “local licensee unique ID generating means.”

The court applied the same reasoning here.  The court concluded that Fiserv would infringe by using the disclosed process to validate checks or by controlling a system for validating checks that includes a scanner and decrypting computer.  The court also rejected Fiserv’s interpretation of the role of the preamble in construing these claims.  The Federal Circuit noted that it looks to the patent’s “statement of purpose to distinguish between those limitations that describe the environment in which a claim operates from the limitations that must be performed by an accused infringer.”  Slip op. at 11.  The court also distinguished prior cases that came to a different conclusion in light of the statement of purpose at issue in those cases.

The Federal Circuit also vacated the district court’s judgment of noninfringement on Fiserv’s induced infringement claims because the district court did not consider whether evidence that Fiserv sold its validating software to banks and helped them install it is sufficient circumstantial evidence of direct infringement.  The court rejected Fiserv’s alternative grounds for noninfringement, concluding that they raised genuine issues of material fact and are not appropriate bases to affirm a summary judgment finding.

Read the original opinion here.


Mems Technology Berhad v. ITC, No. 2010-1018 (Fed. Cir. Jun. 3, 2011) (Judges Lourie, Mayer, and Gajarsa) (nonprecedential)

The Federal Circuit affirmed the Commission’s final determinations that MEMS Technology Berhad’s (“MemsTech”) accused products infringe the asserted claims of Knowles Electronics LLC’s patents, and that the asserted claims are not invalid for anticipation or obviousness.  The patents cover microelectromechanical system packages comprising a substrate, a cover, and a microphone that are used in cell phones.  MemsTech appealed all of the Commission’s final determinations, asserting that the Commission had incorrectly construed claim terms.  The Federal Circuit concluded that the Commission’s constructions were correct and affirmed the Commission’s determination that the accused products infringe.  MemsTech’s argument that Knowles fails to meet the “technical prong” of the ITC domestic industry requirement was also based on its alternative claim constructions, thus, the court affirmed on this issue as well.

Concerning the invalidity contentions, the court gave little credence to MemsTech’s numerous arguments.  In one instance, the court noted that MemsTech’s anticipation defense “unfairly characterize[d]” the testimony of Knowles’s expert.  Slip op. at 23.  In another, the court disregarded MemsTech’s contention that Knowles’s patents were obvious because Knowles had offered “no evidence that the claimed combinations yield anything other than the predictable result.”  Slip op. at 33.  The court remarked, “MemsTech appears to misapprehend its burden for proving obviousness.”  Id. This is yet another appellate opinion that criticizes a party for seemingly overreaching, incomplete, or incorrect characterizations of the record or the proceedings below.

Read the original opinion here.