American Piledriving Equipment, Inc. v. Geoquip, Inc., No. 2010-1283 (Fed. Cir. Mar. 21, 2011) and American Piledriving Equipment, Inc. v. Bay Machinery Corp., No. 2010-1314 (Fed. Cir. Mar. 21, 2011) (Judges Bryson, Gajarsa, and Linn)

In this consolidated appeal, American Piledriving Equipment, Inc. appealed grants of summary judgment of noninfringement in two separate actions involving the same patent.  In each action, the district courts construed the same three critical terms, but in different ways.  The Federal Circuit took this opportunity to provide a side-by-side comparison of the differing constructions of two district courts while conducting its own de novo review.  The court found that the Northern District of California court had read additional limitations into two claim terms that were not supported by other claims, the specification, or the prosecution history.  Ultimately, the Federal Circuit affirmed the claim construction of the Eastern District of Virginia court in its entirety, and reversed the claim construction of the Northern District of California court to the extent that it differed from the Eastern District of Virginia court’s construction.

This case offers guidance to district courts undertaking claim construction analysis.  By comparing the different constructions of the same claim terms, the court demonstrated where the Northern District of California had improperly imported limitations from the specification.  For example, construing the term “insert-receiving area” in a counterweight, the California court included a limitation that the bore formed must “extend fully” through both the “eccentric weight portion” and the “gear portion,” whereas the Virginia court did not include this requirement.  Slip op. at 20.     The Federal Circuit found that this limitation is present in the preferred embodiment of the invention, but “the intrinsic record is devoid of anything to suggest or indicate that the bore must always extend fully through either portion.”  Slip op. at 21.  Thus, the court adopted the broader construction reached by the Virginia court.

The Federal Circuit also concluded that for two of the allegedly infringing products, “American Piledriving’s contentions [regarding infringement] are the result of a distorted reading of the language of both the specification and the claims and do not withstand critical scrutiny.”   Slip op. at 24.  The court affirmed both of the district courts’ summary judgment decisions of noninfringement as to those products.  With respect to an a third allegedly infringing product in the Northern District of California action, however, the panel concluded that “there can be no genuine issue of material fact that [the accused piledriver] satisfies all of the limitations recited in claim 16,” and reversed the grant of summary judgment of noninfringement.

Read the original opinion here.

Innovention Toys, LLC v. MGA Entertainment, Inc., No. 2010-1290 (Fed. Cir. Mar. 21, 2011) (Judges Rader, Lourie, and District Judge Ronald M. Whyte of the Northern District of California, sitting by designation)

In this appeal, MGA might be in check but may be able to bring down Innovention’s king.  Innovention Toys sued MGA Entertainment for infringement its patent on a “chess-like, light-reflecting board game” sold as Laser Battle.  The game is played by moving mirrored and non-mirrored pieces around the board and “firing” a laser-like light beam at the opponent’s pieces, with the ultimate goal of hitting the other player’s key piece.  The district court granted Innovention’s motion for summary judgment of infringement, and MGA appealed.  To begin its infringement analysis, the Federal Circuit construed the claim term “movable” as “capable of movement as called for by the rules of the game or game strategy,” affirming the district court’s construction.  In a game-specific twist, MGA argued that the rules of the game specified that the relevant pieces should NOT be moved, and thus the court’s construction would only be applicable if the players broke the rules.  The Federal Circuit rejected this argument, noting that the instructions for Advanced Game Play allowed the pieces to be moved, and affirmed the district court’s summary judgment of literal infringement.

The district court also granted Innovention’s motion for summary judgment of nonobviousness.  Regarding this motion, the Federal Circuit found that the district court erred in its factual findings relating to analogous art and the level of skill in the art.  The district court had dismissed asserted prior art publications that disclosed an electronic game called Laser Chess as non-analogous, considering the patented invention to be a physical game.  The Federal Circuit rejected this analysis, concluding that the key goal of both the electronic and physical games was “designing a winnable yet entertaining strategy game.”  The court also rejected the district court’s finding that the level of ordinary skill in the art is that of a layperson.  Highlighting the fact that the game’s inventors are mechanical engineers and that the claimed invention requires some knowledge of geometrical optics, the panel concluded that the district court’s obviousness determination was based on an inappropriately low level of skill in the art.

Read the original opinion here.

Move, Inc. v. Real Estate Alliance Ltd., No. 2010-1236 (Fed. Cir. Mar. 22, 2011) (Judges Gajarsa, Linn, and Moore)

This nonprecedential opinion involves straightforward claim construction analysis.  Move filed suit seeking a declaratory judgment that Real Estate Alliance Ltd. (REAL)’s patents disclosing a system for using a computer to locate available real estate properties are invalid and not infringed.  REAL appealed the district court’s final judgment, having stipulated to noninfringement based on the court’s claim construction order.

The Federal Circuit conducted a de novo analysis of the four disputed claim terms and rejected nearly all of the district court’s constructions as importing additional limitations into the claims.  One interesting aspect of the Federal Circuit’s approach is the construction of “a database of available properties”—the panel held that that the term “of” indicates that the database must be populated with at least two properties when it is created.  Thus, an entirely unpopulated database for properties would fall out outside the claims.  The panel further noted that a sequential list of properties could qualify as a database.  Based on its revised construction of the disputed terms, the Federal Circuit vacated and remanded the final judgment.

Read the original opinion here.

In re Verizon Business Network Services Inc., No. M-956 (Fed. Cir. Mar. 23, 2011) (Judges Lourie, Gajarsa, and Linn) (order granting petition for writ of mandamus)

In its second time in as many weeks, the Federal Circuit granted a petition for the extraordinary relief of a writ of mandamus.  The issue before the court in this instance was whether a trial court could deny a motion to transfer to a venue far more convenient to parties and witnesses merely because that court had handled a previous lawsuit on the same patent.  The Federal Circuit said no.

In this action, Red River Fiber Optic Corp sued six telecom companies including Verizon, AT&T, and Qwest, for patent infringement in the Eastern District of Texas.  Red River asserted that its principle place of business is now in Marshall, Texas, although it is operated from Oklahoma.  The telecom companies moved to transfer the case to the Northern District of Texas, Dallas Division.  The magistrate judge denied the petition, holding that, although a number of witnesses resided within 100 miles of Dallas and none resided within 100 miles of Marshall, the case should remain in the Eastern District because that court had previous handled a lawsuit, which settled in 2003, involving the same patent and had construed 25 claim terms.

The Federal Circuit disagreed.  Acknowledging that the trial court has considerable discretion in weighing the case-specific factors of a motion to transfer, the appellate panel concluded that the argument for maintaining jurisdiction due to judicial economy is outweighed by the argument for geographical convenience, particularly considering that seven years had passed between the settlement of the original lawsuit and that current suit.  The Federal Circuit distinguished the circumstances here from those of its recent Vistaprint decision, noting that considerably greater connections to the venue, specifically a co-pending lawsuit in which the trial court had conducted detailed analysis of the technology, justified denial of that petition.  Those connections were not present here.  The Federal Circuit warned against sole reliance on prior lawsuits as a basis for venue, remarking, “To interpret § 1404(a) to hold that any prior suit involving the same patent can override a compelling showing of transfer would be inconsistent with the policies underlying § 1404(a).”

Read the original order here.

Aventis Pharma S.A. v. Hospira, Inc., No. 2011-1018, -1047 (Fed. Cir. Mar. 24, 2011) (Judges Prost, Moore, and Mayer) (precedential order)

The take-away from this order:  be cautious with creative arguments when they might run afoul of the Federal Circuit’s procedural rules.  Aventis appealed a final judgment in favor of Apotex and Hospira that found all asserted claim of the patents in suit invalid for obviousness and unenforceable due to inequitable conduct.  Apotex filed a “protective” cross-appeal to preserve its right to challenge the district court’s ruling that some asserted claims are not invalid for double-patenting.  Citing the Practice Notes to the Federal Rules of Appellate Procedure and the TypeRight case, Aventis gave Apotex the chance to voluntarily withdraw its cross-appeal.  TypeRight Keyboard Corp. v. Microsoft, 374 F.3d 1151 (Fed. Cir. 2004).  Apotex declined.

The Federal Circuit resoundingly reaffirmed its position from Bailey v. Dart Container Corp., 292 F.3d 1360 (Fed. Cir. 2002) and TypeRight:  a cross-appeal is improper when used “to reach issues that do not otherwise expand the scope of judgment.”  Slip op. at 3.   Despite Apotex’s efforts to distinguish TypeRight, the court was unsympathetic, describing Apotex’s behavior as “egregious,” slip op. at 4, and “flaunt[ing] our practice and precedent.”  Slip op. at 5.  Not surprisingly, the court granted Aventis’s motion to dismiss and warned that Apotex may be liable for attorneys’ fees and costs incurred in connection with the improper cross-appeal.

Read the original order here.

Duramed Pharmaceuticals, Inc. v. Watson Laboratories, Inc. No. 2010-1331 (Fed. Cir. Mar. 25, 2011) (Judges Lourie, Linn, and Dyk)

In this nonprecedential opinion, the Federal Circuit reviewed a grant of summary judgment of nonobviousness.  Duramed brought suit against Watson Labs in an ANDA action involving Duramed’s patent for the extended-cycle combined oral contraceptive marketed as Seasonique®.  Watson conceded infringement, but asserted that Duramed’s patent is invalid for obviousness.  The district court granted Duramed’s motion for summary judgment of nonobviousness based on its analysis of only Watson’s “three most significant” prior art references, finding the rest cumulative.  The district court also found that Watson’s expert was not a person of ordinary skill in the art but “an active participant in research in the field of endocrinology.”

The Federal Circuit strongly disagreed with the district court’s obviousness analysis.  The panel concluded that “the district court improperly analyzed and rejected the teaching of each [piece of prior art] in isolation.”  Slip op. at 10.  Moreover, the Federal Circuit noted that the district court misplaced the burden of proof at the summary judgment stage by requiring Watson, the nonmoving party, to show clear and convincing evidence of invalidity as a matter of law, when Watson should only have had to show the existence of a genuine issue of material fact.  Finally, the Federal Circuit determined that the district court’s rejection of Watson’s expert’s testimony because the expert was “not a person of ordinary skill but extraordinary skill” was erroneous because a highly skilled person may opine on the level of knowledge of the hypothetical person having ordinary skill in the pertinent art.

In fact, the Federal Circuit was so convinced by its own obviousness analysis that, not only did it reverse the district court’s grant of summary judgment, it was nearly willing to find Duramed’s patent obvious as a matter of law.  Because Watson did not move for summary judgment of obviousness and stated that it was “‘absolutely not’ requesting that this court hold the asserted claims obvious as a matter of law,” the Federal Circuit remanded.

Read the original opinion here.

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