On Jan. 22, 2016, the Federal Circuit affirmed the district court's finding that the patent infringement case was exceptional but vacated the award of enhanced attorney fees to defendant because the court didn't properly explain the calculation of attorney fees. Lumen View Tech., LLC v. Findthebest.com, No. 2015-1275, -1325 (Fed. Cir. Jan. 22, 2016). Plaintiff sued defendant alleging infringement of a patent directed to a method of facilitating bilateral and multilateral decision-making. In its opposition to plaintiff's motion for judgment on the pleadings under FRCP 12(c), plaintiff included claim construction that required two or more parties' preference data. The district court granted the motion and held that the claims were directed to an abstract idea and invalid under Section 101. The court also found that the suit was frivolous and awarded attorney fees. The Federal Circuit held that the court was justified in finding the case exceptional because even the "most basic" presuit investigation by plaintiff would've shown that the accused functionality required only one party. The judge reasonably found that the suit was filed for extracting nuisance settlement and that the plaintiff had a predatory strategy of baseless litigation. However, the Federal Circuit reversed the trial court's enhancement by a multiplier of two of the lodestar fee amount and explained that adjusting the lodestar amount is not appropriate when considering other factors--deterrence purpose or expedited schedule--unrelated to suitability of compensation of attorney fees.
Federal Circuit affirmed the district court's grant of summary judgment denying patent term adjustment of 197 days of PTO delay in sending a corrected Restriction Requirement. Pfizer, Inc. v. Lee, No. 2015-1265 (Fed. Cir. Jan. 22, 2016). In affirming the decision, Judge O'Malley writing for the majority held that "because the initial restriction requirement placed the applicants on notice of 'the broad statutory basis for [the rejection of the] claims', the restriction requirement satisfied the notice requirement of Section 132." Therefore, the "alleged delay is not the type of error for which the Act was intended to compensate." In her dissent, Judge Newman stated that the majority panel failed to count the delay due to examiner's error and its correction and that such prosecution delay is within the statutory conditions for patent term adjustment. Full text of the opinion is available here.
The U.S. Supreme Court granted cert to review PTAB's broadest reasonable interpretation (BRI) standard for claim construction in IPR proceedings. Cuozzo Speed Tech., LLC v. Lee, U.S. No. 15-446 (Jan. 15, 2016). The high court also agreed to consider reviewability of PTAB's decisions to institute where the Board does not confine itself to the art and grounds asserted in the petition. The questions presented by the Court are:
1. Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.
2. Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.
In its Order, PTAB ruled that demonstratives during oral arguments can only include arguments and evidence already presented to the Board and included in the parties' papers (petition, patent owner response, reply etc). Int'l Business Machines Corp. v. Intellectual Ventures II, LLC, IPR2015-00089, -00092, Paper 41 (PTAB Jan. 14, 2016). In this case, the Petitioner objected to certain slides that cited to patent owner's expert declaration that patent owner did not cite in its Patent Owner Response or any other paper. Patent Owner acknowledged but contended that the paragraphs referenced are conclusions which were argued in the Response. Agreeing with the Petitioner's arguments, the Board precluded the use of the demonstratives to the extent the slides reference paragraphs of the declaration that are not included in the Response.
Federal Circuit held that the same PTAB panel that makes the decision to institute an IPR petition can make the final determination as well. Ethicon Endo-Surgery, Inc. v. Covidien LP, No. 2014-1771 (Fed. Cir. Jan. 13, 2016). Covidien filed an IPR petition challenging a patent held by Ethicon relating to a surgical device to staple, secure and seal cut tissue. The PTAB granted the petition and on the merits, the same panel found all challenged claims invalid as obvious over the prior art. Ethicon appealed contending that the statutory text (Sections 318 and 316(b)) and structure require that the same panel not grant of petition and make a final decision. The Federal Circuit disagreed, and found that the PTO director has authority to delegate institution decision to the Board and nothing in AIA or the Constitution precluded the same panel from rendering the final decision.
PTAB instituted an inter partes review after prior denial of the petition conceding that the panel had erred when it overlooked a key argument of the challenger when denying the petition the first time. AVX Corp. v. Greatbatch Ltd., IPR2015-00710.
PTAB designated two recent decisions as being precedential--LG Elec., Inc. v. Mondis Tech Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015); and Westlake Services, LLC v. Credit Acceptance Corp., CBM2014-00176, Paper 28 (PTAB May 14, 2015). In LG Electronics, LG was served with two complaints, one in 2008 and another in 2014. The 2008 case settled and was dismissed in part with prejudice. The 2014 complaint was served less than a year prior to filing the petition. In refusing the IPR, PTAB disagreed with LG's argument that "a complaint" means "a latest" complaint and that the 2014 complaint makes it eligible to file the IPR. In Westlake, Westlake filed a follow-on CBM petition after PTAB's partial Institution Decision in which the Board opted not to consider some claims. Following issuance of a Final Written Decision, patentee filed a motion to terminate the follow-on petition arguing that the Final Written Decision incorporates the Institution Decision by reference and thus, applies to all claims challenged in the petition, not just the claims on which trial is instituted. PTAB disagreed and found that non-instituted claims are not claims that have resulted in a Final Written Decision.
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