On June 3, 2022, the CAFC held that reliance on an “obvious minor clerical error” within a claim is not a defense to willful infringement. CATR Co. sued Kingston Technology Co. (“Kingston”) for infringement of U.S. Patent No. 6,926,544 (“the ’544 Patent”) in the Central District of California (“the District Court”). The District Court found that the use of the term “case” in the ’544 Patent was a clerical error. Thus, the District Court replaced the term “case” with the term “cover” within the phrase “pivoting the case with respect to the flash memory main body.” The District Court explained that this error was evident from the “face of the patent,” not subject to reasonable debate, and was consistent with the prosecution history. With this correction, the jury found Kingston willfully infringed the ’544 Patent. Kingston appealed arguing that: (1) the District Court should not have replaced the term “case” as the use of that term was not an error, and if there was an error, the error was neither minor nor obvious; and (2) Kingston could not have formed the requisite intent to willfully infringe because Kingston reasonably relied on the fact that it did not infringe the ’544 Patent as originally written.
On appeal, the CAFC explained that a correction is appropriate “only if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims.” Additionally, an error must be “evident from the face of the patent” and must be made from the standpoint of a person skilled in the art. The CAFC found that based on the full context of the claims, there was an obvious minor clerical error in the patent claims. While Kingston tried to argue that it was improper for the District Court to alter the structure of the claimed invention and broaden the claims, the CAFC explained there was no case law that precluded a court from correcting an obvious minor error that alters a claimed structure and that the other claim elements required that the structure be the “cover” instead of the “case.” Next, the CAFC held that the correction was not subject to a reasonable debate because Kingston’s proposed claim construction resulted in the same claim scope as the District Court’s correction. Furthermore, the CAFC held that the prosecution history did not suggest a different interpretation of the claims and therefore, affirmed the District Court’s correction. Next, the CAFC rejected Kingston’s argument that it did not have the requisite intent for willful infringement because it did not infringe the claims as originally written and could not have anticipated that a court would correct the claims. The CAFC held that reliance on an obvious minor clerical error is not a defense to willful infringement. According to the CAFC, the District Court did not change the “metes and bounds” of the ’544 Patent as judicial correction did not re-make the claim; it merely “gave effect to its obvious meaning.” Kingston also tried to rely on the Patent Trial and Appeal Board’s (“the PTAB”) rejection of the patentee’s claim correction request during a parallel IPR proceeding. The CAFC rejected this argument because the PTAB did not consider the substance of the correction request and that the correction request was irrelevant as culpability for willful infringement is measured against the knowledge of the actor at the time of the alleged conduct. Therefore, the CAFC affirmed the District Court’s judgment that Kingston willfully infringed the ’544 Patent.
When considering infringement and willfulness, parties cannot simply rely on the claims as written but must also consider whether the claims contain a non-obvious error, which can include more than typographical errors, such as the error here that changed the structure of the claim.
Irwin IP is pleased to welcome Preethi Nayaganti to the team! Preethi is a Senior Attorney assistant at Irwin IP LLC since June 2022. She will work closely with and assist the Senior Attorneys at Irwin IP, while also handling other administrative tasks. We are excited to have Preethi join our Team!
A federal judge in Los Angeles will conduct a hearing to determine if the Ford Mustang, which appeared in the remake film “Gone in 60 Seconds” starring Nicolas Cage, qualifies as a character protected by copyright, much like the Batmobile.
The remake keept the iconic car “Eleanor,” but switched to one of Shelby’s Mustangs. Legal battles erupted between Halicki’s widow and Shelby’s company over the rights to sell similar cars. They settled after a Ninth Circuit case in 2008.
In 2015, the Ninth Circuit ruled that the Batmobile was a copyright-protected character owned by Warner Bros. due to its consistent traits. Shelby’s company asserts that there’s nothing unique about the “Eleanor” cars in the different movies that sets them apart from other movie cars.
In 2020, Shelby Licensing sued, alleging Halicki’s widow sent cease-and-desist letters to Shelby’s customers, violating their agreement. In retaliation, she countersued, claiming Shelby infringed on her copyright, likening the car to a character, much like the Batmobile. Lawyers for Shelby argue the car is merely a prop and not a central character.
To read the full article on this case, visit: https://www.law360.com/articles/1501465/ip-forecast-60-seconds-car-copyright-saga-rolls-into-la-
In this appeal of an inter partes review (“IPR”) by the Patent Trial and Appeal Board (“PTAB”), the CAFC upheld the PTAB’s decision that the term “self-similar” in a substitute claim 57[1] of U.S. Patent No. 9,565,493 (the “‘493 Patent”) was not indefinite, among other issues. The ‘493 Patent is owned by the Appellee Shure Acquisition Holdings, Inc. (“Shure”) and claims arrays of microphones and housings so that they may be fitted into a drop ceiling grid. The embodiment at issue includes an array configuration with “a plurality of microphone transducers selectively positioned in a self-similar or fractal-like configuration, or constellation.” The ‘493 Patent at 3:66-4:1.
Under 35 U.S.C. § 112(b), patent claims must “particularly point[] out and distinctly claim[] the subject matter” regarded as the invention. This requires that the claims, “viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.”[2] The Board found that a skilled artisan would understand “self-similar” to have had a well-known meaning and include the specification’s disclosure of “fractal-like[] configurations or constellations.” It also concluded that the specification was clear and did not deviate from the term’s well-known meaning.
On appeal, Appellant ClearOne, Inc. (“ClearOne”) raised two main arguments, both of which were rejected by the CAFC. First, it argued that the specification created ambiguity by introducing examples of patterns (i.e., fractals, concentric circles, and repeating patterns) distinct from “self-similar.” This argument was rejected by the CAFC because the patterns are examples of “self-similar” configurations, not of distinct embodiments. Further, extrinsic evidence supported that “self-similar” had a definite meaning.
Second, ClearOne argued that the term “self-similar” is composed of two separate terms of degree (i.e., “self” and “similar”) and that there are different ways to interpret them. The CAFC rejected that argument because claim 57 did not use the term “similar” in isolation as a term of degree. Instead, the term was used in the context of a self-repeating geometric pattern for configuring microphones in an array, which is supported by the claim’s language that it is the configuration that must be self-similar. Further, the CAFC stated that a term being susceptible to more than one meaning does not render it indefinite. This opinion demonstrates that, even if a term may appear to be a term of degree and be susceptible to multiple interpretations, the scope of the invention may still be reasonably certain.
[1] During IPR, Shure amended the claims of the ‘493 Patent and added the independent claim 57 that recites in relevant part: “an array microphone comprising a plurality of microphones arranged in a self-similar configuration . . . .”
[2] Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 910 (2014).
What does a former Syrian prisoner of war, a former Wisconsin Badgers’ Tuba player, a former English teacher for the Spanish Ministry of Education, a former Dallas Stars’ Dancer, and a former Army Officer all have in common?
They are all part of Irwin IP’s 2022 Summer Associate Program, and we are proud to have them! Welcome to the team!
In late 2019, Mitek Systems, Inc. (“Mitek”) filed for a declaratory judgment (DJ) that it did not infringe four USAA check imaging patents. Following a transfer from the N.D. Cal. to the E.D. Tex., the district court dismissed the suit for a lack of subject matter jurisdiction. The district court concluded there was no case or controversy because Mitek did not intervene in prior patent litigation involving infringement assertions against a customer’s software that incorporated Mitek’s product and because USAA’s letters to Mitek’s customers alleging infringement related to Mitek’s software were insufficient. In the alternative, the district court asserted it could exercise its discretion to decline to entertain the DJ.
Initially, the CAFC explained the standard for whether a declaratory judgment action meets the case or controversy requirement is whether the alleged facts, under the totality of the circumstances, demonstrate an actual, substantial, and imminent dispute concerning parties’ legal interests that warrants such relief. Identifying particular facts under the total circumstances is thus important for this standard, the Court said.
Mitek argued that there was a justiciable controversy based on potential patent infringement liability to USAA based on accusations involving Mitek’s software in a case involving Mitek’s customers, and USAA letters to Mitek customers leading to indemnification demands. Regarding potential infringement, the CAFC stated that the court did not analyze Mitek’s liability with sufficient specificity before concluding that Mitek would not be sued. Also, the district court’s analysis did not consider all types of infringement, such as inducement. Regarding the cease-and-desist letters, the CAFC stated that although a communication of patents and an identification of a party’s products is insufficient, the letter here plus the related litigation supported an infringement controversy. The letter included three patents that overlapped with the four asserted in the other suit, stated that the listed patents were relevant to check imaging technology, and included a claim chart explaining how an unrelated patent applied to the customer’s software. The CAFC explained that parsing the facts to make particular DJ jurisdiction determinations required identifying which challenges were facial (based on the complaint and undisputed facts) versus factual (based on other evidentiary materials). While the CAFC determined that the legal sufficiency of the letter was a facial challenge, the lack of clarity in the district court’s analysis required remand.
The CAFC also vacated the district court’s discretionary dismissal because the court did not provide reasoning independent from the deficient jurisdictional analysis. To support alternatives to a DJ based on statutory purposes or judicial-administration principles, the CAFC identified considerations such as the adequacy of available relief and the effectiveness and efficiency of intervention compared to a DJ.
In sum, particularity and a firm grasp of the path selected for challenging declaratory judgment jurisdiction are important to carefully address. Likewise, parties filing declaratory judgment actions are well served by asserting facts that anticipate such review.
In 2014, Toyo Tire Corporation (“Toyo”) brought a trade dress infringement lawsuit against Atturo Tire Corporation (“Atturo”). Atturo alleged seven counterclaims based on actions Toyo took in an investigation brought before the United States International Trade Commission (“ITC”). Specifically, those counterclaims stemmed from allegedly defamatory statements made during settlement negotiations in ITC investigations that Atturo’s tires infringed Toyo’s trade dress, even though, significantly, Atturo was not party (nor was its tires listed in Toyo’s complaint) to that ITC case. Atturo’s counterclaims proceeded to trial, and the jury found Toyo liable for $10 million in compensatory damages, and $100 million in punitive damages. Upon deciding post-trial motions, the Court reduced these damages to $10 million in compensatory damages, and $100,000 in punitive damages.
Here, the actions-at-issue “[were] contained in settlement agreements between Toyo and ITC respondents which were submitted to the ITC.” Specifically, in Toyo’s settlement agreements with its ITC respondents, Toyo include a line stating, “Toyo is aware of additional tires that it believes infringe other Toyo intellectual property not asserted in the ITC action,” and listed an Atturo tire. Those settlement provisions also included a requirement that parties “never sell, import, or manufacture the Atturo tire.” Atturo alleged, among other things, that these communications interfered with Atturo’s business with Dunlap & Kyle (D&K), who were party to the ITC investigation and subsequent settlement agreements. The Court and the jury agreed that Toyo should be liable for damages on some of the counterclaims.
Specifically, the relevant counterclaims that were at-issue in post-trial motions included: (1) tortious interference with contract, (2) tortious interference with prospective business expectancy, (3) defamation, (4) unfair competition, (5) unjust enrichment, and (6) violation of the IDTPA. The Court found that regarding the defamation and IDTPA claims, Atturo’s claims were barred by litigation privilege, which provides that a private party to litigation is entitled to “publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding[.]” Regarding the remaining four claims, the jury originally found Toyo liable and found in favor of Atturo. The Court overturned the jury finding with respect to only the tortious interference with contract and found no reason to disturb the jury findings on the remaining three claims. The Court reasoned that in Illinois, contracts that may be terminated at-will by either party cannot support a claim of tortious interference with contract and is more properly classified as tortious interference with prospective economic advantage.
The Court left the compensatory damages untouched, reasoning that courts only look at the “bottom line” to make sure the award is “reasonable,” and Atturo’s expert opined that Atturo suffered approximately $11.5 million in lost profits as a result of Toyo’s actions. But the Court found that $100 million in punitive damages to be excessive. Although the Court noted that the “jury’s verdict on the six claims against Toyo shows that the jury found that Toyo’s conduct was wrongful, deceptive, and violated principles of commercial morality, justice, equity, and good conscience,” such high punitive damages were not warranted. Accordingly, the Court reduced the punitive damages award to $100,000. Finally, Toyo’s request for a new trial was denied.
On April 29, 2022, the CAFC vacated an inter partes review decision, where the Patent Trial and Appeal Board refused to invalidate Intuitive Surgical Operation, Inc. (“Intuitive”)’s patent, related to instrument swapping in robotic surgery systems, as obvious. The Board determined that Auris Health Inc. (Auris)’s asserted prior art combination disclosed each limitation of the challenged claims, including a servo-pulley system to mimic a surgeon’s movements via robotic arms, and a robotically-adjustable stand to hold multiple instruments. However, when assessing whether a skilled artisan would have been motivated to combine those references, the Board agreed with Intuitive that no motivation existed. Intuitive argued that “surgeons were skeptical about performing robotic surgery in the first place,” thus a skilled artisan would have had no reason to combine the prior art references to create a more-complex surgical system. Auris appealed the Board’s reliance on general industry skepticism to find a lack of motivation to combine.
In a 2-1 precedential opinion, the CAFC reiterated that the motivation-to-combine inquiry determines whether a skilled artisan would have been motivated to combine the prior art to arrive at the claimed invention. The Court held that, as any problem known in the field at the time of invention and addressed by the patent can provide a motivation-to-combine, “generic industry skepticism cannot, standing alone, preclude a finding of motivation to combine.” The CAFC clarified that evidence of industry skepticism can play a role in the obviousness inquiry, but as a secondary consideration. The CAFC further highlighted that “specific evidence of industry skepticism related to a specific combination of references might contribute to finding a lack of motivation to combine” (emphasis in original). In vacating and remanding the Board’s decision, the majority held that it was insufficient for the Board to rely exclusively on evidence of general skepticism about the field of robotic surgery to find a lack of motivation to combine the prior art references.
In his dissent, Judge Reyna agrees with the majority that general skepticism by itself could be insufficient to negate a motivation-to-combine, but he disagreed that general skepticism could never be used to support such a finding. Astutely, Judge Reyna opines that the majority opinion should not be understood as proffering a rigid rule making it “impermissible” for the Board to consider evidence of artisans’ generic industry skepticism in determining the presence of a motivation-to-combine, as such would be contrary to the Supreme Court’s holding in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 415 (2007), articulating an “expansive and flexible approach” to determining obviousness. Further, Judge Reyna dissents with the majority opinion’s assertion that skepticism “may play a role in an obviousness inquiry—but as a secondary consideration,” as it incorrectly suggests that secondary considerations are less important than the other Graham factors for determining obviousness.
Practitioners should remember that specific evidence of industry skepticism related to specific combinations of prior art may contribute to a lack of motivation-to-combine, but general industry skepticism alone is insufficient. Further, the majority opinion should not be interpreted as creating an inflexible rule making it impermissible for the Board to consider generic skepticism in assessing the presence or absence of a motivation-to-combine.
In a design patent infringement dispute between California Costume Collections, Inc. (“CCC”) and Pandaloon, LLC (“Pandaloon”), Judge Holcomb of Central District of California granted Pandaloon’s motion to dismiss CCC’s claim that U.S. Design Patent No. D806,325 (“the ’325 patent”) for a “Pet Costume” was unenforceable due to inequitable conduct. In granting Pandaloon’s motion, Judge Holcomb found that CCC failed to meet the pleading standards for inequitable conduct. This article will explain inequitable conduct claims in patent litigation, and take a closer look at Judge Holcomb’s reasoning.
In general, an inequitable conduct claim alleges that during the prosecution of a patent, the patent applicant misrepresented or withheld material information from the patent office with a specific intent to deceive. A pleading party must allege with specificity: “(1) knowledge of the uncited reference; (2) knowledge of the reference’s materiality; and (3) the specific intent to deceive the PTO by withholding that reference.” California Costume Collections, Inc. v. Pandaloon, LLC, 2022 WL 1062056, at *5.
In California Costume Collections, CCC filed a declaratory judgment against Pandaloon for unenforceability of the ’325 patent due to inequitable conduct. Pandaloon filed a motion to dismiss the inequitable conduct claim, arguing that (1) neither of the two prior art costumes CCC asserted were “but for” material and (2) CCC failed to plead its inequitable conduct claim with particularity.
In his ruling, the Judge denied the motion with respect to materiality but granted it with respect to the pleading standards. First, regarding materiality, the Court ruled that since a first prior art reference was considered by the examiner, it could not be “but-for” material even though CCC did not disclose it during prosecution. Id. at *3-4. Interestingly, the Court noted that withholding this reference might be used as circumstantial evidence for arguing deceptive intent for withholding a second prior art reference. Id. at *4. The Court found that the second prior art reference and the patented design are not so dissimilar that materiality could be resolved on a motion to dismiss. Id. at *5
As to pleading standards, the Court found that CCC failed to adequately plead knowledge of the prior art costumes–CCC only alleged “on information and belief” that those prior art costumes were widely available. Id .at *6. Secondly, although pleading on “information and belief” is permitted when essential information lies uniquely within another party’s control, CCC still failed to plead knowledge of materiality because it did not provide any facts upon which its belief was based. Thirdly, CCC failed to adequately plead specific intent to deceive because it again did not plead any facts or circumstances from which an inference of intent to deceive could be drawn. Id. Finally, the Court granted CCC’s leave to amend its complaint in the interest of justice, and because Pandaloon would not be prejudiced by an amended complaint.