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6 August 2012

What Is An "Abstract Idea"? Who's On First? Who's On Second? - IP Update, Vol. 15, No. 7, July 2012 (Part 1)

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In the wake of the decision of the U.S. Supreme Court in Mayo Collaborative Services v. Prometheus Labs (see IP Update, Vol. 14, No. 6) the U.S. Court of Appeals for the Federal Circuit once again wrestled with the issue of when a patent claim is directed to a non-patent eligible "abstract idea."
United States Intellectual Property

Edited by Paul Devinsky and Rita Weeks

Patents / § 101

What Is an "Abstract Idea"?  Who's on First?  What's on Second?

By Paul Devinsky

In the wake of the decision of the U.S. Supreme Court in Mayo Collaborative Services v. Prometheus Labs (see IP Update, Vol. 14, No. 6) the U.S. Court of Appeals for the Federal Circuit once again wrestled with the issue of when a patent claim is directed to a non-patent eligible "abstract idea."  In the context of a computer implemented invention, a divided panel concluded that a group of patents directed to a computerized trading platform for exchanging obligations so as to eliminate "settlement risk," defined patent-eligible subject matter under 35 U.S.C. § 101.  CLS Bank International v. Alice Corp. Pty. Ltd., Case No. 11-1301 (Fed. Cir., July 9, 2012) (Linn, J.) (Prost, J., dissenting).  The dissent sharply argues that the majority not only "resists" the unanimous Supreme Court directive from Prometheus, but moreover "creates an entirely new framework" that permits district courts to avoid even addressing § 101 quicksand at will.

Section 101 Challenges as a Threshold Issue

While recognizing that the Supreme Court in Bilski (see IP Update, Vol. 13, No. 7) characterized § 101 as a "threshold test" that "certainly can be addressed" first (emphasis in original), the majority opinion opens with a discussion of the purpose and role of §§ 101, 102, 103 and 112, emphasizing the discretion available to district courts to "to control the conduct of proceedings before them, including the order of presentation of issues and evidence." 

In case the point was not clear enough (as to whether, when or if a § 101 challenge must be considered by a district court even if raised) the majority reiterated that "consistent with its role as master of its own docket, a district court properly acts within its discretion in deciding when to address the diverse statutory challenges to validity."

Abstract Ideas

The substantive issue presented was whether the patents in suit are directed to an "abstract idea" i.e., in derogation of the Supreme Court ruling in Prometheus,and thus directed to non-patent-eligible subject mater under § 101.  Recognizing that the "abstract idea" test is itself an abstraction, the majority surveyed various Supreme Court cases and, as a subset of that test, the related articulation of preemption as the effective grant of "a monopoly over an abstract idea," as preemption being the basic evil to be avoided.  In summarizing the cases, the Court noted that neither "mere field of use limitations" nor "the addition of 'post-solution' activity" could "transform an unpatentable principle into a patentable process."  On the other hand, as the Court explained, § 101 does not bar patent claims that are directed to "an application of a law of nature or mathematical formula to a known structure or process."  (Emphasis in original.)

Against that backdrop, the Court proceeded to analyze the "abstract idea" test as applied to computer-related inventions in terms of the "machine-or-transformation" test (recognized by the Supreme Court in Bilski as a "useful" tool, but not a dispositive test), noting along the way that the "mere implementation on a computer of an otherwise ineligible abstract idea will not render the asserted 'invention' patent eligible," but that "a claim that is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not."  (Emphasis in original.)

The majority concluded "that when after taking all of the claim recitations into consideration it is not manifestly evident that the claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101.  Unless the single most reasonable understanding is that a claim is directed to nothing more than a fundamental truth or disembodied concept, with no limitations in the claim attaching that idea to a specific application, it is inappropriate to hold the claim is directed to a patent ineligible 'abstract idea' under 35 U.S.C. § 101."

With its now test in place, the majority criticized the district court for "looking past the details of the claims" and concluded that the asserted claims "require computer implementation," i.e., an indication that they meet the "machine" prong of the machine-or-transformation test, and "appear to cover the practical application of a business concept in a specific way, which requires computer implemented steps of exchanging obligations."  On that basis, the majority reversed the district court decision to the contrary.

Judge Prost concluded that the asserted claims "are abstract ideas repackaged as methods and systems." In her view, the majority failed to follow the prescription of the Supreme Court against patenting abstract ideas by focusing on the "computer implementation" aspect of the claims, rather than the "inventive concept" analysis on which the Supreme Court test is predicated.

Practice Note:  The USPTO has recently issued examination guidelines for analyzing subject matter eligibility under Prometheus (see IP Update, this issue).  IP Update will report further if the Federal Circuit's Alice Corp. decision results in any further revision of the examination guidelines.  On July 27, PTO Dir. Kappos, in his public blog forum, endorced the view of the majority that issues pertaining to §§ 102; 103 and 112 should be addressed prior to consideration of subject matter eligibility under § 101.  (See: http://www.uspto.gov/blog/director/entry/some_thoughts_on_patentability)

Patents / Obviousness

"Clear and Convincing" Is the Standard for Obviousness No Matter What

by Christopher L. May and Clifford (Dale) R. Lamar II

Clarifying the standards and burdens associated with an obviousness analysis, the U.S. Court of Appeals for the Federal Circuit found that the presumption of validity and burden of proving obviousness do not change regardless of the facts of a particular case.  Sciele Pharma Inc. v. Lupin Ltd., Case No. 12-1228 (Fed. Cir., July 2, 2012) (Moore, J.) (Newman, J., dissenting). 

The patent in suit was obtained after a series of errors by the U.S. Patent and Trademark Office (USPTO). The examiner issued claims that had been previously rejected as obvious over a foreign patent application to Cheng.  The patentee informed the examiner of the errors, but nonetheless the patent issued with the previously rejected claims.

The patent was eventually listed in the Orange Book for Fortamet, an extended-release tablet of metaformin hydrochloride.  Lupin submitted an Abbreviated New Drug Application (ANDA) seeking approval for a generic version of Fortamet, and Sciele sued Lupin asserting infringement of Sciele's patent.

After the statutory 30-month stay expired, Lupin made an "at risk" launch of its ANDA product.    Sciele sought a preliminary injunction, which was initially granted by the district court.  Later, the injunction was vacated and remanded by the Federal Circuit because the lower court failed to address Lupin's obviousness arguments that the patent claims were invalid in view of Cheng and a foreign patent application to Timmins.  On remand, the district court again found for Sciele, and issued a preliminary injunction.  The district court concluded that KSR was inapplicable to Lupin's obviousness argument because Cheng and Timmins were before the UPSTO during prosecution and that, given the Patent Office was "a qualified government agency," the court must apply a heightened burden of proving obviousness, and that statements regarding enablement during prosecution could not be used as proof of obviousness. 

The Federal Circuit vacated the preliminary injunction and remanded for further proceedings, finding that, because the lower court incorrectly concluded that Lupin failed to raise a substantial question of validity regarding the asserted patent claims, the court had abused its discretion by issuing the preliminary injunction.  The Court found that the lower court had erred by applying a heightened standard of validity because Cheng and Timmins were before the USPTO.  The Federal Circuit stated that the burden of proving invalidity is "clear and convincing evidence," regardless of whether (or not) the references at-issue were before the Patent Office during prosecution.  The Court stated that it may consider information in the prosecution history in examining whether the accused infringer has met his burden of clear and convincing evidence.  The Federal Circuit also found KSR applied regardless of whether the references at-issue were before the Patent Office. 

On that basis, the Federal Circuit found that Lupin had raised a substantial question of patentability.  The Court found that Cheng combined with Timmins disclosed all of the claimed limitations and that a person of ordinary skill in the art would be motivated to combine the references because Timmins taught benefits over other extended-release metformin, like that in the Cheng reference.  The Federal Circuit also found that an enablement argument made during prosecution that one of ordinary skill could use prior art methods and formulations to achieve the claimed pharmacokinetic limitations of the invention was held to be admissions of "predictability" and skill in the art.  Therefore, the Court vacated the preliminary injunction and remanded for further proceedings.

Patents / Invalidity

A Sticky Situation—Secondary Considerations Require NEXUS to the Claimed Invention

by Avani C. Macaluso

Addressing issues of invalidity and non-infringement of patents asserted between direct competitors in the chewing gum market, the U.S. Court of Appeals for the Federal Circuit explained that in order to be entitled to rely on evidence of unexpected results commercial success or copying, the evidence of secondary translations must be tied to the claimed invention, i.e., the so-called nexus requirement.  WM Wrigley Jr. Co. v. Cadbury Adams USA LLC, Case Nos. 2011-1140, 1150 (Fed. Cir., June 22, 2012) (Bryson, J.) (Newman, J. concurring-in-part and dissenting-in-part).

Wrigley and Cadbury cross-alleged patent infringement of patents directed to chewing gum that provides a cooling sensation when chewed.  The Wrigley patent was directed to chewing gum containing a combination of menthol and WS-23 coolant, while the Cadbury patent was directed to a chewing gum containing a combination of menthol and WS-3 coolant. 

The district court found that one claim of Wrigley's patent was invalid as anticipated by a patent to Shahidi and another was invalid as obvious in view of a patent to Luo and a publication by Parrish.  The lower court rejected Wrigley's evidence of unexpected results, commercial success and copying.  The district court also found that Cadbury's patent was not infringed, either literally or under the doctrine of equivalents.  Wrigley appealed. 

The Federal Circuit affirmed the lower court's finding of obviousness as to Wrigley's patent, concluding that Wrigley failed to demonstrate that the combination of menthol and WS-23, as claimed, resulted in an unexpected benefit beyond what was already known in the art.  The Court stated that prior art teaches that the combination of menthol and WS-3 yields "enhanced breath freshening effects" and that it was known that WS-3 and WS-23 share similar characteristics.  The Federal Circuit dismissed Wrigley's evidence of unexpected results because there was no clear showing that the claimed invention resulted in the alleged unexpected benefits that were attributable to the claimed components and not to other factors, including sweetener levels, higher gum base and filler levels and more expensive ingredients.  Likewise, the Court dismissed Wrigley's evidence of commercial success and copying for a lack of a nexus to the claimed invention.

The Federal Circuit also affirmed the lower court's finding of anticipation based on Shahidi. The Federal Circuit found that Shahidi disclosed a number of different combinations of cooling and flavoring agents, one of which was the claimed combination of menthol, which Shahidi identified as one of the most suitable flavoring agents, and WS-23, which Shahidi listed among a group of other flavoring agents.

Regarding Cadbury's patent, the Federal Circuit found that Cadbury could not prove infringement under the doctrine of equivalents because it had chosen to limit its claimed chewing gum composition to a certain species and not to the broader genus, despite knowing at the time of filing its application that WS-23 and WS-3 were interchangeable.  Cadbury's decision to narrowly recite claim N-substituted-p-menthane carboxamides, which excludes WS-23, was detrimental to its infringement case.

In her dissent, Judge Newman pointed out that Shahidi, the purportedly anticipatory reference, "does not show the claimed combination at all, but merely presents the ingredients on lists" which can be combined in more than a million possible combinations.  Judge Newman also disagreed with the majority's finding on obviousness, stating the record was "rife" with evidence demonstrating a nexus between Wrigley's success of chewing gum combinations with menthol and WS-23, including Cadbury's own internal records and marketing materials stressing the cooling effect of its reformulated chewing gum.

Patents / Obviousness

Prior Art's Disclosure of a Preferred Embodiment Does Not "Teach Away" from Inferior Alternatives

by Vinu Raj

In affirming a finding of obviousness by the U.S. Patent and Trademark Office, Board of Patent Appeals and Interferences (the Board), the U.S. Court of Appeals for the Federal Circuit found that the disclosure of a preferred embodiment in a prior art reference does not teach away from a combination of prior art references that leads to the applicant's invention, even when the combination is described as being inferior.  In re Blaise Laurent Mouttet, Case No. 11-1451 (Fed. Cir., June 26, 2012) (Reyna, J.). 

The applicant's invention is directed to an arithmetic processor that included a nanoscale crossbar array of intersecting electrical wires with molecular switches formed at different intersections or "crosspoints."  During prosecution, the examiner rejected the application claims, relying on a combination of three prior art references, including a patent issued to Falk.  Falk disclosed an arithmetic processor device similar to applicant's processor, except that Falk's device included a crossbar array having intersecting optical channels with programmable switches based on optical intensity, rather than electrical wires and programmable switches based on electrical conductivity. The other two references included a publication by Das that disclosed a nanoscale crossbar array of electrical wires and a patent issued to Terepin that disclosed an analog-to-digital converter, a necessary component of Mouttet's device.  After the Board affirmed the examiner's rejections, the applicant appealed. 

On appeal, applicant argued that substituting Falk's optical channels with electrical wires would destroy the principle of operation and physical structure of Falk's device and that Falk teaches away from an electrical crossbar array. 

The Federal Circuit affirmed the Board's determination that substituting Falk's optical channels with electrical wires would not destroy its principle of operation was supported by substantial evidence.  The Court also found that the nonequivalence of substituted elements is irrelevant, because obviousness determinations do not require "an actual, physical substitution of elements." 

The Court also found that the Board's determination that Falk's description of a preferred embodiment did not "teach away" was supported by substantial evidence, despite the fact that Falk described a "fundamental difference" between optical versus electrical circuits and "even suggests that electrical circuits are an [sic] inferior to optical circuitry for certain purposes."  The Court explained that this was not a sufficient reason to overturn the Board's determination as applicant failed to cite to any evidence suggesting the claimed invention would be unlikely to work using electrical circuitry.  The Court further emphasized that a known system, like the invention in this case, "does not become patentable simply because it has been described as somewhat inferior to some other product for the same use."

Practice Note:  In order to support a "teaching away" argument, a reference should provide a strong indication that the claimed subject matter or proposed combination would be unlikely to work or operate as intended.

Patents / § 337 (ITC)

The Federal Circuit Withdraws Its Prior Holding Concerning the Appealability of Issues that Are "Noticed" but Not Reviewed by the ITC

by Christopher G. Paulraj

In response to a petition for rehearing filed by the International Trade Commission (ITC), the U.S. Court of Appeals for the Federal Circuit has withdrawn its prior holding that a losing party in a § 337 investigation may appeal any decided issue adversely decided by the administrative law judge (ALJ) in an Initial Determination (ID), regardless of whether the ITC actually addresses the issue upon its review in a Final Determination.  General Electric Co. v. International Trade Commission, Case No. 10-1223 (Fed. Cir., July 6, 2012) (Rader, C. J.) (Newman, J., dissenting).  In Part III of the original panel decision, the Federal Circuit had rejected the ITC's argument that issues in an ID that are "noticed" for review, but as to which the ITC takes "no position," are not subject to further appeal.  (see IP Update, Vol. 15, No. 3).  The panel held that denying a losing party the right to appeal any adversely decided issue conflicts with the statutory right of judicial review.

The ITC filed a combined petition for reconsideration by the panel and rehearing en banc, in which it argued that the original panel decision was contrary to both the prior decision in Beloit Corp. v. Valmet Oy (1984) and the Administrative Procedure Act (APA).  First, the ITC argued that the Federal Circuit's decision in Beloit specifically contemplated that the ITC can reach its final determination on a "single dispositive issue," while taking "no position" on the remaining issues in the case, and that the Federal Circuit "does not sit to review what the Commission has not decided."  Second, the ITC argued that, in accordance with the two-step decision-making process pursuant to the APA, once the ITC decides to review an issue from the ID, the ITC is entitled to either address it or take no position on it, but the issue can never become "not reviewed," and it is the agency itself which disposes of the issue.  According to the ITC, "Congress has not seen fit to provide that a Commission decision not to take a position on a reviewed decision, made by a majority of the Commission, should nevertheless be deemed to be an affirmance of the ALJ's ruling on that issue."

In its reconsideration order, the Federal Circuit stated that it was withdrawing the aspect of the opinion to which the ITC voiced objection, and that "[t]he panel offers no decision on the questions raised in Part III, which may arise in future case."  Judge Newman dissented from the decision to withdraw this section, which she said improperly "ratifies the commission's authority to negate the finality of these final decisions, thereby forestalling judicial review and impeding the expeditious resolution of ITC proceedings."  Judge Newman urged that "[i]nstead of simply ratifying this aberrant procedure and accepting its consequences, at a minimum the court should take the case en banc and obtain input from the communities that Section 337 is designed to serve."

Practice Note:  The Federal Circuit's withdrawal of this aspect of the GE v. ITC opinion could result in a spike in "piecemeal" litigation before the ITC.  While the ITC has typically required ALJs to address all issues raised by the parties in their IDs, the Federal Circuit has now sanctioned an approach whereby the ITC may effectively shield more "thorny" issues from further judicial review to the extent resolution of those issues is not needed for the ITC's final decision.  If this approach becomes the norm, parties can expect an increase in the likelihood that the Federal Circuit might remand more § 337 investigations back to the ITC in order to address those issues as to which the ITC took "no position," which could lead to an increase in the length and cost of the litigation.

Patents / Indirect Infringement

A Substantial Non-Infringing Use Does Not Preclude a Finding of Inducement

by Brett Bachtell

In affirming-in-part, vacating-in-part and remanding a lower court's ruling, the U.S. Court of Appeals for the Federal Circuit found that a substantial non-infringing use does not preclude a finding of infringement by inducement.  Toshiba Corp. v. Imation Corp. et al., Case No. 11-1204 (Fed. Cir., June 11, 2012) (Moore, J.) (Dyk, J. concurring-in-part and dissenting-in-part).

Toshiba accused Imation of infringing two Toshiba patents.  The first patent was directed to optical disc technology and, more specifically, how data is written to a recordable DVD.  The district court granted summary judgment of no indirect infringement (i.e., no contributory infringement or inducement) after concluding that recording data to a DVD without "finalizing" the DVD was a substantial non-infringing use.  "Finalizing" a DVD allows the DVD to be read by different devices and infringes the first patent, whereas, not "finalizing" a DVD allows the DVD to be read only by the original device and allows a user to add additional information to the DVD. 

The Federal Circuit affirmed the lower court's ruling as it related to contributory infringement, but vacated the finding of no inducement of infringement.  The Federal Circuit reasoned that the non-infringing use was substantial and supported summary judgment of no contributory infringement.  However, the Federal Circuit found that the lower court erred in determining that a substantial non-infringing use precludes inducement of infringement.  The Federal Circuit found that Toshiba's arguments and related evidence that Imation designed recordable DVDs for use in an infringing manner and instructed users to use the DVDs in an infringing manner was sufficient to preclude summary judgment because a jury could reasonably conclude that, more likely than not, one person somewhere finalized the DVDs in an infringing manner.

The second patent was directed to a recordable DVD having a "management" region containing information about the structure of the DVD.  The "management information" provides a computer with information about the number of recording planes on the DVD.  The lower court construed the "management information" as "information whose purpose is to identify the number of recording planes on the recording medium."  Toshiba accused single-sided DVDs of infringement, and the lower court concluded that because single-sided DVDs contain information identifying the number of planes on only that single side, the accused DVDs do not infringe because the purpose of the information is to only identify the planes on one side of the DVD and not the entire recording medium. 

The Federal Circuit disagreed with the lower court's reading of embodiments of the specification into the claim.  The Court determined that that the "language of the claim only requires that the information 'represents' the number of recording planes." 

In dissent, Judge Dyk found the "number of recording planes" limitation to require the identification of both the number of DVD sides and the number of layers per side, stating that "the specification and the prosecution history ... make clear that the central objective of the patent was to identify whether an optical DVD was a one-sided DVD or a two-sided DVD."  Applying this construction, Judge Dyk would have affirmed the lower court's summary judgment of non-infringement.

Patents / Judicial Estoppel

Judicial Estoppel Bars Flip-Flop Within the Same Case as to Ownership of Patents

by Sarika Singh, Ph.D.

Relying on the doctrine of judicial estoppel in determining the real party in interest, the U.S. Court of Appeals for the Second Circuit found that Intellivision's founders improperly attempted to insert themselves into the litigation at the eleventh hour.  Intellivision et al. v. Microsoft Corp., Case No. 11-1657 (2nd Cir., June 11, 2012) (Summary Order).

Intellivision sued Microsoft for fraudulent inducement, negligent misrepresentation and breach of fiduciary duty over a dispute relating to an agreement for assignment of patent applications. The plaintiffs brought suit in Connecticut by representing that Intellivision, having its principal place of business in Connecticut, was the owner and assignor of the patent applications. The district court denied a motion to dismiss in reliance on that representation, finding that Intellivision's claims, although not viable in New York, were preserved in Connecticut. The plaintiffs persisted with these representations throughout the majority of the litigation, only to later reverse course and assert that the principals of Intellivision owned and assigned the patent applications in their individual capacity to avoid summary judgment in favor of Microsoft based on Connecticut's statute of limitations.

The district court concluded that all three factors for judicial estoppel articulated by the Supreme Court in New Hampshire were satisfied:  the party's new position was "clearly inconsistent" with its earlier position, the party asserting the new position previously persuaded the court to accept its earlier position and (3) that party "would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." Intellivision appealed. 

The 2d Circuit, in affirming the district court, rejected the argument that plaintiffs' position was not "clearly inconsistent," citing the plaintiff's contradictory arguments made in the motion to dismiss and the summary judgment motion. The court also rejected the argument that judicial estoppel requires a party's position to have been adopted by a different court in a "prior separate proceeding."  The 2d Circuit, citing Supreme Court precedent, stated that judicial estoppel is a flexible equitable doctrine without fixed requirements and that judicial estoppel "generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase."

Practice Note:  As judicial estoppel may not be limited to a "prior proceeding," practitioners should consider the doctrine in analyzing their opponent's inconsistent arguments in the midst of litigation.

Patents / Damages

Posner to Apple/Motorola: No Damages, No Injunction, No Trial

by Ryan N. Phelan

Judge Posner (of the U.S. Court of Appeals for the Seventh Circuit), sitting by designation, derailed Apple's and Motorola's expected patent liability trial when he found that both parties provided insufficient evidence to support either damages or injunctive relief.  Apple, Inc. v. Motorola, Inc., Case No. 1:11-cv-08540 (N.D. Ill., June 22, 2012) (Posner. J.).

Apple had sued Motorola, alleging infringement of several of its patents related to touch screens and user interfaces for smartphones.  Motorola counterclaimed with its own patents directed to cell phone communications. In a Daubert hearing, Judge Posner found inadmissible a majority of both parties' proposed expert testimony on damages.  In the aftermath, considering the parties' follow-up briefs and oral arguments, Judge Posner addressed the evidentiary deficiencies for each of damages, injunctive and declaratory relief. 

For damages, Judge Posner found that Apple had conceded that the excluded expert testimony precluded it from recovery of damages for two of its four remaining asserted patents. For one of its patents, Apple attempted to substitute its technical report for its damages report, but Judge Posner countered that the technical report merely "invite[d] guesswork�� because it failed to properly estimate the percent value added by a particular computer chip that performed the patent functionality. Similarly, for its remaining patent, Judge Posner found that Apple's damages calculation was incorrectly based on a stand-alone iPhone application that was not necessarily correlated to patent's claims, e.g., extracting dates from text to create calendar entries.  He also found that Apple could not remedy this deficiency by relying on "nominal damages":  "[y]ou can't go into federal court and say you had a contract with X and [that] X broke it and you're really annoyed even though you sustained no injury of any sort ... so please give me a judgment for $1 that I can pin on my wall."  Federal courts require Article III "cases" and "controversies" for subject-matter jurisdiction.  Finally, Judge Posner found that even § 284 provided no relief where Apple did not show admissible evidence sufficient to substantiate a "reasonable royalty."

Motorola fared no better. Its one remaining patent in the case belonged to a portfolio that Judge Posner found Motorola had committed to license to anyone on a fair, reasonable and non-discriminatory (FRAND) basis (in return for the portfolio being dubbed by various standards organizations as "standard essential"). Judge Posner found that Motorola did not provide evidence sufficient for calculating a reasonable royalty consistent with its FRAND requirement and, similarly, did not provide a reason why Motorola's remaining patent represented "up to" (or, later contradicting itself, "at least") 40 to 50 percent of the entirety of the portfolio's value.

Judge Posner also ruled that neither party proved entitlement to an injunctive relief.  He stated that Motorola's request for an injunction was nonsensical given its FRAND requirement to provide its patented technology to anyone—including Apple.  And Apple's request for an injunction "flunked" the eBay standards of irreparable injury, balance of hardships and public interest—Apple could not receive an injunction based merely on the speculative grounds of loss of consumer good will and market share, especially where the patent claims were directed to technology "worth very little" to consumers and were easy to invent around.

Judge Posner went on to find that the case exemplified "a simple failure of proof" on both sides.  Injunctive relief is no substitute if money damages would have been an adequate remedy but where parties incurred "self-inflicted wound[s]" for lack of evidence on the same.

Thus he stated that declaratory relief would serve no purpose:  "when the court has determined that neither party could obtain monetary or injunctive relief against the other, as in this case, a declaratory judgment in favor of either party would confer no tangible benefit on the victor and so there would be no federal subject-matter jurisdiction"—"the issuance of such a judgment would have no practical effect" —in short, no damages, no injunction, no trial.

Perhaps anticipating an almost certain appeal, Judge Posner ended by dismissing the case with prejudice, noting that "[i]t would be ridiculous to dismiss a suit for failure to prove damages and allow the plaintiff to refile the suit so that he could have a second chance to prove damages."  Judge Posner concluded that "[the parties] can't obtain any benefit from further proceedings in this case but they can appeal its dismissal."

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