United States: Fresh From The Bench: Recent Patent Cases From The Federal Circuit

Last Updated: February 11 2014
Article by Peter Heuser

The Supreme Court agrees to hear Akamai and Nautilus cases.

ln Akamai Limelight Networks, Inc.,692 F.3d 1301 (Fed. Cir. 2012), a 6-5 majority of the en banc Federal Circuit significantly altered the landscape of indirect patent infringement by making it easier to prove induced infringement in patent cases involving multiple actors. A majority of the court overruled BMC Resources, lnc. v. Paymentech, L.P.,498 F.3d 1373 (Fed. Cr.2007), in holding that a patentee claiming induced infringement no longer has to show that a single entity is liable for direct infringement. The majority opinion in Akamai established what has been called an "inducement only rule," which makes the inducing entity liable on greatly enlarged grounds, such as potentially advising or encouraging acts that may constitute direct infringement, even though there is no single party, alone or vicariously, that is a direct infringer of the patented method.

ln Nautilus, lnc. v. Biosig lnstruments, 1nc.,715 F. 3d 891 (Fed. Cir. 2013), the issue is whether the Federal Circuit's acceptance of ambiguous patent claims with multiple reasonable interpretations - so long as the ambiguity is not "insoluble" by a court - defeats the statutory requirement of particular and distinct patent claiming. This case has localflavor because Nautilus is based in Vancouver and the case is being handled by our colleague John Vandenberg of Klarquist Sparkman.

Pacific Coast Marine Windshields Limited v. Malibu Boats. Fed. Cir. No. 2013-1199 (1/8/2014)

This is a design patent infringement case in which the Circuit reversed summary judgment of non-infringement. The district court found that prosecution history estoppel barred the infringement claim. The panel rejected Pacific's contention that prosecution history estoppel did not apply to design patents but reversed the summary judgment based upon its holding that the accused design was not within the scope of the subject matter surrendered during prosecution.

The patent applicant filed an application directed to several different embodiments of a marine windshield. ln response to a restriction requirement in which the examiner determined that there were five patentably distinct groups of designs, the applicant elected the embodiment of Figure 1, amending the claim to recite "the ornamental design of a marine windshield with a frame, and a pair of tapered corner posts," removing the original claim language stating "with vent holes and without said vent holes, and with a hatch and without said hatch."

Figures in original patent filing.

The design patent subsequently issued and Pacific Coast sued Malibu Boats that sold the boat windshield shown below that included three trapezoidal holes in the corner post.

Accused Malibu Boats Windshield.

The district court granted Malibu Boats' motion for summary judgment of non-infringement based on prosecution history estoppel, determining that the applicant had surrendered the designs reflected in the cancelled figures.

The Federal Circuit first considered whether prosecution history estoppel should even apply to design patents, an issue which it stated had not yet been decided by the Circuit. Before doing so, however, the court compared the infringement tests for utility and design patents.

For design patents, the concepts of literal infringement and equivalents infringement are intertwined. Unlike the provisions defining infringement of a utility patent, the statutory provision on design patent infringement does not require literal identity, instead imposing liability on anyone who applies the patented design, or any colourable imitation thereof, to any article of manufacture for sale, or sells an article of manufacture to which such design has been applied. 35 USC § 289. Under the leading Supreme Court case of Gorham Mfg. Co. v. White, 81 U.S. 511 (1871), the test for design patent infringement is whether in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other. Id. at 528. Thus, the test for design patent infringement is whether "the accused design could not reasonably be viewed as so similar to the patented design that a purchaser familiar with the prior art would be deceived by the similarity between the claimed and accused designs, inducing him to purchase one supposing it to be the other. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F. 3d 665, 683 (Fed. Cir. 2008) (quoting Gorham, 81 U.S. at 528).

Turning to the issue of whether prosecution history estoppel should apply to design patents, the panel stated that the same principles of public notice that underlie prosecution history estoppel apply to design patents as well as utility patents. With each type of patent, prosecution history estoppel promotes the "clarity [that] is essential to promote progress." Festo Corp. v. Shokefsu Kinzoku Kogyo Kabushiki Co., 535 U.5.722,730 (2002). Refusing to apply the principles of prosecution history estoppel to design patents would undermine the "definitional and public-notice functions of the statutory claiming requirement." Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,520 U.S. 17, 29 (1987).

The panel then turned to whether the principles of prosecution history estoppel bar the infringement claim in this case, and asked three questions: (1) whether there was a surrender; (2) whether it was for reasons of patentability; and (3) whether the accused design is within the scope of the surrender. ln answer to the first question the panel found that there was a surrender because it is the drawings of a design patent that provide the description of the invention. Here, in response to a restriction requirement, the applicant cancelled figures associated with all but one of the groups identified by the examiner. By cancelling figures showing corner posts with two holes and no holes, the applicant surrendered such designs and conceded that the claim was limited to what the remaining figure showed-a windshield with four holes in the corner post- and colorable imitations thereof.

As to the second question, the panel concluded that claim scope was surrendered in order to secure the patent, as required by the Supreme Court's decision in Fesfo. Here, while the surrender was not made for reasons of patentability (for example, anticipation, obviousness, or patentable subject matter), the surrender was made in order to secure the patent and, pursuant to Fesfo, that is sufficient.

The final question is whether the accused design is within the scope of the surrender. Here, the surrendered designs included windshields with two holes on the corner post. Although the accused design had a three-hole configuration and the originally-claimed design did not include a three-hole configuration, the district court found that "the accused design is still clearly within the 'territory between the original claim and the amended claim," i.e., between the claimed four-hole embodiment and the surrendered two-hole embodiment. However, the panel noted that the defendant did not argue that the scope of the surrendered two-hole embodiment extended to the three-hole embodiment because the three-hole embodiment was not colorably different from the two-hole embodiment. Since the patentee here did not argue that the accused design was within the scope of the surrendered two-hole embodiment, no presumption of prosecution history estoppel could arise. The panel thus held that prosecution history estoppel principles do not bar the infringement claim.

This case has implications on how we file design patent applications. We normally include embodiments with minor variations in order to avoid multiple filing, issue and maintenance fees. The examiners' review to determine if there must be a restriction is highly discretionary. Examiners typically are fairly lenient in that regard. However, this case tells us that if there is a restriction requirement, care must be taken to file divisional applications to alternate embodiments that might be commercially significant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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