United States: Troutman Sanders Federal Circuit Review – October 24, 2014

Each week, Troutman Sanders' Federal Circuit review summarizes the Federal Circuit precedential patent opinions from the prior week.   

This week:

  • Patentee's failure to argue infringement under adverse claim construction on appeal constitutes waiver of the infringement claim. 
  • A claim construction that naturally aligns with the problem and solution in the written description is most likely correct. 
  • The Government assumes infringement liability when it requires a private party to performed a quasi-governmental act that infringes on a patent. 

Patentee's failure to argue infringement under adverse claim construction on appeal constitutes waiver of the infringement claim.

Cardsoft, LLC v. VeriFone, Inc., No. 2014-1135, 2014 U.S. App. LEXIS 19976 (Fed. Cir. Oct. 17, 2014) (Hughes, J.).Click Here for a copy of the opinion.

Cardsoft sued VeriFone for infringing two patents relating to software for controlling a payment terminal.  A jury found that VeriFone's devices infringed Cardsoft's patents, and that the claims were not invalid.  VeriFone appealed the district court's construction of "virtual machine," and argued that under a correct construction, VeriFone was entitled to a judgment of non-infringement as a matter of law.  The district court construed "virtual machine" to be a computer programmed to emulate a hypothetical computer.  VeriFone argued that a proper construction would be computer software that "process[es] instructions expressed in a hardware/operating system-independent language."

The Federal Circuit looked to the specification, prosecution history, and extrinsic evidence of the state of the art at the time the application was filed.  The specification indicated that the claimed invention enables creation of software in a hardware/operating system-independent way.  Further, a year prior to filing, Sun Microsystems released the Java virtual machine, which enabled programmers to write one application software program, which could then be run on any operating system or hardware running the Java virtual machine.  During prosecution of one of the patents, the applicant argued that the Java virtual machine was a "conventional" virtual machine, and that the claimed invention was an improvement upon it.  Based on such evidence, the Federal Circuit agreed with VeriFone's proposed construction.

In its appeal brief, VeriFone argued that under a correct claim construction, it was entitled to a judgment of non-infringement as a matter of law.  Cardsoft's brief argued against VeriFone's claim construction, but did not argue that VeriFone may still infringe under VeriFone's proposed claim construction.  Because Cardsoft failed to respond to VeriFone's non-infringement argument, the Federal Circuit held that Cardsoft had waived their right to argue that VeriFone still infringed.  In light of that waiver, the Federal Circuit did not remand, and granted VeriFone a judgment of non-infringement as a matter of law

A claim construction that naturally aligns with the problem and solution in the written description is most likely correct.

World Class Tech. Corp. v. Ormco Corp., No. 2013-1679, 2014-1692, 2014 U.S. App. LEXIS 20061 (Fed. Cir. Oct. 20, 2014) (Taranto, J.). Click Here for a copy of the opinion.

Ormco owns U.S. Patent No. 8,398,896, which describes a bracket that attaches to a tooth for orthodontic braces. World Class Technology sought a declaratory judgment that it does not infringe the '896 patent. Ormco counterclaimed and sought a preliminary injunction, which the district court denied. The court construed two claim terms, "support surface" and "ledge." Based on the court's construction of "support surface," the parties stipulated to non-infringement of the patent. Ormco then appealed, principally to challenge the claim construction.

Claim 1 of the '896 patent claims an orthodontic bracket having, inter alia, a bracket body coupled with a moveable member. The bracket body has a ledge and an acutely angled support surface that is engaged by a first portion of the moveable member when the movable member is in a closed position. The district court construed "support surface" to mean "at least partially support[] and guide[] the movable member during movement between the open position and the closed position." The court also interpreted the term "ledge" as "contacting the slide only when the slide is in the closed position."

The Federal Circuit affirmed. Despite ambiguous language, the district court's claim construction was not a reversible error. Contrary to Ormco's suggestion, the support surface and ledge are not interchangeable. They have different names, different positions, and different interactions with the bracket components.

To support its interpretation, the court identified in the specification that the sole purpose of the acute angle in the support surface was to avoid contact with the gums. Where claim language is ambiguous, "the construction that stays true to the claim language and most naturally aligns with the patent's description of the invention will be, in the end, the correct construction." Slip. Op. at 7-8 (quoting Renishaw PLC v. Marposs Societa's per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998)). Ormco's construction ignored gum contact and eliminated the need for the acute angle. Thus, Ormco's construction "is unmoored from, rather than aligned with, the description of the invention." The claim interpretation that accounted for the problem and solution of the invention was correct.

The Government assumes infringement liability when it requires a private party to performed a quasi-governmental act that infringes on a patent.

IRIS Corp. v. Japan Airlines Corp. & Japan Airlines Int'l Com., Ltd., No. 2010-1051, (Fed. Cir. Oct. 21, 2014) (Hughes, J.).Click Here for a copy of the opinion.

IRIS Corporation sued Japan Airlines Corporation (JAL) for infringing U.S. Patent No. 6,111,506, which relates to a secure identification document containing an embedded computer chip. IRIS alleged that JAL infringed by examining passports that were made using the claimed methods. JAL moved to dismiss for failure to state a claim and argued that conflict between federal patent law and immigration law warranted its exemption from infringement. That is, IRIS's remedy was to sue the Government, and not a third party acting by authority from the Government. The district court granted the motion, and IRIS appealed.

The main issue was whether the United States had assumed liability under 28 U.S.C. § 1498(a) for JAL's alleged infringed activities. Under the statute, if an invention patented under U.S. patent law is "used or manufactured by or for the United States," a patentee's remedy is by an action against the United States. An infringed activity is "for the United States" if: (1) it is conducted "for the Government" and (2) it is conducted "with the authorization or consent of the Government."

The Federal Circuit affirmed and held that the Government authorized JAL's accused passport activities, and therefore assumed JAL's liability (if any), because "JAL cannot comply with its legal obligations without engaging in the allegedly infringing activities." In addition, an activity is done "for the Government" if it is done "for the benefit of the Government." Here, the Government benefited from JAL's examination of the passports because it "improve[d] the detection of fraudulent passports and reduce[d] demands on government resources." Because JAL's allegedly infringing act was done "for the United States," the district court correctly dismissed the action.

The following opinion is not reported in this newsletter:

Anticancer, Inc. v. Pfizer, Inc. & Crown Bioscience, Inc., No. 2013-1056, 2014 U.S. App. LEXIS 20059 (Fed. Cir. Oct. 20, 2014) (No evidence of bad faith and therefore imposing a fee-shifting sanction as a condition of supplementing the Contentions was erroneous). Click Here for a copy of the opinion.

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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Ethan G. Ostroff
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