United States: Federal Circuit Review - Issue 29

Prior Art is "Analogous" When It Is Reasonably Pertinent To The Inventor's Particular Problem.

Scientific Plastic Products, Inc., v. Biotage Ab, No. 2013-1219, 2013-1220, 2013-1221, 2014 U.S. App. LEXIS 17461 (Fed. Cir. September 10, 2014) (Newman, J.). Click Here for a copy of the opinion.

Scientific Plastic sued Biotage for infringing three patents relating to a resealable cartridge for low pressure liquid chromatography (LPLC). Biotage requested inter partes reexamination and the litigation was stayed. The Patent Office cancelled all of the claims of all three patents as obvious and unpatentable, and the Federal Circuit affirmed. The primary issue on reexamination concerned the obviousness of combining the LPLC cartridge shown in the Yamada reference with the pressure-resistant caps of King or Strassheimer, deemed "analogous art" by the patent examiner.

The criteria for determining whether prior art is analogous may be summarized as "(1) whether the art is from the same field of endeavor, regardless of the problem addressed, and (2) if the reference is not within the field of the inventor's endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved." Slip Op. at 6 (quoting In re Clay, 966 F.2d 656, 658– 59 (Fed. Cir. 1992)). The Patent Office and the Court agreed that the central purpose of the invention was to provide easy access to the contents of an LPLC cartridge without destroying its ability to be sealed and function under LPLC pressures. In these circumstances, it would have been reasonable to look to sealing arrangements for other pressurized systems, i.e. those of King or Strassheimer, even though these references are not within the LPLC field. The inventor's reasoning in solving the LPLC leakage problem was not used as improper hindsight, because this problem was known, and motivated looking further afield, without needing to use insights from the inventor. The PTO's obviousness decision was affirmed.

Reexamination Did Not Toll Six-Year Laches Delay, But Equitable Estoppel Was Not Proved.

SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, No. 2013-1564, 2014 U.S. App. LEXIS 17830 (Fed. Cir. Sept. 17, 2014) (Hughes, J.). Click Here for a copy of the opinion.

SCA sued First Quality for infringing U.S. Patent No. 6,375,646, which relates to adult incontinence products. The district court held that SCA's suit was barred by laches and inequitable estoppel. The Federal Circuit affirmed that SCA delayed its lawsuit for more than six-years, which warranted dismissal for laches. However, given the limited interactions between the parties, the district court's summary judgment as to equitable estoppel was reversed and remanded.

In October 2003, SCA sent a letter to First Quality that expressly put First Quality on notice as to its possible infringement of the '646 patent. First Quality responded by saying it did not infringe an invalid patent, and identified prior art that it said, "reveals the same diaper construction claimed by the '646 Patent." Slip Op. at 3. In July 2004, SCA sought reexamination of the '646 patent. The Patent Office confirmed the patentability of the '646 claims in March 2007. SCA ultimately brought suit against First Quality in August 2010, three years after the reexamination, and more than six years after its 2003 infringement notice. According to SCA, it took three years after the reexamination to implement new management structures, evaluate outside counsel, and investigate potentially infringing products on the market.

Laches is a discretionary equitable defense to patent infringement that may arise only when an accused infringer proves by a preponderance of evidence that a patentee (1) unreasonably and inexcusably delayed filing an infringement suit (2) to the material prejudice of the accused infringer. Delays exceeding six years are presumed to be unreasonable, inexcusable, and prejudicial. These presumptions can be rebutted by producing contrary evidence. If the patentee meets this burden of production, the accused infringer must prove both elements of laches by a preponderance of evidence. Slip Op. at 5-6 (citations omitted).

The Federal Circuit held that the intervening ex parte reexamination did not toll the laches period, and was not a reasonable excuse for the more than six year delay. The three year delay after the reexamination was not reasonable either. The Federal Circuit did not agree that SCA was required to give notice of the reexamination, because First Quality had notice of SCA's original claim and reexaminations are public proceedings. Nevertheless, SCA failed to rebut the presumption of unreasonable delay, because it monitored First Quality since 2003, had a substantial corporate intelligence team, was represented by US counsel, was not excused by ignorance of the US patent system, and did not act promptly when the reexamination was concluded. The delay resulted in prejudice to First Quality, which had expanded its business, and First Quality would have taken less risk if SCA had diligently pursued its claim. On these facts, the district court did not abuse its discretion in finding an inexcusable delay that caused harm. However, laches does not automatically follow; it should arise only after balancing all of the pertinent facts and equities, including the length of the delay, the seriousness of the prejudice, the reasonableness of excuses, and the defendant's conduct or culpability. Here, the district court failed to explicitly balance these equities in its decision, but this was held to be a harmless error. SCA's evidence of good faith did not outweigh the other considerations and did not prove an abuse of discretion by the court.

Equitable estoppel is a discretionary remedy that differs from laches. It may only arise (1) when a patentee communicated something to an alleged infringed in a misleading way, (2) on which the accused infringer relied, (3) such that he would be materially prejudiced if the patentee asserts a claim that is inconsistent with his earlier communication. The passage of time alone does not create an estoppel. The district court found that SCA's 2003 notice to First Quality, followed by silence, was a misleading communication. The Federal Circuit disagreed, because there was no clear duty for SCA to speak. Silence and delay must be coupled with other factors, such that the conduct as a whole amounts to misleading inaction. SCA and First Quality had minimal interaction, nor did SCA's silence constitute an admission that its patent was invalid, particularly when SCA sought reexamination. Thus, the Federal Circuit found there were genuine issues of fact whether SCA's conduct was actually misleading and whether First Quality actually relied on such conduct that caused it harm. (This is different from harm that results from silence or delay, as in laches, even if there was no reliance.) Since First Quality could have relied on its own opinion that SCA's patent was invalid, and not on SCA's silence and delay, the district court's summary judgment of inequitable estoppel was incorrect.

For these reasons, the district court's judgment of laches was affirmed; the judgment of equitable estoppels was reversed and remanded.

Grant of a Litigation Stay Was Proper Despite Collateral Attack On The PTO's Authority To Initiate The Related Post Grant Review

Benefit Funding Sys. LLC & Ret. Capital Access Mgmt. Co. LLC v. Advance Am. Cash Advance Ctrs., 2014 U.S. App. LEXIS 18340 (Fed. Cir. Sept. 25, 2014) (Prost. CJ). Click Here for a copy of the opinion; and click here for Errata.

Benefit Funding sued various defendants for infringing its U.S. Patent No. 6,625,582 for a system and method of converting future retirement benefits into current resources. US Bancorp petitioned the USPTO for post-grant review of the asserted '582 claims under the Transitional Program for Covered Business Method Patents ("CBM review"). See America Invents Act, Pub. L. No. 112-29, § 18, 125 Stat. 284, 329–31 (2011) ("AIA"). The defendants then moved to stay the litigations and the district court denied the motions. Later, the USPTO initiated a post grant review, concluding that "it is more likely than not that the challenged claims are unpatentable." Slip Op. at 3 (citation omitted). The basis for this preliminary finding was that the claims appear to encompass unpatentable subject matter, in violation of 35 U.S.C. § 101. The district court then granted renewed motions to stay, and the patentees made an interlocutory appeal to the Federal Circuit, asking for the stay to be lifted.

Section 18(b) of the AIA provides that a stay may be granted during a CBM review, upon consideration of four factors: whether a stay will simplify the case; whether discovery is complete and a trial is scheduled; whether a stay would be prejudicial to a party; and whether a stay will reduce the burden of litigation for the parties and the court. The district court concluded, and the Federal Circuit agreed, that all four factors favored a stay. The PTO proceedings could make the case moot and could reduce the claims and issues in dispute. The litigation was not far advanced and the PTO proceedings would probably conclude first. There was no prejudice to the patentees from a stay, because the patentees are non-practicing entities, and the negative impact of a stay was overshadowed by the PTO's decision to initiate the post grant review. A stay would also reduce the burden of litigation.

The Federal Circuit reviewed the district court's decision under AIA § 19(b)(2), "to ensure consistent application of established precedent, and such review may be de novo." This is a "more searching review" than the typical "abuse of discretion" standard. The patentees argued there should be no stay because the Patent Office is not authorized to conduct a CBM review on §101 grounds, and therefore, the proceeding will be moot or will not bind the district court,. This argument was rejected, as it was by the district court, as an improper collateral attack on the PTO's authority to initiate the disputed post grant review. The courts will not second-guess such determinations by the PTO. A challenge to the PTO's authority may be appropriate in a direct appeal from the PTO's final decision, but is not proper in an interlocutory appeal from a decision to stay a related lawsuit. Accordingly, the Federal Circuit stated: "we do not address the underlying merits of that attack, namely whether § 101 is a valid ground for CBM review." Slip Op. at 8. The district court did not abuse its discretion, consistency with precedent was not implicated, and a more searching review was not warranted. The decision to stay the litigation during CBM review was affirmed.

The following opinions are not reported in this newsletter:

Buysafe, Inc. V. Google, Inc., No. 2013-1575, 2014 U.S. App. LEXIS 16987 (Fed. Cir. September 3, 2014) (Asserted claims that are squarely about creating a contractual relationship were invalid, where invocation of computers added no inventive concept, because they cover abstract ideas that are ineligible for patenting under 35 U.S.C. § 101). Click Here for a copy of the opinion.

Epos Technologies Ltd. v. Pegasus Technologies Ltd., No. 2013-1330, 2014 U.S. App. LEXIS 17195 (Fed. Cir. September 5, 2014) (Erroneous claim construction was reversed, i.e. "drawing implement" was not limited to "conventional" embodiments; "given time interval" was not limited to "fixed at a few seconds or less;" "marking implement" was not limited to "a marker tip and not a pen tip;" and "temporary attachment" did not mean something that can be removed from the retrofittable apparatus). Click Here for a copy of the opinion.

Interval Licensing LLC v AOL, Inc. Et Al., No. 2013-1282, 2013-1283, 2013-1284, 2013-1285, 2014 U.S. App. LEXIS 17459 (Fed. Cir. September 10, 2014). (The terms "in an unobtrusive manner" and "does not distract a user" are indefinite because they are subjective and come with no objective standard to specify their scope; other claim terms were misconstrued and led to erroneous finding of non-infringement). Click Here for a copy of the opinion.

Virnetx, Inc. v. Cisco Systems, Inc., No. 2013-1489, 2014 U.S. App. LEXIS 17748 (Fed. Cir. September 16, 2014) (In context of disputed claims, "domain name" was affirmed to mean "a name corresponding to an IP address" and "secure communication link" was properly interpreted to require both security and anonymity). Click Here for a copy of the opinion.

American Calcar v. American Honda Motor Co., No. 2013-1061, 2014 U.S. App. LEXIS 18417 (Fed. Cir. 2014) (Inequitable conduct affirmed; "but for" material information about prior art vehicle information system that the inventor withheld, and which disclosed features he claimed, a patent would not have been granted; inventor selectively disclosed other information about the same prior art, and the only reasonable inference was that the omitted information was deliberate). Click Here for a copy of the opinion.

EMD Millipore Corp. v. Allpure Techs., No. 2014 U.S. App. LEXIS 18530 (Fed. Cir. 2014) (Summary judgment affirmed; accused product does not have a "removable, replaceable transfer member" when disassembled and does not provide an infringing equivalent; prosecution history bars the doctrine of equivalents because a narrowing amendment affected the transfer member and was not excused). 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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.