United States: MoFo IP Newsletter – January 2016

Last Updated: January 18 2016
Article by Richard S.J. Hung and Nathan Sabri

Commil USA, LLC v. Cisco Systems, Inc. (Supreme Court, May 26, 2015).

In May, the Supreme Court held that a good faith belief that an asserted patent is invalid is not a defense to inducing infringement of that patent.

A party that induces another's patent infringement is liable if the party "knowingly" induced the infringement and possessed "specific intent" to encourage the other party's direct infringement. In Commil, the Federal Circuit had held that an accused inducer's good faith belief of invalidity may negate the requisite intent for induced infringement.

The Supreme Court reversed, holding that although a good faith belief in noninfringement can insulate a party from liability for induced infringement, a good faith belief in patent invalidity cannot provide such a defense. The Court explained that infringement and invalidity are separate matters under patent law and should not be "conflated." Accordingly, post-Commil, a reasonable belief in patent invalidity remains a defense to a charge of willful infringement — but not a defense to inducing infringement.

Williamson v. Citrix Online, LLC (Fed. Cir. June 16, 2015).

In June, the en banc Federal Circuit expanded the scope of indefiniteness attacks against means-plus-function limitations in the Williamson decision. Section 112, paragraph f, allows a patentee to recite a claim limitation as a "means or step for performing a specified function." A claim that is governed by Section 112, paragraph f, will be interpreted as encompassing the structures disclosed in the specification for performing the claimed function, along with equivalent structures. If the specification fails to disclose sufficient structure for performing that function, however, the claim is invalid as indefinite.

Prior Federal Circuit precedent had held that absence of the term "means" gave rise to a "strong" presumption that Section 112, paragraph f, did not apply. In light of this "strong presumption," accused infringers had found it difficult to argue that a claim limitation that lacked the word "means" was indefinite for lack of corresponding structure.

The Williamson court expressly overruled the Federal Circuit's prior precedent requiring a "heightened" or "strong" presumption. Instead, it held that the standard is simply "whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure." Relying on this standard, the court held that the phrase "distributed learning control module" invoked Section 112, paragraph f, but lacked sufficiently definite corresponding structure in the specification and therefore was indefinite. The Federal Circuit's abandonment of the "heightened burden" and "strong presumption" standard makes it easier for defendants to invalidate claims on definiteness grounds — particularly if the asserted claims include "nonce" words like "module." By contrast, patent applicants must think carefully about how to avoid unintended means-plus-function treatment.

Suprema, Inc. v. ITC (Fed. Cir. Aug. 10, 2015).

In Suprema, the en banc Federal Circuit held that the International Trade Commission has the authority to issue exclusion orders for induced infringement of method claims — even if the claims are not infringed until after the product was imported into the U.S.

The Commission had determined that certain imported goods qualified as "articles that infringe" under Section 337, even though they were not infringing when imported. Based on its construction of the statutory language as allowing inducement even if the direct infringement occurs after importation, the Commission found that the importer had induced infringement of the asserted method claim.

On appeal to the Federal Circuit, the initial panel vacated the exclusion order, holding that there were no "articles that infringe" at the time of importation for the importer to have induced infringement. Judge Reyna dissented, predicting that the panel's decision would "effectively eliminate[] trade relief under Section 337 for induced infringement and potentially for all types of infringement of method claims." On en banc review, the full Federal Circuit vacated the panel's decision. The en banc court explained that the phrase "articles that infringe" in Section 337 was ambiguous because it "introduce[d] textual uncertainty." Due to this ambiguity, the Commission had the authority to construe the language, and the Federal Circuit was obligated to defer to that interpretation if reasonable. Because the Commission's interpretation was reasonable and consistent with the statutory text, policy, and legislative history, the Federal Circuit affirmed the Commission's original order.

In view of Suprema, patentees can continue to raise inducement claims before the ITC based on the post-importation infringement of method claims.

SCA Hygiene Products v. First Quality Baby Products (Fed. Cir. Sept. 18, 2015).

In September, the en banc Federal Circuit considered whether the laches defense in patent infringement cases remains viable in view of a 2014 Supreme Court decision. In that decision, Petrella v. Metro-Goldwyn-Mayer, Inc., the Supreme Court had held that laches was no longer a defense to copyright infringement.

Via a split 6-5 decision in SCA Hygiene Products v. First Quality Baby Products, the Federal Circuit confirmed that laches remains a viable defense in patent infringement cases — even if not in copyright cases. The Federal Circuit explained that, unlike the copyright statute, the patent statute expressly codifies the laches defense by referring broadly to the defenses of "[n]oninfringement" and the "absence of liability for infringement or unenforceability" in Section 282(b)(1).

Although confirming viability of the patent laches defense, the Federal Circuit rejected its prior precedent that laches bars only pre-suit damages, but not prospective relief such as injunctions. The court explained that, when considering whether to grant an injunction, the district court "must weigh the facts underlying laches [as part of] the [Supreme Court's] eBay framework."

Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. Dec. 2, 2015).

Finally, in December, the Federal Circuit declined to hear en banc a decision invalidating certain methods of using cell-free fetal DNA as directed to unpatentable subject matter. In June, the Ariosa panel had affirmed a district court's grant of summary judgment that the asserted claims were invalid under Section 101. Claim 1, for example, recited: A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

The panel majority held that the fetal-diagnostic-method claims violated both prongs of the Supreme Court's test for subject matter eligibility in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012). First, the claims were "directed to a naturally occurring thing or a natural phenomenon." Second, the limitations did not "transform the nature of the claim" into a patent-eligible application and thus lacked an "inventive concept." This is because the methods themselves were conventional, routine, and well-understood applications in the art.

Concurring, Judge Linn suggested that the outcome should have been different, but for the panel's obligation to apply "the sweeping language of the test set out in Mayo." In his view, Ariosa "represents the consequence—perhaps unintended" of applying the Mayo test's "broad language [to] exclude[] a meritorious invention from the patent protection it deserves and should have been entitled to retain." In view of Judge Linn's concurrence, some anticipated that the Federal Circuit would take the case en banc. Now that en banc rehearing has been denied, observers await a petition for certiorari and the Supreme Court's reaction to it.

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Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Richard S.J. Hung
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