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Justin E. Gray

IP Litigation Attorney at Foley & Lardner LLP

Former Adjunct Professor at Northwestern University School of Law

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Federal Circuit Finds Two Claim Terms Indefinite Under Nautilus

Trusted Knight Corp. v. International Business Machines Corp. (Fed. Cir. Mar. 7, 2017) (nonprecedential)

In this case, the Federal Circuit affirmed a district court decision invalidating three patent claims as indefinite under the Supreme Court's Nautilus decision.  The patent at issue relates to protecting computers against key logging malware.

The first term in dispute was "in response to the software key logging through the API stack to an internet communication port."  The district court held this term indefinite because it is unclear what "in response to the software key logging" requires.  On appeal, the plaintiff argued that this limitation does not require responding to or detecting actual malware on a user's computer.  The Federal Circuit found this argument supported by the patent specification, which states "[t]he solution of the present invention does not depend on detection of malware at all."  In the underlying district court decision, the district court had asked what is happening "in response to the software key logging" if the invention is not responding to malware.  The plaintiff responded to this question during the appeal by arguing that the invention responds to the threat of malware.  The Federal Circuit rejected this argument as the claim limitation does not "refer to the 'threat' or 'potential presence' of key logging; rather it refers to key logging."  The Federal Circuit then held that meaning of this claim term is not reasonably certain and the clams containing this term are therefore indefinite.

The second term in dispute was "a process of passing the encrypted data to a 3-ring level where a hook inserted by a hook-based key logger."  The parties agreed that this claim term contains a typographical error.  Specifically, the term is missing a verb between "hook" and "inserted."  The district court held it could not correct this error because the correction was subject to reasonable debate.  The plaintiff argued that the verb "is" should be inserted between "hook" and "inserted."  But the district court found that the claim could also be corrected by inserting "could be" between "hook" and "inserted."  The Federal Circuit determined that the plaintiff's proposed correction would suggest that the "process of passing the encrypted data to a 3-ring level" only occurs when a hook is actually inserted, but "the specification emphasizes that the invention operates regardless of the presence or detection of malware."  The Federal Circuit then determined that the district court's alternative correction "would seem to be consistent with the specification" but "would create a different claim scope than [plaintiff's] proposed construction of adding 'is.'"  As the proposed correction to the claim was subject to reasonable debate, the Federal Circuit held the claim limitation is not amenable to correction and does not inform those skilled in the art about the scope of the invention with reasonable certainty.  The Federal Circuit thus held the claim indefinite.


Supreme Court to Review Interpretation of Patent Venue Statute

TC Heartland, LLC v. Kraft Foods Group Brands LLC (No. 16-341)

Earlier today, the Supreme Court granted certiorari to determine "[w]hether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not be supplemented by 28 U.S.C. § 1391(c)."

In 1957, the Supreme Court held that "28 U.S.C. § 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C. § 1391 (c)" and that the phrase "where the defendant resides" in Section 1400(b) means the state of incorporation only. Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 226, 229 (1957). In 1990, two years after Congress had amended Section 1391(c), the Federal Circuit held that those amendments made Section 1391(c) applicable to Section 1400(b) and therefore defendants in patent litigation could be sued in "any district where there would be personal jurisdiction over the corporate defendant." VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583 (Fed. Cir. 1990).

Congress further amended Section 1391(c) in 2011. Recently, TC Heartland argued to the Federal Circuit, on a writ of mandamus, that those amendments rendered VE Holding inapplicable such that Fourco again controls the interpretation of Section 1400(b).  The Federal Circuit disagreed, calling the 2011 amendments "minor." 

Reversal of VE Holding could shift the focus of patent litigation away from popular districts like the Eastern District of Texas to districts where more companies are actually incorporated or have a significant physical presence, depending on how the Supreme Court rules in this case.


Federal Circuit Relies on Non-Claim Construction Language in Markman Order in Affirming Summary Judgment of Non-Infringement

Impulse Tech. Ltd. v. Microsoft Corp. (Fed. Cir. Dec. 7, 2016) (nonprecedential)

This case concerned the construction of the term "defined physical space" in a patent directed to the use of three-dimensional motion tracking for interactive fitness and gaming applications. The district court held that the construction of this term is an "indoor or outdoor space having size and/or boundaries known prior to the adaptation of the testing and training system." The district court subsequently granted Microsoft's motion for partial summary judgment of non-infringement based on this claim construction.

On appeal, Impulse argued both that the district court's claim construction was incorrect, and summary judgment of non-infringement should not have been granted under the claim construction adopted by the district court. 

On appeal, Impulse argued that "[e]ach of the accused products has software code that specifies the size of a physical space within which the user can play the game." Impulse then argued that since those hardcoded values are fixed, the "size" of the physical space is known prior to adaptation (i.e. prior to game play), and though the location is not known in advanced, the district court's construction provides that the "size and/orboundaries [are] known prior to the adaptation" so the district court should not have granted summary judgment of non-infringement.

In response, Microsoft pointed to language in the district court's Markman order explaining that the district court adopted the "and/or" phrase in its construction solely to account for the "defined physical space" lacking a vertical boundary, as some of the examples of physical spaces disclosed in the specification were outdoor spaces.

The Federal Circuit agreed with Microsoft and "reject[ed] Impulse's interpretation of the district court's construction that a physical space with eithera known size or a known set of boundaries would constitute a 'defined physical space.'" (emphasis in original). The Federal Circuit explained that "[a]s the district court explained, the 'and/or' phrase in its construction was adopted to 'account for the possibility that an outdoor physical space would have no vertical boundary.'" The Federal Circuit then concluded "that both the size and the location of any boundaries that exist must be known prior to adaptation of the system in order to constitute a 'defined physical space.'"

It is interesting that the Federal Circuit interpreted the scope of the district court's claim construction by relying on other language in the Markman order.  The court could have instead, for example, modified the construction itself to expressly include the idea of "boundaries that exist" for situations where there is no vertical boundary. This is interesting as it is quite possible that, if such a case were to have been presented to a jury, the parties may have been precluded from referencing at trial any language in the Markman order other than the claim constructions themselves.  Thus, a jury may not have had the benefit of the additional language the Federal Circuit referenced in its decision.


Gray on Claims Turns Seven Years Old

This blog started in June 2009.  It is still hard for me to wrap my head around that fact.  Seven years and 185 posts later, it is still here (though a bit dormant I admit).  A lot has happened in the last seven years.  We have seen multiple Supreme Court opinions on claim construction and other patent issues, as well as the rise and fall of false marking cases.  Much has changed, while much remains the same.

I am working on some new content which will be published here soon, including content on the recent Supreme Court decisions in Cuozzo v. Lee and Halo v. Pulse, as well as an update to my November 2009 post entitled "Top 150 'Customers':  Increasing Domination of the Patent System."

To my readers, both old and new, I appreciate you taking time to read what I have to contribute to the conversation, and hope this blog has provided, and will continue to provide, value to each and every one of you.  If there are any specific topics (claim construction or otherwise) you are interested in seeing covered on this blog, please feel free to contact me at


What is "Plain Meaning" Anyway?

Sucampo, AG v. Dr. Reddy's Labs., Inc. (D.N.J. Mar. 4, 2016)

It is common in patent litigation for patent holders to request claim terms be given their "plain meaning" by the Court without further clarification of what that plain meaning is.  But recently, Magistrate Judge Arpert in the District of New Jersey ordered plaintiffs to provide such clarification.

In the litigation, the parties disputed construction of eight claim terms.  The defendants proposed substantive constructions for each of the eight terms, while the plaintiffs offered "plain meaning" as their proposed construction for each term.  Defendants sought relief from the Court, arguing that the plaintiffs' position "prevents the Court from engaging in meaningful claim construction."

Magistrate Judge Arpert determined that the plaintiffs' position "without a statement of Plaintiffs contend the 'plain meaning' to be and without acknowledging whether Defendants' proposed construction is within the scope of Plaintiffs' 'plain meaning' is unhelpful to the process and has the potential to unnecessarily burden the Court's construction efforts."  The Magistrate Judge then held that the plaintiffs must affirmatively take a position on whether the defendants' proposed constructions are within the plaintiffs' "plain meaning" constructions as well as disclose a statement as to what the plaintiffs contendthe plain meaning of each term to be.  The court also noted that the plaintiffs are not precluded from arguing that no construction of a term is necessary and the court's order is intended "to assist the District Judge in resolving claim construction issues."

It will be interesting to see if any other judges start to require parties to disclose what they contend a "plain meaning" construction to be, even if the court may ultimately determine the claim term at issue needs no construction.


USPTO Prepares to Launch "Clarity of the Record" Pilot

In a recent blog post, PTO Director Lee announced that the USPTO is preparing to launch a "Clarity of the Record Pilot."  As part of this pilot "examiners will include as part of the prosecution record definitions of key terms, important claim constructions, and more detailed reasons for the allowance and rejection of claims."  The USPTO plans "to develop best examiner and applicant practices for enhancing the clarity of the record" based on the information learned from the pilot.  The blog post further explains that "[t]hrough correctness and clarity, such patents better enable potential users of patented technologies to make informed decisions on how to avoid infringement, whether to seek a license, and/or when to settle or litigate a patent dispute."

It is unclear whether Examiners will themselves be defining key terms or providing claim constructions as part of this pilot.  If Examiners will be taking such actions themselves, it is also unclear how the definitions and constructions provided by the Examiners will interplay with the "broadest reasonable construction" framework used during prosecution, 35 U.S.C. 112 P2 and associated case law regarding the onus of the applicant to provide claims particularly pointing out and distinctly claiming the subject matter regarded as the invention, and the process of construing the claims during litigation.


Federal Circuit Distinguishes Teva v. Sandoz

Shire Development, LLC v. Watson Pharmaceuticals, Inc. (Fed. Cir. June 3, 2015)

In this case, the Federal Circuit had previously reversed the district court's construction of two claim terms in a 2014 decision.  After the U.S. Supreme Court issued its Teva v. Sandoz decision clarifying the standard of review of claim construction on appeal, the U.S. Supreme Court vacated and remanded the Federal Circuit's 2014 decision in this case for further consideration under the revised standard of review.  The Federal Circuit subsequently held that "[b]ecause this case does not involve factual findings to which we owe deference under Teva, we again reverse the district court's claim constructions of the disputed claim terms and subsequent findings of infringement, and remand for further proceedings."

Shire had argued that because the district court "heard" testimony from expert witnesses during both a Markman hearing and at trial, the Federal Circuit must defer to the district court's claim constructions at issue on appeal under Teva.  The Federal Circuit disagreed, stating:

The Supreme Court held that we "should review for clear error those factual findings that underlie a district court's claim construction."  Teva, 135 S. Ct. at 842.  The Court did not hold that a deferential standard of review is triggered any time a district court hears or receives extrinsic evidence.  See id.  Here, there is no indication that the district court made any factual findings that underlie its constructions of "inner lipophilic matrix" and "outer hydrophilic matrix."  See J.A. 4566-67.

It will be interesting to see whether, in light of Teva v. Sandoz, district court judges will be more explicit in their Markman Orders on whether they made any factual findings so such orders are in a better position to trigger the Teva clear error standard of review.


Will Federal Circuit Respond to Supreme Court's Discussion of Federal Circuit's Inducement Reasoning?

Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S. Supreme Court June 2, 2014)

The Supreme Court's decision in this case contains the following passage, which has been described by others as a "comedic error" and "poorly written", but at the very least can be described as curious:

The Federal Circuit's contrary view would deprvie §271(b) of ascertainable standards.  If a defendant can be held liable under §271(b) for inducing conduct that does not constitute infringement, then how can a court assess when a patent holder's rights have been invaded?  What if a defendant pays another to perform just one step of a 12-step process, and no one performs the other steps, but that one step can be viewed as the most important step in the process?  In that case, the defendant has not encouraged infringement, but no principled reason prevents him from being held liable for inducement under the Federal Circuit's reasoning, which permits inducement liability when fewer than all of a method's steps have been performed within the meaning of the patent.

This language is particularly troublesome given the following language from the Federal Circuit's prior en banc opinion in the case:

To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.

Though the Supreme Court's Limelight decision has been cited in over a dozen district court decisions thus far, the above language has not yet been discussed in any court opinion.  This language also was not mentioned in the oral argument before the Federal Circuit on remand of this case.  It will nonetheless be interesting to see how the Federal Circuit decides to deal with this language, if at all, in its forthcoming opinion in this case.


Another Challenge to the False Marking Provisions of the AIA Bites the Dust

Stauffer v. Brooks Brothers Group, Inc. (Fed. Cir. July 10, 2014)

In this false marking case, one of a handful of qui tam false marking cases filed before the Forest Group floodgates opened in late 2009, the Federal Circuit held that the AIA amendments to the false marking statute do not contitute an impermissible pardon and do not violate a common law principle prohibiting use of a pardon to vitiate a qui tam action once it has commenced.

Stauffer accused Brooks Brothers of falsely marking bow ties with expired patents.  While his case was pending, the AIA was signed into law which eliminated the false marking statute's qui tam provision.  In response to a request by the district court to show why Stauffer's case should not be dismissed in light of the AIA, Stauffer made two arguments.  First, he argued that retroactive application of the AIA amendments usurped the President's pardon power because Stauffer believed the amendments eliminated criminal liability for false marking.  Second, he argued that the amendments violated a common law principle prohibiting use of a pardon to vitiate a qui tam action once it has commenced.  The district court rejected both of these arguments, as well as an argument made by Stauffer for the first time in his reply brief that he had suffered a "competitive injury" because he believed Brooks Brothers' actions inflated the price Stauffer paid for his bow ties.

On appeal, the Federal Circuit first pointed to its prior decisions in the Brooks v. Dunlop and Rogers v. Tristar false marking cases, where the court held that retroactive application of the false marking amendments in the AIA did not violate the Due Process or Intellectual Property Clauses of the Constitution and that qui tam plaintiffs did not have vested rights in pre-AIA false marking lawsuits.

Regarding Stuaffer's pardon argument, the Federal Circuit quickly determined that the amendments to the false marking statute did not grant a pardon, but instead repealed a law, an action within Congress's power.  Regarding Stauffer's common law argument, the Federal Circuit held that since Stauffer does not have a vested right in his lawsuit and the AIA amendments do not constitute a pardon, the AIA amendments do not violate the common law principle relied on by Stauffer.

The court also found that Stauffer's additional arguments made for the first time in his reply brief to the district court, including his argument that he suffered a competitive injury, were waived by not properly raising them before the district court.


Nautilus v. Biosig - What Will Be The New Test For "Reasonable Certainty"?

Nautilus, Inc. v. Biosig Instrucments, Inc. (U.S. Supreme Court June 2, 2014)

As has been written about at length, the Supreme Court has rejected the "insolubly ambiguous" test finding it "does not satisfy" 35 U.S.C. 112 P2 and has instead held that "a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of invention."  The Court explained that "[t]o tolerate imprecision just short of that render­ing a claim 'insolubly ambiguous' would diminish the definiteness requirement’s public-notice function and foster the innovation-discouraging 'zone of uncertainty,' United Carbon, 317 U. S., at 236, against which this Court has warned."

It will be interesting to see what the Federal Circuit does on remand with the Supreme Court's new standard.  Will the Federal Circuit create a new test to help both itself and lower courts determine what does and does not inform those skilled in the art with "reasonable certainty"?  Perhaps the Federal Circuit will try to formulate a test that expressly includes the idea from Exxon (with its roots in Athletic Alternatives) that "no narrowing construction can be adopted" (an idea that did not appear in the Federal Circuit's Nautilus opinion) and was explained further in a recent Federal Circuit case decided after cert was granted in Nautilus, namely Takeda v. Zydus.  While Exxon (and the "no narrowing construction" language) was cited by the Supreme Court in a footnote as an example of Federal Circuit decisions using the now-defunct "insolubly ambiguous" language, the likelihood that the Supreme Court will take another 112 P2 case in the foreseeable future is small.  Thus, what the Federal Circuit does with the Nautilus remand has the potential to be the new indefiniteness test for quite some time. 

If readers have thoughts on what the Federal Circuit may do with the Nautilus remand, I would appreciate hearing them.  Feel free to email me at