Federal Circuit Vacates Preliminary Injunction Where District Court Applied Incorrect Claim Construction

Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC (Fed. Cir. June 1, 2011) (nonprecedential)

In this case, the Federal Circuit vacated the district court's grant of a preliminary injunction in part when the district court's ultimate claim construction of certain terms differed from the claim constructions relied upon in granting the preliminary injunction.  The patents at issue related to machine-based methods of folding training pants at the crotch region, aligning and fastening the side seams of the training pants, inspecting the training pants, and folding the training patents for packaging.

In arguing against the preliminary injunction, the defendant argued that all the patents at issue were invalid.  For two of the patents, the district court's claim construction of various terms at the preliminary injunction phase significantly undermined the defendant's invalidity positions.  While the appeal of preliminary injunction was pending at the Federal Circuit, the district court issued its claim construction order.  In this order, the court altered the claim constructions it had relied upon in granting a preliminary injunction for these two patents.

On appeal, the Federal Circuit found that, for both patents, the fact that the district court had applied improper claim constructions, which were subsequently corrected, undermined the conclusion that a preliminary injunction was appropriate for these patents, especially in light of the fact that the amended claim constructions significantly strengthened the defendant's invalidity positions.  For these reasons, the Federal Circuit vacated the grant of preliminary injunction for these two patents.

Federal Circuit Affirms Dismissal of False Marking Case Without Leave to Amend

Juniper Networks, Inc. v. Shipley (Fed. Cir. Apr. 29, 2011)

In this case, the Federal Circuit affirmed a district court's dismissal of a false patent marking cases for failure to state a claim.  The defendant allegedly developed software used on the defendant's website, and that software was listed on the defendant's website as associated with specific patent numbers.  The software itself was allegedly destroyed in 1999 due a hard drive crash, but the description of the software as well as the patent numbers remained on defendant's website.  In an amended complaint, plaintiff alleged that defendant falsely marked "the Website and any firewall or other security products or services operating thereon, as well as web pages generated by the Website."

The district court dismissed plaintiff's amended complaint for failure to state a claim and did not grant leave to further amend, finding that plaintiff had not pled facts showing defendant had marked an "unpatented article" because "when considered in context," the marking on the website referred to the specific software project, not that the specific was functioning or operating on the website.

The Federal Circuit affirmed.  The Court pointed out that plaintiff did not allege that the specific software associated with the patent numbers on the website was falsely marked; instead the plaintiff alleged that it was the website and web pages themselves that were falsely marked.  The Court then considered whether websites can qualify as "unpatented articles" within the scope of Section 292, and determined that "because websites may both embody intellectual property and contain identifying markings, this Court holds that websites can qualify as unpatented articles within the scope of [Section] 292."

Next the Court analyzed issues surrounding the website at issue in this particular case.  While the website indicated the specific software was a "current project", the Court found that nothing on the website reasonably suggested that the specific software at issue actually protected the website and agreed with the district court that "it is beyond cavil that, when considered in context, the reference to 'functioning' relates to the progress of the [software] project, not that the software was functioning or operating on the Website."  Ultimately, the Federal Circuit affirmed the dismissal of the plaintiff's amended complaint and did not give leave to further amend, finding no error in the district court's determination that the amended complaint "could not be saved by further amendment."

Gray on Claims, in conjunction with Docket Navigator®, is providing a false marking chart that is updated daily with new false marking cases as well as status updates on pending cases.  A downloadable PDF chart is available on this page as well including information on the specific patents and products at issue in each litigation.  Gray on Claims is also providing information on false marking settlements.  Other writings on false marking can be found here.

Federal Circuit Prefers Construction that Harmonizes Claim Elements to Define a Workable Invention

Lexion Medical, Inc. v. Northgate Technologies, Inc. (Fed. Cir. Apr. 22, 2011)

In this case, the Federal Circuit affirmed the district court's claim construction as it harmonized the elements of the claim to define a workable invention.  The patent at issue related to an apparatus for heating and humidifying gas to a predetermined and preset temperature for use during laparoscopic procedures.

One limitation of the patent claims at issues required gas to enter the patient "humidified and having a temperature within 2°C of the predetermined temperature."  The district court held that this limitation did not require that the temperature range always be within 2°C of the predetermined temperature because the patent specification disclosed that that temperatures "will, at times, fluctuate outside the four-degree range."  The defendant argued that the claim construction of this limitation should require that the temperature always be within 2°C of the predetermined temperature.

The Federal Circuit agreed with the district court, mainly relying on the specification and surrounding claim language.  More specifically, two other limitations of the claim required "sensing the temperature of the gas as it exits the chamber to determine if it is in the predetermined range" and "actuating the heating means if the temperature of the gas is without the predetermined range."  The Federal Circuit found that these limitations, along with similar disclosure in the patent specification, supported a construction allowing for minor fluctuations outside the 4°C range, and stated that the Court "prefers a claim interpretation that harmonizes the various elements of the claim to define a workable invention."

Federal Circuit Reverses District Court's Finding of Means-Plus-Function Limitations

Rembrandt Data Technologies, LP v. AOL, LLC (Fed. Cir. Apr. 18, 2011)

In this case, the Federal Circuit reversed a district court's summary judgment decision of invalidity in part as there were genuine issues of material fact concerning whether the patent specification disclosed particular algorithms. The patent at issue related to a modem utilizing both the fractional rate encoding technique for more rapidly transferring data and the trellis encoding technique for reducing errors in data transmission.

During claim construction, the district court construed the limitations of "fractional rate encoding means for receiving said first group and performing a fractional encoding thereon to generate a group of fractionally encoded bits" and "trellis encoding means for trellis encoding said frames of equal number of bits" as means-plus-function limitations. The district court then found the patent claims invalid as it found the specification did not disclose algorithms able to perform the recited functions.

On appeal, the Federal Circuit determined that the district court had erred in construing these two claim limitations as means-plus-function claims because expert testimony indicated that the term "fractional rate encoding means" and "trellis rate encoding" were "self-descriptive to one of ordinary skill in the art" and the patent specification "adopted the common meanings" of these two types of encoding.

The parties then debated whether the necessary algorithms for the claim terms "buffer means" and "combining means" were disclosed in the patent specification. The Federal Circuit there were genuine issues of material fact regarding this issue and reversed the district court's grant of summary judgment of invalidity.

Patent Examiners Not Required to Make On-The-Record Claim Constructions

In re Jung (Fed. Cir. Mar. 28, 2011)

In this case, which was appealing a rejection of claims in a pending patent application, the Federal Circuit stated that patent examiners are not required to make an on-the-record construction of every claim term in every rejected claim.  The patent application at issue related to a photo-detector array system for transforming light inputs into electrical signals.  The claims at issue were rejected by the patent examiner and that rejection was sustained by the BPAI.

On appeal, the applicant argued that the patent examiner had not made a prima facie case of invalidity.  The applicant then argued during oral argument that such a prima facie case requires, among other things, an "[o]n-the-record showing of a reasonable, broadest reasonable construction."

The Federal Circuit responded in its opinion, stating that "[t]here has never been a requirement for an examiner to make an on-the-record claim construction of every term in every rejected claim and to explain every possible difference between the prior art and the claimed invention in order to make out a prima facie rejection.  This court declines to create such a burdensome and unnecessary requirement."

Decrease in New False Marking Cases Filed Post In re BP Lubricants

New false marking case filings have appeared to drop dramatically since the Federal Circuit's March 15, 2011 In re BP Lubricants decision.  This is evidenced by the fact that from March 16th through March 30th, the two week period directly following the BP Lubricants decision, only 9 new false marking cases have been filed.  This can be compared to prior two week periods from 2011:

• 48 new cases filed March 1st through March 15th
• 54 new cases filed February 15th through February 28th
• 36 new cases filed February 1st through February 14th
• 42 new cases filed January 16th through January 31st
• 20 new cases filed January 1st through January 15th

Gray on Claims, in conjunction with Docket Navigator®, is providing a false marking chart that is updated daily with new false marking cases as well as status updates on pending cases.  A downloadable PDF chart is available on this page as well including information on the specific patents and products at issue in each litigation.  Gray on Claims is also providing information on false marking settlements.  Other writings on false marking can be found here.

N.D. Ohio District Court Reaffirms Decision Finding False Marking Statute Unconstitutional

Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc. (N.D. Ohio Mar. 14, 2011)

As previously reported, the Northern District of Ohio recently held that the false marking statute is unconstitutional as violating the Take Care Clause of the U.S. Constitution.  Recently, the U.S. government filed a motion to intervene and for reconsideration of that order.  Yesterday, as reported by the Docket Report, the Northern District of Ohio granted the U.S. government's motion for reconsideration but also reaffirmed its earlier decision.

A PDF copy of the Court's order can be found here. 

Federal Circuit Holds Rule 9(b) Applies to False Marking Cases

In re BP Lubricants USA Inc. (Fed. Cir. Mar. 15, 2011)

Today, the Federal Circuit held that the particularity requirement of Fed. R. Civ. P. 9(b) applies to false marking cases.  In its decision, the Court noted that:

• "a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a 'sophisticated company' and 'knew or should have known' that the patent expired."
• "[p]ermitting a false marking complaint to proceed without meeting the particularity requirement of Rule 9(b) would sanction discovery and adjudication for claims that do little more than speculate that the defendant engaged in more than negligent action."
• "a complaint must in the [Sec.] 292 context provide some objective indication to reasonably infer that the defendant was aware that the patent expired."
• A "bare assertion" that the defendant is a "sophisticated company and has experience applying for, obtaining, and litigating patents … provides no more of a basis to reasonably distinguish a viable complaint than merely asserting the defendant should have known the patent expired.  Conclusory allegations such as this are not entitled to an assumption of truth at any stage in litigation."

Gray on Claims, in conjunction with Docket Navigator®, is providing a false marking chart that is updated daily with new false marking cases as well as status updates on pending cases.  A downloadable PDF chart is available on this page as well including information on the specific patents and products at issue in each litigation.  Gray on Claims is also providing information on false marking settlements.  Other writings on false marking can be found here.

District Court Grants Defendant's Motion for Summary Judgment in False Making Case

Heathcote Holdings Corp. v. William K. Walthers, Inc. (N.D. Ill. Mar. 11, 2011)

In this case, the Court concluded on summary judgment that "defendant did not knowingly include false patent markings on [the accused product] packaging" and "[p]laintiff has failed to identify sufficient evidence to enable a reasonable jury to conclude that defendant acted with the deceptive intent required under [Sec.] 292." 

The Court stated, among other things, that "Here, there is simply no evidence that anyone knew the patent information on the [accused product] packaging was false, much less that anyone armed with that knowledge decided to include it anyway.  (And even if someone had, that fact alone still would not be enough for liability under [Sec.] 292, which requires 'a purpose of deceit, rather than simply knowledge that a statement is false.'  Pequignot, 608 F.3d at 1363.)".

The Court also explained that "on the one hand, [the product packaging team] knew that [the accused product] packaging included patent numbers; but none of these individuals knew that the listed patents had expired or did not cover the products to which they were affixed.  On the other hand … an employee of defendant who was involved in the company's due diligence at the time of [an] acquisition, knew that only one patent was recorded among the assets purchased; but he apparently had no idea that [the accused product] packaging was marked with any patent numbers at all, much less that it was marked with patents other than (or really, in addition to) the one assigned to defendants in the course of the … acquisition.  In short, no single corporate agent possessed the various pieces of information necessary to form the requisite deceptive intent."

As the Court concluded the defendant did not knowingly include false patent markings on the accused product packaging, it determined it "need not analyze the remainder of plaintiff's legal argument, which relies on the burden-shifting analysis of Clontech Laboratories, Inc. v. Invitrogen Corp."

A PDF copy of the Court's opinion can be found here.

United States Files Motion to Intervene and for Reconsideration of Order Finding False Marking Statute Unconstitutional

Yesterday, the United States of America filed a motion to intervene and for reconsideration in the Unique Product Solutions v. Hy-Grade Valve case in the Northern District of Ohio, relating to the Court's February 23, 2011 Order that held the false marking statute unconstitutional as violating the Take Care clause of the U.S. Constitution.

A PDF version of the motion can be reviewed here.