Mario Andretti's Right of Publicity Claim Wins Injunction But No Damages Award

Case: Andretti v. Borla Performance Indus. Inc., Case Nos. 04-1835/2404/2406 (6th Cir. October 21, 2005)

The One Sentence Summary: The Sixth Circuit affirmed the district court's (1) injunction prohibiting future use of Mario Andretti's quote or likeness or implying that Andretti endorsed defendant's products; (2) finding that plaintiffs had failed to prove damages; (3) order imposing Rule 11 sanctions against plaintiff for a meritless trademark claim; and (4) awarding costs against plaintiff for failing to accept a Rule 68 Offer of Judgment that would have enjoined future use of plaintiff's name or likeness.


What They Were Fighting About: Retired race car driver Mario Andretti was a spokesman for exhaust system manufacturer Car Sound. Borla, Car Sound's largest direct competitor, used a quote from Andretti in an advertising campaign without his permission. Andretti sued Borla, seeking a permanent injunction and damages for violating Andretti’s right to publicity, tortiously interfering with a business relationship, violating the Michigan Consumer Protection Act, quantum meruit, violating the Lanham Act §§ 1125(a) and 1125(c), and unfair competition.

Sixth Circuit Holdings:

• Affirms summary judgment for defendant because plaintiff did not produce any evidence of damages. Therefore, in light of defendant's offer to enter a permanent injunction, plaintiff's claims were moot.
• Possible damage to plaintiff's reputation as a corporate spokesperson was hypothetical and speculative where plaintiff did not show that any current contract or future opportunity was impaired.
• District court did not abuse its discretion in refusing to impose Rule 11 sanctions on one party with regard to an issue where both parties contributed to the unnecessary expenditure of judicial resources. However, the Sixth Circuit affirmed the imposition of Rule 11 sanctions against plaintiff for failing to properly research his complaint and failing to voluntarily dismiss a meritless count.
• Although plaintiff prevailed in obtaining an injunction, the district court did not abuse its discretion in failing to award plaintiff costs under Rule 54(d) because plaintiff's loss on the issue of damages amounted to a victory for defendant. Moreover, the 6th Circuit affirmed the award of costs to defendant that were incurred after plaintiff refused defendant's Rule 68 offer of judgment because plaintiff's actual recovery was not greater than the Rule 68 offer.
• Defendant had good cause for filing its summary judgment motion two weeks late because plantiff did not complete his compelled responses to defendant's discovery requests until after the scheduled dispositive motion deadline. Furthermore, the delay did not prejudice plaintiff even though the Court, in considering the motion, ruled against plaintiff on the merits.
  
  

Click here to read more.

Means Plus Function Analysis of Video Game Controller Claims Corrected by Federal Circuit

Case: JVW Enterprises, Inc. v. Interact Accessories, Inc., Case No. 04-1410 (Fed. Cir. 10/3/05)

The One Sentence Summary: In a patent dispute involving video-game controller holders, the district court erred in construing a claim's means-plus-function language in a manner that interpreted functions disclosed in the specification as limitations of the claim.

What They Were Fighting About: JVW owns a patent on an accessory that allows a person playing a video game to operate a video game controller without having to hold the controller using his or her hands. Interact manufactures two products called "racing wheels" which include steering wheels that are used with video games to simulate driving cars. Users sit on the bottom of the products and use one or both hands to steer using the steering wheels which are attached to a rod that rises from the base of the products. Both products allow the user to adjust the height of the steering wheel on the riser column. One of Interact's products uses plastic clips mounted inside a shell that surrounds the steering wheel column. The clips press against opposite sides of the column and engage evenly spaced detents in the column. The shell halves are screwed together to enclose the clips attached to the steering wheel column. The second device also includes a shell joined with screws, but the shell does not encase plastic clips. Instead the shell includes a metal shaft surrounded on each end by a spring-loaded, donut-shaped plate. with teeth. The teeth complement mating projections molded into each side of a steering wheel unit.

JVW sued Interact, alleging that the racing wheels products infringed JVW's patent. The operative claim at issue included a means-plus-function limitation, and claimed a video game controller with horizontal base stabilized by the player's body weight; riser extending upward from the base; and a mounting member for attaching the controller to the riser, "said mounting member including means for lockably receiving a video game controller in fixed position on said mounting member."

The district court first construed, "means for lockably receiving a video game controller in fixed position on said mounting member," as a means-plus-function limitation, and defined the word, "lockably" to mean "attached by a method whereby one can lock a game controller in place for use and can unlock and release the game controller after use." After JVW sought clarification regarding the court's construction of the function of the means-plus-function limitation, and the district court responded by noting that its original construction could be misunderstood as adding unlocking to the function of the means-plus-function limitation, and therefore agreed to rephrase its construction of the term, "lockably" by adopting one of several dictionary definitions: "received in fixed position by the interlacing of fitting of parts into each other."

The district court entered a judgment of non-infringement after a bench trial, finding that the means-plus-function limitation did not read on either of Interact's controller devices. It indicated that the clips used in one model to hold the controller in place in a certain position on the steering wheel column, "might be said to lockably receive a game controller, but they did not receive the controller in a fixed position," since the model achieved the function of receiving the controller in fixed position by other means, that is, by the structure assembled by screwing parts tightly together. The district court found that the second device also did not infringe.

Federal Circuit Holdings:

• Determining infringement involves two steps. First the trial court must construe the claims. Claim construction is an issue of law reviewed de novo. A district court's identification of the function and corresponding structure of a means-plus-function limitation is also reviewed de novo. Second the fact-finder must determine whether the claims, as properly construed, read on the accused device. Infringement is a question of fact reviewed for clear error.
• Construction of a means-plus-function limitation also includes two steps. First the court determines the claimed function. Second, the court identifies the corresponding structure in the written description that performs the function.
• The district court's first construction of the means-plus-function language violated two tenets governing the determination of function in a means-plus-function limitation. First, a court may not construe a means-plus-function limitation, "by adopting a function different from that explicitly recited in the claim." Second, a court errs by importing the functions of a working device into the specific claims, rather than reading the claims for their meaning independent of any working embodiment. The district court adopted the unclaimed functions of, "unlocking" and "releasing" the controller. Those functions are not recited explicitly in the claim but rather relate to a working embodiment disclosed in the patents written description, and thus should not have been considered limitations of the means-plus-function language in the claim.
• The district court's second construction of the means-plus-function language, "received in fixed position by the interlacing of fitting of parts into each other," confused function with structure. Determining a claimed function and identifying structure corresponding to that function involve distinct, albeit related, steps that must occur in a particular order. Function must be determined before corresponding structure can be identified.
• The district court correctly identified the structure in the patent disclosure associated with the "means for lockably receiving a video game controller in fixed position."
• The district court clearly erred in its factual finding that Interact's device using clips did not infringe JVW's patent. The clips perform the identical claimed function of, "receiving and locking a video game controller into a fixed position on the mounting member for use." The fact that the device adds a shell to allow the steering wheel height to be adjusted and a cam mechanism to provide a mechanical way to tighten and loosen the clips does not mean that the clips do not lock the steering wheel in a fixed position. These additional features amount to improvements that do not avoid infringement. Moreover, the means-plus-function limitation need only read on part of the device to infringement. The fact that the controller holders in the patent specification may perform unclaimed functions is irrelevant to the question of whether the claims language reads on the accused device.
• The district court did not err in finding that the second device using donut-shaped plates, did not infringe JVW's patent. The structure used by the second device to accomplish the claimed function was neither identical nor equivalent to the structure of the controller holders shown in the specification of the patent. For instance, the controller holders shown in the patent specifications lock the controller into a fixed position by preventing linear, up and down movement of the steering wheel column. In contrast, the projections on Interact's second device locked the controller into a fixed position by preventing rotational movement of the steering wheel unit on the shaft.

Click here to read more.

Licensee Lacked Standing to Pursue Patent Infringement Claims Where It Had Not Been Granted Sufficient Rights Under the Patent

Case: Sicom Sys. v. Agilent Technologies, Inc., No. 05-1066 (Fed Cir. 10/18/05)

The One Sentence Summary: A licensee was not an "effective patentee" and lacked standing to pursue patent infringement claims when it had not been granted "all substantial rights" under the patent.


Federal Circuit Holdings:

• Plaintiff lacked standing to sue for infringement of the patent where it was only a licensee, and it did not have sufficient rights to be an "effective patentee."
• A patentee and its successors have the right to sue for infringment under 35 U.S.C. § 281. A licensee can sue for infringement only when it holds "all substantial rights" in the patent.
• Plaintiff did not have all substantial rights under this patent when the licensor retained substantial rights including the right to sue for non-commercial infringement, the right to veto sublicenses, and the right to approve litigation settlements.
  
  

Click here to read more.

Licensee in Good Standing Could Not Challenge Patent Despite Claims of Collusive Settlement in Violation of Antitrust Laws

Case: Medimmune, Inc. v. Genentech, Inc. , No. 04-1300, 04-1384 (Fed Cir. 10/18/05)


The One Sentence Summary: The district court (1) properly dismissed a declaratory judgment action because licensee, Medimmune, lacked standing to challenge Genentech's patent when Medimmune was in good standing under the license and lacked reasonable apprehension of a suit; and (2) properly granted summary judgment against antitrust and unfair competition claims.


What They Were Fighting About: Genentech obtained a patent after settling interference proceedings in district court with another company that had claimed priority, and after further proceedings in the PTO. Medimmune, a licensee under the patent, brought this declaratory judgment action seeking a declaration that Genentech's patent was invalid because the district court settlement had been fraudulent and collusive in violation of antitrust laws. The district court dismissed Medimmune's patent claims for lack of standing, and granted summary judgment against the antitrust claims. The Federal Circuit affirmed.

Federal Circuit Holdings:

• Medimmune, a licensee in good standing under patents owned by Genentech, lacked standing to pursue a declaratory judgment action seeking a declaration of invalidity of Genentech's patents.
• The allegedly collusive settlement of interference proceedings in the district court under 35 U.S.C. § 146 between Genentech and Celltech did not provide an independent basis of standing.
• The district court properly considered new evidence as to priority in the district court that had not been presented in earlier PTO interference proceedings.
• The settlement of a dispute as to patent priority in an interference proceeding is not a per se violation of the antitrust laws.
• The panel held that a patent does not of itself confer market power or a presumption of market power, noting that a Federal Circuit panel's recent decision to the contrary in Independent Ink is pending review in the Supreme Court.
• There was no collusion by joint submission of a settlement agreement to the district court because the parties were obligated to do so due to the pending litigation under 35 U.S.C. § 146. Thus, there was no need to invoke Noerr-Pennington antitrust immunity, and the district court erred in invoking that doctrine. The settlement of disputed issues as to priority could not be recast as a misrepresentation to the court.
• The district court properly granted summary judgment against Medimmune on its claim of an antitrust violation by enforcement of a fraudulently obtained patent (a Walker Process claim). Medimmune had not pled fraud, and the complaint's allegations of inequitable conduct were not sufficient.
• The district court did not abuse its discretion in denying Medimmune's leave to amend the complaint to allege fraud.
• Medimmune's claim that the Genentech patent was invalid due to inequitable conduct did not create standing for a declaratory judgment action.
• Over a dissent by Judge Clevenger, the panel held that the antitrust and unfair competition issues should not be referred to the Ninth Circuit. The Federal Circuit had jurisdiction over the entire appeal because the case involved patent claims.
  

Click here to read more.

Computer Fraud And Abuse Act Claim Fails When Access Was Authorized by License Holder

Case: SecureInfo Corp. v. Telos Corp., Case No. 1:05-cv-00505-GBL-TCB (E.D. Va. 9/9/2005)

The One Sentence Summary: The District Court granted a motion to dismiss a claim under the Computer Fraud and Abuse Act against Plaintiff’s competitors, who were alleged to have hired a consultant to fraudulently obtain a license to use Plaintiff’s copyrighted software and then allow them, in violation of the license, to access and copy the software, user manuals, and outputs of the software, because the competitors had been authorized by the license holder to use the program and thus were not “unauthorized users” as defined by the statute.


What They Were Fighting About: SecureInfo licensed software used to help customers identify and comply with information security regulations. This software was copyrighted and contained confidential information, and its license was subject to stringent confidentiality requirements, as well as limits on authorized users. Two of SecureInfo’s competitors, Telos Corp and Xacta, allegedly hired a consulting firm to perform a competitive analysis of SecureInfo’s software. An employee of the consulting firm subsequently contacted SecureInfo and falsely claimed that he wished to license their software for a project his company had with the General Services Administration. When the license was granted, the employee installed the software on his server and allowed employees at Xacta and Telos to access the server in order to copy the software, user manuals and outputs of the software. SecureInfo filed suit against Telos and Xacta, alleging violation of the Computer Fraud and Abuse Act, copyright infringement, conspiracy, tortious interference with contract, violation of RICO, combination to injure plaintiff in its reputation, trade or business, violation of the Virginia Computer Crimes Act and Uniform Trade Secrets Act of Virginia, and common law trespass to chattels and detinue. SecureInfo also alleged that the consultant committed common law fraud.

District Court Holdings:

• The Computer Fraud and Abuse Act claim was dismissed. Telos and Xacta could not be held liable under the Computer Fraud and Abuse Act, because the consultant had authorized them to use his server, and thus they were not “unauthorized users” as defined by the Act. While the consultant had exceeded the scope of his license, Telos and Xacta were not parties to the license, and could not therefore be said to have accessed the server “without authorization or exceed[ing] authorized access.” The Court balked at the implications of the Plaintiff’s claim, stating, “In essence, the plaintiff is asking the Court to hold that every breach of a computer software license agreement allows the licensing party to recover damages against a non-party to the software license under the CFAA.”
• The copyright claims were not dismissed because the database of “facts” used by the software could be organized in such a way as to show the minimum amount of creativity necessary to deserve copyright protection, and the plaintiff had properly alleged that the database, its user manual, and any software outputs were copyrighted.
• The conspiracy and combination claims were dismissed because a principal and its agent cannot conspire or combine under Virginia law.
• The RICO claim was dismissed because there was no allegation of threat of future criminal activity. Because this was an isolated scheme to defraud, it was better handled under state law.
• The claims under the Virginia Computer Crimes Act and Uniform Trade Secrets Act of Virginia were dismissed because they were preempted by federal copyright law. The work at issue was “within the scope of the subject matter of copyright,” because the claim at issue dealt with the misappropriation of copyrighted material. In addition, “‘the rights granted under state law’” [were] “‘equivalent to any exclusive rights within the scope of federal copyright.”
• The tortious interference with contract claim was dismissed because the consulting company was alleged to have interfered with its own contract with SecureInfo, and under Virginia law, a company could not interfere with its own contracts.
• The common law trespass to chattels claim was dismissed because there was no contention that the property retained by the defendants had been damaged in any way. While the Plaintiffs alleged that their own proprietary information had lost value due to its disclosure, a trespass to chattels claim is only valid where the actual property in the defendants’ possession has lost value. The court found that the information retained by the Defendants had not lost value.
• The common law detinue claim, however, was upheld, since the Defendants had retained a number of tangible objects (e.g. instruction manuals and printouts of computer outputs) that the Plaintiff alleged were wrongfully withheld. The claim was not found to be pre-empted by copyright law, because the possession of tangible property constituted an element of the common law claim that was qualitatively different from a copyright claim.
• The fraud claim against the consultant was dismissed because the Plaintiff had not alleged any actual damages, but only the prospective harm the Defendants could cause to Plaintiff’s business with the fraudulently obtained information about their software.
  
  

Click here to read more.

Use of Unregistered Marks in Posts On Consumer Watch-Dog Type Website Did Not Constitute Defamation and Trademark Infringement

Case: Whitney Information Network, Inc. v. Xcentric Ventures, LLC, No. 2:04-cv-47-FtM-33SPC (M.D. Fla. 7/14/05)

The One Sentence Summary: The district court granted Defendants’ motion to dismiss claims for defamation and trademark infringement finding that (1) Defendants were immune from liability under § 230(c)(1) of the Communications Decency Act for merely publishing on their website complaints written by consumers; and (2) there was no likelihood of confusion among consumers accessing Defendants’ websites regarding Plaintiffs’ product and service offerings.

What They Were Fighting About: Defendants Xcentric Ventures, LLC, badbusinessbureau.org and Ed Magedson publish the websites http://www.ripoffreport.com/ and http://www.ripoffrevenge.com/. Consumers that feel they have been defrauded by companies or individuals can post complaints about those that have “ripped them off” on http://www.ripoffreport.com/ and can purchase services and do-it-yourself kits to help win their money back on the website http://www.ripoffrevenge.com/. Plaintiffs claimed that Defendants do not verify the complaints posted on http://www.ripoffreport.com/ and that they recklessly published false stories about Plaintiffs. Defendants responded that they did not engage in any wrongful conduct by merely providing a forum for consumers to publish their grievances.

District Court Findings:

• Defamation Per Se of Business Reputation – Plaintiffs alleged that the publication of false stories about Plaintiffs on http://www.ripoffreport.com/ defamed Plaintiffs and resulted in harm to Plaintiffs’ business reputation. Plaintiffs claimed their business reputation was harmed because consumers using Plaintiffs’ marks in a search engine would get Defendants’ websites as a result option and could be directed to Defendants’ websites. Defendants argued that the Communications Decency Act barred Plaintiffs’ defamation claim because Defendants do not write the messages posted by consumers and merely provide a forum for consumers to post complaints. The district agreed with Defendants concluding that as service providers that merely publish information written by others, Defendants were immune from liability by virtue of § 230(c)(1) of the Communications Decency Act.
• Federal Trademark Infringement under 15 U.S.C. § 1114 – To state a claim for trademark infringement under 15 U.S.C. § 1114(1)(a), a plaintiff must show that the defendant “use[d] in commerce any reproduction . . . of a registered mark.” Plaintiffs, however, did not have registered federal trademarks for their marks (the service mark applications for “Russ Whitney” and “Whitney” were pending in the USPTO at the time of the decision). Therefore, the district court summarily rejected this claim noting that actions for unregistered trademark infringement are restricted to 15 U.S.C. § 1125.
• False Designation of Origin, False Description and False Representation under 15 U.S.C. § 1125 – The essential element in sustaining a claim under the Lanham Act is that the alleged infringement “creates a likelihood of confusion on the part of consumers as to the source of goods.” In order to determine if likelihood of confusion exists, the 11th Circuit has set forth several factors that must be examined: (1) type of mark; (2) similarity of mark; (3) similarity of products the marks represent; (4) similarity of the parties’ retail outlets and customers; (5) similarity of advertising media; (6) defendant’s intent; and (7) actual confusion. The district court explained that while Defendants did use Plaintiffs’ unregistered marks by posting consumer complaints about Plaintiffs on their websites, there was no likelihood of confusion on the part of consumers because the service and product offerings of the parties were not similar at all. While Plaintiffs primarily sell real estate investment education courses, Defendants sell advertising space and a service and do-it-yourself kit that helps consumers recoup money lost on bad products or services. Plaintiffs and Defendants also do not target the same type of customer – Plaintiffs seek customers interested in purchasing real estate education courses and similar products, while Defendants target consumers who feel they have been defrauded and are looking for an outlet to share their story. The district concluded there was no likelihood of confusion among consumers regarding the parties’ respective products and services and thus no trademark infringement by Defendants.
• The district court also dismissed Plaintiffs’ false advertising claim finding that Defendants’ website did not contain false advertising about Plaintiffs. In fact, in addition to consumer gripes, Defendants’ website also contained favorable comments about Plaintiffs’ products and services.
• The Plaintiffs’ claim for unfair competition also failed because the “consumer watchdog” website maintained by Defendants did not try to pass off Defendants’ good or services as being the same as those offered by Plaintiffs.
• Common Law Trademark Infringement – To state a valid common law claim for common law trademark infringement, the plaintiff must show that: (1) the mark has priority; and (2) that the defendant’s mark is likely to cause consumer confusion. Although Plaintiffs could demonstrate that their marks had priority, there was no likelihood of confusion among consumers regarding the products sold by Defendants and those sold by Plaintiffs.
  
  

Click here to read more.

Non-Challenge Clause in Certification Mark License Agreement Was Against Public Policy and Unenforceable

Case: State of Idaho Potato Commission v. G & T Terminal Packaging (9th Cir. No. 04-35229 10/07/05)

The One Sentence Summary: The Ninth Circuit affirmed district court rulings that a non-challenge clause in a certification mark license agreement was unenforceable and that selling of packages bearing the mark after expiration of the license agreement allowed an award of statutory damages for counterfeit use of the mark.


Ninth Circuit Holdings:

• The prior decision of the Second Circuit in Idaho Potato Commission v. M&M Produce Farms & Sales, 335 F.3d 130 (2d Cir. 2003) (M&M III), cert. denied, 541 U.S. 1027 (2004), that the non-challenge clause was non-enforceable did not establish a basis for issue preclusion because the doctrine does not apply to government litigants such as the Idaho Potato Commission.
• The Ninth Circuit agreed with the Second Circuit's decision in M&M III that a non-challenge provision in a certification mark license was unenforceable as against public policy.
• The panel affirmed a nominal $1 damages award for breach of contract for violation of labeling provisions after finding that the district court did not have authority to award it as a civil penalty under the applicable statute.
• The district court's award of $50,000 to IPC could not be upheld as a discovery sanction for missing documents absent a showing that defendant intentionally destroyed the documents, nor as a civil penalty.
• The district court properly awarded $100,000 in statutory damages for use of a counterfeit mark for the sale of potatoes in bags bearing the certification mark after the license to use the mark had expired. The court rejected defendant's argument that there was no confusion because the potatoes were genuine. The certification mark holder must have an opportunity to inspect the goods, and was deprived of this ability by misuse of the mark.
  

Click here to read more.

Foreign Sales Of Infringing Catalysts Supports Liability Under 35 U.S.C. Section 271(f)

Case: Union Carbide Chemicals & Plastics Tech. Corp. v. Shell Oil Co., 04-1475, -1512 (Fed. Cir. 10/3/05)

The One Sentence Summary: In an infringement suit over a patent for catalysts used to produce ethylene oxide, the Federal Circuit affirmed a jury verdict finding infringement, but vacated and remanded the damage award, finding that 35 U.S.C. section 271(f) applies to process claims, so that Shell's foreign export of infringing catalysts should have been included in the damages calculation.


What They Were Fighting About: Union Carbide had a patent for catalysts composed of silver and alkali metals that improved the efficiency of a process for ethylene oxide production. A jury found that Shell was producing catalysts that infringed the patent. Shell appealed the infringement verdict, and Union Carbide appealed the trial court's refusal to allow Shell's profits from exporting the infringing catalyst to be included in the damages calculation.

Federal Circuit Holdings:

• One basis for Shell's challenge of the infringement verdict was the use by Union Carbide's expert of a test expressly approved in the patent specification for measuring catalyst activity -- based on those test results, the Shell catalysts were found to fit squarely within a claim limitation. The Federal Circuit found that use of a test approved in the specification was sufficient evidence to support the jury verdict of infringement of that limitation.
  
• Shell also challenged the expert's failure to vary the silver composition during his experiments, but the Federal Circuit held that the claim language did not require variation of all of the named components. The claim uses the language "independent variables, silver, cesium, and alkali metal" and by using the word "independent" the court found that it meant each variable was free to operate without regard to the others, such that the silver concentration could be set at any value, including zero, and thus the expert's method was proper.
  
• Shell also argued that the expert had failed to test Shell's catalysts in the same ethylene production system that Shell used. The expert had instead used a single system, which was representative of all of the 69 Shell processes that were accused of infringing. Use of an approximation of the entire set of processes, even though it did not match any single process, was found sufficient because the claim as written did not require an exact match to the accused processes. (In fact, Shell only used a single set of experimental conditions to test catalyst efficiencies and warranted the catalysts based on that one set of conditions -- that is, Shell itself did not test catalyst efficiency under the conditions used in all 69 commercial processes that it employed).
  
• With respect to computation of royalties, the Federal Circuit found it proper to have considered the impact of Shell's infringement on the parent of the holding company that owned the patent at issue, finding that the relationship between the parent and holding company went far beyond a mere licensor/licensee relationship, as Shell had argued. For example, the holding company would not enter any negotiation without considering the competitive position of the parent.
  
• On Union Carbide's cross-appeal, the Federal Circuit clarified that 35 U.S.C. section 271(f) applied to process claims -- the phrase "any component of a patented invention," as used in the statute, does not distinguish between patentable method/process inventions and other forms of patentable inventions, a distinction that the lower court had erroneously made. The court distinguished one case, NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005), which had found that section 271(f) did not apply to out-of-country use of domestically manufactured Blackberry wireless systems, because the facts there did not involve supplying a component to a foreign affiliate. Thus, in NTP no additional damages were available under section 271(f). In contrast, here additional damages were available for Shell's export of these catalysts directly to foreign customers. The Federal Circuit found that those exports should have been included in the damages award.

Click here to read more.

Patentee Could Not Claim All Methods for Achieving a Result - Only the Single Method Described Satisfied the Written Description Requirement

Case:Lizardtech, Inc. v. Earth Resource Mapping, Inc. , No. 05-1062 (Fed Cir. 10/4/05)

The One Sentence Summary: A claim for creating a digital wavelet transform (“DWT”) for image compression was interpreted to include the limitation “seamless” due to arguments in the prosecution history in which a group of claims were all characterized as seamless, but the claim was invalid because it did not provide an adequate written description of a generic method of creating a seamless DWT other than the one embodiment described in the specification and claimed in other claims.


What They Were Fighting About:Discrete wavelet transforms (“DWT”) are algorithms used in digital image compression. In order for less powerful computers to compress images, image compression can be done on sections or tiles of an image that are then recombined. This method has the drawback that the tiling can create visible borders around the “tiles”, degrading the image. Lizardtech had a patent for a method of creating a seamless DWT by performing calculations on adjacent tiles and using the sums to correct the tiles and remove the borders. Earth Resource Mapping used a different technique for creating a seamless DWT by performing the algorithm on one row or column at a time. The district court held that defendant did not infringe, and that one of the claims of the patent was invalid.

Federal Circuit Holdings:

• The district court properly construed the claims and granted summary judgment of non-infringement with respect to claims 1 and 13 which provided for achieving a seamless DWT through the use of updated sums taken from adjacent tiles. Defendant’s process did not use a tiling method or summing adjacent values to achieve a seamless DWT.


• Claim 21, which did not state that the DWT was “seamless”, should nevertheless be interpreted to mean “seamless” where the applicant argued to the examiner in the prosecution history that a group of claims including 21 resulted in a seamless DWT. This had an effect on the examiner who noted that claim 21 produced a seamless DWT in the reasons for allowance.


• Claim 21 was not valid under the written description requirement of 35 U.S.C. § 112 1 because it did not state a way to achieve a seamless DWT. The specification and claim 1 described only a single method of obtaining a seamless DWT, and the specification had no support for more generic methods. The claim failed to meet the written description requirement because it did not establish that the applicant had possession of a generic method of making seamless DWTs (other than the tiling process claimed by claim 1), nor did it enable one of ordinary skill in the art to create a seamless DWT without undue experimentation.


• The court made the analogy that an inventor who made one type of fuel efficient engine cannot make a broad claim for every type of fuel efficient engine, no matter how different in structure or operation.
  

Click here to read more.

Reliance on Experiment That Never Worked Was Inequitable Conduct

Case: Novo Nordisk Pharmaceuticals, Inc. v. Bio-Tech. General Corp. , No. 04-1581 (Fed Cir. 10/5/05)

The One Sentence Summary:The panel affirmed district court rulings after a bench trial that (1) a patent claim for synthetic human growth hormone was anticipated by an article discussing an alternate formulation method; and (2) the patent was unenforceable due to inequitable conduct in not disclosing that an experiment in an earlier application used to establish priority had never been successfully performed.


What They Were Fighting About: Plaintiff Novo Nordisk held a patent for synthetic human growth hormone (hGH) with the amino acid sequence and biological activity of natural hGH and a process for producing it by cleaving an e-coli grown fusion protein with an enzyme. After a bench trial, the district court held that the claims were anticipated by a published article pursuant to 35 U.S.C. § 102(a) and that the patent was invalid due to inequitable conduct.
Federal Circuit Holdings:

• The district court properly held that the claim for hGH was anticipated and enabled by the article which described synthetic hGH and a method to test it. Enablement under 102(a) is a different standard than under 35 U.S.C. § 112(a). One of ordinary skill in the art must be able to practice the invention without undue experimentation, and suggestions in the prior art need not be actually performed in order to anticipate.


• The panel stated the inequitable conduct standard as follows: ”Inequitable conduct occurs when a patent applicant breaches his or her “duty of candor and good faith” to the PTO. 37 C.F.R. § 1.56(a) (2004); Bruno Indep. Living Aids, Inc. v. Acorn Mobility Servs., Ltd., 394 F.3d 1348, 1351 (Fed. Cir. 2005). Inequitable conduct includes “affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive.” CFMT, Inc. v. YieldUp Int’l Corp., 349 F.3d 1333, 1340 (Fed. Cir. 2003) (quoting Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995)). Materiality and intent must be established by clear and convincing evidence. Id. Once materiality and intent have been established, the district court must weigh these factors in light of all of the circumstances to determine whether a finding that inequitable conduct occurred is warranted. Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1363 (Fed. Cir. 2003) (citing Purdue Pharma L.P. v. Boehringer Ingelheim GMBH, 237 F.3d 1359, 1366 (Fed. Cir. 2001)). We have stated that “when balanced against high materiality, the showing of intent can be proportionally less.” Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d 1226, 1234 (Fed. Cir. 2003) (citation omitted).”


• The district court properly found inequitable conduct in Novo’s use of an example from a 1983 PCT application for establishing priority when in fact that example technique had never been successfully performed.


• The district court properly found that Novo had intended to deceive the patent office by not disclosing the fact that the example was prophetic and had never been performed. The inventors knew that the example had not been performed, and they should have told their attorney.


• The district court properly held that the information withheld from the examiner was material. Evidence of the inventor’s failure to perform the invention at the time of the filing of the application is relevant to non-enablement.
  

Click here to read more.

Unresolved Counterclaim Means No Final Judgment and No Appellate Jurisdiction

Case: Enzo Biochem, Inc. v. Gen-Probe Inc. (9/30/05 - No. 04-1570)

The One Sentence Summary: The Federal Circuit panel lacked jurisdiction over the appeal of a summary judgment ruling when the district court had never ruled upon an unresolved claim of inequitable conduct.

What They Were Fighting About: The district court had granted summary judgment of invalidity of a patent due to the on-sale bar and entered judgment for defendant. However, defendant's counterclaim of invalidity of the patent due to inequitable conduct was never ruled upon nor dismissed.

Federal Circuit Holdings:

• The presence of an unresolved counterclaim of invalidity meant that there was no "final judgment" for appeal, and that the appellate court lacked jurisdiction.
• Although the district court asked the parties whether there were any remaining issues after it granted summary judgment, and was not told of the remaining counterclaim, this did not constitute a waiver of the counterclaim.
  
  

Click here to read more.