Failed Attempt to Cover Explicity, What the Claims Already Covered Implicitly, Narrowed Their Scope

Automed Technologies, Inc., v. Knapp Logistics & Automation, Inc., [06-1587](May 31, 2007)[PER CURIAM, Mayer, Rader, Garbis] NON-PRECEDENTIAL The Federal Circuit affirmed summary judgment of non-infringement of U.S. Patent No. RE37,829 on a method of automatically filling prescription drug orders.
BRIEF: At issue was the district court's claim construction. Automed argued that the district court improperly imported limitations into the claims regarding the order in which vials are to be filled and labeled. The Federal Circuit examined the specification, which clearly implied an order to the steps, but said "because the portions of the specification discussed above purport to be describing a non-exhaustive set of embodiments, the claim language and the specification, without more, may have been insufficient to support the trial court’s claim construction." However, when the Federal Circuit we evaluate the prosecution history, it becomes evident that labeling before filling is indeed not encompassed by the claims. During prosecution Automed attempted to add a claim a claim expressly covering the steps in either order, but this claim was rejected for introducing new matter, and was withdrawn. The Federal Circuit said that: "Even if this action does not constitute a clear and unmistakable statement of disavowal giving rise to prosecution history estoppel as to the asserted claims, it would, nevertheless, be inconsistent in light of the concession to construe them in a manner that encompassed labeling before filling."
COMMENT: It is interesting that but for the failed attempt to present a claim clearly covering the process with different orders of steps, the Federal Circuit apparently would have construed to claims as broad enough to cover the process in any order of steps. In other words a failed attempt to cover explicitly, which the claims already covered implicitly, narrowed their scope.

Court to Defendant: Stop Moneying With Zoo's Trademark

Zoological Subdistrict of Metropolitan Zoological Park and Museum Subdistrict, [4:06CV1250TM](E.D. MO May 31, 2007)[MUMMERT] The district court granted summary judgment of infringement, unfair competition, and dilution, and determined that defendant's registrations had been fraudulently obtained.

BRIEF: Lewis obtained Missouri registrations on ST. LOUIS ZOO and I LOVE ST. LOUIS ZOO, started selling merchandise on a third-party website, and wrote to the Saint Louis Zoo demanding that the cease infringement of his registered trademarks. The Court first examined whether the Zoo had protectable rights without a registration, and concluded that it did. The court then examined whether Lewis' use of "St. Louis Zoo" was a misleading or deceptive use of the mark in violation of Section 43(a). After examining the six factors traditionally considered in the Eighth Circuit, the Court concluded that there was a likelihood of confusion in violation of the Zoo's rights under the Lanham Act and common law. The Court then turned to dilution under the Missouri anti-dilution statute Mo. Rev.Stat. 417.061. The Court concluded that the same findings that create a likelihood of confusion, and establish unfair competition "compel a finding that Lewis' use dilutes the Zoo's use by blurring. Finally the Court turned to the cancellation of Lewis' service marks, and found that his statement that "no one else had a right to use "St. Louis Zoo" was fraudulent, and cancelled the registrations.

The Invention Must Actually Be Used for A Public Use

Motionless Keyboard Company v. Microsoft Corporation, [05-1497](May 29, 2007)[RADER, Dyk andMoore] The Federal Circuit affirmed the determination of no infringement of U.S. Patent Nos. 5,178,477 and 5,332,322, but reversed the determination of invalidity for public use and obviousness due to a terminal disclaimer.
BRIEF: The Federal Circuit agreed with the district court's claim construction and affirmed summary judgment of non-infringement. With respect to infringement under the doctrine of equivalents, the Federal Circuit said that to avoid the grant of summary judgment of non-infringement by equivalents, the patentee must present particularized evidence and linking argument as to the insubstantiality of the differences between the claimed invention and the accused device, or with respect to the function, way result test. Regarding the public use defense, the Federal Circuit said that public use includes any public use of the claimed invention by a person other than the inventor who is is under no obligation, restriction or obligation of secrecy to the inventor. The Federal Circuit found no public use of the invention. Regarding obviousness from filing a terminal disclaimer, the Federal Circuit said that "a terminal disclaimer simply is not an admission that a later-filed invention is obvious."

Inherency May Not be Established by Probabilities and Possibilities

Haberman v. Gerber Products Company, [06-1490, 1516](May 29, 2007)[ROBINSON, Michel, Gajarsa] NON-PRECEDENTIAL The Federal Circuit reversed a determination of invalidity of U.S. Patent No. 6, 116,457 for anticipation, and reversed JMOL of validity.
BRIEF: The Federal Circuit held that Gerber failed to establish anticipation by clear and convincing evidence, rejecting Gerber's position that the prior art inherently taught the claimed invention. Extrinsic evidence can be used to filling in a gap in a reference, but it must make clear that the missing descriptive matter is necessarily present in the thing described in the reference, and that it would be so recognized by persons of ordinary skill in the art: inherency may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient. The Federal Circuit remanded for consideration of obviousness. The Federal Circuit found that the trial court erred when it concluded no reasonable jury could have reached a verdict of no infringement.

Refusal of Registration of ASPIRINA Leaves Bayer with a Headache

In re Bayer, [06-1279](May 24, 2007)[MOORE, Newman, Schall) The Federal Circuit affirmed the TTAB's ruling that ASPIRINA was merely descriptive of analgesics.
BRIEF: Bayer applied to register ASPIRINA as a trademark, the Examiner refused registration on the ground that the mark was merely descriptive, and the TTAB affirmed. The Federal Circuit explained that a term is merely descriptive if it immediately conveys knowledge of a quality, feature, function or characteristic of the goods with which it is used. Descriptiveness is not considered in the abstract, "it is considered in relation to the particular goods for which registration is sought, the context in which it is being used, and the possible significance that the term would have to the average purchaser of the goods because of the manner of use or intended use." LOF: The determination that a mark is merely descriptive is a factual finding, which is reviewed for substantial evidence. Evidence of descriptiveness may be obtained from any competent source, such as dictionaries, newspapers, or surveys. "Aspirin" is generic, and the Federal Circuit agreed with the board that merely adding an "a" did not result in an inherently distinctive term. Bayer challenged the use of only definitions and translations as being unreliable. The Federal Circuit noted that "[i]nternet evidence is generally admissible and may be considered for purposes of evaluating a trademark" and found that such evidence indicated that ASPIRINA was descriptive. Bayer's challenge to Google search engine results, had a better reception: "Search engine results -- which provide little context to discern how a term is actually used on the web page that can be accessed through the search result link --
may be insufficient to determine the nature of the use of a term or the relevance of the search results to registration considerations, and noting that web-based information that includes greater context for the use o t ether term will have greater probative value. The Federal Circuit also dismissed evidence of foreign registrations on ASPIRINA as "not legally or factually relevant to potential consumer perception " in the United States. The Federal Circuit concluded by noting that there was conflicting evidence in the record, but concluded that under the deferential substantial evidence standard, the decision of the Board must be affirmed.

A Reasonable Royalty Includes All Benefits to the Patent Holder, Not Just Cash Payments

Monsanto Company v. McFarling, [05-1570, -1598](May 24, 2007)[BRYSON, Lourie, Rader] The Federal Circuit affirmed award of damages, the rejection of McFarling's argument for vacating judgment of liability, and the refusal of Monsanto's request to modify the permanent injunction.
BRIEF: McFarling bought Monsanto patented seed, signing a technology agreement with Monsanto, and thereafter saved seed from his crops, in violation of the technology agreement and infringing Monsanto's patents. The jury returned a verdict of $40 per bag of seed, far in excess of the established $6.50 Technology Fee charged by Monsanto. An established royalty is usually the best measure of a reasonable royalty for a given use of an invention because it removes the need to guess at the terms to which parties would hypothetically agree. However, the Federal Circuit recognized that the direct payment of $6.50 was not the only compensation Monsanto received, and thus the direct payment alone was not representative of a reasonable royalty for McFarling's infringement. The Federal Circuit noted additional value to Monsanto from the Technology Agreement, and concluded that it was reasonable that a reasonable royalty from an infringer could exceed the amount paid by farmers who complied with the Agreement. The Federal Circuit said that it was also proper to consider the benefits conferred upon the infringer in evaluating reasonable royalty. In review damages awards in patent cases, we give broad deference to the conclusions reached by the finder of fact. A jury's damage award "must be upheld unless the amount is grossly excessive or monstrous, clearly not supported by the evidence or based only on speculation or guess work."

Modifiers in the Claims Narrow Them

Furnace Brook LLC v. Overstock.com, Inc., [07-1064](May 23, 2007)[BRYSON, Mayer, Clevenger] The Federal Circuit affirmed summary judgment of non-infringement of U.S. Patent No. 5,721,832.
SIGNIFICANCE: Adjectives in claims have meanings that cannot be ignored, and may distinguish broader disclosures in the specification. Generic disclosures do not support §112, ¶6 limitations.
BRIEF: At issue was whether personal computer and cell phones were “telephone terminals” within the meaning of the claims. In light of the specification, the Federal Circuit found that a telephone terminal required a dial-up connection to a catalog server. The Federal Circuit noted that while these devices were capable of performing the function of a telephone terminal, they must actually be performing that function in order to be “telephone terminals” as that term is used in the claims. The Federal Circuit rejected the argument that because the specification discloses a terminal that communicates like a computer or cell phone, computers and cell phones literally infringe the claim. The Federal Circuit pointed out that the claim term was telephone terminal, not terminal, and “[t]he “modifier ‘telephone’ must add some limitation to the noun ‘terminal’ for the modifier to have any meaning.” The Federal Circuit also found that the patentee simply failed to provide adequate proof of infringement under the doctrine of equivalents. Another claim at issue claimed “customer terminal means” instead of “telephone terminal” The Federal Circuit agreed with the district court that this was a §112, ¶6 limitation, and that the structure disclosed in the specification was a standard land line telephone and a touch tone telephone connected to a television. The Federal Circuit rejected the argument that an “online interactive communications network” was also a disclosed structure because it “identified no specific structure for performing the claimed function, ; it describes only a generic class of structures and was thus properly ignored. Regarding equivalents to the structures disclosed, the Federal Circuit again found the patentee’s proof of equivalent lacking.

Tradtional Rules of Claim Construction Trim Plaintiff's Infringement Claim

Byrne v. The Black & Decker Corporation, [06-1523](May 21, 2007)[GAJARSA.Rader, O'Malley) NONPRECEDENTIAL The Federal Circuit affirmed summary judgment of non-infringement of U.S. Patent No. RE 34,815 on a patent on a flexible flail trimmer
BRIEF: At issue was the term "generally planer surface" which giving the term its ordinary meaning, the trial court found was not met by Black & Decker's U-shaped loop. LOF: While claim construction is a question of law, infringement is a question of fact. The meaning of a claim is determined by using intrinsic evidence which includes the claims, the specification, and the prosecution history and by using extrinsic evidence which includes dictionaries. Extrinsic evidence may be less reliable: "extrinsic evidence may be useful to the court, but it is unlikely to result in a reliable interpretation of patent claim scope unless considered in context of intrinsic evidence. Heavy reliance on the dictionary divorced form the intrinsic evidence risks transforming the meaning of the claim term to the artisan into the meaning of the term in the abstract, out of its particular context, which is the specification. Byrne complained about the use of the accused device in the claim construction, but the Federal Circuit responded that "there is a distinction between performing claim construction and deciding what should be construed." A court may consider the accused device to determine what part of the claim must be construed.
The Federal Circuit held that the district court erred when it found that the accused Black & Decker device did not have a surface, but found that summary judgment was still appropriate because the accused device lacked a generally planar surface.

Rehearing Denied

Pfizer, Inc. v. Apotex, Inc., [06-1261](May 21, 2007)[PER CURIUM, Newman, Mayer, Lourie, Rader, schall, Bryso, Gajarsa, Linn, Dyk, Prost, and Moore] The Federal Circuit denied Pfizer's motion for rehearing and rehearing en banc. Newman, Lourie, and Rader each dissented. Judge Rader's dissent provided the clearest explanation why the panel decision needed to be reheard, rehearing.

Don't Take It Personally; An Officer of a Willful Infringer is Not Necessarily Personally Liable

Wechsler v. Macke International Trade, Inc., [05-1242, 1243](May 18, 2007)[PROST, Mayer, Gajarsa] The Federal Circuit reversed JMOL that O’Rourke was personally liable for inducing infringement of U.S. Patent No. 5,636,592, and affirmed JMOL that the jury’s award of lost profits damages was not supported by substantial evidence.
SIGNIFICANCE: Where the patent is not making a product, lost profits are only avaiable upon proof that the infringing sales prempted subsqueent sales or eroded the patentee's price. Proof that the patentee could have made sales is not the same as proof that the patentee would have made those sales.
BRIEF: The jury returned special verdicts that defendants willfully infringed the ‘592 patent, but that O’Rourke was not personally liable for inducing infringement. The jury awarded a combination of lost profits and reasonable royalty damages. The trial court granted JMOL that O’Rourke was personally liable for inducement, and denied defendants motion for JMOL to set aside the lost profits award on the grounds that plaintiff did not manufacture a product until after defendants’ product was off the market. The trial court found the jury’s special verdict that O’Rourke was not personally liable to be inconsistent with the special verdict that O’Rourke and the corporate defendant had willfully infringed, and granted the JMOL to reconcile the inconsistency. The Federal Circuit rejected the trial court’s conclusion that the record fully supports that the jury intended to find Rourke personally liable, which was in direct conflict with the jury’s special verdict. The Federal Circuit said that under the trial court’s logic, a person that incorporates to conduct business can never escape personal liability for willful infringement by the corporation, which is inconsistent with Federal Circuit law. Unless the corporate structure is a sham, personally liability for inducement must be supported by personal culpability, which requires a specific intent to aid and abet the infringement.
LOF: Whether lost profits are legally compensable in a particular situation is a question of law reviewed de novo. To recover lost profits, the patent owner must show causation in fact, establishing that but for the infringement he would have made additional profits. The Federal Circuit found that not only was substantial evidence of causation lacking, but that the availability of lost profits was a question for the court, and not the jury. Ordinarily, if the patentee is not selling a product, by definition there can be no lost profits, the only exception is where the patentee has the ability to manufacture, and simply chooses not to. The Federal Circuit said that a patentee could still receive lost profits if the infringing sales preempted subsequent sales by the patentee, and or eroded the market price the patentee was able to charge for its product. The Federal Circuit found a lack of substantial evidence under either theory. Evidence that the patentee could have sold the infringing product, is not evidence that the patentee would have made the sales.

Inequitable Conduct from Failure to Provide Details of Prosecution of Similar Applications

McKesson Information Solutions, Inc., v. Bridge Medical, Inc., [06-1517](May 18, 2007)[CLEVENGER, Bryson, Newman] The Federal Circuit affirmed a finding on unenforceability due to inequitable conduct.
SIGNIFICANCE: While inequitable conduct require materiality and deceptive intent, the Courts with unrealistic expectations of prosecutors command of a full prosecution docket, are willing to infer deceptive intent, and the Federal Circuit will readily affirm.
BRIEF: Schulman was prosecuting at least two related applications. Seventeen days after making an argument in one application, a reference that refuted the argument was cited in the other application (arguably for a different teaching). Although Schulman disclosed the existence of the two applications, he did not disclose the reference from the other application, claiming he believe it was cumulative, but because of the materiality of the reference and its close timing, the trial court inferred intent, and the Federal Circuit agreed. While Schulman did disclose the existence of the two cases, he did not disclose the rejections received in one in the other application. The trial court also found deceptive intent in this conduct. Finally, Schulman failed to disclose the allowance of one application in the other, claiming that since the claims were different there was not double patenting issue, and thus no reason to disclose. Again the trial court found deceptive intent, and the Federal Circuit affirmed.
LESSON: I. When prosecuting “related” applications: (1) cross-cite prior art from each application in the other; (2) disclose all rejections in each application in the other; and (3) disclose final disposition (including allowance) of each application in the other. II. If you determine a reference is cumulative, you better have “contemporaneous evidence (e.g. notes, records, files, etc.) or you will be second guessed – particularly where the reference on its face appears to be non-cumulative.

Every Once in a While, a Trial Court Gets it Right

Hildebrand v. Steck Manufacturing Company, Inc., [06-1120, -1162](May 17, 2007)[PER CURIAM, Michel, Mayer, and Gajarsa] The Federal Circuit affirmed judgment that U.S> Patent No. 5,737,981 is valid and infringed, but denying wilful infringement.
SIGNIFICANCE: A surprising amount of deference to the actions of the district court.
BRIEF: In a non-precedential opinion, the Federal Circuit held that the patent was not anticipated, and that the defendant failed to prove to the jury by clearn and convincing evidence that the claimed invention was obvious. The finding of wilful infringement was supported by substantial evidence, and the decision not to aware reasonable royalties was unobjectionable since the damage award was adequate to compensate for the harm actually caused.

Federal Circuit Does Not Favor Forfeitures of Rights

General Mills, Inc. v. Kraft Foods Global, Inc., [06-1569, -1606](May 16, 2007) [LINN, Bryson, Clevenger] The Federal Ciruit affirmed the dismisal of General Mills' claim of patent infringement on the ground that the claim was barred by a covenant not to sue Kraft's predecessor in interest.
BRIEF: General Mills sued Farley for infringement of U.S. Patent Nos. 5,287,667 and 5,723,163 on rolled fruit snacks. The suit was settled with a covenant not to sue Farley and its "successors". Kraft succeeded to the business of Farley, sold off some of Farley's assets to Catterton, and eventually sold the rolled fruit snack business to Kellogg. General Mills sued Kraft for infringement, Kraft motion to dismiss in view of the settlement agreement and covenant not to sue, was granted. General Mills argued that the covenant not to sue was lost when Kraft sold some of the Farley assets to Catterton. The district court rejected this argument, because the agreement only addressed the fact that all of Farleys assets must be transferred in order to transfer the convenant, and did not address whether all of the assets must be retained in order to retain the covenant. The Federal Circuit said that it has taken a "dim view of purported forfeitures of patent rights". Finding no language to support a forfeiture of rights triggered by the tranfer of assets to Catterton, the Federal Circuit found no basis to conclude that Kraft's rights under the covenenant not to sue were terminated by the Catterton transaction.
In an interseting procedural ruling, the Federal Circuit held that the deadline for answering an amended complaint is not suspended by the filing of a motion to dismiss. The result being that Kraft was not permitted to file an answer and counterclaim to the amended complaint, once the amended complant was dismissed.

BPAI Cannot Base Factual Findings in Inter Partes Cases On Its Own Expertise

Brand v. Miller, [2006-1419](May 14, 2007)[DYK, Michel, Archer] The Federal Circuit reversed the BPAI’s conclusion that Brand derived the subject matter of the interference from Miller, and remanded.
SIGNIFICANCE: In inter partes proceedings, the BPAI cannot rely upon its own expertise, but is limited to the record.
BRIEF: Noting that adjudicatory proceeding before the Board are governed by the APA, and even though the BPAI’s proceedings are not formal adjudications, review of those proceedings is still governed by the substantial evidence standard of Section 706 of the APA. The Federal Circuit held that in the context of a contested case, “it is impermissible for the Board to base its factual findings on its expertise, rather than on evidence in the record, although the Board’s expertise appropriately plays a role in interpreting record evidence.” (The Federal Circuit expressly did not decide to what extent the BPAI’s use of its expertise is constrained in ex parte proceedings.) LOF: Noting that derivation is a question of fact, on the issue of communication of the invention from Miller to Brand, the Federal Circuit found that the Board improperly substituted its own opinion for evidence for evidence of knowledge of one of ordinary skill in the art. The Federal Circuit noted that there was no citation to the record for the BPAI’s conclusion of what one of ordinary skill in the art would have recognized from the information provided by Miller to Brand, and concluded that it was not supported by substantial evidence.

Inferference Party Must Appreciate Invention, Not Necessarily Precise Language of Count

Henkel Corporation v. The Proctor & Gamble Company, [06-1542](May 11, 2007)[LINN, Gajarsa, Moore] The Federal Circuit vacated and remanded a decision by the Board because of an error in imposing an unwarranted requirement for reduction to practice.
BRIEF: At issue were intefering patent applications on diswasher detergent tablets divided into two regions. The Board awarded priority to Proctor & Gamble on the ground that Hinkel inventors failed to demonstrate that its named inventors "appreciated" that which they had invented. LOF: Priority, conception, and reduction to practice are questions of law whch are based on subsidiary factual findings." To show reduction to practice, an inventor must prove that he contemporaneously appreciated an embodiment tht met all the limitations of the interference count." The interference count required that the tablets have a compressed region with a dissolution rate that is greater than the rate of the other region, and the Federal Circuit held that is was error to require Henkel to show it calculated or measured the specific rates of dissolution. The Federal Circuit said that "[A]s a matter of law, we do not require that a junior party in an interference demonstrate that it recongized the exact languge of the ultimate count -- only the subject matter of the ultimate invention."

First Federal Circuit Decision on Obviousness After KSR

Leaprfog Enterprises, Inc. v. Fisher-Price, Inc., [06-1402](May 9, 2007)[LOURIE, Mayer, Dyk] The Federal Circuit affirmed judgment of noninfringement and invalidity of claim 25 on an interactive learning device.
SIGNIFICANCE: It may be obvious to convert a mechanicallly operated device to an electrically operated device.
BRIEF: LOF: Infringement is a question of fact, reviewed for clear error. Leapfrog fell well short of supporting a definite and firm conviction that a mistake had been made on the question of infringement. LOF: Obviousness is a question of law, reviewed de novo based upon underlying factual questions which are reviewed for clear error. In the first post-KSR obviousness case, the Federal Circuit affirmed the finding of obviousness, noting that “An obviousness determination is not the result of a rigid formula disassociated form the consideration fo the facts of a case. Indeed the common sense of those skilled in the art demonstrates why some combination would have been obvious where others would not.” The Federal Circuit said that “Accomodating a prior art mechanical device that accomplishes a goal to modern electronics would have been reasonably obvious to one of ordinary skill in desigining children’s learning devices.” adding that “Applying modern electronics to older mechanical devices has been commonplace in recent years.” The Federal Circuit concluded that one of ordinary skill in the art would have found it obvious to combine the Bevan device with the SSR to update it using modern electronic components in order to gain the commonly understood benefits of such adaptation, such as decreased sized, increased reliability, simplified operation, and reduced costs. The only difference between the combination of prior art and the claimed invention was the addition of a reader, which was found to be commonplace at the time of the invention. The Federal Circuit noted there was no evidence that the inclusion of a reader was uniquely challenging or difficult for one of ordinary skill, nor was there any other evidence that the inclusion of a commonly used device represented an unobvious step over the prior art. The conclusion was reinforced by the fact that the inventor did not have a technical background, and could not have built the prototype himself.