An Error in the Claim Must Be Apparent from the Claim; Not the Specification

Fargo Electronics Inc., v. Iris, Ltd., Inc., [2007-1523] (June 27, 2008) [PROST, Newman, Moore] NON-PRECEDENTIAL The Federal Circuit affirmed partial summary judgment of no contributory or induced infringement of claims 1 through 7, and invalidity of claims 8 through 15 of U.S. Patent No. 5,755,519.
SIGNIFICANCE: To correct an error in a claim, the correction must be apparent from the face of the patent; the specification is consulted to ensure the correction is consistent, not as the source of the correction
PRACTICE TIP: In arguing the claim is not ambiguous, don’t present more than one proposed construction.
BRIEF: LOF: A a determination that a claim is indefinite under 35 U.S.C. § 112, ¶ 2 is a question of law, reviewed without deference. At issue was the meaning of the limitation: “the second supports other than the”. The patentee presented two possible meanings for the language. The concluded that the claim contained an error, and rejected both of the proposed “constructions” because they required the addition or subtraction of claim terms. The district court relied upon Novo Industries, which held that a district court may only correct an error in a patent by interpretation of the patent “if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims.” The district court concluded that claim 8 was invalid as indefinite. The Federal Circuit agreed that absent correction, the was insolubly ambiguous and not amenable to construction. The Federal Circuit further found that the correction was not apparent from the face of the patent, and that the prosecution history should only be consulted to make sure that a correction is not inconsistent, and not as the source of the correction.

Disclaimer Can Result From Disavowals Made During the Prosecution of Ancestor Patent Applications

Heuft Systemtechnik GMBH, v. Industrial Dynamics Co., LTD, [2007-1417, -1462] (June 25, 2008) [LINN, Michel, Newman] NON-PRECEDENTIAL The Federal Circuit reversed the district court’s denial of Industrial Dynamics motion for judgment as a matter of law of non-infringement, finding error in the district court’s claim construction.
BRIEF: At issue were the meanings of the terms for “arranging” in claim 1 and “stabilizing means” in claim 6 of U.S. Patent No. 6,298,974 directed to a “method and apparatus for inspecting rotating containers.” LOF: Infringement, either literal or under the doctrine of equivalents, is a question of fact.
Prosecution disclaimer occurs when a patentee, either through argument or amendment, surrenders claim scope during the course of prosecution. Amendments or arguments that are merely vague, ambiguous, or subject to other reasonable interpretation are not sufficient to surrender claim scope. In order for prosecution disclaimer to attach, the patentee’s actions must be “clear and unmistakable.” The Federal Circuit found that the applicant had clearly disclaimed subject matter in the parent, and turned to the question of disclaimer in the ‘974 patent in suit. It is well-settled that “prosecution disclaimer may arise from disavowals made during the prosecution of ancestor patent applications.” The Federal Circuit said that when the application of prosecution disclaimer involves statements from prosecution of a familial patent relating to the same subject matter as the claim language at issue in the patent being construed, those statements in the familial application are relevant in construing the claims at issue. The Federal Circuit found that the disclaimer in the parent did apply to the language in the claims at issue.

Meaning of a Disputed Claim Term Cannot be Determined in a Vacuum

Realsource, Inc., v. Best Buy Co., Inc., [2007-1387, -1439] (June 23, 2008) [YOUNG, Michel, Gajarsa] NON-PRECEDENTIAL The Federal Circuit affirmed summary judgment of noninfringement of U.S. Patent No. 5,732,136 on a merchant specific debit card verification system.
BRIEF: The district court entered summary judgment after the patentee conceded that under the courts construction of two terms there was no infringement literally or under the doctrine of equivalents. The Federal Circuit said that the meaning of a disputed claim term cannot be determined in a vacuum, and that the claims must be read in the context of the written description and the prosecution history. The Federal Circuit found that these two sources, taken together, make clear that the patentee did not regard its invention as encompassing systems such as those used by the defendants, where the card contained no information other than the card number. The Federal Circuit rejected the patentees arguments for a broader definition in line with “information” as defined in the specification, noting that the claim referred to ID information, not merely information. Furthermore, the Federal Circuit rejected a claim differentiation argument first noting that claim differentiation is a guideline, not a rule, and further that claim differentiation may indicate that an independent claim is broader than a dependent claim, but it does not necessarily determine in what way it is broader.

Questions About Petition to Make Spedical Almost Sink Patent

Scanner Technologies Corporation v. Icos Vision Systems Corporation N.V., [ 2007-1399] (June 19, 2008) [CLEVENGER, Michel, Gajarsa] The Federal Circuit affirmed in part, reversed in part, and remanded the district court’s finding the asserted patents unenforceable, invalid for obviousness, and not infringed, the finding of unenforceability extending to all related patents derived from the same common parent application.
BRIEF: Patentee successfully petitioned to make the application special due to on-going infringement, and in the ensuing litigation the defendant claimed that the affidavits supporting the petition were fraudulent. In order to establish inequitable conduct, the party challenging the patent is required to establish by clear and convincing evidence that the patent applicant (1) either made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the U.S. Patent and Trademark Office. LOF: Both intent and materiality are questions of fact, and must be proven by clear and convincing evidence. The Federal Circuit said that a false statement in a Petition to Make Special is material if it succeeds in prompting expedited consideration of the application." However the Federal Circuit rejected the determination that the “rigid comparison” between the accused product and claims required a physical inspection. Overall the Federal Circuit criticized the adverse inference the district court made on virtually every alleged misrepresentation, finding that the existence of a reasonable alternative explanation prevented there from being clear and convincing evidence of inequitable conduct. The Federal Circuit ultimately concluded that the district court was incorrect about materiality, and therefore reversed the finding of invalidity for inequitable conduct.
The Federal Circuit also considered whether the case was exceptional LOF: Whether a case is exceptional under section 285 is a factual question reviewed for clear error. Because the district court's finding of inequitable conduct served as the essential foundation of its finding that this case was exceptional, the district court likewise erred in finding that this case was exceptional, and therefore abused its discretion in awarding attorney fees.
Turning to the question of obviousness, finding “there simply was not much evidence of secondary indicia of obviousness for the court to consider and discuss” the Federal Circuit rejected the patentee’s argument that the court failed to consider evidence of objective indicia of nonobviousness. On the substance of obviousness, the Federal Circuit found the trial testimony showed that the relatively small logical gap between the prior art and the claim in this case is closed by a person of ordinary skill in the art "pursu[ing] known options within his or her technical grasp."Lastly the Federal Circuit rejected the patentee’s complaint that the district court failed to consider infringement of all of the claims. The Federal Circuit noted that the parties had stipulated that infringement would rise and fall with claim 1, and said that even without the stipulation, the district court’s decision was correct because no evidence was introduced about infringement of the other claims.

District Court Has to Give Some Reason for Dismissal

Board Of Trustees Of The Leland Stanford Junior University v. Motorola, Inc., [2007-1564] (June 19, 2008)[DYK. Rader, Moore] NON-PRECEDENTIAL The Federal Circuit reversed the dismissal of a patent infringement action because not basis for dismiss was articulated by the district court,
BRIEF: The Federal Circuit concluded that it could not review the district court’s order without an explanation of the basis of the court’s decision. We vacate the district court’s decision and remand for further proceedings in accordance with this opinion.

The Claims Need Not be Construed to Encompass all Disclosed Embodiments When the Claim Language is Clearly Limited to One or More Embodiments

Tip Systems, LLC v. Phillips & Brooks/Gladwin, Inc., [2007-1241, -1279] (June 18, 2008) [PROST, Michel, Pogue] The Federal Circuit finding no error in the district court’s claim construction affirmed summary judgment of non-infringement of two related patents, U.S. Patent Nos. 6,009,169 and 6,512,828 directed to cord-free telephones for use in correctional facilities.
SIGNIFICANCE: The claims need not be construed to encompass all disclosed embodiments when the claim language is clearly limited to one or more embodiments.
BRIEF: The Federal Circuit found no error in the district court’s construction of “handset” to mean “a handle with an earpiece at one end and a mouthpiece at the opposite end.” The Federal Circuit also rejected the patentee’s attempts to read out “handset” from the ‘169 patent based upon its elimination of the term during prosecution of the ‘828 patent. While the prosecution history of a related patent application may inform construction of a claim term, when the two applications are directed to the same subject matter and a clear disavowal or disclaimer is made during prosecution of the related application, the Federal Circuit noted that the specification of the ’828 and ’169 patents were distinct, and that the ‘828 patent did not even use the term “handset” in the specification, so it could hardly inform the meaning of handset in the ’169 patent.
The Federal Circuit also found no error in the district court’s construction of “extending outward from said housing through said aural apertures” in claim 1 of the ’828 patent as meaning “both the earpiece and mouthpiece pass through apertures in the front wall such that they project out from the front wall.” The Federal Circuit rejected the patentee’s argument that through had a functional rather than structure connotation, finding that it would lead to a non-sensical result. The Federal Circuit also had no problem with the fact that the construction did not cover an alternative embodiment, and that “to construe the claim term to encompass the alternative embodiment in this case would contradict the language of the claims.” The Federal Circuit said that the claims of the patent need not encompass all disclosed embodiments, and that its precedent is replete with examples of subject matter that is included in the specification, but is not claimed. Thus, the mere fact that there is an alternative embodiment disclosed but not encompassed by district court’s claim construction does not outweigh the language of the claim. The claims need not be construed to encompass all disclosed embodiments when the claim language is clearly limited to one or more embodiments.
Lastly, the Federal Circuit rejected the patentee’s argument for infringement under the Doctrine of Equivalents. Infringement under the doctrine of equivalents may be found when the accused device contains an “insubstantial” change from the claimed invention. Whether equivalency exists may be determined based on the “insubstantial differences” test or based on the “triple identity” test, namely, whether the element of the accused device “performs substantially the same function in substantially the same way to obtain the same result.” The essential inquiry is whether “the accused product or process contain elements identical or equivalent to each claimed element of the patented invention In other words, the “all elements” rule is applicable to infringement under the doctrine of equivalents just as it is to literal infringement. The Federal Circuit rejected the argument that the separately claimed housing was also the handle, noting that while there need not be a one-to-one correspondence between elements of the accused device and the claimed invention, that does not condone ignoring a claimed limitation in assessing infringement under the doctrine of equivalents. Such a holding would be contrary to the “all elements” rule.

To Award Attorney Fees, Courts Must Weigh Factors Such as Degree of Culpability, Closeness of the Questions, and Litigation Behavior

Nilssen v. Osram Sylvania, Inc., [2007-1198, -1348 ] (June 17, 2008) [LOURIE, Newman, Mayer] The Federal Circuit found no abuse of discretion in awarding Osram its attorney fees and denying appellants’ expert fees, and therefore affirmed the district court.
BRIEF: The district court denied the losing patentete’s motion for expert deposition fees, finding that awarding such fees would be a “manifest injustice.” The district court granted Osram’s motion for attorney fees, finding that the case was exceptional for three reasons: Nilssen’s inequitable conduct, the frivolous nature of the lawsuit, and appellants’ litigation misconduct. LOF: The Federal Circuit reviews a finding that a case is “exceptional” within the meaning of 35 U.S.C. § 285 for clear error. LOF: Once a case is determined to be exceptional, the Federal Circuit reviews a district court’s decision to award attorney fees under an abuse of discretion standard.
There is no per se rule of exceptionality in cases involving inequitable conduct. However, this does not mean that inequitable conduct is insufficient for a finding of an exceptional case. Inequitable conduct “may constitute a basis for an award of attorney fees under 35 U.S.C. § 285. In determining whether to award attorney fees, courts must weigh factors such as degree of culpability, closeness of the questions, and litigation behavior, and the Federal Circuit found that the district court did just that in this case.
The Federal Circuit also agreed with the district court that “manifest injustice” was not as limited as Nilssen asserted, and affirmed the denial of expert deposition fees.

District Court Must Detail What Makes An Exceptional Case Exceptional

Innovation Technologies, Inc., v. Splash! Medical Devices, LLC., [2007-1424] (June 16, 2008) [FRIEDMAN, Mayer, Moore] The Federal Circuit vacated the award of attorneys fees, holding that the district court failed to make adequate findings to support its “exceptional-case” determination.
SIGNIFICANCE: District court must make specific findings on what makes case exceptional.
BRIEF: Innovation Technologies, Inc. (“Innovation”), sued Splash for infringement of its U.S. Patent No. 5,830,197 on a method for irrigating wounds. More than a year after filing suit, Innovation executed a covenant not to sue Splash for infringement of the ’197 patent by the Splash device involved in this case and moved to dismiss its suit with prejudice. Splash then moved for attorney fees pursuant to 35 U.S.C. § 285, and the district court awarded Splash $140,232 in attorneys fees. The Federal Circuit said that the only basis for concluding that this was an “exceptional case” was that Splash had shown that “Innovation knew or, on reasonable investigation, should have known, that its claims of infringement were baseless.” The court gave no explanation of, or factual basis for, that conclusion. The Federal Circuit said that in order to provide a basis for meaningful review, it is incumbent on the trial court not only to make the ultimate finding that the case is exceptional, but also to articulate the more particular factual findings from which the finding of ‘exceptional circumstances’ follows.” Because there was no such explanation, the Federal Circuit vacated the award.

District Court Failed to Follow Mandate

Central Admixture Pharmacy Services, Inc. v. Advanced Cardiac Solutions, P.C. [2007-1575] (June 16, 2008) [GAJARSA, Schall, Clevenger] NON-PRECEDENTIAL The Federal Circuit reversed the judgment dismissing the case and remand to the district court for adjudication of CAPS’s patent infringement claim.
BRIEF: Plaintiff CAPS stipulated that if its Certificate of Correction was held valid it did not intend to pursue their claim for damages against Defendants for infringement of the patent for any sales of the accused solutions made prior to issuance of the Certificate of Correction. Thereafter the district court ruled that the Certificate was valid, and entered a Pretrial Order stating that Plaintiffs have withdrawn their claim that Defendants infringe the patent claims prior to issuance of the Certificate. The district court then entered summary judgment for CAPS against ACS on the issue of infringement of the post-COC claims.
However after the Certificate was held invalid on appeal, the district court still entered judgment against plaintiff on its infringement claim based on its pretrial order that plaintiff’s had withdrawn its infringement claim.
The Federal Circuit tersely reversed the district court’s action as not in compliance with its mandate: “Our decision and mandate were clear: on remand, the district court was to decide the merits of CAPS’s infringement claim under the pre-COC claims. The district court was not at liberty to ‘determine’ the issue on procedural grounds, as it did. CAPS was entitled to pursue its pre-COC infringement claim. We explicitly said so in three places in our opinion, and to boot we amplified our order in a long footnote enumerating issues related to CAPS’s infringement claim that remained for decision on remand.

Flawed Testing Fails to Prove Infringement

ADC Telecommunications, Inc., v. Switchcraft, Inc., [2007-1423, -1525] (June 16, 2008) [SCHALL, Prost, Ward] NON-PRECEDENTIAL The Federal Circuit affirmed judgment following a jury trial that defendant Switchcraft did not infringe U.S. Patent No. 6,045,378 on a a switching coaxial jack device that utilizes inwardly projecting fins to provide improved impedance matching between the jack and its connected cables
BRIEF: The case turned on the test for determining whether a claim limitation was met ADC introduced evidence comparing the impedance matching in Switchcraft’s accused devices with and without the waveguides and projections, to demonstrate that the presence of those structures improved impedance matching. Switchcraft countered with test results generated by an alternative method, and also argued that ADC’s testing method was flawed because it did not remove the fins’ surrounding slots, which themselves, Switchcraft contended, affected impedance matching. Thus, according to Switchcraft, ADC’s test results reflected the combined effects of both fins and slots on impedance matching, and did not properly isolate the effect of fins alone.
LOF: Infringement is a question of fact, reviewed for substantial evidence when tried to a jury. Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Plaintiff asserted that the testing method required by the claims was a matter of law, which should be reviewed de novo. However, the specification lacked any clear indication that a particular testing method is required. Because the claim language does not require a particular form of testing, this inquiry is not a claim construction question, which the Federal Circuit reviews de novo, but a question of fact.
The Federal Circuit found that there was substantial evidence, in defendant's own testing and criticism that plaintiff’s testing did not isolate the source of the improvement of impedenance matching, to support the verdict, and affirmed.

Legal Title Holder is Responsible for Maintenance Fees

Burandt v. Dudas, [2007-1504](June 10, 2008)[LOURIE, Newman, Bryson] The Federal Circuit affirmed summary judgment that affirmed the Patent Office’s refusal to accept Burandt’s late payment of maintenance fees.
SIGNIFICANCE: The hold of legal title is responsible for maintenance fees, and is the party whose conduct must considered in deciding whether non-payment was unavoidable.
DISCUSSION: Legal title to Burandt’s patents were held by IRI, while Burandt claimed equitable title. Burandt challenged the focus on the actions of IRI as the legal title holder in determining whether there was unavoidable delay rather than focusing on the actions of Burandt as the equitable owner. The Federal Circuit held that the legal title holder is responsible for payment of the maintenance fees.

Arguments Made in the Prosecution of Corresponding European Patent Useful in Interpreting U.S. Claims

In Re Omeprazole Patent Litigation, [2007-1476, -1477, -1478](June 10, 2008) [LOURIE, Bryson, And Gajarsa] NON-PRECEDENTIAL The Federal Circuit affirmed a finding noninfringement of U.S. Patents 4,786,505 (“the ’505 patent”) and 4,853,230 (“the ’230 patent”).
SIGNIFICANCE: Arguments made in the prosecution of corresponding European Patent were used to determine whether a composition met a claim limitation.
BRIEF: Omeprazole is the active ingredient in Prilosec®, a widely prescribed drug used to treat ulcers. However, Omeprazole is susceptible to degradation and suffers from other formulation problems, including sensitivity to heat, organic solvents, moisture, and light an the ‘505 and ‘230 patents relate to preparations of Omeprazole to overcome these difficulties. Astrazeneca sued for patent infringement under Hatch-Waxman and at a consolidated trial, the district court held that Astrazeneca failed to prove by a preponderance of the evidence that Mylan/Esteve’s products contained an alkaline reacting compound (ARC) as required by the claims. Astrazeneca asserted that the talc used in defendants products contained carbonates, and ARC, but the district court held that Astrazeneca failed to prove the presence of carbonates in defendant’s products. The Federal Circuit rejected Astrazeneca’s argument that the district court failed to apply a preponderance of evidence standard on the issue if infringement by requiring conclusive proof of an ARC. The Federal Circuit also noted statements in the specifications of the patents, as well as arguments in the corresponding European patent application, showed that defendant’s talc was not an ARC.

A Party May Not “Split” Its Cause of Action Into Multiple Suits

Beam v. Roller Derby Skate Corporation, [2007-1368](June 6, 2008)[NEWMAN, GAJARSA, WARD] NON-PRECEDENTIAL The Federal Circuit affirmed dismissal with prejudice of the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds of res judicata and separately on the relevant statutes of limitations.
BRIEF: Dismissal pursuant to 12(b)(6) is a procedural question to which the Federal Circuit applies the law of the local circuit. Under the doctrine of res judicata, more specifically claim preclusion, a final judgment on the merits precludes the parties or their privies from relitigating claims that were or could have been raised in that action. For claim preclusion to attach, there must be an identity of parties or their privies, an earlier final judgment on the merits, and the new claim must be based on the same set of transactional facts as the first.
The Federal Circuit held that the record was abundantly clear that plaintiff’s present claims are based on substantially the same set of transactional facts as his earlier claims. The Federal Circuit further held that the new claim of patent infringement should have been brought in the 1998 action for breach of license, finding that a party may not “split” its cause of action into multiple suits,

Unsubstantiated Allegations of Inducing Infringement Sanctioned

Pellegrini v. Analog Devices, Inc., [ 2008-1091] (June 5, 2008) [BRYSON, PROST, ZAGEL] NON-PRECEDENTIAL The Federal Circuit affirmed the district courts order imposing sanctions against plaintiff and denying leave to file an amended complaint.
COMMENT: Are the courts hostile to patent claims? It seems that the district court and the Federal Circuit were quick to sanction a pro se plaintiff under Rule 11, when similarly unsubstantiated personal injury and product liability claims go undeterred.
BRIEF: The Federal Circuit applies the law of the regional circuit in which the district court sits in review of the court’s decisions regarding sanctions and requests to amend. The district court granted defendant’s motion for sanctions, finding that Pellegrini violated Rule 11 by accusing Analog of inducing infringement under 35 U.S.C. § 271(b) without having evidentiary support’ of direct infringement by Analog’s customers, and ordered ordered Mr. Pellegrini to pay a sanction in the amount of $20,000. The Federal Circuit deferred to the district courts discretion on the issue of sanctions, and on the refusal to allow plaintiff to amend the complaint as untimely.

If the Patentee Meant "At least" the Patentee Should Have Said At Least

Helmsderfer v. Bobrick Washroom Equipment, Inc., [2008-1027] (June 4, 2008)[MOORE, Mayer, Friedman] The Federal Circuit affirmed the district court’s decision that defendants did not infringe U.S. Patent No. 6,049,928.
SIGNIFICANCE: Different claim terms are preseumed to have different meanings.
BRIEF: After holding a Markman hearing, the district court issued an order setting forth its claim construction of seven disputed claim terms. Plaintiff objected to the construction of one term, and conceded that the construction of that term precluded a finding of infringement, upon which the district court entered an appealable final judgment of noninfringement. At issue on appeal was the district court’s construction of “partially hidden from view,” which the district court construed to mean “hidden from view to some extent but not totally hidden from view.”
Plaintiff argued that partially hidden from view included completely hidden from view. The Federal Circuit noted that plaintiff was trying to change the meaning of the limitation to at least partially hidden from view, which it rejected noting that plaintiff had used the terms “generally” and “at least” elsewhere in claim 1. Relying on the canon of construction that different claim terms are presumed to have different meanings, the Federal Circuit found that plaintiff failed to rebut the presumption that partially hidden form view (a phrase not used in the specification) meant the same thing as “generally hidden from view” which was used in the specification, or “at least partially hidden from view,” the construction it was seeking. The Federal Circuit said that if plaintiff had intended to use these terms, it should have.

No Lost Profits to Owner of Patent, Where Patent Was Licensed to and Used by Subsidiary

Mars, Incorporated v. Coin Acceptors, Inc., [2007-1409, -1436] (June 2, 2008) [LINN, Clevenger, Prost] The Federal Circuit affirmed in part, reversed in part, and remanded the district courts judgment, agreeing that Mars was not entitled to recover on a lost profits theory, that Mars’s subsidiary lacked standing prior to 1996, and that the reasonably royalty rate was correct, but disagreeing with the district court’s conclusion that Mars had standing to recover damages for the period between 1996 and 2003.
SIGNIFICANT: Lost profits are not available to non-practicing patent owner who licensed patent to subsidiary.
BRIEF: As to the availability of lost profits, LOF: “Availability of lost profits is a question of law reviewed without deference.” The Federal Circuit said that patent infringement is a tort. In patent cases, as in other commercial torts, damages are measured by inquiring: had the tortfeasor not committed the wrong, what would have been the financial position of the person wronged? The Federal Circuit said that there were other measures of damages besides lost profits and reasonable royalty, but that marks stipulated that it would only seek lost profits or a reasonable royalty, and was bound by its stipulation. “The correct measure of damages is a highly case-specific and fact-specific analysis.” Mars claims that, by virtue of the parent-subsidiary relationship and its consolidated financial statements, all the subsidiary’s lost profits were inherently lost profits of Mars. The Federal Circuit said that Mars identified no record evidence that it ever received or recognized any form of profit or revenue from the subsidiary apart from royalty payments. Thus the Federal Circuit concluded that Mars’s claim that it “inherently” lost profits when MEI lost profits is unsupported by the record, as the district court correctly concluded. The Federal Circuit said that id need not decide whether a parent company can recover on a lost profits theory when profits of a subsidiary actually do flow inexorably up to the parent.
Regarding motion to amend to add the subsidiary as a party, the Federal Circuit stated that only a patent owner or an exclusive licensee can have constitutional standing to bring an infringement suit; a non-exclusive licensee does not. Finding that another subsidiary also held a license, the Federal Circuit found that MEI was not an exclusive licensee. and as such, it received only a ‘bare license’ and has no entitlement under the patent statutes to itself collect lost profits damages for any losses it incurred due to infringement.
Regarding Mars standing, the Federal Circuit first noted that the plaintiff in an infringement action must be the person or persons in whom the legal title to the patent resided at the time of the infringement. Thus whether Mars had title depended upon the agreements. Construction of patent assignment agreements is a matter of state contract law. The first agreement, by its terms was governed by Delaware law, and the Federal Circuit held that it was a transfer from Mars to MEI. The second agreement, by its terms was governed by New York law, and the Federal Circuit held that it merely transferred the rights to sue for past infringements. Regarding the 7% reasonable royalty, defendant argued that the district court erred by awarding a reasonable royalty rate higher than the cost to Coinco of implementing acceptable noninfringing alternatives, that a reasonable royalty rate could not exceed 4%, in light of Mars’s representations to Inland Revenue. Finally, and finally that it was error to rely on incremental profit, rather than its operating profit, to calculate a reasonable royalty. The Federal Circuit rejected all three arguments. As to the first, the Federal Circuit said an infringer may be liable for damages, including reasonable royalty damages, that exceed the amount that the infringer could have paid to avoid infringement. As to the second argument, the Federal Circuit held that representations to a taxing authority were not representative of the mark. As to the last, the Federal Circuit said we have never held that any one profit accounting methodology is appropriate in all industries, for all companies, in all cases. The selection of the appropriate method of profit accounting in the circumstances is properly left to the broad discretion of the district court. Here, the district court heard competing expert testimony and found that a profitability analysis based on incremental profits was appropriate, and deferred to that finding.

District Court Should Have Granted Discovery, Not Summary Judgment

Metropolitan Life Insurance Company v. Bancorp Services, L.L.C. [2007-1312 ] (June 2, 2008) [DYK, Mayer, Moore] The Federal Circuit reversed summary judgment of non-infringement even though it found that the district court correctly construed the claim term in dispute, because the court erred in denying additional discovery and that, even on the present record, there were genuine issues of material fact as to the issue of infringement.
BRIEF: The district court provided no explanation for why it did not allow any period for discovery as to defendant’s infringement action, but instead denied the Rule 56(f) motion on the basis that Bancorp had not proven that MetLife’s witnesses would testify contrary to their declarations. When, as here, there has been no adequate initial opportunity for discovery, a strict showing of necessity and diligence that is otherwise required for a Rule 56(f) request for additional discovery does not apply. The Federal Circuit concluded that that the district court erred both in denying Bancorp’s motion pursuant to Fed. R. Civ. P. 56(f) and in entering summary judgment of noninfringement in favor of MetLife.