Alerts and Updates
Federal Circuit Alert
July 2005
Implicitly Time-Dependent Patent Claim Terms Interpreted as of the Effective Filing Date
PC Connector Solutions LLC v. SmartDisk Corp. and Fuji PhotoFilm U.S.A., Inc., No. 04-1180
The plaintiff PC Connector owns rights in U.S. Patent No. 5,224,216, which is directed to communication interface adapters for computer diskette drives. The defendants SmartDisk Corporation and Fuji PhotoFilm U.S.A., Inc. ("SmartDisk") sold diskette-shaped sleevelike adapters for flash memories and smart cards that can be accessed using a personal computer diskette drive. PC Connector sued SmartDisk for infringement of its patent before the U.S. District Court for the Middle District of Florida.
The district court construed the claims of the patent and granted SmartDisk summary judgment of non-infringement. PC Connector appealed to a Federal Circuit panel consisting of Judges Michel, Lourie and Prost.
An element in one of the two asserted claims required:
...an end user computer peripheral device having an input/output port normally connectible to a conventional computer input/output port... (emphasis added).Interpreting the word "conventional" to refer to technologies that were in common use as of 1988 (the effective filing date for the patent), the district court held that flash memories and smart cards were not peripherals that were connectible to computer input/output ports that were in common use as of 1988. Similarly, the district court held that an element in the other asserted claim, specifically,
where each separate end user computer peripheral [ ] traditionally connectable to a computer by means of an input/output port of the computer and the standard input/output port... (emphasis added),also referred to peripherals that were connectible to computer input/output ports in common use as of 1988. Based on this reasoning, the district court granted summary judgment that the SmartDisk adapters for flash memories and smart cards did not literally infringe the asserted claims.
On appeal, PC Connector asserted that the district court erred by construing the terms "normally," "conventional," "traditionally" and "standard" to refer only to peripherals and ports that were in common use as of 1988. PC Connector argued that these terms merely clarify the manner of connecting peripherals and ports, and did not limit the claims to ports and peripherals of a particular time period.
The Federal Circuit examined the patent and its prosecution history, and found neither to be determinative of the meaning of the disputed terms. Citing established claim construction precedent, the Federal Circuit accorded the words of the claims their "ordinary and accustomed meaning" as of the effective filing date of the patent and held that the disputed words are implicitly time-dependent. The Federal Circuit concluded that the district court did not err by limiting words such as "conventional" to a meaning specific to the time of the patent's effective filing date.
The Federal Circuit panel declined to consider the issue of infringement by application of the doctrine of equivalents on the grounds that the issue had not been properly raised at the district court level. However, even if the issue had been properly raised before the panel, the Federal Circuit noted in dicta that, as a matter of law, there could be no infringement under the doctrine of equivalents since a finding of equivalence "would effectively vitiate the time related limitation."
Link to this Federal Circuit opinion: http://fedcir.gov/opinions/04-1180.pdf
Representation Falsely Implying Existence of Experimental Results Renders Patent Unenforceable
Purdue Pharma L.P. et al. v. Endo Pharmaceuticals Inc. et al., Nos. 04-1189, 04-1347 and 04-1357
Despite the frequency with which inequitable conduct claims are made during patent litigation, it is relatively uncommon for a court to hold a patent unenforceable on those grounds, and even less common for a verdict of unenforceability to be upheld on appeal. An exception occurred in June 2005, when a decision finding three patents asserted by Purdue Pharma L.P. against Endo Pharmaceuticals, Inc. unenforceable due to inequitable conduct was affirmed by the Federal Circuit.
Purdue sells OxyContin®, an FDA-approved controlled release oxycodone product for pain relief. Purdue owns several patents relating to its oxycodone products. In 2000, Endo filed an abbreviated new drug application to obtain FDA approval to market a generic version of OxyContin®. As part of that application, Endo filed a paragraph IV certification pursuant to 28 U.S.C. § 505(j)(2)(A)(vii), asserting that Purdue's patents either were invalid or would not be infringed by Endo's generic equivalent.
Filing a paragraph IV certification is considered an act of infringement pursuant to 35 U.S.C. § 271(e)(2), and Purdue asserted three patents against Endo shortly after Endo filed its certification. In a counterclaim, Endo asserted that the three patents were unenforceable on account of inequitable conduct during prosecution of the patents before the USPTO. The U.S. District Court for the Southern District of New York held all three of Purdue's asserted patents unenforceable, and Purdue appealed.
Confirming established precedent, a three-judge panel of the Federal Circuit indicated that a party asserting inequitable conduct has the burden of proving by clear and convincing evidence that the patentee had made material misrepresentations to the Patent Office with the intent to deceive or mislead the Patent Office. The Federal Circuit reviewed the district court's factual findings regarding materiality and intent for clear error and its ultimate determination of inequitable conduct under an abuse of discretion standard.
The specifications of the three asserted patents were virtually identical, and each of the three patents stated that it had been "surprisingly discovered" that the oxycodone formulations disclosed in the patents could be more easily adapted to the dosing requirements of individual patients than could similar known formulations. Furthermore, Purdue cited its "surprising discovery" and "results" several times during prosecution of the patents in order to overcome rejections citing prior art related to similar known formulations. However, Purdue never disclosed to the Patent Office that the "surprising discovery" described in its patent applications and arguments was based solely on the mental insight of an inventor and not on any experimental results, clinical results or other actual data.
The district court held that the lack of scientific proof of the discovery purportedly made by the Purdue inventors was a material fact that was inconsistent with statements made by Purdue to obtain allowance of the patents' claims over rejections by the patent examiner. The district court also held that the pattern of misrepresentations made by Purdue to the examiner was evidence of intent to mislead the Patent Office.
On appeal, the Federal Circuit reviewed the context of the statements made by Purdue during prosecution of the patents and held that the district court's findings regarding the materiality of those statements were not clearly erroneous because Purdue's representations implied that clinical studies had been performed, even if that representation was not explicitly stated. The Federal Circuit also found no clear error in the district court's holding that Purdue's statements to the Patent Office, consistently and repetitively implying the existence of clinical results, evinced deceptive intent. Finding no clear error in the lower court's factual findings relating to materiality and intent and finding nothing on the record to suggest an abuse of discretion in the manner by which the district court weighed materiality and intent, the Federal Circuit upheld the finding of inequitable conduct.
It is important to recognize that this decision does not announce any new requirement for clinical data to support an assertion of patentability. Instead, as the Federal Circuit emphasized, the finding of inequitable conduct in this case was grounded in Purdue's misrepresentation of the evidentiary basis of its "surprising discovery" and Purdue's reliance on such misrepresentations to overcome rejections by the Patent Office.
Link to this Federal Circuit opinion: http://fedcir.gov/opinions/04-1189.pdf
Notice Triggering Willful Infringement Does Not Require Disclosure to "Decision Maker"
Imonex Services, Inc. v. W.H. Munzprufer Dietmar Trenner GMBH et al., Nos. 04-1262 and 04-1290
An en banc panel of the Federal Circuit issued a decision in September 2004 (Knorr-Bremse Systeme fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337) intended to clarify standards for assessing whether damages for patent infringement should be enhanced on account of willfulness on the part of the infringer, as permitted by 35 U.S.C. § 284. The Imonex decision is one of the first Federal Circuit panel decisions to apply the Knorr-Bremse standards.
The plaintiff Imonex owns two issued U.S. patents, each directed to devices for sorting coins. The defendant Munzprufer manufactured a coin-sorting device (the "W2000") alleged by Imonex to infringe its patents. The other defendants were original equipment manufacturers ("OEMs") which incorporated the W2000 into newly made appliances such as laundry machines or into existing appliances to retrofit them for coin-operated use.
Imonex sued Munzprufer and the OEMs in the U.S. District Court for the Eastern District of Texas, alleging that the defendants had willfully infringed Imonex's patents. Following a jury verdict awarding damages to Imonex for willful infringement of its patents, the defendants moved for judgment as a matter of law (JMOL) on the issue of willfulness. The district court denied this motion, and the denial was appealed to the Federal Circuit.
The question before the Federal Circuit was whether the district court, applying the law of the Fifth Circuit, appropriately denied the defendants' motion for JMOL. In the Fifth Circuit, a jury's verdict must be upheld unless a judge finds that "there is no legally sufficient evidentiary basis for a reasonable jury" to reach that verdict.
Like the defendants in the Knorr-Bremse case, none of Munzprufer and the OEM defendants obtained legal advice regarding the scope or validity of Imonex's patents prior to being served with Imonex's complaint for patent infringement. Following Knorr-Bremse, the Federal Circuit in the Imonex case drew no adverse inference of willfulness based on the defendants' failure to obtain such legal advice. The Federal Circuit panel indicated that proof of willfulness "requires a showing that the totality of the circumstances evince the egregious conduct that constitutes willful infringement."
The Federal Circuit proceeded to hold that the question of willfulness hinged on "when the defendants had actual knowledge of Imonex's patent rights, and their actions after that time." Applying standards developed before its Knorr-Bremse decision, the Federal Circuit indicated that actual notice of another's patent rights triggers an affirmative duty of due care to avoid infringement.
The defendants argued that none of their employees "with decision-making capacity" had received notice of or studied Imonex's patents and that their duty of due care had not been triggered for that reason. The Federal Circuit declined to examine whether it was necessary for a "decision maker" to have notice. Instead, the Federal Circuit found the following evidence sufficient to establish that the OEMs had actual notice of Imonex's patents, thereby triggering defendants' duty of care:
i) Imonex's disclosure of properly marked products to employees of the OEMs at trade shows,The Federal Circuit proceeded to conclude that there was sufficient basis for a reasonable jury to find willfulness and upheld the district court's denial of defendants' motion for JMOL.
ii) Imonex's widespread distribution of advertising literature depicting its devices as patented, and
iii) Imonex's correspondence with the OEMs proposing use of its patented devices in the OEMs' products.
Link to this Federal Circuit opinion: http://fedcir.gov/opinions/04-1262.pdf
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