Author: FCBJ

In re TC Heartland, LLC,
821 F.3d 1338 (Fed. Cir. 2015)
Authored by Amanda Block

Statement of Facts: Kraft Foods Group Brands LLC (“Kraft”) filed suit against TC Heartland LLC, (“Heartland”) alleging that Heartland’s liquid water enhancement products infringe three of Kraft’s patents. Heartland is a limited liability company organized under Indiana law with its headquarters in Indiana. It has contracts with two national accounts, under which the company ships the accused products into Delaware. In 2013, Heartland shipped 44,707 cases of the accused product into Delaware, generating $331,000, which is about 2% of their total sales of that product for the year.

Procedural History: Kraft filed suit against Heartland in the United States District Court for the District of Delaware, alleging that Heartland infringed three patents. Heartland moved to dismiss the complaint for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Heartland also moved to transfer venue to the Southern District of Indiana if the action was not dismissed for lack of jurisdiction. In ruling on the motions, the Magistrate Judge held that the court had specific personal jurisdiction over Heartland in regard to the accused products under Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1571 (Fed. Cir. 1994) (“Beverly Hills Fan”). Further, the Magistrate Judge determined that Congress’s 2011 amendments to 28 U.S.C. § 1391 did not change the law governing venue for patent infringement suits in any way that invalidated the holding in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) (“VE Holding”). The district court adopted the Magistrate Judge’s report and recommendation in full and denied Heartland’s motion. Heartland filed a petition for a writ of mandamus with the Federal Circuit.

Questions Presented: (1) Is the definition of corporate residence in applying the patent venue statute, 28 U.S.C. § 1400, governed by the general venue statute, 18 U.S.C. § 1391(c), or by federal common law? (2) Does the District Court of Delaware have specific personal jurisdiction over Heartland?

Holdings: The Federal Circuit held that a writ of mandamus is not warranted. (1) The court held that the definition of corporate residence in the general venue statute governs where an alleged infringer resides, rejecting Heartland’s argument that venue is governed by federal common law. (2) Further, pursuant to settled precedent in Beverly Hills Fan, Heartland had sufficient minimum contacts with Delaware to be sued in that jurisdiction.

Reasoning: A writ of mandamus is an extraordinary remedy that is only appropriate in special circumstances where there has been a judicial usurpation of power or a clear abuse of discretion, which is not the case here.

VE Holding already resolved Heartland’s venue arguments in holding that the definition of corporate residence in the general venue statute, § 1391(c), applies to the patent venue statute, 28 U.S.C. § 1400. The court rejected Heartland’s argument that the 2011 amendments to the general venue statute rendered the decision inapplicable. The amendments were minor, only changing “For the purposes of venue under this chapter . . .” to “For all venue purposes . . . .” 821 F.3d 1338, 1341 (Fed. Cir. 2015). The change in language broadens, not narrows, the applicability of the corporate residence definition.

The other 2011 amendment that Heartland referenced included the addition of language in § 1391(a), which states, “Applicability of section.—Except as otherwise provided by law.” Id. at 1341. Heartland argued that this makes § 1391(c) no longer applicable to patent cases. However, the patent venue statute does not define corporate residence, so there is no other “law” on point. The general statute defines a term in § 1400(b), and does not conflict with it.

The court also rejected Heartland’s argument that Congress intended for Supreme Court precedent to govern the definition of corporate residence, rendering § 1391(c) inapplicable, because in 2011 there was no Supreme Court ruling on the issue that the statute could have been codifying.

The holding in Beverly Hills Fan forecloses Heartland’s arguments regarding personal jurisdiction. The court held that there are sufficient minimum contacts to satisfy due process requirements when a non-resident defendant purposefully ships accused products into the forum through an established distribution channel and the cause of action arises out of those activities. Heartland admits that it directly shipped orders of the accused product into Delaware and that the claims arise out of or relate to these shipments, which satisfies the minimum contacts requirement. Delaware has a significant interest in discouraging injuries in the state and the circumstances here do not make the court’s exercise of discretion unreasonable or especially burdensome on Heartland. Heartland failed to show a clear and indisputable right to a writ of mandamus in regard to the venue and personal jurisdiction issues.

Enfish, LLC v. Microsoft Corp
822 F.3d 1327 (Fed. Cir. 2016)
Authored by Mario Kolev

Statement of Facts: Through the late 1990s and early 2000s, Enfish developed and sold a new type of “self-referential” data-base program. In late 2000, Enfish received U.S. Patents 6,151,604 (“the ‘604 patent”) and 6,163,775 (“the ‘775 patent”), which are directed to an innovative logical model for a computer database. The patented logical model differed from conventional logical models because it included all data entities in a single table with column definitions provided by rows in that same table. Due to this property, the innovative model is said to be “self-referential.” The self-referential model is in contrast with the conventional relational model that places data entities in multiple tables. The two patents Enfish received reveal that the self-referential model has multiple benefits over the relational model by allowing faster searching of data, more effective storage, and more flexibility in configuring the database. Enfish claims that ADO.NET, a product Microsoft develops and markets, infringes the ‘604 and ‘775 patents by creating and manipulating self-referential tables as part of its operation. Enfish asserted five claims: claims 17, 31, and 32 in relation to the ‘604 patent and claims 31 and 32 in relation to the ‘775 patent.

Procedural History: Enfish brought suit against Microsoft in the United States District Court for the Central District of California for infringement of several patents related to a “self-referential” database. The district court granted summary judgment in favor of Microsoft, finding that all five claims were invalid as directed to an abstract idea under 35 U.S.C. § 101, claims 31 and 32 of both patents were invalid under 35 U.S.C. § 102(b) as anticipated by the prior public sale and use of Microsoft’s Excel 5.0 product, and claim 17 was not infringed by ADO.NET. Enfish appealed to the Federal Circuit.

Questions Presented: (1) Did the district court err in finding all claims invalid under 35 U.S.C. § 101 as directed to an abstract idea? (2) Did the district court err in finding claims 31 and 32 of both patents invalid under 35 U.S.C. § 102(b) as anticipated by the prior public sale and use of Microsoft’s Excel 5.0 product? (3) Did the district court err in finding claim 17 not infringed by ADO. NET?

Holdings: (1) Yes, the district court erred in granting summary judgment based on 35 U.S.C. § 101 because all five claims on appeal are patent eligible. (2) Yes, the district court erred in granting summary judgment based on 35 U.S.C. § 102. (3) No, the district court did not err in granting summary judgment as to non-infringement. ADO.NET does not infringe claim 17. The case was remanded to the district court for further proceedings consistent with this holding.

Reasoning: The Federal Circuit reviewed the district court’s grant of summary judgment de novo. The court took Enfish’s three arguments in turn. First, the Court addressed the invalidity of all claims under 35 U.S.C. § 101. Second, the court addressed the invalidity of claims 31, 32 under § 102. Finally, the court addressed the district court’s finding of claim 17’s non-infringement.

First, the court rejected the district court’s ruling as to § 101 invalidity. Under 35 U.S.C. § 101, a patent can be obtained for “any new and purposeful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Enfish LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. May 12, 2016). The court reiterated the Supreme Court’s recognized exception to patent-eligibility under § 101—“[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S Ct. 1289, 1293 (2012)). To determine whether the claims are patent-eligible, the court engaged in what it calls the Mayo/Alice inquiry, which first asks “whether the claims at issue are directed to a patent-ineligible concept,” Alice Corp. Pty Ltd. V. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014), and, if this is met, then asks the court to “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at 1289, 1297). The court recognized that the Supreme Court has not established a ready test to determine what constitutes an “abstract idea” under the first step of the Mayo/Alice inquiry. Enfish, 822 F.3d at 1334-35. In order to conduct the inquiry, the court looked to whether the claims at issue are comparable to those claims already found to be directed to an abstract idea in previous cases.

The Federal Circuit emphasized that the first step of the Mayo/Alice inquiry is a crucial one because the question as to “whether the claims at issue are directed to a patent-ineligible concept,” Alice, 134 S. Ct. at 2355, implies that there are several claims that are inherently not directed to a patent-ineligible concept. The “directed to” inquiry does not simply ask whether the claims involve a patent-ineligible concept, because every patent-eligible claim that involves a physical product involves a law of nature occurring in the physical world. Rather, the first step of the inquiry serves as a filter for claims that are considered in light of certain specifications and asks whether “[the claims’] character as a whole is directed to excluded subject matter.” Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015).

The Federal Circuit noted that the Supreme Court has not foreclosed the possibility that claims “purport[ing] to improve the functioning of the computer itself” or “improv[ing] an existing technological process” may survive the abstract idea limitation. See Alice, 134 S. Ct. at 2358–59. The court found that some improvements in computer-related technology, such as chip architecture and LED displays, are plainly not abstract. The court went further and noted that improvements to software can also be non-abstract. As a result, the court found that all claims directed to improvements to computer-technology, whether they be directed to hardware or software, do not have to necessarily be analyzed at the second step of the Alice inquiry. The court thus held that it is relevant to ask whether the particular claims are directed to an improvement to computer functionality as opposed to being directed to an abstract idea at the first step of the Alice inquiry.

The Federal Circuit found that, in this case, the first step of the Alice inquiry examines whether the focus of the claims is on the specific asserted improvement in computer functionality (namely the self-referential table for a computer database) as opposed to a process that can be described as an abstract idea for which a computer is merely used as a tool. The court found that this case involves claims whose plain focus is an improvement to computer functionality and not on other tasks for which a computer is used in its ordinary capacity. Accordingly, the court found that the claims at issue in this case are not directed to an abstract idea under the Alice inquiry.

The Federal Circuit disagreed with the district court that the claims at issue were “directed simply to ‘the concept of organizing information using tabular formats.’” Enfish, LLC v. Microsoft Corp., 822 F.3d at 1337-38. The court found that the district court oversimplified the self-referential component of the claims and discounted the benefits of the invention. In support of its holding that the claims are directed toward an improvement of an existing technology, the court noted that the self-referential component allows for increased flexibility, faster search times, and smaller memory requirements when compared to conventional databases.

The Federal Circuit distinguished the claims in this case from the claims in Alice and Versata Development Group v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015), a case which Microsoft claimed is similar to this one by noting that the claims at issue in those cases involved simply adding conventional computer components to well-known business practices. The court found that in this case, the claims are directed to actual improvements in the functioning of a computer. Similarly, the court found that other cases differed from this case because they involved patent-ineligible claims characterized by the use of an abstract mathematical formula to be used on any general purpose computer, a purely conventional computer implementation of a mathematical formula, or generalized steps to be performed on a computer using conventional computer activity.

In sum, the Federal Circuit declined to adopt a broad reading of Alice that implies all improvements of computer technology are inherently abstract and thus directed to a patent-ineligible concept under step one of the Mayo/Alice inquiry. The court inquired whether the claims are directed toward an abstract idea or an improvement in computer functionality. The court found that the claims at issue in the appeal are not directed to an abstract idea, but rather are specifically directed to a self-referential table for a computer database. The court noted that this is not a situation in which general-purpose computer components are added post-hoc to a fundamental economic practice or mathematical equation. Instead, the court found that the claims at issue are directed to a specific implementation of a solution to a problem in the software field. The court found that this constitutes an improvement in computer functionality and that the claims are therefore not directed to an abstract idea. Accordingly, the court found it unnecessary to proceed to step two of the Alice inquiry and held that the claims are patent-eligible.

Second, the Federal Circuit rejected the district court’s finding that claims 31 and 32 of both patents are invalid under 35 U.S.C. § 102(b) as anticipated by the prior public sale and use of Microsoft’s Excel 5.0 product. A finding of anticipation necessitates “that the reference describe [sic] not only the elements of the claimed invention, but also that it describe [sic] those elements ‘arranged as in the claim[.]” NetMoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008) (quoting Finisiar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1334 (Fed. Cir. 2008)). The court found that the district court erred in granting summary judgment of anticipation because Excel 5.0 does not include the claimed single table with a row defining a column within the very same table, but rather introduces two different tables on a single spreadsheet.

Finally, the Federal Circuit agreed with the district court’s holding that Microsoft’s ADO.NET does not infringe claim 17 of the ‘604 patent. The court agreed with the district court’s finding that ADO.NET does not perform the “means for indexing” recited in Claim 17. The district court looked to the language in 35 U.S.C. § 112 (2006) to interpret “means for indexing.” That language states that such a claim element “should be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” 35 U.S.C. § 112. The district court used Enfish’s own proposed algorithm as the corresponding structure for the “means for indexing.” Enfish, 822 F.3d at 1344. The algorithm is a three-step process, which consists of the following:

1) Extract key phrases or words from the applicable cells in the logical table.
2) Store the extracted key phrases or words in an index, which is itself stored in the logical table.
3) Include, in text cells of the logical table, pointers to the corresponding entries in the index, and include, in the index, pointers to the text cells.

Enfish,822 F.3d at 1344.

Under 35 U.S.C. § 112, an accused product must perform the exact function using an equivalent or identical structure in order to practice a claim element. See Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999). The Federal Circuit agreed with the district court that ADO.NET does not perform either step two or step three of the above algorithm and that, therefore, it does not infringe the patent under the claim.

CSIRO v. CISCO Systems, Inc.
809 F.3d 1295 (Fed. Cir. 2015)
Authored by Megan Osborn

Statement of Facts: CSIRO is the principal research arm of the Australian Federal Government. CSIRO obtained a patent for a technique that attempts to solve the “multi-path problem,” in which wireless signals reflect off objects and interfere with each other. CSIRO v. CISCO Systems, Inc., 809 F.3d 1295, 1297 (Fed. Cir. 2015). In 1999, the Institute of Electrical and Electronics Engineers included CSIRO’s patent’s techniques in their revision of the 802.11 wireless standard (802.11a) for specifications of products using the Wi-Fi brand.

CSIRO entered into a Technology Licensing Agreement (“TLA”) with CISCO Systems, Inc. (“Cisco”) in 2001 for use of CSIRO’s patent’s technology in wireless chips. The TLA ended in 2007 when Cisco ceased using chips with the CSIRO patent in their products.

In 2004, CSIRO approached Cisco offering them a license to the patent under new terms used in their “Rate Card” system that they offered to other companies. Cisco did not accept the offer. Cisco’s Vice President Dan Lang, however, suggested a new royalty rate for the patent use at a lower price than what was offered in the “Rate Card” system, which was only slightly lower than the royalties Cisco was then paying to CSIRO under the TLA. Ultimately, CSIRO and Cisco did not come to an agreement on this matter. In 2007, Cisco stopped selling chips using the CSIRO patent’s technology.

Procedural History: Patentee CSIRO sued CISCO Systems, Inc. (“Cisco”) for an infringement of their patent in the United States District Court for the Eastern District of Texas. The district court awarded CSIRO $16,243,067 in damages after a bench trial in which Cisco stipulated to infringement. Cisco appealed to the Federal Circuit Court.

Questions Presented:

(1) Did the district court violate apportionment principles in employing the damages model by taking into account the parties’ informal licensing negotiations with respect to the multi-component end product?

(2) Did the determination of a reasonable royalty have to take into account the accruing value of the adoption of the patent’s standard-essential status?

(3) Did the district court have to consider the TLA in its analysis of damages for infringement?

Holdings: The district court was correct in relying upon the parties’ licensing negotiations when analyzing damages, but erred in not accounting for the patent’s standard-essential status and in its reasons for discounting the TLA. Accordingly, the damages award was vacated and the case was remanded for recalculation of a reasonable royalty in light of the patent’s standard-essential status and a reevaluation of the TLA’s relevance. In answer to the Questions Presented:

(1) No, the district court did not violate apportionment principles in employing a damages model taking into account the parties’ informal licensing negotiations with respect to the multi-component end product;

(2) Yes, determination of a reasonable royalty for a patent infringement damages award has to account for value accruing to adoption of a patent’s standard-essential status;

(3) Yes, the district court did have to take into account the TLA when it analyzed the damages for infringement.

Reasoning: The district court’s analysis of the parties’ damage models was flawed. These flaws led the Federal Circuit to reject the lower court’s analysis in favor of its own hypothetical negotiation damages model using the Georgia-Pacific factors.  The Federal Circuit held that the district court’s consideration of the parties’ informal licensing negotiations by Mr. Lang was appropriate because under the apportionment principle in Apple Inc. v. Motorola, Inc., there may be more than one reliable method for estimating a reasonable royalty. 757 F.3d. 1286, 1315 (Fed. Cir. 2014). Mandated use of the “smallest salable patent-practicing unit” to establish the value of the patent infringement would unnecessarily exclude an effective value estimation method such as evidence of license negotiation for the patent alone. CSIRO v. CISCO Systems, Inc., 809 F.3d 1295, 1301 (Fed. Cir. 2015) In this case, those negotiations were available and the court stated it was appropriate for the district court to utilize them in creating an upper and lower bound for damages in accordance with the Georgia-Pacific factors.  The district court determined that the following factors were relevant to this case: (3) The nature and scope of the license, as exclusive or non-exclusive, or as restricted or non-restricted in terms of territory or with respect to whom the manufactured product may be sold; (4) The licensor’s established policy and marketing program to maintain their patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designated to preserve that monopoly; (5) The commercial relationship between the licensor and licensee, such as, whether they are competitors in the same territory in the same line of business or whether they are inventor and promotor; (8) the established profitability of the product made under the patent, its commercial success, and its current popularity; (9) the utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results; (10) the nature of the patented invention, the character of the commercial embodiment of it as owned and produced by the licensor, and the benefits to those who have used the invention.  According to the court, the negotiations in this case were especially useful in assessing the value of the patent because it valued the use of the patent alone. The court stated that this valuation could, in some cases, be more appropriate and exact than trying to isolate the value of the patent within a larger product.

The district court erred in failing to account for extra value accruing to the patent from standardization under 802.11a. Because the patent was a “standard essential patent” (“SEP”), unique considerations apply: SEPs can only be valued for the value of the patented feature and not for any added value from standardization of such technology.  Ericsson, Inc. v. D-Link Sys., 773 F. 3d 1201, 1232 (Fed. Cir. 2014). The district court, which did not have the benefit of the Ericsson opinion at the time when it decided this case, erred when it increased the royalty award attributable to the patent’s commercial success due to its standardization under 802.11. The court states that some factors shouldn’t be used at all when analyzing SEPs, stating that “Ericsson calls out factors 8, 9 and 10 as all being irrelevant or misleading in cases involved SEPs.” Id. at 1305. Additionally, the court erred by not considering the effect of standardization on the figures suggested in Mr. Lang’s informal negotiations. On remand, the district court should calculate a reasonable royalty in consideration of the monetary effects of standardization on the patent’s value.

Finally, the district court erred in not taking into consideration the TLA when determining the valuation of the patent. The district court improperly rejected the TLA as a determining factor of the patent’s value because it was forged in 1998 and because it was based on chip prices. These reasons are insufficient to discount the TLA from determining the patent’s value. First, the timing of the origination of the TLA is irrelevant as it was renegotiated in 2003, around the time in which the licensing negotiations with Mr. Lang occurred. Second, a license cannot be excluded from value determination of a patent solely because of its royalty base. Ericsson, 773 F.3d at 1228.

In conclusion, the Federal Circuit held that on remand the district court should reconsider the relevance of the as-amended TLA in its damages analysis in light of following: (1) the agreement was between Cisco and the Commonwealth; (2) the agreement was contemporaneous with the hypothetical negotiation; (3) the agreement  was reached before the 802.11(g) standard was adopted; and (4) the agreement  focuses on the chip.

ClearCorrect Operating, LLC v. International Trade Commission
819 F.3d 1334 (Fed. Cir. 2016) (per curiam)
Authored by Kristin Elia

Statement of Facts: Align Technology, Inc. (“Align”) held valid patents in certain dental products. In the Matter of Certain Digital Models, Digital Data, and Treatment Plans for Use in Making Incremental Dental Positioning Adjustment Appliances, the Appliances Made Therefrom, and Methods of Making the Same, Inv. No. 337-TA-833, 1–2. ClearCorrect Operating’s (“ClearCorrect”) Pakistani affiliate transmitted certain “digital models, digital data, and digital information,” similar to Align’s goods, into the United States through the Internet. ClearCorrect Operating, LLC v. Int’l Trade Comm’n, 819 F.3d 1334 (Fed. Cir. Mar. 31, 2016) (per curiam) (Newman, J., dissenting). Section 337 of the Tariff Act, 19 U.S.C. § 1337, authorizes the United States International Trade Commission (“ITC”) to exclude the importation of “articles” that infringe a United States patent, copyright, trademark, mask work, or design. ClearCorrect Operating, LLC v. Int’l Trade Comm’n, 810 F.3d 1283, 1286 (Fed. Cir. 2015).

Procedural History: On April 5, 2012, the ITC initiated an investigation of ClearCorrect and its affiliates based upon a complaint filed on behalf of Align. Inv. No. 337-TA-833, 1–2. The complaint alleged violations of Section 337 of the Tariff Act based upon patent infringement through ClearCorrect’s importation of the digital goods. The ITC found that ClearCorrect’s imported goods infringed upon Align’s valid patents. The ITC thus issued a Cease and Desist Order to ClearCorrect.

On November 10, 2015, ClearCorrect appealed to the Federal Circuit before Chief Judge Prost and Circuit Judges Newman and O’Malley. 810 F.3d 1283. The ITC, Appellee, argued here that “articles” should include the electronic transmission of digital data, or digital goods. The court held that this definition expanded the scope of the ITC’s jurisdiction and was contrary to clear congressional intent. As such, the court held that the ITC has no jurisdiction to exclude infringing digital goods that are imported electronically. Thus, the Federal Circuit reversed the ITC’s Cease and Desist Order. The ITC and Align, Intervenor, filed petitions for rehearing en banc.

Question Presented: Should the court grant petitions for rehearing en banc to determine whether the ITC has the authority to exclude digital goods as infringing imports under Section 337 of the Tariff Act?

Holding: In a per curiam decision, the Federal Circuit denied the petitions for rehearing en banc.

Reasoning: The ITC does not have jurisdiction to exclude infringing digital goods that are imported electronically into the United States because the term “articles” within Section 337 of the Tariff Act does not include digital goods. Because the ITC’s interpretation of this term does not align with clear congressional intent, the ITC’s interpretation is unreasonable and thus not entitled to judicial deference.

Concurring Opinion: Chief Judge Prost and Circuit Judge O’Malley, with whom Circuit Judge Wallach joined, concurred in the denial of the rehearing en banc. The concurrence is based upon disagreement with the dissent’s alleged misinterpretation of Section 337 of the Tariff Act. The concurring judges argued that the dissent viewed a myriad of statutes as illustrating congressional intent to account for the “advent of things like digital data and electronic transmissions.” 819 F.3d at 1336 (Prost, J., concurring). The concurrence argued, conversely, that those statutes are irrelevant to Section 337, the applicable statute in this case. The dissent’s reliance on these statutes is unfounded because those statutes would help prove the majority’s conclusion that if Congress hoped to bridge the gap between the non-digital and digital worlds, it would do so affirmatively. In addition, contrary to the dissent’s suggestion, Congress must change the law, not the courts.

The concurrence and dissent also disagreed over which factors determined whether something was an “article.” The concurrence argued that, in order for the ITC to exercise jurisdiction under Section 337, the imported good must be an “article” that might infringe a U.S. patent. The dissent claimed that Section 337 depended only on whether the imported good infringed a patent, copyright, trademark, or design. The concurrence also claimed that the dissent mischaracterized its own definitions of “article” and, regardless, the dissent’s definitions are not inconsistent with defining “article” as a “material thing.” As such, the dissent failed to provide support for its overly broad interpretation of the term “article.”  According to the concurrence, the correct interpretation of “articles” in Section 337, as determined by the majority, is “material things[.]” Id. This interpretation is “mandated by the plain meaning of the word, the context of 19 U.S.C. § 1337(a) and the entire statutory scheme, and the legislative history.” Id.

Dissenting Opinion: The dissent argued that the majority’s decision was inconsistent with precedent and congressional intent. In a previous Federal Circuit decision, Suprema, Inc. v. International Trade Commission, 796 F.3d 1338, 1350 (Fed. Cir. 2015) (en banc), the Federal Circuit held that there was congressional intent within Section 337 to vest broad enforcement authority to the ITC in remedying unfair trade acts. In the current case, however, the court has held that “article” within Section 337 does not include digital goods, even though “article” has been a general term including digital goods across judicial and agency rulings for goods in trade. The essence of the dissent’s argument is that “[d]igital goods are included in the tariff laws[.]” Id. at 1337 (Newman, J., dissenting). Just like physical goods, digital goods are imported, bought, and sold, and are subject to the same patent laws. The dissent’s opinion is based upon three arguments.

First, Section 337 does not differentiate between forms of goods, but instead focuses on whether the imported good infringes a patent, copyright, trademark, or design. The dissent believes the majority was in error because it is the first time the court has created a distinction between imports depending on the infringing goods’ carrier.

Second, the court’s holding conflicts with precedent. Several other courts’ precedential decisions have indicated that the Tariff Act was meant to provide broad protection to domestic industries from foreign goods.  The Supreme Court has urged that statutory law should be interpreted based upon technological changes to reflect the legislative purpose behind the statute. If technological change has rendered literal terms ambiguous, the statute must be interpreted according to its intended purpose. It is clear now that patent law covers digital goods and that digital goods may be imported, so there is no basis for finding that infringing digital goods are not covered by the Tariff Act if they are imported electronically.  Previous Federal Circuit and ITC cases illustrate a willingness to include digital goods as subject to the ITC’s jurisdiction. The dissent also argued that the court’s ruling conflicts with decisions of many other courts, agencies, and statutes, such as the Bureau of Customs and Border Protection, the Court of International Trade, the Department of Labor, the Arms Export Control Act, the Omnibus Trade and Competitiveness Act of 1988, and the Trade Priorities and Accountability Act of 2015. All of these entities and statutes have illustrated that digital products are “goods” or “articles” just as ordinary material goods are.

Third, the term “article” should not be limited to “classical technology,” based upon the above information. The dissent cited many authorities with several definitions of “article” to show that the term is generally intended to be broad. Such authorities include the Customs Court, now the Court of International Trade, the Court of Customs and Patent Appeals, Webster’s New International Dictionary, the Supreme Court, and the Dictionary of Tariff Information. In this case, the dissent argued that the ITC’s definition of “articles” as encompassing all “articles of commerce” was correct. Although digital goods did not exist at the inception of Section 337, there is no indication that Congress intended the section to exclude later-discovered technologies. Moreover, there is a general assumption that statutes are not meant to be confined to their particular time. The dissent further argued that the court wrongly based its definition of “articles” on selections from chosen dictionaries. The dissent analyzes thirty definitions of “article” from 1900-1930 and found that the “unifying theme of all the definitions is that ‘article’ refers to one of a class of things, and that the nature of the class is defined by context, not by the word ‘article.’” Id. at 1344. None of the modifying terms within Section 337 would merit eliminating digital goods from the statute. The dissent also argued that including in Section 337 authorization for cease-and-desist orders in 1975 does not suggest that digital goods should be excluded. Furthermore, the carrier of the import, or the form it is in, should not affect the meaning of Section 337 because the section does not differentiate between carriers. Lastly, if there remains any doubt within the Federal Circuit about the proper interpretation of Section 337, the court should have deferred to the ITC’s reasonable interpretation, as it has done in similar situations in the past.

For the above reasons, the dissent found that a rehearing en banc was appropriate.

Hicks v. MSPB
819 F.3d 1318 (Fed. Cir. 2016)
Authored by Jenny DaRin

Statement of Facts: In August 1989, the Air Force fired Ms. Hicks from her secretary position at the Maxwell Air Force Base in Alabama. The Air Force fired Ms. Hicks because she missed work after “fail[ing] to request leave in accordance with proper procedures.” Hicks v. MSPB, 819 F.3d 1318, 1319 (Fed. Cir. 2016). Ms. Hicks appealed the Air Force’s decision to fire her to the Merit Systems Protection Board (“MSPB”), which reversed the former organization’s decision, imposing a sixty day sentence instead. One year later, the Air Force fired Ms. Hicks again.

Procedural History: Ms. Hicks appealed the Air Force’s second decision to fire her to the MSPB, which upheld the former organization’s decision. One year later, Ms. Hicks sought appellate review of the disciplinary decision by the entire MSPB. Ms. Hicks’ “petition was dismissed as untimely.” Id. Ms. Hicks filed a subsequent appeal with the Federal Circuit. The court affirmed the MSPB’s decision because it failed to see how Ms. Hicks’ depression hindered her ability to file a timely appeal with the MSPB.

Twenty-three years later, Ms. Hicks submitted a complaint to the United States Office of Special Counsel (“Office of Special Counsel”), claiming that the Air Force fired her in retaliation for appealing its first disciplinary action. Two months after Ms. Hicks submitted her complaint, the Office of Special Counsel completed its probe into the Air Force’s purported retaliation, opting not to initiate an action against the Air Force. Ms. Hicks appealed the outcome of the Office of Special Counsel’s investigation to the MSPB pursuant to the Whistleblower Protection Enhancement Act of 2012 (the “WPEA”). The MSPB ultimately determined that while WPEA bars agencies from firing government employees in retaliation for appealing agency decisions, the statute should not be applied retroactively. Ms. Hicks appealed the MSPB’s decision to the Federal Circuit.

Question Presented: Did the MSPB properly refuse to retroactively apply WPEA to Ms. Hicks’ claim that the Air Force fired her in retaliation for appealing its previous disciplinary decision?

Holding: The Federal Circuit held that the MSPB properly refused to retroactively apply WPEA to Ms. Hicks’ claim that the Air Force fired her in retaliation for appealing its previous disciplinary action. Nonetheless, the Federal Circuit limited its decision to § 101(b)(1) of WPEA, declining to determine whether other provisions of the statute could properly be applied retroactively.

Reasoning: Courts presume statutes should not be applied retroactively absent a plain Congressional intent to the contrary. Here, the Federal Circuit determined that the pertinent provision did not indicate such an intent, noting that “Congress specifically provided . . . that WPEA would become effective . . . thirty days after it was signed into law.” Hicks, 819 F.3d at 1321. Although the Court acknowledged that WPEA’s legislative history “suggests that at least some of its provisions could apply retroactively to cover appeals pending on or after the Act’s effective date,” it asserted that this intimation could not alone indicate a plain Congressional intent to permit retroactive application of the provision at issue. Id. Lastly, the Federal Circuit noted that retroactive application of statutes is particularly disfavored, when such application would “increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.” Id. at 1322 (quoting Landgraf, 511 U.S. at 277) (internal quotation marks omitted) (citing Princess Cruises, Inc. v. United States, 397 F.3d 1358, 1366-67 (Fed. Cir. 2005)).

Here, retroactive application would “significantly increase the government’s potential liability for past conduct.” Id. Before Congress passed WPEA, the MSPB could contemplate whether a governmental organization fired an employee in retaliation for appealing a decision in a disciplinary action as an affirmative defense, but not as a distinct cause of action. Yet, if § 101(b)(1) was applied retroactively, individuals fired before the ratification of WPEA could now seek a remedy for the government’s retaliatory conduct. Thus, the retroactive application of § 101(b)(1) of WPEA would “significantly increase the government’s potential liability for past conduct.” Id. For the aforesaid reasons, the Federal Circuit held the MSPB properly refused to retroactively apply § 101(b)(1) of WPEA to Ms. Hicks’ claim. However, the court limited its holding against retroactive application of the WPEA to § 101(b)(1) recognizing that under Landgraf, “there is no special reason to think that all the diverse provisions of [an] Act must be treated uniformly” with respect to retroactivity. Hicks, 819 F.3d at 1323 (quoting 511 U.S. at 280) (internal quotation marks omitted).

Apple, Inc. v. Samsung Electronics Co., Ltd.
786 F.3d 983 (Fed. Cir. 2015)
Authored by David Bly

Statement of Facts: During the iPhone design development, Apple obtained several patents and trade dress protections. Apple held design patents involving elements of the iPhone’s front face, features extending to the outside frame of the phone, and graphical user interface and utility patents involving the iPhone’s “double-tapping” procedure, where a user can double tap the screen to enlarge and center an image. Apple also had a registered trade dress for the iPhone’s home screen, featuring sixteen distinct items and unregistered trade dress for physical design elements, such as evenly rounded corners, a flat clear surface, and a row of dots on the home screen that allows a user to toggle between a series of icons. Samsung developed and manufactured numerous smartphones that Apple alleged infringed Apple’s intellectual property and subsequently brought suit in the United States District Court, Northern District of California. This case is an appeal from that decision brought by Samsung.

Procedural History: In 2012, a jury in the district court ordered Samsung to pay over $1 billion in damages to Apple for repeated patent infringement and trade dress dilution. After the jury trial, the district court upheld the jury’s findings of patent infringement and trade dress dilution, as well as $639,403,248 in damages, but ordered a partial retrial of the remainder of damages because Samsung lacked notice of some of the patents. The jury in the partial retrial awarded $290,456,703 to Apple and Samsung subsequently appealed to the Federal Circuit. Since the Federal Circuit decided this case, the Supreme Court has granted certiorari to determine whether an award of an infringer’s profits should only be limited to those profits attributable to the component in question.

Questions Presented:

(1) Did the district court properly deny Samsung’s motion for a judgment as a matter of law that Apple’s unregistered trade dress is not protectable because it is functional?

(2) Did the district court properly deny Samsung’s motion for a judgment as a matter of law that Apple’s registered trade dress for iPhone’s icons is not protectable because it is functional?

(3) Did the district court commit prejudicial error warranting a new trial because it failed to exclude the functional aspects of the design patents in the jury instructions regarding infringement?

(4) Did the district court act within its discretion when it precluded Samsung’s testimony rebutting an allegation of copying?

(5) Did the district court properly find that Samsung failed to carry the burden of showing that claim of the “double-tap to zoom” patent is invalid for indefiniteness?

(6) Were the design patent infringement damages proper based on 29 U.S.C. § 289, which states that an infringer “shall be liable to the owner to the extent of his total profit[?]”

(7) Did the district court properly find that Apple’s expert testimony was sufficient evidence to justify reasonable royalty awards to Apple?

Holdings:

(1) No. Apple failed to meet its burden of proving that the unregistered trade dress for was not functional. Therefore, the district court improperly denied Samsung’s motion for judgment as a matter of law and the Federal Circuit reversed the district court’s decision.

(2) No. Apple failed to meet its burden of proving that the trade dress was not functional. Therefore, the district court improperly denied Samsung’s motion for judgment as a matter of law and the Federal Circuit reversed the district court’s decision.

(3) No. The district court’s failure to exclude the functional aspects of the design patents in its jury instructions was not prejudicial error warranting a new trial.

(4) Yes. The district court’s preclusion of Samsung’s testimony to rebut an allegation of copying was within its discretion. The Federal Circuit upheld the district court’s decision.

(5) Yes. The district court properly found that Samsung failed to carry its burden of showing that the claim regarding the “double-tapping” patent was invalid for indefiniteness. The Federal Circuit upheld the district court’s decision.

(6) Yes. The design patent infringement damages were proper based on 29 U.S.C. § 289, which states that an infringer “shall be liable to the owner to the extent of his total profit[.]” The Federal Circuit upheld the district court’s decision.

(7) Yes. The district court properly concluded that Apple’s expert provided sufficient evidence to justify royalty awards to Apple. The Federal Circuit upheld the district court’s decision.

Reasoning:

(1) The district court improperly denied Samsung’s motion for a judgment as a matter of law that Apple’s unregistered trade dress was not protectable because it was functional.

The jury found Samsung liable for dilution of Apple’s iPhone trade dresses under the Lanham Act. Because the action was brought within the Ninth Circuit, the Federal Circuit applied Ninth Circuit law to settle the issue of whether Apple’s unregistered trade dress was functional, and therefore not protected. In the Ninth Circuit, trade dress is defined as “the totality of elements in which a product or service is packaged or presented.” See Apple, Inc. v. Samsung Electronics Co., Ltd., 786 F.3d 983, 990 (Fed. Cir. 2015) (quoting Stephen W. Boney, Inc. v. Boney Servs., Inc., 127 F.3d 821, 828 (9^th Cir. 1997)). A trade dress exists to identify the product and is protected, but that protection is limited to the physical details and design considered “nonfunctional.” Id. at 991. In the Ninth Circuit, a product feature is considered “functional” if it has “some utilitarian advantage.” Id. The four factors used to analyze functionality are: “(1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design, and (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture.” Id. at 992 (citing Disc Golf Ass’n v. Champion Discs, Inc., 158, F.3d 1002, 1006 (9^th Cir. 1998)). The Federal Circuit evaluated Apple’s arguments under each of the Disc Golf factors and found there was insufficient evidence to find non-functionality under any factor.

The court found the first non-functionality factor, whether the design yields a utilitarian advantage, was not established. Apple’s argument that “the iPhone’s physical design did not contribute unusually . . . to the usability of the device” and that the unregistered trade dress was not developed for “superior performance” failed because those arguments do not address the Ninth Circuit’s standard that an unregistered trade dress must not serve any purpose besides identification. Id. Here, Apple’s arguments about unusual usability and superior performance failed to show the unregistered trade dress had no other purpose than identification. Thus, the Federal Circuit found the unregistered trade dress has a utilitarian advantage.

The court found the second non-functionality factor, whether alternative designs are available, was not established. Apple attempted to use alternative designs to the iPhone to show that alternative designs were available, but failed to demonstrate that these alternative designs had the same features of the trade dress at issue. The Federal Circuit found that Apple therefore failed to show non-functionality under the second factor.

The court found the third non-functionality factor, whether advertising touts the utilitarian advantages of the design was not met. Apple’s argument centered on its “product as hero” approach, which features the product itself as the primary focus of its advertisements. Id. at 993–94. The Federal Circuit rejected this argument, however, citing the demonstrations of how the user interface worked through demonstrations in commercials, thus touting the iPhone’s utilitarian advantage.

The court found the fourth non-functionality factor, whether the particular design results from a comparatively simple or inexpensive method of manufacture, was not established. Apple did not meet its burden of proof with its evidence demonstrating the iPhone was not relatively simple to manufacture. The Federal Circuit rejected Apple’s manufacturing challenges argument because the increased durability resulting from the manufacturing challenges were outside the scope of Apple’s claimed unregistered trade dress.

In total, Apple failed to meet all four of the Disc Golf factors and the Federal Circuit held no reasonable jury should have found that Apple’s unregistered trade dress was non-functional. Accordingly, the Federal Circuit reversed the district court’s decision to deny Samsung’s motion for judgment as a matter of law because Apple’s unregistered trade dress is functional, and therefore not protected.

(2) The district court improperly denied Samsung’s motion for a judgment as a matter of law that Apple’s registered trade dress for iPhone’s icons was not protectable because it was functional.

The other trade dress at issue concerned the iPhone home screen icons’ design details. This trade dress is a federally registered trademark, which provides prima facie evidence that the trade dress is not functional. The defendant, in this case, Samsung, has the burden of providing evidence of functionality, which then shifts back to the plaintiff, Apple.

Here, Samsung provided the prima facie evidence of non-functionality by pointing to individual elements that are functional. These elements include icons that signal certain functionalities, such as the icon depicting a map, a pin, and a road sign. Apple’s own user interface expert described these icons as visual shorthand. Because the trade dress is just an assembly of functional parts, Apple’s argument that Samsung’s separation of individual elements somehow negates the usability function of those elements failed.

With the burden shifting back to Apple, Apple failed to argue any of its points under the Disc Golf factors. The only two citations Apple made in regard to the Disc Golf factors include an “alternative design” and “advertising” argument that fall short. The other two factors are not even addressed. Apple failed to show substantial evidence in the record to find non-functionality. The Federal Circuit therefore reversed the district court’s denial of Samsung’s motion for judgment as a matter of law

(3) The district court did not commit prejudicial error in instructing the jury.

Samsung argued that the district court improperly failed to exclude in its jury instructions the functional aspects of the design patents for elements on the front face of the iPhone, design features on the bezel of the iPhone, and user interface. Samsung argues that the functional elements should be completely ignored from the scope of the design patent claim, but the Federal Circuit found that case law did not support Samsung’s position. Case law also did not support Samsung’s argument that any “structural” aspect should be removed from the scope of the claim. Id. Samsung’s alternatively argued that the jury should have been instructed to compare the “overall ornamental appearance” of Samsung phones instead of “the overall appearance.” Id. at 999. The Federal Circuit, however, found the absence of the word “ornamental” was not a prejudicial error warranting a new trial when considering the jury instructions as a whole.

Samsung also argued that the jury instruction stating that there was no need for actual deception as well as the instructions giving guidelines to consider prior art (i.e., Samsung’s older phone models) were erroneous. Samsung argued this because the jury then considered a lack of actual deception irrelevant, which in turn caused the jury to disregard the prior art. The Federal Circuit disagreed with Samsung’s assessment. The court found that the jury instructions merely clarified that proving actual deception was not required and were explicit that the jury must consider the prior art.

(4) The district court acted within its discretion by excluding testimony rebutting an allegation of copying.

Samsung sought to provide testimony about its development of the “F700” phone before the iPhone was released to rebut an allegation of copying. Samsung was previously precluded from introducing F700 evidence under Rule 37 of the Federal Rules of Civil procedure because it did not disclose the evidence during discovery. The witness did not design any of the devices at issue and did not know whether any of the devices in question were based on the F700. Therefore, the Federal Circuit found the district court acted within its discretion by finding the probative value of the testimony was outweighed by the possibility that the jury would consider it for a purpose prohibited under the Rule 37 sanction.

(5) The district court’s award of total profits for design patent infringement was appropriate.

The district court awarded Apple damages for the design patent infringement, ordering Samsung to pay the entire profits from its infringing phones. Samsung argued that rather than awarding the entirety of the profits, the damages should have been limited to the profit that can actually be attributed to the design patent infringement.

Section 289 of Title 35 of the United States Code provides that when a person or entity sells a product that infringes a design patent, the person or entity “shall be liable to the owner to the extent of his total profit[.]” Although the Federal Circuit acknowledges the policy argument that awarding a defendant’s entire profits for design patent infringement does not make sense in today’s world, the Federal Circuit held it is bound to the statute’s language.

Samsung argued that the profits awarded should only have considered those limited to the infringing component, but the Federal Circuit rejected Samsung’s argument citing a Second Circuit decision that “allowed an award of infringer’s profits from the patented design of a piano case but not from the sale of the entire piano.” Id at 1002. The Federal Circuit rejected this argument because that case contained a fact where the purchasers actually regarded the case and piano as distinct articles of manufacture, which was not the case with Samsung’s smartphones. Samsung’s argument ultimately could not overcome the express statutory language of 35 U.S.C. § 289, and therefore the Federal Circuit upheld the damage award for design patent infringement.

(6) The district court correctly found that Samsung failed to carry its burden in challenging the validity of the “double-tapping” patent for indefiniteness.

Users can double-tap iPhone screens, causing an image to be enlarged and “substantially centered.” Id. at 1002. Samsung challenged double-tapping infringement claim because the patent does not provide an “objective standard” for what it means to be “substantially centered.” Id. The Federal Circuit, however, found that the “objective standard” Samsung sought exceeded the definiteness requirements for valid patents. Id. Indefiniteness causes a patent to be invalid when the patent does not provide “skilled artisans” with reasonable certainty about the scope of the patent. Id. at 1003. Samsung was unable to point to evidence that skilled artisans would be reasonably uncertain about the meaning of “substantially centered.” Id. Apple, on the other hand, presented evidence showing that the same skilled artisans would interpret “substantially centered” to provide for small amounts of spacing to allow for other graphical elements. Id. The Federal Circuit therefore held that the district court correctly found Samsung did not carry its burden for challenging the double-tapping patent for indefiniteness.

(7) The district court properly found that Apple’s expert on damages provided sufficient evidence to support reasonable royalty awards.

On the retrial for damages, Apple’s expert testified both about damages for lost profits and damages in the form of reasonable royalties. Samsung argued that because Apple’s expert did not explain her analysis of the demand for reasonable royalties like she did for lost profits, there was insufficient evidence to support an award of reasonable royalties. The Federal Circuit, however, held that a reasonable jury could simply use the expert’s testimony on lost profits to consider a calculation on royalty rates, especially because she expressly testified that the demand factor for lost profits was a relevant consideration to determine a reasonable royalty. Therefore, The Federal Circuit upheld the jury’s reasonable royalty awards from the damages retrial.

Jiaxing Brother Fastener Co. v. United States
822 F.3d 1289 (Fed. Cir. 2016)
Authored by Michael M. Hart-Slattery

 

Statement of Facts: Appellants, Jiaxing Brother Fastener Co., Ltd., IFI & Morgan Ltd., and RMB Fasteners Ltd. (collectively “Jiaxing”), are affiliated Chinese producers and exporters of steel. In May of 2011, the U.S. Department of Commerce (“Commerce”) initiated an administrative review to determine whether less-than-fair value steel products from China materially injured the U.S. industry. Jiaxing was the subject of antidumping proceedings regarding the price of its steel threaded rod.

The Tariff Act directs Commerce to calculate a hypothetical normal value of a product in those circumstances in which a subject company manufactures a product in a nonmarket economy. The normal value is the price of the product produced in a comparable market economy: it is used to determine whether the nonmarket value is less-than-fair. To calculate the normal value of the subject company’s product, Commerce selects a surrogate country and uses data from that country in place of nonmarket data.

Commerce selects a comparable market economy by considering data quality and similarities in income. Under Federal Circuit precedent, Commerce has discretion to select one country over another if it decides there is better data available for the country it selects. See QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011) (holding that Commerce had discretion to select country data it deemed the best available data); see also Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378, 1386 (Fed. Cir. 2014) (noting that “Commerce generally selects, to the extent practicable, surrogate values that are publicly available, are product-specific, reflect a broad market average, and are contemporaneous with the period of review.”). Since 2007, Commerce has used the Gross National Income per capita (“GNI”), a measurement of per capita annual income, to compare incomes because the World Bank regularly compiles that information.

China is considered a nonmarket economy. For three decades, Commerce used India as a surrogate country when calculating normal values of Chinese products that were the subject of antidumping proceedings. At the initiation of Jiaxing’s antidumping proceedings, Indian GNI was $1,340 and Chinese GNI was $4,260.

Among seven countries considered to serve as a market economy of comparison, Commerce selected Thailand as the surrogate country in proceedings against Jiaxing. Commerce selected Thailand because the best information available related to steel threaded rod was from a Thai Company, Capital Engineering Network Public Company Limited (“CEN”), and because Thailand’s GNI was similar to that of China. CEN financial statements provided the best available data because they contained information on low carbon steel closely related to Jiaxing’s products. Thailand’s GNI was $4,210.

Jiaxing argued that the decision to select Thailand was erroneous for three reasons. First, Jiaxing argued that India should not have been excluded from consideration as a possible surrogate. Second, Jiaxing argued that because India had long been used as a surrogate, the decision to select Thailand was arbitrary and capricious. Third, Jiaxing argued that there was insufficient evidence to support selection of Thailand as the surrogate and that if India were not selected, the Philippines should have been selected instead.

For the last of these arguments, Jiaxing provided three sub-arguments. Jiaxing argued that Commerce should not have selected Thailand over the Philippines because (1) CEN was not an appropriate comparison; (2) that Commerce overestimated the value of steel by using Thai values which are higher than those in other countries; and (3) that Commerce erroneously favored Thai data on hydrochloric acid over similar data from the Philippines.

Procedural History: The U.S. Court of International Trade affirmed the decision of the U.S. Department of Commerce in antidumping proceedings to select a Thai company as the surrogate for the purpose of calculating the normal value of subject materials. Jiaxing subsequently appealed to the Federal Circuit.

Question Presented: Whether Commerce’s decision to use Thailand as a surrogate in calculating the normal value of steel threaded rod was permissible.

Holding: Judge Reyna, joined by Judges Chen and O’Malley, authored the Federal Circuit’s opinion. The court affirmed the decision of the U.S. Court of International Trade, holding that the decision of the U.S. Department of Commerce was in accordance with law, that it was not arbitrary or capricious, and that it was supported by substantial evidence.

Reasoning: The Federal Circuit held that the Tariff Act did not require Commerce to use a particular country as a surrogate in antidumping proceedings. Because Federal Circuit precedent permits Commerce discretion in selecting a surrogate and because Commerce provided reasoned analysis supported by substantial evidence, the court held that the exclusion of India from the selection process was permissible. For the same reasons, the court held that selecting Thailand as a surrogate was neither arbitrary nor capricious. Despite a long history of selecting India as surrogate, Commerce was not bound to continue selecting India as surrogate.

The Federal Circuit held that selecting Thailand over the Philippines as surrogate was reasonable and supported by substantial evidence. Selecting CEN was reasonable because the company derived a substantial amount of revenue from products similar to those produced by Jiaxing, the company was not receiving favorable tax benefits at the time in question, and because there was no evidence in the record that the company’s financial statements were erroneous. Commerce was permitted to select CEN despite higher costs for steel in Thailand than in the Philippines because evidence showed that Thai steel was superior to Philippine steel. Finally, the selection of Thai data on hydrochloric acid over Philippine data was permissible because the record showed that both data sets were equally usable and that the selection of Thai data was therefore supported by substantial evidence.

DOW Chemical Co. v. NOVA Chemicals Corp.,
809 F.3d 1223 (Fed. Cir. 2015) (denial of rehearing en banc)
Authored by Peter McDonald

Statement of Facts: This is a patent infringement case that The Dow Chemical Company against NOVA Chemicals Corporation and NOVA Chemicals, Inc. (collectively, “NOVA”) alleging infringement of United States Patent Nos. 5,847,053 (the “ ‘053 patent”) and 6,111,023 (the “ ‘023 patent”). The DOW Chemical Company is a multinational chemical corporation that provides chemical, plastic, and agricultural products and services to consumer markets that include food, transportation, health and medicine, personal care and construction. NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta whose products are used in a wide variety of applications, including food and electronics packaging, industrial materials, appliances, and a variety of consumer goods. NOVA Chemicals, Inc. is their American subsidiary incorporated in Delaware.

The asserted claims of both patents cover ethylene polymer compositions, which are a type of plastic with improved modulus, yield strength, impact strength, and tear strength. These polymers can be made into films that can be down-gauged, or made thinner, without losing strength. The patents at issue require “a slope of strain hardening coefficient greater than or equal to 1.3.” 803 F.3d 623, 624 (Fed. Cir. 2015). The patents expired on October 15, 2011.

Procedural History: The Dow Chemical Company filed suit against NOVA Chemicals Corp. alleging infringement of patent claims on October 21, 2005, in the United States District Court for the District of Delaware. NOVA claims that the patents are “indefinite” because they fail to teach a person skilled in the art how to measure the “slope of strain hardening” which is required to calculate the strain hardening coefficient. On June 15, 2010, a jury found that NOVA infringed the claims of the asserted patents and that the patents were not invalid for indefiniteness. The jury had been instructed that “if the meaning of the claims is discernible it is definite.” Id. at 625. NOVA appealed, arguing that the patents were invalid for indefiniteness. In 2012, the Federal Circuit held that the patents were not indefinite. On remand, the district court held a bench trial on supplemental damages for the period between January 1, 2010 and October 15, 2011, when the patents expired. On March 28, 2014, the district court granted supplemental damages to Dow in the form of lost profits and reasonable royalties. NOVA appealed the award of supplemental damages on April 23, 2014 to the Federal Circuit. Dow cross-appealed the denial of its request for enhanced damages on May 1, 2014.

While the appeals were pending, the Supreme Court decided Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014). In Nautilus, the Supreme Court announced a new standard for indefiniteness, stating that “a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” 134 S. Ct. at 2124. NOVA argued on appeal that the damages award should be vacated because the patents are invalid for indefiniteness in light of the Nautilus decision. Dow argued that the Federal Circuit was bound by its decision and NOVA’s claim is barred due to res judicata. The Federal Circuit panel reversed the award of supplemental damages on August 28, 2015, ruling that the patents at issue did not provide one skilled in the art with the scope of the invention and thus were invalid in light of Nautilus. The Federal Circuit explained that the Nautilus decision changed the law, thus supporting the determination that the change of law exception to the doctrine of res judicata permitted appellate courts to reconsider whether the patents were invalid for indefiniteness. Dow filed a combined petition for rehearing and rehearing en banc with the Federal Circuit.

Question Presented: Whether to grant petition for rehearing en banc.

Holding: The Federal Circuit denied the petition for rehearing en banc per curiam.

Concurring Opinion of Chief Judge Prost: Chief Judge Prost and Circuit Judges Dyk and Wallach concur in the denial of rehearing, writing separately to confirm that if a skilled person would choose an established method of measurement, it may be sufficient to defeat a claim of indefiniteness, even if that method is not explicitly stated in the patent itself.

Concurring Opinion of Judge Moore: In his concurring opinion in the denial for rehearing en banc, Judge Moore focused his opinion around answering two questions: (1) Can extrinsic evidence be relied upon when determining whether a patent’s specification is definite? (2) Did the panel’s decision alter or change the law relating to indefiniteness in regards to deference to findings of fact and burden of proof?

In denying Dow’s petition for rehearing, Judge Moore reiterated that the panel’s decision did not change the law regarding indefiniteness. While the ultimate question of indefiniteness is one of law, indefiniteness sometimes requires resolution of underlying questions of fact. Nautilus only changed the governing formulation of the substantive standard for indefiniteness, which in many cases requires factual inquiries into skilled artisans’ understanding. Appreciating what a skilled artisan knew at the time of the invention is pertinent to whether the claims are reasonably clear in their meaning and scope. A question about the state of the knowledge of a skilled artisan is a question of fact, likely necessitating extrinsic evidence to establish.

Judge Moore argued that the panel’s decision cannot change the Supreme Court’s ruling that factual findings that rely on extrinsic evidence must be given deference on appeal. He further explains that two post-Nautilus cases (Teva Pharmaceuticals USA v. Sandoz, Inc., 789 F.3d 1335 (Fed. Cir. 2015) and Interval Licensing LLC v. AOL, Inc., 766 F.3d 1364 (Fed. Cir. 2014)) both recognize that factual findings underlying an indefiniteness determination are reviewed for clear error. When the jury renders a general verdict on validity or indefiniteness, the Federal Circuit must presume all factual findings in support of the verdict.

Precedent also requires that the burden of proof for indefiniteness remain on the party challenging validity and it must be established by clear and convincing evidence. The burden of proving indefiniteness includes proving not only that multiple measurement techniques exist, but also that one of skill in the art would not know how to choose among them. Judge Moore pointed out that this has been the standard for over 30 years, and this decision cannot be understood to change that standard.

Judge Moore concluded that the panel’s decision did not change the law of indefiniteness in three key respects: (1) the panel opinion does not support the proposition that extrinsic evidence cannot be relied upon when determining whether a patent’s specification is sufficiently definite; (2) the panel’s opinion does not alter the Supreme Court or Federal Circuit precedent that factual findings made incident to the ultimate legal conclusion of indefiniteness receive deference on appeal; (3) the panel’s decision does not alter Supreme Court or Federal Circuit precedent that the burden of proving indefiniteness remains on the party challenging validity. On the basis of these conclusions, Judge Moore concurred with the decision that en banc action is not warranted in this case and the issues presented are not worth rehearing.

Dissenting Opinion of Judge O’Malley: Judge O’Malley, with whom Judge Reyna joins, dissented in the denial of the petition. While O’Malley agreed that the panel’s decision did not have sweeping effects on the law of indefiniteness, she believed that the panel should not have discussed indefiniteness at all due to lack of jurisdiction to render a judgment. Judge O’Malley argued that Federal Rules of Civil Procedure Rule 54(b) prohibited the panel from reaching to apply the later-decided Nautilus decision to the earlier final judgment on validity here. O’Malley believed that the only thing the panel should have reviewed on appeal is the measure of royalty owed post-verdict and pre-expiration of the patent. In her mind, the panel should have never reviewed de novo the validity of the patent or Dow’s entitlement to supplemental damages; those were established and affirmed as final.

Ramona Two Shields v. United States
820 F.3d 1324 (Fed. Cir. 2016)
Authored by Cem Islikci

Statement of Facts: The appellants Ms. Two Shields and Ms. Defender Wilson held interests in an Indian Allotment in Fort Berthold, located in North Dakota. Under the General Allotment Act of 1887 and the Indian Reorganization Act of 1934, the United States was the trustee of millions of acres of Indian allotment land, including the appellants’ land. Additionally, pursuant to the Fort Berthold Act of 1998, Fort Berthold allottees could not lease their oil-and-gas interests without the Secretary of State’s approval of the lease as “in the best interest of the Indian owners of the Indian Land”. Pub. L. No. 105-188, 122 Stat. 620 (1998) (“Fort Berthold Act”) (amending 25 U.S.C. § 396).

Between 2006 and 2009, a company named Dakota-3 acquired leases on thousands of acres of allotment land in Fort Berthold at below-market rate. In 2010, Dakota-3 made a $900 million profit on the sale of this land to the Williamson Companies. The appellants alleged that the Bureau of Indian Affairs (the “BIA”) knew that this deal was not in the best interest of the Indian landowners, but approved it nonetheless.

The claims and reasoning in Ramona Two Shield v. United States is heavily connected to another lawsuit named Cobell v. Salazar, No. 96-1285, 2011 WL10676927 (D.D.C. July 27, 2011). Cobell was filed on behalf of more than 300,000 Native Americans. The plaintiffs alleged that the Government had mishandled their Individual Indian Money accounts by not accounting “for billions of dollars relating to leases of allotment land for oil extractions and logging.” Ramona Two Shields v. United States, 820 F.3d 1324, 1327 (Fed. Cir. 2016). Eventually the lawsuit was settled and Congress ratified the result via the Claims Resolution Act of 2010, which funded the settlement with $3.4 billion. The settlement had an opt-out option, which the appellants in this suit have failed to exercise.

The complaint here included three counts. Count I alleged that BIA breached its fiduciary duty under the Fort Berthold Act because it failed to ensure that the leases were in the best interests of the Indian owners. Count II alleged that the Government breached a different type of fiduciary duty because it failed to disclose information relating to the Fort Berthold claims during the Cobell settlement proceedings. Finally, Count III alleged that the Claims Resolution Act of 2010 violated the Fifth Amendment because it was a legislative taking of their property interests in the claims of Counts I and II.

Procedural History: In 2013, Ramona Two Shield and Mary Louise Defender Wilson sued the Government for violating its obligations. On February 6, 2015, the Court of Federal Claims (“COFC”) released its opinion. The COFC held that the Government prevailed on all counts. It granted summary judgment on Count I because the appellants had failed to opt out of the settlement. The COFC dismissed Count II for lack of subject-matter jurisdiction because it found that there was no federal law that stated the specific fiduciary duty allegedly breached. Finally, the COFC dismissed Count III for failing to identify a cognizable property interest in the claims. Appellants appealed to the Federal Circuit on all three counts.

Questions Presented: (1) Count I: Did the Cobell settlement bar the appellants from asserting their Count I claim against the Government? (2) Count II: Under the Fort Berthold Act, during the Cobell Settlement proceedings, did the Government have a fiduciary duty to disclose information relating to the claims asserted? (3) Count III: Was the Claims Resolution Act of 2010 a taking of Counts I and II in violation of the Fifth Amendment?

Holdings: Affirmed on all counts. (1) On Count I, the Federal Circuit affirmed the COFC’s grant of summary judgment finding that the settlement barred the appellants from asserting their Count I Claim against the government. (2) On Count II, the Federal Circuit affirmed the COFC’s dismissal of the claim due to lack of subject matter jurisdiction because the Government did not have a fiduciary duty to disclose information relating to the claims asserted. (3) On Count III, the Federal Circuit affirmed the COFC’s dismissal of the claim because it found that even though the appellants had a cognizable property interest, they have forfeited their rights by not opting out of the settlement.

Reasoning: Count I: The appellants made four arguments, which the Federal Circuit addressed. First, the appellants argued that the settlement did not cover their claim. The Federal Circuit found that this assumption was wrong. Count I was a “land administration claim” that Cobbell settled because the settlement’s scope included known and unknown claims that have been or could have been asserted through the Record Date of September 30, 2009. The current claims satisfied this date requirement because, even though the sale to Williams Companies was after 2009, this sale was just the final link. These claims had accrued back when BIA first approved the below-market Dakota 3 leases in 2006, which was before the Record Date. Second, the appellants argued that the settlement’s payment schedule under-compensated the appellants and therefore did not cover the current claims. The Federal Circuit rejected this argument. It reasoned that the appellants accepted the under-compensated settlement offer by not opting out of the settlement when they had the chance.

Third, the appellants argued that the Government had failed to provide “full information” about appellant’s claims during the Cobell settlement. The Federal Circuit rejected this argument by finding that a general trust relationship between the United States and its beneficiary does not impose an information-disclosure requirement to the United States. Fourth, the appellants argued that the Cobell plaintiffs lacked standing to assert the appellants’ Count I claim because the alignment of interest and the injury in between the class representatives and the other class members were not exact. The Federal Circuit emphasized the fact that the alignment of injury does not necessarily have to be exact. It found that the Cobbell settlement covered the current claims because the class members in the two different lawsuits do not “implicate a significantly different set of concerns.” Gratz v. Bollinger, 539 U.S. 244, 265 (2003). The Federal Circuit also found that the fact that the named Cobell plaintiff’s oil-and-gas interests may have been tied to a different location or the fact that the Cobell complaint did not specifically reference the Fort Berthold Act is insufficient to implicate a different set of concerns. Lastly, the Court stated because the statute was clear on the matter, no extrinsic evidence was required.

Count II: The Federal Circuit made a Tucker Act inquiry and found that there was no subject-matter jurisdiction. Under both the Tucker Act, 28 U.S.C. § 1491, and the Indian Tucker Act, 28 U.S.C. § 1505, two obstacles must be cleared to have subject-matter jurisdiction. The tribe “must identify a substantive source of law that establishes specific fiduciary or other duties, and allege that the Government has failed faithfully to perform those duties.” United States v. Navajo Nation, 556 U.S. 287, 291 (2009) (quoting United States v. Navajo Nation, 537 U.S. 488, 490 (2003) (Navajo Nation I)). If the appellant can show this, then, the court must decide “whether the relevant source of substantive law can be fairly interpreted as a money-mandating.” Ramona Two Shields, 820 F.3d at 1332.

The Federal Circuit found that Count II failed at the first step of the test. “The United States is only subject to those fiduciary duties that it specifically accepts by statute or regulation.” Hopi Tribe v. United States, 782 F.3d 662, 667 (Fed. Cir. 2015). Because the statute in question, 25 U.S.C. § 396, did not impose a specific fiduciary duty to disclose litigation-related documents and because the appellants did not include any other source providing one, the Federal Circuit found that the COFC was correct to dismiss Count II based on lack of subject-matter jurisdiction.

Count III: Unlike the COFC, the Federal Circuit assumed that Counts I and II had cognizable property interests. Nevertheless, it dismissed the complaint because the appellants have chosen to forfeit their rights to bring claims against the Government, by not opting out of the Cobell settlement in time. “In other words, as the district court in that case put it, ‘[t]here is not a taking’ when ‘those affected are afforded a reasonable opportunity to bring suit.” Ramona Two Shields, 820 F.3d at 1334 (citing Littlewolf v. Hodel, 681 F. Supp. 929, 944 (D.D.C. 1988)).

SCA Hygiene Products v. First Quality Baby Products
807 F.3d 1311 (Fed. Cir. 2015)
Authored by Bailey Gallagher

Statement of Facts: SCA Hygiene Products (“SCA”) and First Quality Baby Products (“First Quality”) both manufacture adult incontinence products. SCA holds U.S. Patent No. 6,375,646 (“ ‘646 patent”) for its product. In an October 2003 letter to First Quality, SCA claimed that First Quality’s Prevail All NitesTM adult incontinence product infringed the ‘646 patent. In the letter, SCA requested that First Quality review the patent and either assure that it would cease manufacturing and selling Prevail All NitesTM, or explain why the product did not infringe the patent. First Quality responded to SCA’s letter in November 2003 asserting that U.S. Patent No. 5,415,649 (“ ‘649 patent”) invalidated the ‘646 patent because the two patents claimed the same diaper product and the ‘649 patent was filed earlier. First Quality argued that it could not be liable for infringing an invalid patent.

SCA did not respond to First Quality’s letter. Instead, SCA requested reexamination of the ‘646 patent in 2004 to ensure that it did not infringe on the ‘649 patent. It did not notify First Quality about the reexamination. In 2007, the U.S. Patent and Trademark Office (“USPTO”) confirmed the ‘646 patent’s validity on all original claims and issued several more claims that SCA added upon reexamination. Between 2006 and 2009, First Quality invested millions of dollars in its adult incontinence products. Although SCA was aware of First Quality’s activities, SCA did not notify First Quality of the reexamination or its results.

 Procedural History: SCA filed suit in the United States District Court for the Western District of Kentucky on August 2, 2010, three years after the reexamination of the ‘646 patent. First Quality asserted noninfringement, equitable estoppel, and laches defenses. With respect to laches, First Quality claimed that SCA’s delay in bringing the suit was inexcusable and that such a suit exposed the corporation to unreasonable harm. First Quality moved for partial summary judgment on its noninfringement defense and summary judgment on its laches and equitable estoppel defenses. The district court granted summary judgment of laches and equitable estoppel and dismissed the noninfringement motion as moot.

SCA appealed the district court’s decision to a panel of the Federal Circuit. In response to First Quality’s laches defense, SCA argued that in light of the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), laches was no longer a viable defense to patent infringement within the six-year damages recover period prescribed by 35 U.S.C. § 286. SCA asserted that Petrella, which held that laches is not a defense to a suit for copyright infringement brought within the Copyright Act’s statute of limitations, effectively overturns A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992), which upheld the availability of laches as a defense to a claim for patent infringement. On September 17, 2014, the panel affirmed the district court’s ruling on laches, but reversed the lower court’s opinion on equitable estoppel. The panel rejected SCA’s contention that the Supreme Court’s decision in Petrella eradicated laches as a defense to patent law claims. The Federal Circuit determined instead that its opinion in Aukerman controlled.

SCA filed a petition for rehearing en banc. SCA asked the court to reconsider Aukerman under Petrella’s precedent. The Federal Circuit granted SCA’s petition for rehearing on December 30, 2014.

Questions Presented:

(1) Taking into consideration the Supreme Court’s opinion in Petrella v. Metro-Goldwyn-Mayer, and the differences between copyright and patent law, should the Federal Circuit overturn its ruling in A.C. Aukerman Co. v. R.L. Chaides Construction Co., abolishing the defense of laches for claims based on patent infringement occurring within the six-year damages limitation under 35 U.S.C. § 286?

(2) Considering that there is no statute of limitations for patent infringement claims, should the defense of laches be available to bar an infringement suit for damages or injunctive relief?

Holdings:

(1) No. The Federal Court did not overturn its ruling in Aukerman. Laches remains a defense to bar legal relief on a patent law claim.

(2) Laches may be available to bar an infringement suit for both damages and injunctive relief. However, laches generally cannot bar an ongoing royalty unless the circumstances are extraordinary.

Reasoning: In answering the first question, the Federal Circuit looked to 35 U.S.C. § 286. The court determined § 286 to be a damages limitation rather than a statute of limitations. While the provision precludes recovery for an infringement committed more than six years before the plaintiff filed a complaint, it does not preclude bringing a claim. However, the court concluded that patent law is a continuous tort. Thus, there is little difference between a damages limitation and a statute of limitations. Therefore, the Supreme Court’s analysis of the copyright statute of limitations in Petrella applied to an analysis of § 286.

The court looked to Congress’s intent with respect to 35 U.S.C. § 282(b)(1), concluding that the statute codified a laches defense. Specifically, the court reasoned that Congress intended 1952 Patent Act to have a broad reach, codifying defenses that had been historically available, including equitable defenses such as laches.

Upon determining that § 282 codified a laches defense, the court explored whether laches as codified in the Patent Act barred recovery of legal relief, or if it is only a defense against equitable relief. The court concluded that when Congress incorporated laches in § 282, it intended to adopt patent common law as it existed at that time, including laches under common law. The court looked to pre-1952 case law to determine whether patent common law before the 1952 Patent Act applied laches to bar legal relief, or whether the case law suggested that laches was only available to bar equitable relief. After an examination of relevant case law, the Federal Circuit ruled that laches was available to bar legal relief, in addition to equitable relief, before the 1952 Patent Act.

The court distinguished Petrella from the facts in the present case. While Petrella eliminated laches to bar relief on a copyright claim because Congress had codified a statute of limitations for copyright actions, thereby “[speaking] on the timeliness of copyright infringement claims,” Congress had enacted no such statute of limitations applicable to patent law complaints. SCA Hygiene Prods. v. First Quality Baby Prods., 807 F.3d 1311, 1329 (Fed. Cir. 2015). The court explained that laches, as a common law defense, is “gap-filling, not legislation-overriding.” Id. Under this reasoning, and in light of the § 286 damages limitation and the § 282 laches defense, the court upheld laches as a defense to legal relief in patent law.

The court answered the second question in two parts, exploring “whether laches [could] bar permanent injunctive relief and whether it [could] bar an ongoing royalty for continuing infringing acts.” Id. at 1331. The court looked to eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), to answer the first inquiry. eBay’s four factor test guides courts’ equitable discretion, providing them with standards for granting injunctions on patent infringements. The test requires that a plaintiff demonstrate: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” First Quality, 807 F.3d at 1331. The Federal Circuit held that laches fit within eBay’s framework, conforming to the Supreme Court’s four factor test.

The court rejected Auckerman’s bright-line rule, holding that laches could in some circumstances bar permanent injunctive relief. It recognized that injunctive relief is inappropriate in some cases. If a patentee cannot prove that the “equities favor an injunction,” ongoing royalties may be the appropriate type of relief. Id. at 1332–33. The court ruled that “a patentee guilty of laches typically does not surrender its right to an ongoing royalty,” concluding that although laches could bar permanent injunctive relief, the defense generally could not bar royalties. Id. at 1333. In sum, the court reasoned that the defense of laches was available to First Quality and that although the defense could bar damages and injunctive relief, laches could probably not bar ongoing royalties paid to SCA for patent infringement.

Opinion Concurring-In-Part and Dissenting-In-Part: Judge Hughes, joined by Judges Moore, Wallach, Taranto, and Chen, dissented with the majority’s ruling on the first issue. The dissent disagreed with the majority’s analysis of pre-1952 case law. It argued that a look at Supreme Court common-law principles prior to 1952 disproved the majority’s conclusion that Congress explicitly recognized laches a defense to legal damages in the Patent Act of 1952. According to the dissent, “in 1952, the Supreme Court had already recognized the common-law principle that laches cannot bar a claim for legal damages,” reasoning that there was “no precedent for inferring a congressional departure from a common-law principle recognized by the highest court based solely on aberrational lower-court decisions.” Id. at 1333.

The dissent reasoned that under Petrella, § 286 of the Patent Act eliminated laches as a defense to patent infringement. It regarded § 286 to be a statutory limitations period similar to the statute of limitations in the Copyright Act. Just as the Petrella Court determined that the “statutory limitations period itself takes account of delay,” so too does § 286. Id. at 1334. Under Petrella, courts can therefore not enforce the doctrine of laches to “further regulate the timeliness of a claim.” Id. Under the dissent’s reasoning, laches was not available to First Quality as a defense against SCA’s infringement claim. SCA should be free to bring suit against First Quality because SCA filed its complaint within § 286’s statutory limitations period. The dissent concurred with the majority’s reasoning on the second issue regarding whether laches can bar an ongoing royalty, but did not explicitly weigh-in on its analysis of this question.