Author: FCBJ

In re Cuozzo Speed Technologies, LLC
793 F.3d 1268 (Fed. Cir. 2015)
Authored by Iran Garcia Domenech

Statement of Facts: Cuozzo Speed Technologies (“Cuozzo”) is the assignee of a patent issued on August 17, 2004, entitled “Speed Limit Indicator and Method for Displaying Speed and the Relevant Speed Limit.” In re Cuozzo Speed Technologies, 793 F.3d 1268, 1271 (Fed. Cir. 2015). The patent “discloses an interface which displays a vehicle’s current speed as well as the speed limit” by using a global position system (“GPS”) to track the vehicle’s current location and identify the speed limit at that location. Id. The system discloses the speed limit by displaying speeds above the legal speed limit as red and speeds below the speed limit as white.

Procedural History: On September 16, 2012, Garmin International, Inc. and Garmin USA, Inc. (collectively “Garmin”) filed a petition with the United States Patent and Trademark Office (“USPTO”) for inter partes review (“IPR”) of claims 10, 14, and 17 of Cuozzo’s August 17, 2004 ‘074 patent. Garmin contended that claim 10 was invalid as anticipated under 35 U.S.C. § 102(e) and that claims 10, 14, and 17 were obvious under 35 U.S.C. § 103(a). The USPTO granted IPR and determined that there was a reasonable likelihood that all three claims were obvious under § 103(a) over 5 different patents, US Patent No. 6,633,811 (“Aumeyer”), 3, 980,041 (“Evans”), 2,711,153 (“Wendt”), 6,515,596 (“Awada”), and German Patent No. 197 55 470 (“Tegethoff”). In its final decision, the Patent Trial and Appeals Board (“PTAB”) stated that an “appropriate construction of the term ‘integrally attached’ in independent claim 10 is central to the patentability analysis of claims 10, 14, and 17.” Id. (internal citations omitted). The PTAB applied the “broadest reasonable interpretation standard” and defined the term “integrally attached” as “discrete parts physically joined together as a unit without each part losing its own separate identity.” Id. (internal citations omitted). The PTAB found claims 10, 14, and 17 were unpatentable as obvious under 35 U.S.C. § 103(1) over Aumayer, Evans, Wendt, Awada, and Tegenthoff. The PTAB also denied Cuozzo’s motion to amend the patent by replacing the three claims with substitute claims, 21, 22, and 23. The PTAB denied the motion to amend based on proposed claim 21 because “substitute claim 21 lacked descriptive written description support as required by 35 U.S.C. § 112,” and the substitute claims would “improperly enlarge the scope of the claims as construed by the [PTAB].” Id. at 1272. Cuozzo appealed, the USPTO intervened, and the Federal Circuit granted Garmin’s motion to withdraw as appellee.

Questions Presented:

(1) Did the USPTO properly institute IPR on claims 10 and 14 when it relied on prior art that Garmin did not identify in its petition as grounds for IPR as to those two claims?

(2) Can a party seek a writ of mandamus to challenge a USPTO’s decision to grant a petition to institute IPR after the PTAB’s final decision in situations where the USPTO has “clearly and indisputably exceeded its authority?”

(3) Did the PTAB wrongly apply the “broadest reasonable interpretation standard” in claim construction when it found the claims “obvious?”

(4) Did the PTAB properly construe the claims under the broadest reasonable interpretation standard?

(5) Did the PTAB correctly hold that claims 10, 14, and 17 were obvious?

(6) Did the PTAB properly deny Cuozzo’s motion for leave to amend and substitute claim with a substitute claim 21?

Holding:

(1) Yes. The USPTO properly instituted IPR, even though its decision to implement such review might have been flawed.

(2) Yes. Mandamus may be available to a challenging party.

(3) No. Congress approved the broadest reasonable interpretation standard in the American Invents Act (“AIA”). Additionally, 35 U.S.C. § 316 provides authority to the USPTO to adopt the standard in a regulation.

(4) Yes. The Federal Circuit panel saw no error in the PTAB’s interpretation of the broadest reasonable interpretation standard.

(5) Yes. The PTAB correctly held that all three claims were obvious.

(6) Yes. The PTAB properly denied Cuozzo’s motion for leave to amend.

Reasoning:

First, the Federal Circuit held that 35 U.S.C. § 314(d) prohibits review of a decision to institute IPR even after a final decision. Id. at 1273. The statutory provision excludes all review of the USPTO’s decision to institute IPR. That Garmin’s IPR petition could have been defective is irrelevant because a proper petition could have been drafted. Thus, there was no bar to finding claims 10 and 14 unpatentable based on the references not cited in the petition.

Regarding the second question presented, the Federal Circuit stated that three conditions must be satisfied to issue a writ of mandamus. Id. at 1274-75. First, parties seeking a writ of mandamus must have no other adequate means to attain the relief they desire. Second, the petitioning parties must satisfy the burden of showing that their right to issuance of the writ is clear and indisputable. Third, the issuing court must be satisfied that the writ is appropriate under the circumstances. Here, the situation does not satisfy the “clear-and-indisputable” requirement for mandamus because the grounds that would invalidate claim 17 would invalidate both claims 10 and 14, thus Garmin implicitly asserted that claims 10 and 14 were unpatentable when it asserted that claim 17 was unpatentable.

Third, the AIA does not bar the USPTO or the PTAB from utilizing the broadest reasonable interpretation standard in claim construction. There is no indication that Congress designed the AIA to change the claim construction standard that the USPTO has used for over a hundred years. Additionally, in 35 U.S.C. § 316, Congress provided authority to the USPTO to adopt the broadest reasonable interpretation standard. 35 U.S.C. § 316(a)(2) provides that the USPTO shall establish regulations ‘‘setting forth the standards for the showing of sufficient grounds to institute a review.’’ Id. at 1278. The Federal Circuit applied the Chevron two-step test to determine whether Congress authorized the USPTO to prescribe regulations. The Chevron test determines what standard of review should be applied by a court to a government agency’s own reading of a statute that it is charged with administering. Under Chevron, the first question is whether Congress has directly spoken to the precise question at issue. Chevron, U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984). If the statute is found to be ambiguous, the second question is “whether the agency’s interpretation is based on a permissible construction of the statutory language at issue.” Id. Because 35 U.S.C. § 316 is ambiguous as to whether it approved the broadest reasonable interpretation standard, step one is satisfied. In re Cuozzo, at 1279. The second step of the Chevron test is satisfied because the USPTO’s interpretation of 35 U.S.C. § 316 is based on “a permissible construction of the statutory language.” Id. § 316’s language covers the action that the USPTO took because it is not a “sharp departure from historical practice.” Id. The USPTO provided a uniform approach that must be followed by administrative patent judges when deciding IPR proceedings.

Fourth, the Federal Circuit found that the PTAB was reasonable in interpreting “integrally attached” as included in Claim 10 as “‘discrete parts physically joined together as a unit without each part losing its own separate identity.” Id. at 1280. The specifications’ language supported the PTAB’s construction that the speedometer and speed limit are independent.

Fifth, the Federal Circuit held that Claim 10, 14, and 17 are obvious over Aumayer, Evans, and Wendt, because, in combination, the patents present a speedometer that “displays the speed limit for the current location of a vehicle as determined by a GPS receiver,” the same object that Cuozzo had in its ‘074 patent. Id. at 1282.

Finally, the PTAB found that Cuozzo’s substitute claims would enlarge the scope of the patent. Id. 35 U.S.C. § 316 and USPTO regulation 37 C.F.R. § 42.221(a)(2)(ii) bar amendments that would broaden the scope of the claims. When facing this question, the Federal Circuit has applied the following test: “a claim is broader in scope than the original claims if it contains within its scope any conceivable apparatus or process which would not have infringed the original patent.” Id. at 1283. Claim 21 was broadening because it encompasses a single LCD unit, wherein the speedometer and the colored display in issue are LCDs, which was not a part of the original claims.

Dissenting Opinion: Judge Pauline Newman dissented because she found that the majority’s rulings were contrary to the AIA. Judge Newman stated that one of the purposes of the AIA was for the PTAB to serve as a surrogate for district court litigation of patent validity. Judge Newman found that the panel majority’s decision precludes the PTAB from achieving “adjudication of patent validity comparable to that of the district courts, where validity is determined on the legally correct claim construction” and, thus, diminishing the role of the USPTO as “a reliable arbiter of patent viability.” Id. The panel’s decision goes against the AIA’s intention of invigorating and incentivizing the role of patents, by providing a faster, cheaper, and reliable determination of the validity of issued patents.

The dissent goes even further by finding that Congress, when it passed the AIA, intended the USPTO and the PTAB determine validity of claims under the legally correct, or proper meaning, claim construction standard. Here, the dissent argues that the USPTO changed the applicable statutes and determined its own test for how claims of issued patents are to be construed by using the broadest meaning claim construction standard. By deferring to the USPTO’s interpretation of its statutory authority, the majority allowed the USPTO to depart from the purpose of the AIA to create a surrogate for district court litigation, and allowed it to create regulations that do not serve the statute’s language and purpose.

Additionally, the dissent argued that review of the USPTO’s decision to institute IPR is not barred when material aspects that were decided in connection with the petition are in question. Judicial review of a final agency action cannot be barred unless there is a persuasive reason to believe that that was the purpose of Congress when it passed the applicable statute. Here, 35 U.S.C. § 314 does not preclude judicial review of whether the statute was applied in accordance with its legislated scope.

Subsequent History: After the panel’s decision, Cuozzo filed a petition for a Rehearing En Banc in the Federal Circuit. The Federal Circuit denied the petition. Of the eleven members of the Federal Circuit, five joined in dissenting from the Court’s denial of the petition. The dissenting judges argued in favor of eliminating the broadest reasonable interpretation standard in IPR proceedings because these proceedings are substitutes for district court litigation, thus the claim construction standard should apply and the right to amend in IPR proceedings is limited. The concurring judges found no reason for overturning the “longstanding practice” of applying the broadest reasonable interpretation standard in USPTO proceedings, and found nothing in the AIA to indicate congressional intent to change the standard.

Promega Corp. v. Life Technologies Corp.
773 F.3d 1338 (Fed. Cir. 2014)
Authored by Kevin Sipe

Statement of Facts: This case centers on Promega Corporation’s (“Promega”) ownership of five patents relating to the multiplex amplification of STR (short tandem repeats) loci. An STR locus occurs when a set of nucleotides (adenine, guanine, thymine, or cytosine) is repeated multiple times in a single region of a DNA strand. A string of two guanines followed by a thymine would be an STR locus if that exact strand were repeated. It may be useful to think of an STR locus as a randomly generated social security number—the more nucleotides that are studied in one strand, the more likely that the strand is utterly unique to that individual. Next, multiplex amplification is the process of making copies of a locus in order to create a detectable amount of DNA for further study. Notably, Promega owned four of the patents outright, while Promega exclusively licensed the fifth patent (“the Tautz patent”).

STR profiling is an important method of finding a DNA “fingerprint.” An individual may have a specific sequence of nucleotides that is unique to that person. This DNA “fingerprint” is thus useful for law enforcement agencies, as well as other scientific fields. Multiplex amplifications are generally better than monoplex amplifications, as multiple STR loci can be amplified simultaneously, quickly creating the required number of loci necessary for a sizeable sample. However, multiplex amplification is significantly more complicated because the loci have to be selected very carefully. If any locus overlaps with another locus, it can interfere with the entire process.

Life Technologies Corporation (“LifeTech”) manufactured DNA testing kits that law enforcement agencies use for forensic identification. Applied Biosystems (“Biosystems”) entered into a non-exclusive cross license agreement with Promega that allowed Biosystems to use the Promega patents to aid law enforcement in legal proceedings. Biosystems was a wholly owned subsidiary of LifeTech.

Procedural History: In 2010, Promega sued LifeTech and Biosystems in the Western District of Wisconsin for infringing on the Promega and Tautz patents, alleging that LifeTech had abridged the 2006 Cross License by selling STR testing kits in a manner that violated the agreement. Promega argued that the STR testing kits sold for research rather than law enforcement violated their patents. LifeTech responded that it was indeed licensed to sell STR testing kits for research and counterclaimed that Promega’s patent claims were invalid.

After both parties moved for summary judgment, the district court ruled that LifeTech’s sale of STR kits for purposes other than law enforcement infringed upon the patents, adopting a very narrow reading of the license that limited the use to forensic investigations conducted by police officers. Thus, any sale by LifeTech outside of this specific field constituted infringement.

The case went to a jury for an assessment of damages, and the jury awarded Promega $52 million in lost profits—10% of the gross sales of LifeTech that involved Promega’s patents. The instructions given to the jury were to find the total dollar amount of sales that were outside of the narrow scope of forensic investigations. The ultimate verdict was willful infringement upon the patents.

After the jury verdict, LifeTech moved for judgment as a matter of law (“JMOL”), claiming that Promega failed to adequately prove damages. The district court granted LifeTech’s JMOL and vacated the prior finding of infringement.

Both parties appealed the ruling. Promega’s appeal focused on the JMOL and the district court’s vacatur of the jury’s verdict and damage award. LifeTech appealed two aspects of the decision. First, LifeTech appealed the ruling that Promega’s patents were nonobvious and enabled. Second, they challenged the finding that it infringed upon the patents by selling testing kits to non-law enforcement entities.

Questions Presented: (1) Whether Promega’s four patents (not including the Tautz patent) are enabled and obvious. (2) Whether the district court’s finding that LifeTech is not licensed to use the Promega patents and the Tautz patent for practices other than law enforcement is valid.

Holding: (1) The Federal Circuit reversed the district court’s position, finding that Promega’s patents were not enabled and (2) upheld the district court’s judgment that the 2006 Cross License prohibited the use of the Tautz patent for practices other than law enforcement.

Reasoning: The district court read the four Promega patents (not including the Tautz patent) broadly, finding that even if the patented locus was merely a single link in a long DNA chain, the patent was still enabled. The enablement requirement is defined in 35 U.S.C. § 112, which states the written description must be clear enough as to “enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.”

A. The Skilled Artisan

While the Federal Circuit admits that the DNA industry is unpredictable, it found that an STR locus in a long DNA strain was merely a singular component of the strain, rather than such a comprehensive element as to cover the entire strain. Thus, the Promega patent did not enable a skilled artisan to “practice the full breadth of this claim scope without undue experimentation.” Promega Corp. v. Life Technologies Corp., 773 F.3d 1338, 1350 (Fed. Cir. 2014). The Federal Circuit relied on a bevy of precedent to reach this point.

In Magsil Corp. v. Hitachi Global Storage Techs Inc., 687 F.3d 1377 (Fed. Cir. 2012), the Federal Circuit held that there needed to be at least a significant change of resistance in computer hard drive disks in order to evade potential patent liability. Without such a standard, patent claimants would assert their rights even if the change in resistance was very significant. The Federal Circuit mirrored this precedent by not drawing a brightline as to where exactly Promega’s claims are enabled. Instead, the court found that it was sufficient to generally conclude that a skilled artisan could not identify the sets of STR loci due to their large size and complexity.

In Wyeth & Cordis Corp. v. Abbott Labs., 720 F.3d 1380 (Fed. Cir. 2013), the patent-in-question was for a drug compound with very specific properties and structures. However, the patentee attempted to claim thousands of others compounds not disclosed by the patent. The Federal Circuit found that a skilled artisan would not be able to determine whether any given drug compound produced the desired effects without an incredibly intensive testing process. Therefore, the patent did not include all of the claimed compounds within the scope. The court used the precedent here by claiming that the cases are very similar. Promega was attempting to expand its patent to a wide swath of particular DNA combinations. However, it would require a skilled artisan to use incredibly difficult tests to determine if the DNA combinations would produce anything useful to identification.

Certainly, a small amount of experimentation would still lead to a patent extending to previously unspecified areas. But it is the unique aspects of the experimentation that concern the Federal Circuit. In Johns Hopkins Univ. v. CellPro, Inc., the Federal Circuit found that even a large amount of experimentation was reasonable, so long as it is “merely routine” or the patent “provides a reasonable amount of guidance” regarding the direction of experimentation. 152 F.3d 1342, 1360-61 (Fed. Cir. 1998). The Federal Circuit determined here that significant experimentation would be necessary to enable the full scope of coverage—experimentation that did not have sufficient guidance from the patent itself.

The four Promega patents were considered invalid for lack of enablement. The patents did not enable a skilled artisan to practice without undue experimentation. The denial of LifeTech’s motion for summary judgment was reversed. Because the four Promega patents were considered invalid for lack of enablement, the district court needed to only consider the Tautz patent for infringement.

 B. Inducement

A party can infringe upon a patent based on activity that does not occur within the United States. 35 U.S.C. § 271(f)(1) states, “[w]hoever [actively induces] the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.” This is known as “inducement.”

The inducement question comes down to whether or not the “actively induce the combination” prong required only the intent to cause the patent to be infringed outside the United States or the involvement of a particular third party. The Federal Circuit held that no third party was required.

First, the court relied on definitions of the word “induce” to prove that the word “induce” alone is not sufficient to imply a third party. If the drafters of the law wanted third parties to be included, they could have used a phrase like “induce another.”

Second, the third party requirement did not show up in the legislative history of the amendment. “In order to be liable as an infringer under paragraph (f)(1), one must supply or cause to be supplied ‘all or a substantial portion’ of the components in a manner that would infringe the patent if such combination occurred within the United States.” Section-by-Section Analysis: Patent Law Amendments of 1984, 130 Cong. Rec. 28,069 (1984).

Third, the adoption of § 271(f) was to avoid this very loophole. In Deepsouth Packing Co. v. Laitram Corp., the Supreme Court was faced with a similar fact pattern in the field of shrimp deveining. The Court found that because a shrimp deveining machine was exported with the elements unassembled, it did not count as infringement if a foreign party then assembled the elements together. § 271(f) was passed to close this exact loophole.

LifeTech argued that Global-Tech Appliances, Inc. v. SEB SA required a third party based on the Supreme Court’s interpretation of the phrase “actively induces infringement.” 35 U.S.C. § 271(b). The Federal Circuit distinguished Global-Tech due to § 271(b)’s lack of strict liability.

 C. Substantial Portion of the Components

The difference between the Promega patents and the Tautz patent was small, but significant. The Tautz patent included a claim for Taq polymerase, an enzyme that enables a critical function of DNA testing. Without the Taq polymerase, a DNA testing kit would be next to useless.

The district court held that a single component of an invention could never satisfy the “substantial portion of the components test” propagated in 35 U.S.C. § 271(f)(1). LifeTech argued that the reference to components in the plural indicated that multiple components must be offered outside of the United States. The Federal Circuit rejected this argument.

First, the Federal Circuit replied with the Dictionary Act, which states, “words importing the plural [can] include the singular.” 1 U.S.C. § 1. Second, the Federal Circuit used grammatical structure. If Congress wished to make clear that a singular component was insufficient, they could have used a phrase like “all or a substantial portion of the components.” Third, the Federal Circuit moves to the very next subsection, arguing that § 271(f)(2) is designed for cases where a singular component is all that is necessary to violate the patent structure and is thus distinguished from § 271(f)(1). Fourth, the Supreme Court had already answered this question in Microsoft v. AT&T Corp., where the Court held that § 271(f) could apply to the export of a single component.

In this case, the component was the Taq polymerase covered by the Tautz patent. LifeTech constructed components of DNA testing kits in the United States, including the Taq polymerase. After assembly in the United Kingdom, LifeTech subsequently sold those DNA testing kits to industries other than law enforcement. The Federal Circuit held that this was in violation of the Tautz patent. The court found the Taq polymerase to be the compelling factor. Because the kit would be useless without the Taq polymerase, the Taq polymerase was such a significant component that the Tautz patent extended to cover those kits.

LifeTech argued that the research, education, and training clause from the patent meant that it could also be sold to universities. The Federal Circuit disregarded this argument, holding that this clause was clearly meant to apply specifically to the research, education and training as it applied to police officers.

The kits were ultimately assembled in the United Kingdom, which may have helped LifeTech escape liability. However, the Federal Circuit found compelling evidence that LifeTech induced its subsidiary in the United Kingdom to produce the kits in violation of U.S. patent law. The court thus found that there was sufficient evidence to support the jury’s finding that LifeTech was liable for patent infringement.

Dissenting Opinion: Chief Judge Prost’s dissented only to Section II(c) of the majority decision (regarding inducement). The dissent argued that, because the U.K. subsidiary was wholly owned, it was impossible for LifeTech to induce itself to manufacture DNA testing kits. First, the Supreme Court had held in the past that “induce” implicitly meant “induce another” in Global-Tech Appliances Inc. v. SEB SA. Second, the dissent joined with the concurrence in doubting the veracity of the legislative history. While it is possible that Congress intended the result in this case, it was impossible to know for sure. Third, the dissent argued that the majority’s reading of Deepsouth Packing Co. v. Laitram Corp. was too broad, as the justices in that case were very careful to issue a narrow decision. Fourth, the dissent believed that Microsoft Corp. v. AT&T Corp. admitted that while Congress could not possibly address all permutations and loopholes, judicial reservation was key in the field of extraterritorial liability.

Additionally, while the majority believed that it would be illogical to allow a company to do overseas what it cannot do in the United States, the dissent claimed that the statutory language on that specific section is ambiguous enough to make Congressional intent opaque.

Wi-LAN USA, Inc. v. Apple Inc.
830 F.3d 1347 (Fed. Cir. 2016)
Authored by Bud Davis

Statement of Facts: In this infringement action, appellants Wi-LAN, Inc. and Wi-LAN USA, Inc. (“Wi-LAN”) claimed that Apple’s iPhone operating on a 4G LTE network infringed on two of Wi-LAN’s patents, Nos. 8,311,040 (“the ‘040 patent”) and 8,315,640 (“the ‘640 patent”). The patents, which Wi-LAN had previously purchased from a networking company named Ensemble, modified a typical wireless network by introducing intermediary nodes between the base station, such as a cellular tower, and user devices, such as the iPhone. In essence, the intermediary nodes function to increase a network’s overall efficiency. The ‘040 patent converts and reformats data packets received from users into a single, uniform format for easier transmission to the base station. The ‘640 patent allocates uplink bandwidth to ensure that quality-of-service (“QoS”) needs are met within the network.

Wi-LAN alleged that the patented intermediary nodes “mapped onto” the iPhone’s baseband processor, which manages communication with the 4G network. Under Wi-LAN’s theory of infringement, a user device “maps onto” the phone’s application processor, which runs the phone’s applications. Accordingly, Wi-LAN contended that Apple’s network architecture made use of its patented inventions.

Procedural History: Wi-LAN filed suit against Apple Inc. in the United States District Court for the Southern District of California. During the claim construction phase of litigation, the District Court construed several terms, including “specified connection” in the ‘040 patent and “UL connections” in the ‘640 patent. After discovery concluded, Apple moved for summary judgment based on its proposed constructions of “specific connection” and “UL connections.” Apple defined the former as “the communications link between an intermediary node and a specific end user,” id. at *4, and defined the latter as “an uplink connection between the intermediary node and its user[.]” Id. Essentially, as Apple argued, the iPhone’s broadband processor did not function as an intermediary node, and its application processor did not operate as a user device. Therefore, contrary to Wi-LAN’s claims, the iPhone contains one connection, rather than multiple, between an intermediary node and user device.

The District Court agreed with Apple’s constructions and granted Apple summary judgment for noninfringement. Wi-LAN moved for reconsideration, presenting a new infringement theory and new constructions of the two terms, which the District Court denied. Wi-LAN then appealed to the Federal Circuit, claiming that the District Court erroneously granted summary judgment by misconstruing the two terms. Apple also asserted on appeal that waiver barred Wi-LAN from changing its interpretation of “UL connection” as it did on its motion for reconsideration.

Questions Presented: There were three issues before the Federal Circuit. First, whether “specified connection” under the ‘040 patent excludes embodiments where the intermediary node can maintain only one “specified connection,” rather than multiple. Second, whether District Court abused its discretion in allowing Wi-LAN to change its claim construction position on “UL connections” after it had lost on summary judgment. Third, whether “UL connections” under the ‘640 patent refers to multiple connections between an intermediary node and a user device, rather than a connection between an intermediary node and a base station.

Holdings: As to the first issue, the Federal Circuit affirmed the District Court’s construction of “specified connection” under the ‘040 patent as excluding embodiments where an intermediary node maintains only one specified connection. The court found that the specification’s “consistent references to multiple ‘specific connections’” and the related claims’ discussion of allocating bandwidth favored Apple’s construction. The Federal Circuit therefore affirmed the District Court’s grant of summary judgment regarding the infringement claims relating to the ‘040 patent.

As to the second issue, the Federal Circuit also affirmed the District Court’s construction of “UL connections” under the ‘640 patent as referring to connections between the intermediary node and user devices. Looking to the prosecution history, the court found that the term referred to intermediary node’s connections with user devices, rather than the base station. The Federal Circuit reached this conclusion based on the patent’s allocation of bandwidth between intermediary nodes and user connections, the network architecture, and Wi-LAN’s representations made during prosecution. Accordingly, the Federal Circuit also affirmed the grant of summary judgment for Apple regarding the infringement claims relating to the ‘640 patent.

As to the third issue, the Federal Circuit concluded that waiver did not bar Wi-LAN from taking a different claim-construction position regarding “UL connections.” The District Court was within its authority to decide Wi-LAN’s motion for reconsideration on the merits, even though the District Court understood that Wi-LAN had adopted an inconsistent position.

Reasoning: The Federal Circuit applied the Teva standard of review because the issues pertained to claim construction. Under this standard, “the ultimate issue of the proper construction of a claim should be treated as a question of law.” Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S Ct. 831, 839 (2015). Accordingly, the District Court’s findings based on the patents’ intrinsic evidence (e.g., the patents’ claims, specifications, prosecution history) were conclusions of law and subject to de novo review. Id.

Regarding “specified connection,” the Federal Circuit first asked how an “ordinary artisan” would understand the term at the time of invention. Finding that this analysis informed little as to whether the patent excluded embodiments unable to maintain multiple specified connections, the court next looked to whether the intrinsic record enlightened the term’s context. Neither Apple nor Wi-LAN, however, argued that the specification provided a definition. The court nonetheless found that the specification discussed a “plurality of user connections” and did not suggest only one specified connection. The court also found that the claims’ verbiage entailed words expressing relativity, such as “allocate,” “priority,” “high,” and “mid,” which grammatically indicated that “specified connection” referred to multiple objects and thus multiple specified connections.

Turning next to the ‘640 patent, the Federal Circuit, as an initial matter, addressed the procedural issue of waiver. The Federal Circuit first observed that district courts have the discretion to set schedules for claim construction such that parties adhere to their respective positions by a certain date. However, the Federal Circuit also noted that it has “long held that a district court may ‘engage in rolling claim construction, in which the court revisits and alters its interpretation of the claim terms as its understanding of the technology evolves.’” Wi-LAN USA, Inc., 2016 WL 4073324 at *7 (quoting Conoco, Inc. v. Energy & Envtl. Intern., L.C., 460 F.3d 1349, 1359 (Fed. Cir. 2006)). Therefore, the District Court did not abuse its discretion when it adjudicated Wi-LAN’s motion for reconsideration on the merits, even though Wi-LAN had failed to challenge the District Court’s construction prior to summary judgment and had failed to identify newly discovered evidence to support a shift in its position.

In interpreting “UL connections,” the Federal Circuit first noted that the term had no plain meaning. Second, the specification did not explicitly define it. Accordingly, the court examined the patent as a whole and its prosecution history to ascertain its meaning. Looking to how the patent allocates bandwidth, the court found that its allocation scheme suggested that connections exist between the intermediary node and its users, rather than the base station, and that the allocation process only made sense under Apple’s construction. Additionally, the specification described a network architecture in which intermediary nodes maintain a connection with a base station and multiple connections with user devices, which further indicated that “UL connections” referred to connections between intermediary nodes and users. Lastly, the court found that Wi-LAN’s statements made during prosecution refuted Wi-LAN’s attempt to differentiate “UL connections” as a term which referred only to a connection between an intermediary node and base station.

Rapid Litigation Management Ltd. v. CellzDirect, Inc.
827 F.3d 1042 (Fed. Cir. 2016)
Authored by Gesué Staltari

Statement of Facts: Plaintiffs-Appellants Rapid Litigation Management Ltd. and In Vitro, Inc., (collectively, “IVT”) hold U.S. Patent No. 7,604,929 (“the ‘929 Patent”), which outlines a method of hepatocyte cryopreservation. Hepatocytes are a type of liver cell that is useful for a variety of testing and medical purposes. They also have short lifespans. As a result, researchers often freeze the cells to preserve them. This damages or renders useless many of the cells, leading researchers to believe that they could freeze and thaw the cells only once before using or discarding them. The inventors of the ‘929 Patent, however, found that some hepatocytes could survive multiple freeze-thaw cycles and still be viable for testing and medical purposes. The ‘929 Patent describes a method of collecting these resilient hepatocytes by subjecting a pool of previously frozen and thawed hepatocytes from multiple donors to density gradient fractionation—which separates viable from non-viable hepatocytes—and then refreezing the viable cells. This process yields a much higher proportion of viable hepatocytes after the second thaw, allowing researchers to more easily prepare and pool samples from multiple donors.

Procedural History: IVT sued Defendants-Appellees CellzDirect, Inc. and Invitrogen Corporation (collectively, “LTC”) for infringing the ‘929 Patent. LTC filed a motion for summary judgment of invalidity under 35 U.S.C. §§ 101 and 112. The United States District Court for the Northern District of Illinois applied the Supreme Court’s two-step framework for determining invalidity under § 101, set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012), finding that the ‘929 Patent was (1) “directed to an ineligible law of nature: [that] hepatocytes are capable of surviving multiple freeze-thaw cycles” and (2) that “the patented process lack[ed] the requisite inventive concept.” Celsis In Vitro, Inc. v. CellzDirect, Inc., 83 F. Supp. 3d 774, 784-85 (N.D. Ill. 2015). Accordingly, the District Court granted LTC’s motion and dismissed the case with prejudice. IVT appealed to the Federal Circuit.

Question Presented: Whether the ‘929 Patent claims are directed to a patent-ineligible concept under 35 U.S.C. § 101.

Holding: The ‘929 Patent claims are not directed to a patent-ineligible concept and, even if they were, they improved an existing technological process sufficiently to transform the process into an inventive patent-eligible application of the concept. Therefore, the Federal Circuit vacated the District Court’s judgment and remanded the case.

Reasoning: The Federal Circuit applied the two-part Mayo test to the ‘929 Patent de novo. The Mayo test gives meaning to an important exception to 35 U.S.C. § 101—which provides the statutory basis for patenting new processes, machines, and improvements—namely, that “laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014). The first prong of the Mayo test asks whether the patent claims are “directed to [a] patent-ineligible concept.” Mayo, 132 S. Ct. at 1294, 1296-97. If the answer is yes, the inquiry advances to step two, which asks whether the patent is sufficiently inventive to “transform the nature of the claim into a patent-eligible application.” Alice Corp, 134 S. Ct. at 2354 (internal quotations omitted). This requires more than “well-understood, routine, conventional activity already engaged in by the scientific community.” Mayo, 132 S. Ct. at 1294.

At step one, the Federal Circuit found that the ‘929 Patent was not directed to a patent-ineligible concept. In so finding, the court noted that the ‘929 Patent was directed not to the ability of hepatocytes to survive multiple freeze-thaw cycles, as the District Court had found, but to a new laboratory technique for hepatocyte preservation and sample creation. As the court explained, that a claimant can describe a patent principally by the “natural ability of the subject matter” (for example, describing a cancer treatment as “cancer cells’ inability to survive chemotherapy”) does not mean that patent is ineligible under § 101. Nor does the ‘929 Patent attempt to patent a new type of resilient hepatocyte. Rather, the ‘929 Patent uses a natural discovery to improve a prior art. Specifically, the ‘929 Patent involves multiple freeze-thaw cycles and pooling cells from multiple donors. This method, in particular the pooling of hepatocytes from multiple donors after multiple freeze-thaw cycles, was the subject of the patent. In this respect, the Federal Circuit distinguished the ‘929 Patent from those found ineligible in Funk Bros. Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948), and Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013), both of which involved attempts to patent end-products.

The Federal Circuit also addressed the second step of the Mayo test. The court noted that, despite LTC’s contentions, the ‘929 Patent had significant inventive qualities. Most notably, the ‘929 Patent process repeatedly froze hepatocytes while conventional practice was to freeze and thaw them once before using or disposing of them. Further, that each step of the technique described in the ‘929 Patent was known to the general scientific community did not reduce its inventive quality. Indeed, as the Federal Circuit noted, the general scientific community “taught away from multiple freezings.” This made the ‘929 patent’s multiple freeze-thaw method all the more innovative. Thus, the patent fell within § 101.

The court ended its discussion by adding two points. First, the simplicity of a method has no bearing on its patent eligibility. Rather ease of application and obviousness are concerns dealt with in other portions of the Patent Act. Second, the ‘929 Patent is not overbroad, such that it would interfere with future innovation by “lock[ing] up the natural law in its entirety.” Rapid Litigation, 827 F.3d at 1052. Indeed, by the time of the decision, “LTC ha[d] already managed to engineer around the patent.” Id. (quoting Celsis In Vitro, Inc. v. CellzDirect, Inc., 83 F. Supp. 3d 774 (N.D. Ill. 2015)).

Amgen Manufacturing Limited v. Apotex Inc.
827 F.3d 1052 (Fed. Cir. 2016)
Authored by Wesley Stafford

Statement of Facts: In 2002, Amgen Manufacturing Limited (“Amgen”) marketed an FDA-approved and licensed product (Neulasta®) whose active ingredient (pegfilgrastim) stimulates the production of white blood cells in patients undergoing chemotherapy. In obtaining its license for Neulasta®, Amgen had to show that its biological product was “safe, pure, and potent.” 42 U.S.C. § 262(a)(2)(C)(i)(I) (2012). In 2014, Apotex Inc. (“Apotex”), sought to market a biologically similar, or ‘biosimilar,’ product and submitted a licensing application with the FDA. In 2009, Congress passed the Biologics Price Competition and Innovation Act (“BPCIA”), which created a shortcut for those seeking to market products biologically similar to products previously licensed by the FDA. 42 U.S.C. § 262, 35 U.S.C. § 27(e), 28 U.S.C. § 2201(b), 21 U.S.C. § 355. The shortcut allows manufacturers of “biosimilar” products, in this case Apotex, to use public information about the previously licensed product, streamlining their licensing application with FDA. For the purposes of the BPCIA, the entity manufacturing the biosimilar product seeking FDA approval (in this case Apotex) is called the applicant, and the entity the received the original FDA license (in this case Amgen) is called the sponsor.

The BPCIA also sets out a specific pathway to pursue streamlined preliminary litigation which tends to arise out of alleged patent infringement of the similar products; however, the company producing the biosimilar has the power to vastly curtail the subject of litigation by deciding which patents will be the subject of an infringement suit. See 42 U.S.C. § 262(l). (For brevity sake, the following statutory discussion references the subsections under “§ 262(l).”) Section (2)(A) dictates that when an applicant submits its application for FDA approval, it has twenty days to notify the product sponsor (in this case Amgen). Under (3)(A), the sponsor then has sixty days to notify the applicant of patents that may be infringed upon and the possibility of licensing those patent. Under (3)(B) the applicant then has sixty days to respond by either contesting that a certain patent is being infringed upon, or replying to the licensure offer. Under (3)(C) the sponsor must then respond within sixty days, accepting licensure agreements , and continuing to assert its patents. Although the sponsor must supplement the (3)(A) list, the original list defines the scope of the immediate litigation under paragraph (6). Following a good faith effort to negotiate over which patents should be the subject of the immediate litigation and assuming the parties arrive at a consensus, the sponsor has thirty days to file for infringement. If a consensus is not reached, paragraph (5) commands the applicant to inform the sponsor of how many patents it believes are being infringed upon. The two entities then create lists of the patents they believe are being infringed upon, naming no more patents than the number the applicant enumerated, and then exchange lists. Within thirty days the sponsor may sue on precisely the number of patents that appear on the combined list. (In the case that the applicant lists no patents the sponsor may list one and bring suit on just one patent). It is in this way that the applicant can curtail the scope of the patent infringement suit, pre-FDA approval. This bars the original license holder, in this case Amgen, from litigating certain claims of infringement until a later date. Of particular relevance here is 42 U.S.C. § 262(l)(8)(A) (“8A notice”) which states that the company manufacturing the biosimilar “shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed. . .” through the streamlined pathway. This serves as notice to the sponsor that it has 180 days to file a suit not statutorily curtailed in scope by the applicant.

Procedural History: In October of 2015, Amgen sued Apotex for a preliminary injunction in the United States District Court, Southern District of Florida (the “District Court”) to enforce the 8A notice provision. It asked the court to order a proper (8)(A) notice and order the delay of commercial marketing of the biosimilar for 180 days after the 8A notice was properly given (i.e. after approval of the FDA’s granting of a license). The District Court agreed with Amgen and issued the preliminary injunction, only ruling on the likelihood of success on the merits as the parties stipulated that the potential for irreparable harm, the balance of hardships and the public interest factors favor Amgen. See eBay v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006). Apotex appealed to the Federal Circuit, which claimed jurisdiction under 28 U.S.C. § 1292(a)(1) and (c)(1).

Question Presented: Must a manufacturer of a biosimilar product refrain from giving 8A notice until the FDA has licensed their product and refrain from marketing their product for 180 days subsequent to that notice?

Holding: In upholding the District Court’s preliminary injunction, the Federal Circuit stated that when a manufacturer attempts to market a biosimilar product, it must give 8A notice post-FDA-licensure of the biosimilar product (and wait 180 days before engaging in commercial marketing), regardless of whether that company has engaged in the streamlined litigation set out under the BPCIA.

Reasoning: The Federal Circuit espoused three reasons why the likelihood of success on the merits favored Amgen: (1) the plain language of 42 U.S.C. § 262(l)(8)(A) suggests that choosing to engage in the streamlined litigation process under 42 U.S.C. § 262(l) has no effect on whether a manufacturer must provide (8)(A) notice; (2) under Amgen v. Sandoz, 794 F.3d 1347, 1357-58 (Fed. Cir. 2015) (hereinafter Sandoz), a vastly similar case, the six month waiting period does not impermissibly extend the life of a patent; and (3) that § 262(l)(9) does not make a declaratory judgment action the exclusive remedy for an 8A violation.

The court first touched on whether the plain language of the statute, 42 U.S.C. § 262(l)(8)(A), effected when 8A notice must be given. The court emphasized the word “shall” in stating that giving notice was mandatory. It also stated that there was no other language in the plain text that could be construed to constrict the applicability of the notice requirement. It continued on to state that the 8A notice was required regardless of whether the streamlined litigation process described in subsection l of 42 U.S.C. § 262 was used. Additionally, it dispenses with an attempt by Apotex to liken 8A’s use of “shall” to 2A’s use of the same term, holding that the statutory provisions relating to 2A restrict a mandatory construction in certain situations. See Sandoz, 794 F.3d at 1357-58. The Federal Circuit held here that 8A has no such intertwining statutory constraints and should be construed as a mandatory, stand-alone requirement.

The Federal Circuit then discusses its previous holding in Sandoz when disposing of Apotex’s argument that forcing the 180 day waiting period after FDA licensure impermissibly extends the period of time Congress reserved to original licensees to exercise their exclusive right to profit from licensing their products. The court rejected this argument by explaining that the expedited litigation curtailed the original licensee from potentially bringing meritorious claims against the biosimilar manufacturer for infringement. Bringing the suit before the FDA approved the license would lead to litigation over non-finalized, changing, and potentially rejected licenses. Such claims are not ripe as the potential for infringement does not concretely exist yet. Additionally, once the license is granted, the original manufacturer needs notice of said license and time to develop a case. In this situation, Congress deemed 180 days a sufficient amount of time for an original manufacturer to decide if bringing suit was advisable, regardless of whether the patent said to be infringed upon was near the end of its life and essentially extending the patent by 180 days. The Court interpreted and gave life to Congress’ intent here as to help sponsors avoid hasty litigation over injunctions which threaten imminent harm to both the applicant and the sponsor.

Finally, the court touched on Apotex’s argument that paragraph 9 of 42 U.S.C. § 262(l) makes a declaratory-judgment action the only remedy for an 8A notice violation. The Supreme Court has ruled that absent a direct and explicit restriction on the courts’ equitable powers, there must be some “necessary and inescapable inference” that restricting remedies was the legislative intent. Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946). The court stated that because paragraph 9 does not explicitly restrict the remedies a court may grant a manufacturer in this situation, there must be a strong inference for exactly such a restriction. Paragraph (9)(C) says that declaratory-judgment actions may be brought under 28 U.S.C. § 2201 if a biosimilar manufacturer does not give the (2)(A) notice that it will be pursuing the streamlined litigation. It makes no further statements about the exclusivity of such a remedy with regard to 8A. The provision simply lays out when a declaratory-judgment action can be brought but goes no further in restricting courts, either explicitly or implicitly, in exercising their equitable powers.

Cahill v. Merit Systems Protection Board
821 F.3d 1370 (Fed. Cir. 2016)
Authored by Gil Landau

Statement of Facts: Between March 2011 and July 2014, Matt Cahill was an employee at the Department of Health and Human Services in the Centers for Disease Control and Prevention (“Agency” or “CDC”). Cahill was an information technology professional who worked for the Quantitative Science and Data Management Branch (“QSDM”) and supported the Behavioral and Clinical Surveillance Branch’s (“BCSB”) data management activities. BCSB collected data for studies via field workers utilizing hand held devices called “Pocket PCs.” Cahill alleged that at a March 22, 2012, meeting, he voiced concerns with BCSB’s data collection processes, including its utilization of Pocket PCs. Cahill alleged that after making this disclosure, he was treated poorly by the Agency, discouraged from participating in his projects, received a negative Performance Management Appraisal Program Review, and was placed on a performance improvement plan.

Procedural History: In February 2014, Cahill filed a complaint with the Office of Special Counsel (“OSC”), alleging that he was retaliated against due to his disclosures which were protected pursuant to 5 U.S.C. § 2302(b)(8)(A). After he exhausted his administrative remedies with the OSC, Cahill filed an Individual Right of Action (“IRA”) before the Merit Systems Protection Board (“MSPB”) pursuant to 5 U.S.C. § 1214(a)(3)(A). The MSPB administrative judge (“AJ”) requested that Cahill show that the MSPB had jurisdiction over his complaint. Upon reviewing Cahill’s response, the AJ found that the MSPB did not have jurisdiction because Cahill had not made non-frivolous allegations of protected disclosures and that the alleged disclosures were not contributing factors to the personnel actions.

Cahill then appealed to the MSPB’s Board. Although the Board reversed some of the AJ’s findings, it affirmed the AJ’s holding. Cahill v. Dep’t of Health & Human Servs., No. AT-1221-14-0906-W-1, 2015 WL 1477814 (M.S.P.B. Apr. 1, 2015). The Board explained that although Cahill had made non-frivolous allegations of gross mismanagement and danger to public health, Cahill had not non-frivolously alleged that they were a contributing factor to his personnel actions. This was because Cahill did not allege that any of the individuals who allegedly retaliated against him attended the March 2012 meeting or knew otherwise about his disclosures. Cahill appealed the Board’s decision to the Federal Circuit.

Question Presented: Did Cahill present to the MSPB a non-frivolous allegation that the agency retaliated against him due to his protected disclosure, despite not explicitly alleging that the retaliating officials knew or attended the meeting in question?

Holding: The Federal Circuit reversed and remanded. The court held that, looking at the context of Cahill’s allegations, he met the jurisdictional threshold of making a non-frivolous allegation that his disclosures during the meeting on March 22, 2012, were a contributing factor to the Agency’s personnel actions, despite not having explicitly alleged that the retaliating officials knew or attended the meeting.

Reasoning: A petitioner establishes that the MSPB has jurisdiction by exhausting his remedies before the OSC as well as non-frivolously alleging that (1) he made a 5 U.S.C. § 2302(b)(8)(A) protected disclosure and that (2) it was a contributing factor for a § 2302(a) prohibited personnel action. Here, the only issue at bar was whether there were sufficient allegations that the protected disclosure was a contributing factor. The court explained this can be established by circumstantial evidence of Agency knowledge of the protected disclosure or temporal proximity of the retaliation to the protected disclosure.

Although Cahill did not explicitly state that the retaliators knew about his protected disclosure because they had attended the March 2012 meeting, the court held that the context of Cahill’s complaint and the written record was sufficient to imply that Cahill alleged that at least one of the retaliators attended the meeting. Cahill’s complaint alleged that “BCSB management, team leads, project leads, and QSDM management” attended the meeting. These general categories encompassed three of the alleged retaliators and only few other Agency staff. Accordingly, the court held that it was reasonable to infer that Cahill was alleging the retaliators were at the March 2012 meeting and thus knew about his protected disclosures.

Further, one of the alleged retaliators had notes indicating that they attended the meeting in question. The court explained that even if the retaliators did not attend in person, the facts in context indicated that the retaliators would have learned what transpired in the meeting. Moreover, the court noted that the agency never raised an issue with Cahill’s allegation that the retaliators knew about the protected disclosures. For the court, this indicated that the Agency understood Cahill’s allegation about the meeting included the retaliators’ presence at the meeting.

Finally, the court noted that the Agency’s silence deprived Cahill of an opportunity to clarify and correct his allegations. The court indicated that, as per Fed. R. Civ. P. 15(a)(2), a petitioner should be given the opportunity to amend a deficient complaint rather than a case being dismissed. In a situation where a petitioner has the ability to make a more specific allegation and does not, dismissal might be appropriate. However, as in Cahill’s case, when a petitioner does not receive notice that a more detailed allegation is required, the absence of detail is an insufficient basis to dismiss a petitioner’s complaint.

Hopi Tribe v. United States
782 F.3d 662 (Fed. Cir. 2015)
Authored by Anna Lindrooth

Statement of Facts: The Hopi Tribe is a federally recognized tribe and occupies an Indian reservation in northeastern Arizona. The Executive Order of 1882 established the reservation. Congress ratified the Executive Order in the Act of July 22, 1958, which declared that the reservation lands were “to be held by the United States in trust for the Hopi Indians[.]” Act of July 22, 1958, Pub. L. No. 85-547 (72 Stat. 403).

The reservation’s public water system depends on a system of wells which draw water from subsurface layers of water-bearing rock. The wells serving five communities on the eastern side of the reservation—Mishongnovi, Polacca, Sipaulovi, Shungopavi, and Keams Canyon—contain unsafe arsenic levels exceeding the federally allowed maximum. The Government provided funding and technical assistance for the construction of many of the affected wells. The Department of the Interior, Bureau of Indian Affairs (“BIA”) currently manage the Keams Canyon wells. The Tribe owns and operates the other four communities’ wells.

Procedural History: The Hopi Tribe filed a complaint against the United States in the Court of Federal Claims seeking damages for the cost of providing alternative drinking water sources. The Court of Federal Claims dismissed the complaint for lack of jurisdiction under the Indian Tucker Act, 28 U.S.C. § 1505 and denied the Tribe’s request for jurisdictional discovery. The Tribe appealed to the Federal Circuit.

Question Presented: Whether the United States owed a fiduciary duty to the Hopi Tribe to ensure adequate drinking water quality on the reservation.

Holding: The United States did not owe a fiduciary duty to the Tribe to provide adequate drinking water. Therefore, the Tribe’s claim failed for lack of jurisdiction under the Indian Tucker Act and the Court of Federal Claims’ dismissal was affirmed.

Reasoning: The doctrine of sovereign immunity limits the Court of Federal Claims’ jurisdiction over claims against the United States. However, the United States waived sovereign immunity under the Indian Tucker Act, 28 U.S.C. § 1505, which grants jurisdiction to the Court of Federal Claims over certain claims Indian tribes bring against the United States.

The Indian Tucker Act does not itself create any substantive rights. Rather, the Indian tribe must assert a claim rising out of a substantive source of law, such as “the Constitution, or any Act of Congress, or any regulation of an executive department.” 28 U.S.C. § 1491. Furthermore, the claim must be “one for money damages against the United States . . . and the claimant must demonstrate that the source of substantive law he relies upon can fairly be interpreted as mandating compensation by the Federal Government for damages sustained.” United States v. Mitchell, 463 U.S. 206, 216-217 (1983) (Mitchell II). Accordingly, claims under the Indian Tucker Act are analyzed under a two-part test to determine jurisdiction: the claimant must (1) identify a substantive source of law that establishes a specific duty and (2) show that the government’s breach of the duty mandates compensation. See White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 147-48 (1980); United States v. Navajo Nation, 556 U.S. 287, 290 (2009) (Navajo II).

The Hopi Tribe claimed that the United States had a fiduciary duty to ensure adequate drinking water on the Hopi reservation. The Tribe stated that the Executive Order of 1882 and the Act of 1958, as well as other provisions authorizing agencies to promote safe drinking water on Indian reservations, establish this fiduciary duty and satisfy the first step of the Indian Tucker Act.

The Executive Order of 1882 and the Act of 1958 do not constitute the kind of substantive law contemplated by the Indian Tucker Act. Neither the Order of 1882 nor the Act of 1958 refers to drinking water. At the most, the trust language contained in the Act of 1958 grants the United States the power to exclude others from diverting or contaminating reservation water. This duty does not include a responsibility to provide water treatment and infrastructure. See United States v. Mitchell, 445 U.S. 535, 541-42 (1980) (Mitchell I) (finding that “bare” trust language is not enough to establish a fiduciary duty to manage land resources).

The Tribe’s other cited provisions, including the Indian Health Improvement Act, 25 U.S.C. § 1632(a)(5), and the Indian Sanitation Facilities Act, 42 U.S.C. § 2004a(a)(1), likewise do not establish a specific fiduciary duty. Rather, these statutory provisions simply authorize the BIA and Indian Health Services to construct and maintain water supplies and facilities. See, e.g., 25 U.S.C. § 1632(b); 42 U.S.C. § 2004a(a)(1). Although the cited provisions show federal control of water resources, “[t]he Federal Government’s liability cannot be premised on control alone.” Navajo II, 556 U.S. at 301; see also Mitchell II, 463 U.S. at 224-25. Like the “bare” trust language in Mitchell I, the United States’ assistance with constructing and managing the wells on the Hopi reservation does not establish a fiduciary duty to ensure adequate water quality on the reservation. See Mitchell I, 445 U.S. at 541-42.

The trust language in the Order of 1882 and the Act of 1958, combined with separate and scattered obligations to help provide safe water, do not show that Congress expressly accepted a common-law fiduciary duty to manage water resources. Navajo II, 556 U.S. at 302. The elaborate system of federal control and the express statutory language present in Mitchell II and White Mountain Apache were not found here. See White Mountain Apache, 537 U.S. at 475 (finding that a statute which authorized United States to exclusively use trust land indicated that Congress intended to create fiduciary duty to maintain land); Mitchell II, 463 U.S. at 220, 224-25 (finding that statutes and regulations addressing “virtually every aspect of forest management” gave United States “full responsibility” over Indian resources, and therefore Congress accepted a fiduciary duty to manage those timber resources). Unlike the system of plenary federal control found in both White Mountain Apache and Mitchell II, the statutory provisions cited here simply required the Government to assist in providing safe drinking water. Furthermore, nothing in the trust language or statutes prevented the Tribe from managing the resource on its own. Thus, the Hopi Tribe failed to “identify a specific, applicable, trust-creating statute or regulation that the [United States] violated.” Navajo II, 556 U.S. at 302.

Because the Tribe could not prove the first element to establish jurisdiction under the Indian Tucker Act, the Federal Circuit did not need to reach the second step of the inquiry and determine whether the specific obligation was money-mandating. The Federal Circuit also denied the Tribe’s request for jurisdictional discovery relating to the federal government’s control over water resources, because additional evidence of control would not change the Court’s analysis. The Court of Federal Claims’ dismissal for lack of jurisdiction under the Indian Tucker Act was affirmed.

Avid Technology, Inc. v. Harmonic, Inc.
815 F.3d 1040 (Fed. Cir. 2016)
Authored by Amanda Block

Statement of Facts: Avid Technology Inc. (“Avid”) asserted two patents against Harmonic, Inc. (“Harmonic”), U.S. Patent No. 6,760,808 and No. 7,487,309. Both patents protect data storage systems that allow users to store and retrieve large files. Avid’s patented systems have three significant components: multiple storage units; a client application that writes data on and reads data from the storage units; and a central controller.

In Avid’s patented data storage system, files are split into segments and stored in duplicates at separate units. The storage system keeps track of where the segments are stored in a tables, and those tableswhich are stored together as a catalog. When the client needs to find a certain segment of a file, the client finds the applicable storage unit and sends a request for a given segment to that unit. The storage unit then transmits the segment to the client, acting as an intermediary between the system and the client.

Harmonic’s system, MediaGrid, has a central controller that keeps track of file segments and monitors the storage unit location for each segment. To retrieve a needed segment, the client must obtain the identity of the applicable storage unit from the central controller. The client then deals directly with the storage unit to get the needed segments, and the central controller does not act as an intermediary in the data transfer.

Procedural History: Avid sued Harmonic in the United States District Court for the District of Delaware, claiming that Harmonic infringed two of their patents. At trial, there were two claim elements in dispute. Claim one, referred to as the “independent storage units” element, covers systems that have “a plurality of independent storage units for storing the data.” Avid Technology, Inc. v. Harmonic, Inc. No. 2015-1246, 2016 WL 363410, at *4 (Fed. Cir. Jan. 29, 2016). Claim two, referred to as the “in files” element, covers a system in which data is stored on a plurality of storage units in files that each include segments of data, and the data is stored in duplicate for each segment. The jury found that Avid’s two patents were valid, but that Harmonic did not infringe either patent. Avid appealed the non-infringement judgment to the Federal Circuit.

Questions Presented: Whether Harmonic’s data storage system infringed on Avid’s two patents in regards to the “independent storage unit” and the “in files” claim elements.

Holding: As to the “independent storage unit” claim element, the Federal Circuit held that the District Court erred by giving the jury a narrow construction of the claim. However, Harmonic did not present evidence showing how MediaGrid might not have “independent storage units” under a proper construction nor did it suggest an alternate claim construction. Accordingly, the Federal Circuit held this claim requirement to be settled and not re-tried on remand. In regard to the “in files” claim element, the court held that the jury instruction to use “plain and ordinary meaning” did not enable the jury to interpret the scope of the claim as applied to the Harmonic system. Id. at *15. The Federal Circuit set aside the general non-infringement verdicts and ordered the infringement claim to be re-tried with respect to the “in files” claim element only.

Reasoning: The Federal Circuit held that the claim construction was too narrow because disclaiming actions or statements made in a prior prosecution must be clear and unmistakable when constructing the claim based on prosecution history. A court will not find a prosecution disclaimer if the alleged disavowal is unclear or susceptible to more than one reasonable interpretation. In Avid’s past statements, the company claimed that a central controller is excluded if it performs two functions: identifying storage units that store data and issuing requests to storage units. This language does not clearly exclude controllers that perform just one of these functions. Therefore, the Federal Circuit reasoned that the District Court “read more into the passage than is clearly there” by instructing the jury that “independent storage units” are not centrally controlled and the memory addresses are not globally assigned. Id. at *10. Because Harmonic did not present evidence showing how MediaGrid might not have “independent storage units” under a proper construction or suggest an alternate claim construction, the Federal Circuit held this claim requirement was settled and should not be re-tried in the new trial.

Regarding the second claim, the Federal Circuit noted that the “in files” element went to the jury without clarification of the language. Although the District Court instructed the jury to use “plain and ordinary meaning” in interpreting the claim, the Federal Circuit found that the word “file” must be defined to enable the jury to interpret the claim of the scope and how that applies to the Harmonic system. Id. at *15. Harmonic presented evidence showing that their storage may not be considered “in files” or that it may not store files in a way that meets the other requirements of the claim element. Harmonic’s expert witness testified that the single segment of information stored in Harmonic’s system do not meet the requirements of a file under Avid’s patent. Avid’s patent states that a file “includes segments of data,” and the expert testified that Harmonic’s files are singular and not plural, and thus would fall outside the scope of the patent. Id. at *4. Based on this evidence, the Federal Circuit ordered a new trial.

Ford Motor Co. v. United States
811 F.3d 1371 (Fed. Cir. 2016)
Authored by Jacky Beda

Statement of Facts: In 2004 and 2005, Ford imported Jaguar-brand cars from the United Kingdom into the United States. These imports were subject to duty payments upon arrival to the U.S., to be paid to U.S. Customs and Border Protection (“CBP”). Ford later concluded that it had overpaid the duty payments because its own estimates were too high. Accordingly, Ford sought a refund from CBP of about $6.2 million. Consequently, Ford filed nine reconsolidation entries with CBP.

CBP has the authority to liquidate these entries, which involves determining the actual amount of duty owed. Such an appraisal must be “just, impartial, and uniform” pursuant to the Secretary of the Treasury. See 19 U.S.C. § 1502 (2012). CBP has one year from the time of filing to make the determination, but it may extend the period if additional information is needed or for good cause. See 19 U.S.C. § 1504(b). CBP has a maximum of four years to make the determination to liquidate. An extension in determining whether to liquidate may be granted if additional information is needed to properly appraise or classify the imported merchandise or if good cause for an extension is demonstrated. If an extension is not granted and liquidation has not occurred within the four-year period, CBP no longer has the authority to calculate the appropriate duty rate. Instead, the importer shall calculate the duty.

Procedural History: On April 15, 2009, Ford filed suit in the Court of International Trade (CIT) challenging CBP’s treatment of its nine reconciliation entries. Ford argued that CBP was no longer authorized to recalculate the appropriate duty because it had failed to properly extend the liquidationed period allocated to them. CBP rebutted that it properly extended the liquidation period and thus had the authority to calculate the duty. In turn, Ford sought a declaratory judgment that its nine reconciliation entries were now liquidated as a matter of law and, therefore, Ford was entitled to the $6.2 million refund based on its own duty calculation.

The CIT granted the government’s motion to dismiss, holding that Ford’s claims from 2005, except for Claim 5, were barred by the two year statute of limitations under 28 U.S.C. § 2636(i) (2012). The CIT held that Ford reasonably should have known the claims existed over two years from when the claims were actually brought. For the remaining claims, including Claim 5 and the claims from the 2006 entries, the CIT recognized that there was no statute of limitations issue. However, the court granted the government’s motion to dismiss, declining to exercise its discretionary jurisdiction. CIT claimed that it “would not be an efficient and effective use of the court’s time and resources.” Ford Motor Co., 811 F.3d at 1376. Ford appealed to the Federal Circuit.

Questions Presented: There were two legal issues before the Federal Circuit. First, whether the claims from 2005, excluding Claim 5, were barred by the statute of limitations. Second, whether the CIT abused its discretion in declining to issue declaratory relief in regards to Claim 5 and Ford’s 2006 claims.

Holding: First, the Federal Circuit held that there was no need to address the statute of limitations issue because the statute was not jurisdictional. The Federal Circuit determined that the Supreme Court in United States v. Kwai Fun Wong, 135 S. Ct. 1625, 1632 (2015) set a more stringent test, which required Congress to expressly state that a statute of limitations was jurisdictional. Absent a clear statement, the statute of limitations would be treated as non-jurisdictional. Second, CIT did not abuse its discretion in declining to issue declaratory relief because an action for a declaratory judgment brought under 28 U.S.C. § 1581(i) may not be used to challenge the calculation of duties. Instead, it is limited to the determination of whether the entries are liquidated as a matter of law. Lastly, the court held that the CIT did not abuse its discretion in dismissing Ford’s declaratory judgment claims because both the issue of whether Ford’s entries were deemed liquidated as a matter of law and the correct rate of duty could be decided in the proper alternative, streamlined action.

Reasoning: The Federal Circuit reasoned that the statute in question, § 2636(i) did not speak in jurisdictional terms because Congress “failed to provide anything like the clear statement the Court has demanded before deeming a statute of limitations.” Ford Motor Co., 811 F.3d at 1378. The Federal Circuit applied the Kwai Fun Wong test, which required a “high bar to establish that a statute of limitation is jurisdictional,” including a clear statement from Congress that the statute was jurisdictional. See Kwai Fun Wong, 135 S. Ct. at 1632–33. In applying Kwai Fun Wong, the Federal Circuit concluded that since Congress did not clearly state that the statute was jurisdictional, it should treat the restriction as non-jurisdictional. Furthermore, Congress’s separation of the filing deadline from the jurisdictional grant indicates that the statute was not jurisdictional. Lastly, nothing else in the history of the statute suggested that the statute of limitations was jurisdictional.

The Federal Circuit held that the CIT did not abuse its discretion in declining declaratory relief because the decision was not based on an incorrect conclusion of law, clearly erroneous findings of fact, or clearly unreasonable or arbitrary reasoning. In addition, CIT did not abuse its discretion because there was a more appropriate action pending that would address whether Ford was entitled to a declaratory judgment to deem the entries liquidated as a matter of law and resolve the correctness of the duty calculations if the entries are not deemed liquidated. See Ford Motor Co. v. United States, 688 F.3d 1319, 1323 (Fed. Cir. 2012).

The remaining question was whether to remand the claims from 2005, except for Claim 5, to the CIT because the statute of limitations did not bar those claims. The Federal Circuit decided not to remand because it was clear that the CIT would decline to exercise its discretionary jurisdiction for those claims as well. Because the CIT did not abuse its discretion in declining to issue declaratory relief for the claims from 2006 and Claim 5, it would also not abuse its discretion with the remaining claims from 2005. As a result, the Federal Circuit affirmed the CIT decision, dismissing all of Ford’s claims.

Dissenting Opinion: Judge Newman concluded that Ford should have been refunded the $6.2 million dollars that it had calculated as overpaid import duties. Judge Newman noted that the government itself did not dispute Ford’s findings regarding the value of the overpaid imports or the merits of the claim itself. Furthermore, Judge Newman found that there was no justification for CBP’s delay and Ford had the right to calculate the duties. After nine years of the government avoiding payment, Ford was entitled to its refund. Judge Newman further argued that the appropriate role for the judiciary is to “take on a stewardship role to achieve speedy, fair and efficient justice.” Ford Motor Co., 811 F.3d at 1382. Here, the appropriate judicial role was to order the refund and bring the matter to a close.

Merck v. Gnosis S.P.A.
808 F.3d 829 (Fed. Cir. 2015)
Authored by Arjun Amernath

Statement of Facts: Merck owns U.S. Patent No. 6,011,040 (“ ‘040 Patent”). Homocysteine is an amino acid that causes cardiovascular, ocular, neurological and skeletal disorders when present in large quantities. A deficiency in the enzymes required for the body’s normal method of regulating homocysteine levels can cause excessive levels of homocysteine levels, called hyperhomocysteinemia. This process, called the methionine cycle, converts homocysteine to methionine. The ‘040 patent involves the use of folates to lower levels of homocysteine in humans.

One of the folates ‘040 patent uses is 5-methyl-tetrahydrofolic acid (“5-MTHF”), a reeducated folate which occurs naturally during the metabolization of folic acid and is found in foods. The patent recites a method of reducing homocysteine levels by using tetrahydrofolates and identifies a deficiency of methylene tetrahydrofolate reductase as a cause of elevated homocysteine levels. The patent further recommends administering L-5-MTHF, a stereoisomer of 5-MTHF with at least one B-vitamin, the active substance, to reduce homocysteine levels.

Procedural History: Gnosis contested claims 1-3, 5, 6, 8, 9, 11-15, and 19-22 of the ‘040 patent in the United States Patent and Trademark Office Patent Trial and Appeal Board (the “Board”). Merck voluntarily cancelled claims 1-3, 5, 6 and 13, while disputing claims 8, 9, 11, 12, 14, 15 and 19-22. The Board invalidated the remaining claims for obviousness. Merck appealed to the Federal Circuit, under 28 U.S.C. § 1295(a)(4)(A).

Questions Presented: Whether, in light of previous art, the ‘040 patent was obvious.

Holding: The Federal Circuit affirmed the Board, holding that claims are invalid as obvious. The Federal Circuit declined to consider anticipation and claim construction.

Reasoning: Obviousness is a question of law based on findings of facts, including the: (1) scope and content of the prior art; (2) differences between the prior art and the claims at issue; (3) level of ordinary skill in the art at the time the invention was made; and (4) objective evidence of nonobviousness, if any. In appeals of Board decisions, these factual findings are reviewed for substantial evidence. Based on the underlying factual findings, the Federal Circuit reviews the Board’s ultimate conclusion of obviousness de novo.

The Board found the ‘040 patent obvious due to three prior art references: European Patent App. No. 0 595 005 (Serfontein), U.S. Patent No. 5,194,611 (Marazza), and 57 Am. J. Clinical Nutrition (Ubbink). Serfontein teaches that folate deficiencies cause elevated homocysteine levels, and that a folate or a “suitable active metabolite of folate,” combined with vitamin B6 or B12 can be a treatment. Serfontein did not specify what made an active metabolite of folate suitable. Marazza identified the L-5-MTHF used here as a natural metabolite, which can be used in treating a folate deficiency. Marazza also teaches how to separate MTFH into the stereoisomers L-5-MTHF and D-5-MTHF. Ubbink studied folate levels in men with elevated homocysteine, and identified a vitamin supplement containing folic acid (a B vitamin) as having a positive result.

Here, the Federal Circuit found all elements of the claim in a combination of prior art and that a person of ordinary skill in the art would be motivated to combine them with a reasonable chance of success. The court recognized that while KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 481 (2007), states that a factfinder’s analysis of a reason to combine known elements “should be made explicit,” it cautions against using formalistic rules to limit the obviousness analysis. KSR International Co., 550 U.S. at 481. Accordingly, the court holds that “KSR does not require an explicit statement of a reasonable expectation of success in every case.” Merck v. Gnosis S.P.A., 808 F.3d 829, 836 (Fed. Cir. 2015). Merck argued that the prior art taught away from the combination of L-5-MTHF and B vitamin because the prior art suggested that 5-MTHF would increase levels of homocysteine. The court disagreed.

The court considered objective indicia of non-obviousness, finding that, although the commercial success (a factor that cuts against obviousness) of Merck’s product was high, there lacked an adequate nexus between the novel features of the ‘040 patent and evidence of success. The successful products which licensed the ‘040 patent from Merck used additional active ingredients and had material features beyond those in the ‘040 patent. In other instances, the product was used for treatments not disclosed by the patent.

Dissenting Opinion: Judge Newman dissented, holding that the majority applied the wrong standard of review and that the patent was not obvious because prior art did not teach toward the usage of L-5-MTHF. While the Board applied a standard of clear and convincing evidence, Judge Newman found that the burden of proof before the Board was a preponderance of the evidence, to give no deference to the prior examination or to the grant of the patent. When the case appeared before the Federal Circuit, Newman criticized the majority’s decision to use the substantial evidence standard of review. Delving into the America Invents Act, Newman proffered that the duty of the Federal Circuit included reviewing decisions with no deference, and that only the standard of a preponderance of the evidence would satisfy the “legislative purpose of providing optimum determination of patent validity” under the act. Merck v. Gnosis, 808 F.3d 829, 841 (Fed. Cir. 2015).

With regard to the substantive arguments, Judge Newman reiterated that Serfontein did not mention L-5-MTHF nor suggest its use for treatment. He found that Marazza did not link the L-5-MTHF molecule to the treatment of elevated homocysteine or suggest the use of the molecule for treatment. He further stated that Serfontein and Marazza references cannot be combined because “the close similarity of purpose and disclosure” would not have been sufficient for a person of ordinary skill in the art to combine them “with a reasonable expectation of success in treating elevated homocysteine.” Merck v. Gnosis S.P.A., 808 F.3d 829, 843 (Fed. Cir. 2015). The majority held that the prior art would not teach away from Merck’s use, satisfying their standard of substantial evidence. Newman, however, believed that no reference taught Merck’s use, failing to satisfy his preponderance of the evidence standard.

When considering evidence of commercial success, Judge Newman found that although the objective indicia of non-obviousness do not have to control the result, they must be considered. He further found that the Board and majority discounted the evidence due to an insufficient nexus. Newman believed that consumers purchased the product for the L-5-MTHF, not the other ingredients.