Patent Reexams: A Patent Holder's Headache Cured by Contract?

Posted on August 5, 2011 by Matthew Osborne

Can a contract between private parties prevent the PTO from proceeding with a patent reexamination? Callaway Golf thought so when it signed a settlement agreement with a competitor in the golf ball industry. In Callaway Golf Co. v. Kappos, Case No 1:11CV266, 2011 U.S. Dist. LEXIS 82381 (E.D. VA. July 27, 2011) (Brinkema, L.), Judge Brinkema disagreed.

The settlement agreement, entered into to resolve in multiple cases, contained a “Dispute Resolution” clause vesting venue solely in Delaware federal court. Callaway’s competitor and party to the settlement, Acushnet Co., later filed a request for inter partes reexamination. The PTO granted the request based on its determination of a substantial new question of patentability. Callaway unsuccessfully petitioned the PTO to vacate the reexamination, which led to the civil action against Kappos seeking an injunction vacating the reexaminations.

Although Acushnet had breached the settlement agreement by requesting the reexamination, the Court would not order a halt to the PTO proceedings for a multitude of reasons:

  • Neither the settlement agreement nor breach of contract ruling bound the PTO as it was not a party in either instance.
  • The inter partes reexamination statute imposes a nondiscretionary duty upon the PTO to conduct reexaminations when it receives a request that leads to a substantial new question of patentability.
  • Private contracts preventing patent reexaminations are contrary to the public interest in valid patent monopolies.

Among its many reasons for rejecting Callaway’s motion, the Court emphasized that reexaminations, once started, cannot be halted by private contract provisions. As a consolation, Judge Brinkema noted Callaway’s success in its contract claim; though damages for the breach of a license for an invalid patent may not be as high as Callaway would hope.
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Judge Brinkema Allows Inequitable Conduct Claims to Go to Trial

Posted on April 13, 2011 by Dabney Carr

After Exergen v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) (summarized here), it appeared that claims of inequitable conduct would fail at the pleading stage because of the requirements of a specific “who, what, when, where and how” of the alleged misrepresentation and specific facts that permitted an inference of an intent to deceive.

A recent case before Judge Brinkema, though, breathes some new life into inequitable conduct claims in the EDVA. Rolls-Royce PLC v. United Tech’s. Corp., 1:10CV457, 2011 U.S. Dist. LEXIS 20679 (E.D.Va. March 2, 2011) (Brinkema, J.) (found here). The key is the specificity of the allegations. If a defendant's allegations state a plausible claim of inequitable conduct, Judge Brinkema concluded, questions of materiality and intent are merely issues of disputed fact unsuitable for resolution on either a motion to dismiss or a motion for summary judgment. 

In her decision on the motion to dismiss in Rolls-Royce, Judge Brinkema addressed four theories of inequitable conduct:

  • First, the defendant claimed the inventor had filed a false inventor declaration. Judge Brinkema held that the inventor’s deposition testimony presented a plausible claim of a false statement and “would lead to a reasonable inference that Rolls-Royce intended to deceive the PTO by filing the declaration.”
  • Second, the defendant alleged that Rolls-Royce had falsely claimed a priority date in a continuation-in-part application in order to avoid disclosure of material prior art. Judge Brinkema held that the defendant’s specific identification of material prior art and its explanation of Rolls-Royce's reasons for its conduct date were sufficient. Whether the application contained new subject matter, the Court held, was a question of fact.
     
  • Third, the defendant asserted that Rolls-Royce failed to disclose several pieces of prior art and proffered reasons why the art was material, not cumulative and might have impacted the examiner’s review. Rolls-Royce claimed that the art was cumulative, but Judge Brinkema held that it could not make that determination on a motion to dismiss.
  • Finally, the defendant claimed that Rolls-Royce misrepresented the defendant’s patent during prosecution. Rolls-Royce conceded that it had mischaracterized the patent but claimed its statements were immaterial. Again, Judge Brinkema held that the allegations satisfied Rule 9(b)’s standard of specificity and that whether Rolls-Royce’s statement was material required evidence beyond the scope of a motion to dismiss.

In essence, Judge Brinkema concluded at the motion to dismiss stage that the defendant had established a prima facie case of inequitable conduct, particularly on issue of intent to deceive.  Indeed, Judge Brinkema denied Rolls-Royce’s motion for summary judgment based on a lack of intent to deceive on April 8. Thus, the lesson for litigants may be that if claims of inequitable conduct are sufficiently fact-based to overcome a motion to dismiss, they will also create a genuine issue of fact to defeat summary judgment.

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Judge Brinkema Grants Summary Judgment to Defendants in TecSec v. IBM Patent Case

Posted on March 31, 2011 by Dabney Carr

We previously blogged about the massive patent infringement case TecSec filed against thirteen separate defendant groups here, here and here. After more than a year of procedural wrangling, Judge Brinkema brought the first phase of the case to an abrupt end by awarding summary judgment to IBM on all of TecSec’s claims. The judge’s opinion can be found here and is also at TecSec, Inc. v. International Business Machines Corp., 2011 U.S. Dist. LEXIS 21726 (E.D. Va. March 3, 2011).

TecSec asserted infringement of three separate groups of patents addressing encryption and security methods and products. The Court identified the patents as the “DCOM” patent family, the XML patent and the Parallel Processor patent.

In the course of her summary judgment ruling, Judge Brinkema reached three decisions on claim construction which led directly to her conclusion on summary judgment:

  1. First, she ruled that the phrase “multi-level multimedia security” in the preamble of the DCOM patent family was a defining aspect of the invention and so served as a claim limitation.
  2. Second, she ruled that “multi-level security” requires multiple layers of encryption. Thus, encrypted objects must be nested within other encrypted objects. TecSec attempted to broaden the definition to include a single level of encryption, but Judge Brinkema ruled that it had advocated multiple levels of encryption as the essence of the invention during prosecution.
  3. Third, Judge Brinkema held that “storing” of encrypted objects could not be interpreted to cover passing information on a real-time basis to the intended recipient of the information.

From these rulings, a finding of non-infringement followed because IBM’s products provided, at most, only a single level of encryption or were designed to pass encrypted messages on a real-time basis.

Other significant rulings by Judge Brinkema included:

  • IBM did not infringe the asserted method claims because neither IBM or any third party performed all of the steps of those claims;
  • IBM did not infringe the asserted system claims because TecSec only accused IBM’s software of infringement but the claimed systems also included hardware means;
  • TecSec claimed that six different configurations of IBM products infringed but offered no evidence that IBM actually made or sold the specific accused configurations;
  • TecSec could not prove inducement of infringement because there was no evidence that any customer used the IBM products in any of the six accused configurations;
  • TecSec’s claim that circumstantial evidence showed that the products might be used in an infringing configuration failed because such a theory required a showing that the products would necessarily infringe, and IBM’s products could be used in a variety of ways that did not infringe;
  • The ability of the products to be used in non-infringing configurations also doomed TecSec’s claim of contributory infringement;
  • TecSec failed to identify sufficient corresponding structure in the specification for the means plus function claims of its patents.

After ruling on summary judgment, Judge Brinkema entered an Order, found here, continuing the stay of the litigation against all of the other defendants based on TecSec’s representations that it would promptly pursue an appeal of the summary judgment ruling and that  it will not pursue its claims against the other defendants until the conclusion of that appeal.

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Virginia is for Virginians

Posted on February 2, 2011 by Joshua Heslinga

A patent infringement suit against Facebook, YouTube, LinkedIn, and Photobucket is headed to California, after the defendants prevailed on their motion to transfer venue.  The opinion reinforces a trend against giving choice of forum deference to patent holding companies, particularly if those companies formed shortly before the lawsuit.  The opinion also makes clear that compliments about the Rocket Docket do not help a plaintiff stay in Virginia.

District Judge Leonie M. Brinkema transferred Pragmatus AV, LLC v. Facebook, Inc. et al, case no. 1:10cv1288, from the U.S. District Court for the Eastern District of Virginia to the U.S. District Court for the Northern District of California, by memorandum opinion and order dated January 27, 2011.

The case involves three patents related to the storage, distribution, and playback of media files.  The inventors, the owners of the IP while the patents were pending, and lawyer who prosecuted the original applications are located in California.  Three of the four defendants are headquartered in the Northern District of California, and the fourth has offices in Denver and San Francisco.  None have any relevant personnel or evidence in Virginia.  Pragmatus, the plaintiff, is a patent holding company that was incorporated in Virginia one week after acquiring the patents in June 2010.  Suit was filed in November 2010.  One of the two owners of Pragmatus has lived in Alexandria, Virginia, four days per week since 2007.

If these facts don’t sound like they show much of a connection to Virginia to you, you are getting the picture.  After proceeding through the 28 U.S.C. 1404(a) two-step analysis and factors, Judge Brinkema concludes that they “weigh overwhelmingly” in favor of transfer.

Two interesting points emerge along the way. 

First, following a January 5, 2011, Federal Circuit order in the In re Microsoft case, Judge Brinkema concludes that where a patent holding company was created in the forum shortly before the lawsuit, its choice of its “home” forum gets “minimal” weight (at least in the absence of other meaningful connections).  The nature of the plaintiff – its lack of a business other than enforcing IP rights, often through litigation – explicitly is part of what leads the Court to discard deference to the plaintiff’s choice.

Second, the plaintiff argued that the Eastern District’s “Rocket Docket” status should weigh in its favor.  On its face, this seems like a good tactic – after all, “docket conditions” are explicitly part of the 1404(a) analysis, and how can you go wrong complimenting a court?.  The plaintiff noted that the average time to resolution is 10 months in the Eastern District of Virginia and 26 months in the Northern District of California and said that it wanted a “quick and efficient” resolution of its claims.  The Court was unmoved. It explained that if it allowed those with “minimal” connections to the forum, like Pragmatus, to choose the forum because of the Court’s speed, that could lead to the Court being swamped with patent cases and unfairly slow cases for parties with “genuine connections” to the forum.  Thus, the interests of justice favor transfer.

As we've noted in other posts, the Rocket Docket's procedures impose special challenges that can help or hurt a patent plaintiff or defendant.  This opinion does not change those considerations, but it does shed light on what patent litigation properly can be maintained in the Eastern District of Virginia.  In sum, if a patent plaintiff wants to take advantage of the Rocket Docket, the case needs a real connection to the forum, and patent holding companies in particular raise this concern.  Moreover, in part to defend the Rocket Docket itself, complimenting the Court for its efficiency will not save such a plaintiff from transfer.

 
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Judge Brinkema Denies Motions for Summary Judgment of Inequitable Conduct and Invalidity in TecSec v. IBM

Posted on January 31, 2011 by Dabney Carr

As we posted here and here, the case of TecSec v. IBM et al., Case No. 1:10CV115 (E.D.Va.), pending before Judge Brinkema, is one of the most complex patents suits ever filed in the Eastern District of Virginia. TecSec asserted 11 patents involving 380 claims against thirteen unrelated groups of defendants. To gain control over this massive suit, Judge Brinkema stayed the litigation as to all defendants except IBM.

Judge Brinkema is now working her way through the parties’ summary judgment motions. In an opinion (found here) issued January 12 on a first-round of motions, Judge Brinkema denied IBM’s motion for summary judgment of inequitable conduct but allowed the inequitable conduct claim to proceed to trial.   TecSec, Inc. v. IBM, 2011 U.S. Dist. LEXIS 3116 (E.D. Va. Jan. 12, 2011).

 

IBM asserted inequitable conduct based on the patentee’s failure to disclose the role of a former TecSec employee, Roy Follendore, in inventing the methods contained in one family of the patents at issue. Follendore was one of the pioneering developers of the technology at issue and had been awarded a patent on a closely related invention. TecSec, however, did not specifically disclose the Follendore patent to the PTO, even though the Follendore patent contained claim language that was, in the Court’s words, “strikingly similar” to the claims of the patents in suit. Moreover, the same attorneys prosecuted both the Follendore patent and the patents in suit.

 

The patents in suit, however, specifically referenced the Follendore patent in their specification and there was other evidence of a lack of materiality and intent to deceive. For those reasons, Judge Brinkema held that IBM had not met its burden of proving inequitable conduct by clear and convincing evidence but allowed the claim to proceed to trial.

 

IBM also moved for summary judgment of invalidity of two patents due to anticipation and lack of adequate written description as to one of those patents. Judge Brinkema not only denied IBM’s motion but held that TecSec was entitled to summary judgment on IBM’s written description defense and judgment that the cited prior art references did not invalidate those two patents. IBM recently moved for reconsideration of the invalidity decision (brief in support found here) on the grounds that TecSec did not seek summary judgment that the prior art references were not anticipating and on the grounds that the Court did not apply the proper standard. A hearing on the reconsideration motion is scheduled for February 4. 

 

Finally, the parties recently filed a second round of cross-summary judgment motions. A hearing on those motions is set for February 11. 

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Eastern District of Virginia Judge Permits Copyright and Lanham Act Claims Arising from Website "Scraping"

Posted on October 11, 2010 by Dabney Carr

Any IP case that includes website "scraping", "reverse passing off" and both "clickwrap" and "browsewrap" agreements deserves a blog post.  In Cvent, Inc. v. Eventbrite, Inc., 2010 U.S. Dist. LEXIS 96354 (E.D. Va. Sept. 14, 2010) (found here), U.S. District Judge Leonie Brinkema ruled that a plaintiff which alleged “scraping” of its website may maintain a claim for “reverse passing off” under the Lanham Act and a claim for unjust enrichment in addition to a copyright infringement claim. The Court, however, dismissed claims under the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, Virginia’s Computer Crimes Act, Va. Code Ann. § 18.2-152.3, and for both statutory and common law conspiracy.  Shortly after Judge Brinkema's decision, the parties entered into a consent order resolving their dispute, which can be found here.

“Scraping” a Website Database

Cvent maintains a website to assist meeting planners in locating venues for large-scale events. The website includes a database of meeting venues with detailed information about capacity, amenities and services. Eventbrite runs a competing on-line event planning website, and Cvent alleged that Eventbrite hired a third-party to “scrape”, or copy, information from Cvent’s database to create its own on-line “Venue Directory.” The gravamen of Cvent’s complaint, was “a claim for intellectual property theft and copyright infringement.” Eventbrite moved to dismiss all of the claims asserted in the Complaint except Cvent’s claim for copyright infringement.

Reverse Passing Off and Unjust Enrichment Claims Allowed to Proceed

Judge Brinkema’s ruling on Cvent’s claim for reverse passing off under the Lanham Act is perhaps the most important part of the decision because of the lack of any prior authority on this issue in the EDVA. In Dastar v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), the Supreme Court limited the scope of the Lanham Act to “tangible goods offered for sale, and not to the author of any idea, concept or communication embodied in those goods.” Otherwise, a Lanham Act reverse passing off claim would be indistinguishable from a copyright infringement claim.

Judge Brinkema noted a split of authority over whether a plaintiff could bring a Lanham Act claim for copying intellectual property and passing it off as one’s own. She found no controlling precedent in the Fourth Circuit or prior caselaw in the EDVA on the issue. The key factor in her decision was a distinction she made between Cvent’s ideas and its product. Cvent did not allege that Eventbrite passed off its ideas as its own, but rather than it passed off Cvent’s product – its database – as its own. While Dastar referred to “tangible goods,” Judge Brinkema held that the Supreme Court used that language merely to distinguish between “goods” and “ideas” and not to exclude electronic products, such as Cvent’s database, from Lanham Act protection.

Similarly, Cvent’s unjust enrichment claim survived a preemption challenge because Cvent alleged unauthorized scraping and repackaging of its products as opposed to a copyright infringement claim based on the theft of its copyrightable ideas.

Failure to Limit Access to Website Defeated Computer Fraud and Abuse Act Claim

The CFAA bars obtaining of information from a computer without authorization or exceeding authorized access. Cvent relied on the “Terms of Use” on its website which stated that access to the website by competitors was unauthorized. Cvent, however, took no steps to restrict access to its website, such as making the site password-protected or even requiring visitors to click “I Agree” to the Terms of Use before gaining access to the site.

The Court also found it persuasive that the Terms of Use could only be reached by going through several links, the first of which was buried at the bottom of the webpage in fine print. Thus, the Court refused to find that Eventbrite’s access to Cvent’s website was unauthorized. Citing its own decision in State Analysis, Inc. v. American Financial Services, Assoc., 621 F.Supp.2d 309 (E.D.Va. 2009), and the “overwhelming weight of authority,” the Court held that the mere allegation that a defendant improperly used information to which it had lawful access did not state a claim under the CFFA.

Virginia Computer Crimes Act Claim Preempted

The Fourth Circuit held in Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225 (4th Cir. 1993), that the Copyright Act preempts claims under the Virginia Computer Crimes Act (VCCA) that do not require proof of elements beyond those necessary to prove copyright infringement.

Cvent argued that preemption did not apply because the VCCA had been amended since Rosciszewski to require that the defendant have committed larceny, false pretenses, embezzlement or conversion. Judge Brinkema took little time with this argument, rejecting the claim because the complaint alleged nothing more than copyright infringement and did not give rise to a plausible inference of larceny or any other crime.

Breach of Contract Claim Fails to Meet Twombley Standards

Eventbrite also claimed that the Copyright Act preempted Cvent’s breach of contract claims, but Judge Brinkema rejected that argument because a claim for breach of contract based on the Terms of Use is qualitatively different from a claim for copyright infringement.

The Court dismissed the contract claims, however, because Cvent’s allegations failed to allege sufficient facts to support a plausible allegation that a contract existed between the parties. Since a website visitor was not required to read or assent to the Terms of Use, the Court noted, this case did not involve an alleged “clickwrap” contract but rather a “browsewrap” agreement. To state a claim for breach of such an agreement, Cvent must show that a website user had actual or constructive knowledge of the website’s terms and conditions and assented to those terms. Cvent did not plead sufficient facts to establish such consent, and its conclusory allegations failed to satisfy the requirement of Bell Atlantic Corp. v. Twombley, 550 U.S. 544 (2007).

Intracorporate Immunity Barred Conspiracy Claims

Cvent alleged that Eventbrite hired an independent contractor, Stephen Foley, to scrape data from Cvent’s website. Under the intracorporate immunity doctrine, however, a corporation cannot conspire with its own agent, regardless of whether Foley was Eventbrite’s employee or an independent contractor. As long as the actor acts with the same general objective as the corporation, and the corporation retains decisionmaking authority, the individual and the corporation constitute the same entity and logically cannot conspire with one another. Since Foley had no independent interest from Eventbrite, Cvent’s conspiracy claims failed.
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Federal Circuit Affirms Solo Cup False Marking Decision

Posted on June 10, 2010 by Dabney Carr

In a widely-followed appeal of an Eastern District of Virginia case which we previously blogged about here, the Federal Circuit held today that Solo Cup did not have the "intent to deceive the public" required for false marking liability.  in Pequignot v. Solo Cup Co., No. 2009-1547 (Fed. Cir. June 10, 2010) (found here). The decision affirmed Judge Brinkema's ruling granting summary judgment in favor of Solo Cup, Pequignot v. Solo Cup Co., 646 F.Supp. 2d 790 (E.D. Va. 2009). Under the Federal Circuit’s decision, even if a patentee knowingly marks a product with an expired patent, it can avoid liability by showing by a preponderance of the evidence that it did not intend to deceive the public.

In short, Solo Cup marked certain plastic cold drink lids by stamping the lids with two patent numbers during the production process. After one of the patents expired, Solo sought advice of counsel about whether it needed to replace all of its stamping molds to remove the patent number. Based on the advice it received and the cost of replacing all of its molds, Solo developed a policy to wait to remove the expired patents when it replaced the molds. Solo’s outside counsel also advised Solo to include on its packaging the phrase “the product may be covered by one or more U.S. or foreign pending or issued patents. For details contact www.solocup.com.” Based on that advice, Solo placed the “may be covered” language on its packaging, even though it knew that some of the packaging was not patented.

Judge Brinkema granted summary judgment to Solo, finding that Solo had no intent to deceive the public. Solo’s knowledge of the falsity of the patent marking, she held, raised a rebuttable presumption of intent to deceive. Solo successfully rebutted that presumption, however, based on its good faith reliance on advice of counsel and its desire to reduce costs and avoid business disruption. Judge Brinkema likewise found that Solo had rebutted the presumption with respect to the “may be covered” language based on the advice of counsel and for logistical and financial reasons.

The Federal Circuit affirmed the finding of lack of intent to deceive.

  • Agreeing with Judge Brinkema, the court held that under Clontech Labs., Inc. v. Invitrogen, 406 F.3d 1347 (Fed. Cir. 2005) the combination of a false statement and knowledge that the statement was false created a rebuttable presumption of intent to deceive, not irrebuttable proof of such intent.
  • Solo’s burden of proof was to show by a preponderance of the evidence that it did not have the requisite intent to deceive.
  • Where the false markings at issue are expired patents that had previously covered the marked products, the presumption is weaker.
  • A good faith belief that an action is appropriate, especially when it is taken for a purpose other than deceiving the public, can negate the presumption.

Solo’s unrebutted evidence that it relied on the advice of counsel, its evidence that its true intent was to reduce costs and business disruption and its good faith step of implementing and following a policy to remove the patent numbers when molds were replaced were sufficient to rebut the presumption of deceptive intent.

As to the “may be covered” language, the Court held that “it is highly questionable” whether such a statement could be made for the purpose of deceiving the public. Regardless, the court affirmed Judge Brinkema’s decision that Solo’s evidence successfully rebutted the presumption.

The Federal Circuit did not agree with Solo on everything, however. It rejected Solo’s claim that the statute did not apply where products were previously covered by a patent. It also refused to reach Judge Brinkema’s alternative holding that even if Solo had an intent to deceive, it could have committed no more than three “offenses” within the meaning of the statute.

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Judge Brinkema Stays Claims in TecSec Case Against All Defendants Except IBM

Posted on June 7, 2010 by Dabney Carr

In an order entered June 4 in TecSec v. IBM, et al, Case No. 1:10CV115, Judge Brinkema in Alexandria rejected an increasingly common tactic in patent cases – suing multiple unrelated defendants on numerous patents. While the practice apparently is allowed in the Eastern District of Texas, Judge Brinkema rebuffed it – ordering that the litigation proceed solely against IBM and staying the claims against the other defendants. The Court’s June 4 Order can be found here.

TecSec’s Complaint was massive and complex. It asserted 11 patents with a total of 380 claims in the very esoteric field of computer encryption technology against 13 separate defendant groups, including IBM, Oracle, SAP, Adobe, eBay and PayPal.

The defendants responded aggressively, filing an early motion to modify the Court’s normal pretrial schedule to extend the time for discovery and to require TecSec to issue its claim charts very early -- prior to the Rule 16(b) Pretrial Conference. The defendants emphasized the extraordinary nature of the case, pointing out that TecSec would not identify which of the 380 claims it was asserting and the massive amount of discovery that was expected – including an agreement to up to 800 hours of fact-witness depositions.

Judge Brinkema swiftly issued an order the day after defendants’ motion was filed ordering the parties to appear for a hearing the following Friday and indicating that she was considering limiting the litigation to one of the named defendants. At the hearing, Judge Brinkema granted the motion and moved the case schedule back by more than two months, which is almost unprecedented in the Eastern District of Virginia. The judge also ordered TecSec to file its finalized claim charts in two weeks. Judge Brinkema’s April 30 Order can be found here.

TecSec’s claim charts did little to narrow the case. It asserted 205 of the claims against a total of 61 accused products. TecSec asserted 196 claims against 29 IBM products and no fewer than 68 claims against each of the other Defendants. Moreover, TecSec accused a diverse range of products of infringement, ranging from mainframes, to programming languages, routers, database systems and PayPal’s online payment systems.

In response, all of the defendants except IBM moved to sever and to stay the claims against them. The moving defendants pointed out that they were competitors selling unique, proprietary products and argued that FRCP 18 and 20 do not permit the joinder of multiple defendants into a single lawsuit where the claims against the defendants are unrelated.

After a hearing on June 4, Judge Brinkema agreed with the moving defendants and entered an order directing that the litigation proceed solely against IBM and that the claims against all other defendants be stayed.

Judge Brinkema did not set forth the reasoning for her decision, but two factors made TecSec a good candidate for severance:

  • the large number of defendants and asserted claims made the case very unwieldy, especially under the Eastern District of Virginia’s fast trial procedures.
  • none of the moving defendants moved for transfer in addition to severance. As a result, there was no danger of inconsistent verdicts and greatly lessening the possibility of inconsistent claim constructions.

The broader issue is whether the Eastern District of Virginia judges would grant severance in other multiple defendant patent cases. On that issue, there appears a clear divide between the Eastern District of Virginia and the Eastern District of Texas. We plan to address the split between the courts in detail in a follow-up blog post soon.
 

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Federal Circuit Affirms EDVA Judge's Ruling in Long-Running Patent Interference Action

Posted on May 12, 2010 by Dabney Carr

On May 5, the Federal Circuit upheld a decision by EDVA District Judge Leonie Brinkema reversing a decision of the Board of Patent Appeals and Interferences (BPAI) in an interference proceeding that has taken eight years to work its way through the courts. Rolls-Royce, PLC v. United Technologies Corp., No. 2009-1307 (Fed. Cir. May 5, 2010) (found here). 

For an EDVA case, the case has a long and unusual history, and it’s not over. United Technology Corp. (UTC) filed its Request for Interference in the BPAI in July, 2002, and Judge Brinkema conducted a bench trial on the appeal from the BPAI in December, 2005. For some reason, however, Judge Brinkema did not issue a decision until more than three years later, on March 31, 2009. Rolls-Royce didn’t waste any time once the Federal Circuit upheld Judge Brinkema’s decision in its favor, however. The same day of the decision, Rolls-Royce filed suit for infringement of the patent-at-issue in the EDVA (Complaint found here). Rolls-Royce, PLC v. United Technologies Corp., Case No. 1:10CV00457 (E. D. Va.). The infringement suit has also been assigned to Judge Brinkema.  Because of the long delay, however, Rolls-Royce has potentially lost several years of recoverable damages.

 

The patents involved in the interference proceeding involve an improved design for jet engine fan blades to reduce the amount of shockwaves produced by the engine.  The BPAI ruled in favor of UTC, holding that UTC’s application covered a fan blade that had a tip that swept either forward or rearward. 

 

Judge Brinkema reversed the BPAI’s decision. She construed the UTC claim to cover only fan blades with tips that swept rearward, and so the UTC patent did not capture Rolls-Royce’s patent on a forward swept tip. Based on her claim construction, Judge Brinkema found that the Rolls-Royce patent was not obvious over the UTC claim.

 

UTC appealed, and the Federal Circuit upheld both Judge Brinkema’s construction and her finding of non-obviousness. The Federal Circuit rejected UTC’s argument that a forward sweep in the tip of the fan blade would have been an easily predictable and achievable variation in view of the disclosure of the rearward sweep in UTC’s earlier application. The invention was not obvious to try, the Court held, because of the broad selection of choices for further investigation that included any degree of sweep for the fan blade tip. Further, secondary considerations, which showed that an embodiment of Rolls-Royce’s invention had become the industry standard, reinforced the finding of non-obviousness.

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