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    Jim Hall is an intellectual property litigator straddling Nutter’s Litigation and Intellectual Property Departments. Clients rely on Jim to master the technical aspects of patent disputes and work with expert witnesses to ...

On June 12, 2017, the U.S. Supreme Court granted certiorari in Oil States Energy Services LLC v. Greene’s Energy Group, LLC to decide whether the AIA (America Invents Act) patent review program for challenging the validity of issued patents is constitutional. Specifically, the Court will decide the question of “whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”

Today the U.S. Supreme Court issued an opinion, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, in which it held that laches cannot be used as a defense to a claim of patent infringement. The opinion had been anticipated ever since the Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. ___ (2014) struck down the defense in copyright cases, using reasoning that appeared to apply to all federal actions involving causes of action subject to statutes of limitations.

Yesterday, the U.S. Supreme Court issued a decision in the case of Halo Electronics, Inc. v. Pulse Electronics, Inc., once again changing patent law by loosening the standard by which district courts may award enhanced damages under 35 U.S.C. § 284. In so doing, the Court discarded the two-part test set forth by the Court of Appeals for the Federal Circuit in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007). The so-called Seagate test first requires that the patentee show by clear and convincing evidence that an infringer’s actions were objectively unreasonable. If this burden is met, the patentee must then prove that the infringer subjectively knew or should have known that its actions risked infringing a valid patent. If a patent holder is able to meet both prongs of the test, any enhancement of damages is subject to the discretion of the district court. Appellate review of such determinations involves a tripartite standard, in which the determination of objective recklessness is reviewed de novo, the determination of subjective knowledge is reviewed for substantial evidence, and any award of enhanced damages is reviewed for abuse of discretion.

Exchange of ideas between InventorsEarlier this month, the Federal Circuit revisited the issue of inventorship disputes and iterated in a nonprecedential opinion that proving nonjoinder of inventors in an issued patent is a difficult threshold for a challenger to meet. In doing so, the Federal Circuit affirmed the district court holding that the challenge to correct inventorship of two issued patents was not supported by evidence that rose to the “clear and convincing” standard required to prevail on a 35 U.S.C. § 256 claim.

Posted in Litigation

On October 19, 2015, the Supreme Court consolidated and granted certiorari in Halo Electronics, Inc. v. Pulse Electronics, Inc., et al. and Stryker Corporation, et al. v. Zimmer, Inc., et al., both of which concern enhanced patent infringement damages under 35 U.S.C. § 284. At issue in both cases is the question of whether the Federal Circuit is correct in requiring a willfulness finding under the rigid, two-part Seagate test to award enhanced damages. Under Seagate, finding willfulness requires the patentee to prove that an infringer acted “despite an objectively high likelihood that its actions constituted infringement” and that such risk was known, or should have been known, to the infringer. The question of this test’s propriety is particularly ripe given the Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc. during its last term, where a similarly rigid test for imposing an award of attorney’s fees was rejected in favor of a more flexible and discretionary determination. 

Posted in Litigation, Patents

Expired patent- Parking meter

Summary: In Kimble v. Marvel Enterprises, Inc. 576 U.S. __ (2015), the Supreme Court relied on stare decisis, declining to overrule its 1964 Brulotte v. Thys Co. decision and holding that a patent owner cannot charge royalties for the use of an invention after the patent expires. Justice Kagan’s June 22, 2015 opinion affirmed the appellate court’s decision and maintains the status quo for patent licensing practice. As before, licensors should steer clear of Brulotte’s ban on post expiration royalties. However, the parties can use other intellectual property that is likely to live well beyond an underlying patent (e.g., trademark, trade secret) and other financial tools (e.g., amortization, partnering) to reach a competitive, mutually beneficial, and enforceable license agreement that exists beyond the life of the underlying patent.

Tags: Licensing

On January 20, 2015, the United States Supreme Court decided the case of Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., which presented the question of the proper standard of review for factual findings by district courts during patent claim construction. The CAFC has long held that claim construction rulings, including underlying factual findings, are reviewed de novo (that is, without deference to the district court). The Supreme Court has now partly upended that rule, holding that determinations of fact made by district courts must be reviewed for abuse of discretion, which is more deferential to the district court. The Court left alone, however, the existing de novo standard of review for the ultimate legal determination of patent claims' meanings.

Posted in Litigation, Patents

Today the United States Supreme Court decided the case of Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U. S.____ (2015), which presented the question of the proper standard of review for factual findings by district courts during patent claim construction. The Court of Appeals for the Federal Circuit (CAFC), the Nation's sole appellate court for cases arising under the patent statute (Chapter 35 of the United States Code), has long held that claim construction rulings, including underlying factual findings, are reviewed de novo (that is, without deference to the district court). The Supreme Court has now partly upended that rule, holding that determinations of fact made by district courts must be reviewed for abuse of discretion, which is more deferential to the district court. The Court left alone, however, the existing de novo standard of review for the ultimate legal determination of patent claims' meanings.

While the Court noted that "[i]n some instances, a factual finding will play only a small role in a judge's ultimate legal conclusion about the meaning of [a term in a patent claim]," in other cases "a factual finding may be close to dispositive of the ultimate legal question of the proper meaning of the term in the context of the patent." In either case, "the ultimate question of construction will remain a legal question."

Because the case before it presented a potentially dispositive factual dispute regarding the meaning of a particular term to persons skilled in the art, and because the CAFC overturned the district court's determination of that dispute under the de novo standard, the Court has remanded the case back to the CAFC with the instruction to apply the less stringent abuse of discretion standard to the district court's factual findings. Thus, while the Court was careful to note that "subsidiary factfinding is unlikely to loom large in the universe of litigated claim construction," there are sure to be litigants, like those in Teva Pharmaceuticals, who will be affected by this decision.

This advisory was prepared by James C. Hall, a member of the Intellectual Property practice group at Nutter McClennen & Fish LLP. For more information, please contact Jim or your Nutter attorney at 617.439.2000.

This advisory is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

In Octane Fitness LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), decided in April 2014, the Supreme Court lowered the bar for obtaining attorneys’ fees in patent infringement cases. In particular, the Supreme Court replaced the previously restrictive interpretation of an “exceptional case” that qualifies for the award of attorneys’ fees under § 285 of the Patent Act (chapter 35 of the United States Code (U.S.C.)) with a lower, more discretionary standard. We previously provided an analysis of Octane Fitness, and the related Highmark Inc. v. Allcare Health Mgmt. Sys., Inc. decision in an April 30, 2014 advisory. Since then, there has been a rash of litigants attempting to cash in on their success in intellectual property litigation of all types—including trademark and trade dress litigation brought under the Lanham Act (15 U.S.C.). Section 1117(a) of the Lanham Act includes a provision for awarding attorneys’ fees that is identical to § 285 of the Patent Act; however, because Octane Fitness only expressly addresses exceptional cases under § 285 of the Patent Act, courts are struggling with whether to replace the prevailing standard in their Circuit with the new, lower standard in cases brought under the Lanham Act. So far, courts are divided as to whether Octane Fitness applies to the Lanham Act, although a greater weight of authority exists in favor of applying the Octane Fitness standard to § 1117(a) of the Lanham Act.

Today the United States Supreme Court issued two opinions addressing patent law issues—Limelight Networks, Inc. v. Akamai Technologies, Inc. and Nautilus, Inc. v. Biosig Instruments, Inc. In both cases, the nation’s highest court unanimously reversed the Federal Circuit. In doing so, the Court simultaneously raised the bar for patentees with respect to patent infringement and lowered the bar for alleged infringers with respect to invalidity.

Active Inducement of Infringement

The Patent Act provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b). In Limelight Networks Inc. v. Akamai Technologies, Inc., Limelight was alleged to have actively induced infringement of a method patent by carrying out some steps of the claimed method and encouraging its customers to carry out the remaining steps. For purposes of this case, the Supreme Court assumed that infringement of all the method steps could not be attributable to a single party, either because Limelight had not actually performed the steps or because it did not direct or control others who performed them. Accordingly, the Supreme Court reversed the Federal Circuit and found that Limelight could not be liable for active inducement of infringement. In doing so, it reinstated the principle that liability for induced infringement must be predicated on direct infringement. The Court, however, made specific note that the Federal Circuit on remand will have the opportunity to revisit the question of direct infringement by Limelight under 35 U.S.C. § 271(a). For today, however, Limelight has escaped a finding of liability by dividing the performance of method steps between more than one party.

Indefiniteness

In addition to reversing the Federal Circuit’s holding concerning active inducement of infringement, the Court in Nautilus, Inc. v. Biosig Instruments, Inc. set forth a new test for patent definiteness. Patent claims can be found invalid for indefiniteness under 35 U.S.C. § 112. In Nautilus, Inc., the Court held that “a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” This new standard replaces the Federal Circuit’s long-standing “insolubly ambiguous” test, which directed lower courts to invalidate claims only if they are not “amenable to construction,” meaning that claims should survive so long as a court could “ascribe some meaning” to them. In overturning that standard, the Supreme Court found that it “can leave courts and the patent bar at sea without a reliable compass.”

Because the Court remanded the case back to the Federal Circuit with the instruction to apply the new standard to the claims at issue, the application and breadth of the newly pronounced indefiniteness standard are uncertain. While the Court found that the old standard was too lenient toward ambiguous claims, it cautioned that “[s]ection 112 … entails a ‘delicate balance’” that “must take into account the inherent limitations of language,” and allow for “[s]ome modicum of uncertainty,” while also requiring claims to “be precise enough to afford clear notion of what is claimed.” The Court also pointed out the importance of viewing the claims from the point of view of a person skilled in the art, and that such an investigation “may turn on evaluations of expert testimony.” Thus, the new standard appeals to a rule of reason, and its application likely will involve an intense factual investigation. In addition, the Court restricted its holding to the 2006 version of the Patent Act, which was in effect prior to enactment of the America Invents Act in 2012. It will thus be left to future cases to determine whether the Supreme Court’s new standard will be applied to patents filed after September 16, 2012.

This advisory was prepared by James C. Hall and Heather B. Repicky, members of the IP Litigation practice group at Nutter McClennen & Fish LLP. For more information, please contact Jim, Heather, or your Nutter attorney at 617.439.2000.

This advisory is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.

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