Articles Posted in Supreme Court

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Defendant Murphy USA Inc. (“Murphy”) filed a motion for summary judgment of invalidity as to certain claim U.S. Patent No. 6,076,071 (“the ‘071 Patent”) and one claim of U.S. Patent No. 6,513,016 (“the ‘016 Patent”) on the grounds that the patents are directed to non-patentable subject matter under 35 U.S.C § 101. In its motion, Murphy contended that “[t]he Asserted Claims, directed to an ‘automated product pricing system,’ cover nothing more than the abstract idea of changing prices from a central location using known electronic components, and are not patent-eligible under § 101.” Murphy also presented a chart of one of the claims to demonstrate why each discrete claimed “principle” is purportedly accomplished in a conventional manner.

The district court began its analysis by noting that”[p]atent claims enjoy a presumption of validity. 35 U.S.C. § 282. Beyond listing the claimed elements in a column entitled ‘Abstract Commercial Principle,’ Defendant has failed to articulate convincingly why it believes the ‘automated product pricing system’ of the Asserted Claims is considered abstract under the law. By evaluating Claim 24 of the ‘071 Patent as a whole, the court concludes the Asserted Claims are not abstract under the law.”
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After an appeal to the Federal Circuit, Defendant Arthrex, Inc. (“Arthrex”) filed a motion to reopen the judgment under FRCP 60(b). Arthrex premised its motion on the argument that the judgment should be reopened in light of the Supreme Court’s recent holding in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831 (2015).

Plaintiffs Smith & Nephew, Inc. and John Hayhurst (collectively “S&N”) had appealed the district court’s decision to grant Arthrex’s motion for judgment as a matter of law. As set forth by the district court, under the case law in effect at the time of the appellate decision, the Federal Circuit reviewed all aspects of the district court’s claim construction de novo. The Federal Circuit ultimately reversed the decision granting Arthrex’s motion for judgment as a matter of law.
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In this patent infringement action, FedEx moved for reconsideration after the district court had denied its motion for summary judgment regarding the plaintiff’s claim for inducing patent infringement. FedEx moved for reconsideration based on the Supreme Court’s recent decision in Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct. 2111 (2014).

The district court first analyzed whether the motion to reconsider was procedurally proper. “Under Local Rule 7-18, a motion for reconsideration may be made on the following grounds only:

(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. No motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion.”
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In this patent infringement action, Defendant Lighthouse Photonics Corporation’s (“Lighthouse”) moved to reconsider the Court’s Claim Construction Order. Lighthouse argued three reasons for reconsideration: “first, Newport withheld discovery regarding its relevant prior art patents; second, a recent Supreme Court decision constitutes an intervening change in the law; and third, the Court adopted a construction that had not been advanced by either party until the reply briefing.”

The district court, turning to the first basis for the motion to reconsider, stated: “There has been no shortage of sniping and finger-pointing in this case, and the briefing on this Motion is no exception. The parties vigorously dispute whether Newport withheld discovery regarding its prior art patents: No. 4,756,003 (“‘003 Patent”) and No. 5,410,559 (“‘559 Patent”). The Court finds no need to wade into the quagmire over who withheld what, because it exercises its “inherent jurisdiction to modify, alter, or revoke” interlocutory decisions. See Martin, 226 F.3d at 1048-49. Specifically, the Court finds that the presentation of two related patents, which were allegedly withheld by Newport, constitutes good cause to reconsider the May 7, 2014 claim construction order.”
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After a hearing in an Investigation occurred between February 24 and March 7, 2014 and with the parties having submitted their opening post-hearing briefs on March 21, 2014 and their reply post-hearing briefs on March 28, 2014, the Administrative Law Judge determined that supplemental briefing was necessary after the Supreme Court’s decision in Nautilus v. Biosig.

Noting that the final initial determination on violation in the Investigation was currently due to be issued no later than June 20, 2013, the Administrative Law Judge pointed out that “among the material issues involved in this investigation is whether certain claims of the asserted patents are indefinite under 35 U.S.0 § 112.”
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For over a decade, to show that a claim term is invalid as indefinite under 35 U.S.C. §112, ¶2, the Federal Circuit has required that such terms be “not amenable to construction” or “insolubly ambiguous.” The Supreme Court in Nautilus, Inc. v. Biosig Instruments, Inc. has rejected that standard on the grounds that it tolerates too much imprecision. Under the new standard, a claim term is indefinite if it, instead, fails to define “the scope of the invention with reasonable certainty.”

The patent at issue, assigned to Biosig Instruments, Inc. (“Biosig”), involves a heart-rate monitor used with exercise equipment. Prior heart-rate monitors, the patent asserts, were often inaccurate in measuring the electrical signals accompanying each heartbeat (electrocardiograph or ECG signals) because of the presence of other electrical signals (electromyogram or EMG signals) generated by the user’s skeletal muscles. The invention claims to improve on prior art by detecting and processing ECG signals in a way that filters out the EMG interference.

Claim 1 of the patent, which contains the limitations critical to the case, recites a “heart rate monitor for use by a user in association with exercise apparatus and/or exercise procedures.” The claim comprises, among other elements, a cylindrical bar with a “live” electrode and a “common” electrode “mounted . . . in spaced relationship with each other.” Biosig filed the underlying patent infringement suit, alleging that Nautilus, Inc. (“Nautilus”) infringed on its patented claims by selling exercise machines containing Biosig’s patented technology.

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In the long-awaited decision in Limelight Networks, Inc. v. Akamai Techs., Inc., the Supreme Court once again reversed the Federal Circuit. This time, the Court’s reversal involved the issue of indirect infringement. Specifically, the Court held that an accused infringer cannot be liable for inducing infringement under §271(b) where no one has directly infringed under §271(a) or any other statutory provision.

By way of background, Akamai Technologies, Inc., (“Akamai”) is the exclusive licensee of a patent that claims a method of delivering electronic data using a content delivery network (“CDN”). Limelight Networks, Inc., (“Limelight”) also operates a CDN and carries out several of the claimed steps in the patent. But, its customers, rather than Limelight itself, perform a claimed step of the patent known as “tagging.”

Under Federal Circuit case law, most recently refined in Miniauction, Inc. v. Thomson Corp., liability for direct infringement of a method patent requires performance of all steps to be attributable to a single party. The District Court concluded that Limelight could not have directly infringed the patent at issue because performance of the “tagging” step could not be attributed to Limelight. In an en banc decision, the Federal Circuit reversed, holding that a defendant who performed some steps of a method patent and encouraged others to perform the rest could be liable for inducement of infringement even if no single entity was liable for direct infringement.

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In a nine to zero decision authored by Justice Breyer, the United States Supreme Court reversed a decision of the Federal Circuit and held that when a licensee seeks a declaratory judgment against a patentee that the licensee’s products do not infringe the licensed patent(s), the patentee bears the burden of persuasion on the issue of infringement.

Petitioner Medtronic, Inc., (“Medtronic”) designs, makes, and sells medical devices. Respondent Mirowski Family Ventures, LLC, (“Mirowski”) owns patents relating to implantable heart stimulators. In 1991, Medtronic and Mirowski entered into a patent-license agreement that allows Medtronic to practice several Mirowski patents in exchange for royalty payments. In 2007, pursuant to terms of the agreement, Mirowski notified Medtronic that it believed several newly released Medtronic products infringed the licensed patents and, therefore, Medtronic owed additional royalties. Medtronic disagreed and challenged Mirowski’s infringement claim in a declaratory judgment action. The District Court (for the District of Delaware) concluded that Mirowski, as the party asserting infringement, bore the burden of proving infringement and that Mirowski had not met that burden. Mirowski appealed to the Federal Circuit.
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In Mayo v. Prometheus, the U.S. Supreme Court held that claims directed to a diagnostic method were unpatentable, not simply because the subject matter of the claims was not novel or obvious, but rather because the subject matter covered by the claims was the mere application of the laws of nature – the discovery of facts of nature – and therefore not patentable on a more fundamental basis under Section 101 of the Patent Act.
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Defendant American Master Lease LLC (“AML”) appealed the decision of Judge Guilford of the Central District of California holding that all claims of U.S. Patent No. 6, 292,788 were invalid for failing to meet the subject matter eligibility requirements of Section 101 of the Patent Statute. The Federal Circuit (in a panel consisting of Circuit Judges Prost, Schall and Moore) affirmed the invalidity of the claims based on the district court’s pre-In re Bilski application of the machine or transformation test.

The claims at issue relate to an investment tool to enable property owners to buy and sell property without incurring tax liability pursuant to 26 U.S.C. § 1031 (“1031 Exchange”). All claims in the ‘788 patent are method claims, with claim 1 being representative:

1. A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising:

aggregating real property to form a real estate portfolio;

encumbering the property in the real estate portfolio with a master agreement; and
creating a plurality of deedshares by dividing title in the real estate portfolio into a plurality of tenant-in-common deeds of at least one predetermined denomination, each of the plurality of deedshares subject to a provision in the master agreement for reaggregating the plurality of tenant-in-common deeds after a specified interval.
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