Secure Axcess, LLC v. PNC Bank National Association

This is a patent case—the issue turns on what is a covered business method patent. Appellant Secure Axcess, LLC (“Secure Axcess”) challenges a Final Written Decision of the Patent Trial and Appeal Board (“Board” or “PTAB”). As part of that decision, the Board reaffirmed its determination that the patent at issue, U.S. Patent No. 7,631,191 (“’191 patent”), owned by Secure Axcess, was a covered business method (“CBM”) patent under § 18 of the Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284 (2011). The Board further held that claims 1–32, all the claims in the patent, were unpatentable under that statute on the grounds that they would have been obvious under the cited prior art.

On appeal, Secure Axcess challenges the Board’s determination to decide the case as a covered business method patent, as well as the Board’s obviousness determination. We agree with Secure Axcess on the first point and therefore do not reach the second. Recently, in Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379–82 (Fed. Cir. 2016), we concluded that the Board-adopted characterization of CBM scope in that case was contrary to the statute. We draw the same conclusion here, and further conclude that the patent at issue is outside the definition of a CBM patent that Congress provided by statute.

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Held: The supply of a single component of a multicomponent invention for manufacture abroad does not give rise to §271(f)(1) liability. Pp. 4–11.

(a) Section 271(f)(1)’s phrase “substantial portion” refers to a quantitative measurement. Although the Patent Act itself does not define the term “substantial,” and the term’s ordinary meaning may refer either to qualitative importance or to quantitatively large size, the statutory context points to a quantitative meaning. Neighboring words “all” and “portion” convey a quantitative meaning, and nothing in the neighboring text points to a qualitative interpretation. Moreover, a qualitative reading would render the modifying phrase “of the components” unnecessary the first time it is used in §271(f)(1). Only the quantitative approach thus gives meaning to each statutory provision.

Promega’s proffered “case-specific approach,” which would require a factfinder to decipher whether the components at issue are a “substantial portion” under either a qualitative or a quantitative test, is rejected. Tasking juries with interpreting the statute’s meaning on an ad hoc basis would only compound, not resolve, the statute’s ambiguity. And Promega’s proposal to adopt an analytical framework that accounts for both the components’ quantitative and qualitative aspects is likely to complicate rather than aid the factfinder’s review. Pp. 4–8.

(b) Under a quantitative approach, a single component cannot constitute a “substantial portion” triggering §271(f)(1) liability. This conclusion is reinforced by §271(f)’s text, context, and structure. Section 271(f)(1) consistently refers to the plural “components,” indicating that multiple components make up the substantial portion. Reading §271(f)(1) to cover any single component would also leave little room for §271(f)(2), which refers to “any component,” and would undermine §271(f)(2)’s express reference to a single component “especially made or especially adapted for use in the invention.” The better reading allows the two provisions to work in tandem and gives each provision its unique application. Pp. 8–10.

(c) The history of §271(f) further bolsters this conclusion. Congress enacted §271(f) in response to Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518, to fill a gap in the enforceability of patent rights by reaching components that are manufactured in the United States but assembled overseas. Consistent with Congress’s intent, a supplier may be liable under §271(f)(1) for supplying from the United States all or a substantial portion of the components of the invention or under §271(f)(2) for supplying a single component if it is especially made or especially adapted for use in the invention and not a staple article or commodity. But, as here, when a product is made abroad and all components but a single commodity article are supplied from abroad, the activity is outside the statute’s scope. Pp. 10–11.

773 F. 3d. 1338, reversed and remanded.


Metalcraft of Mayville, Inc. v. Toro Co.

The United States District Court for the Eastern District of Wisconsin granted Metalcraft of Mayville, Inc.’s motion for a preliminary injunction precluding The Toro Company and Exmark Manufacturing Co., Inc. from making, using, selling, and offering to sell lawnmowers equipped with platform suspension systems that infringe U.S. Patent No. 8,186,475 (“the ’475 patent”). We affirm.

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Organik Kimya v. International Trade Commission

Organik Kimya San. ve Tic., A.Ş., Organik Kimya Netherlands B.V., and Organik Kimya US, Inc. (collectively, “Organik Kimya”) appeal from the International Trade Commission’s (“the Commission” or “ITC”) decision imposing default judgment sanctions for spoliation of evidence and entering a limited exclusion order against Organik Kimya. See Certain Opaque Polymers, Inv. No. 337-TA-883, 2015 ITC LEXIS 139, at *5–6 (Apr. 17, 2015); see also Certain Opaque Polymers, Inv. No. 337-TA-883, at 16–24, available at commopin883.pdf (“Commission Opinion”); Certain Opaque Polymers, Inv. No. 337-TA-883, USITC Order No. 27, 2014 WL 5768586 (Oct. 20, 2014) (“ALJ Order”). Because the Commission did not abuse its discretion in entering default judgment as a sanction for Organik Kimya’s spoliation of evidence and further did not abuse its discretion in entering the limited exclusion order, we affirm.

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Personal Web Technologies, LLC v. Apple, Inc.

Apple Inc. petitioned for inter partes review of various claims of PersonalWeb Technologies, LLC’s U.S. Patent No. 7,802,310, asserting unpatentability for obviousness based on two prior-art references. After instituting review, the Patent Trial and Appeal Board reviewed the claims and agreed with Apple. PersonalWeb appeals the Board’s construction of certain claim terms and the ultimate obviousness determination. We affirm the Board’s claim construction. We vacate the Board’s obviousness determination as to the appealed claims, because the Board did not adequately support its findings that the prior art disclosed all elements of the challenged claims and that a relevant skilled artisan would have had a motivation to combine the prior-art references to produce the claimed ’310 inventions with a reasonable expectation of success. We remand for further proceedings.

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