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February 2009
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Cordis Corp. v. Boston Scientific Corp.

Cordis Corporation (“Cordis”) appeals, and Boston Scientific Corporation and Scimed Life Systems, Inc. (“Boston Scientific”) cross-appeal, from a final judgment of the United States District Court for the District of Delaware. The judgment was based on two separate jury verdicts of infringement: (1) infringement by Boston Scientific of claims 1 and 23 of U.S. Patent No. 4,739,762 (“the ’762 patent”) and claim 2 of U.S. Patent No. 5,895,406 (“the ’406 patent”), and (2) infringement by Cordis of claim 36 of U.S. Patent No. 5,922,021 (“the ’021 patent”). The judgment also determined that those claims were not invalid. Cordis Corp. v. Boston Scientific Corp., Civ. No. 03-027-SLR (D. Del. Sept. 24, 2007) (judgment). With one minor exception, we affirm.

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In re Gleave

Martin Gleave and Maxim Signaevsky (collectively, “Gleave”) filed U.S. Patent Application No. 10/346,493 (“’493 application”) on January 17, 2003. The examiner rejected claims 1, 4, 15, and 18–21 as indefinite under 35 U.S.C. § 112, ¶ 2 and as anticipated or obvious under 35 U.S.C. § 102(b)/103(a). The United States Patent and Trademark Office Board of Patent Appeals and Interferences (“Board”) reversed the examiner’s § 112, ¶ 2 rejection and affirmed the § 102(b)/103(a) rejection. Ex parte Gleave, No. 2007-4154, 2008 WL 867799 (B.P.A.I. Mar. 31, 2008). Gleave appeals the § 102/103 rejections. For the reasons set forth below, we affirm.

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Clock Spring, L.P. v. Wrapmaster, Inc.

Clock Spring, L.P. (“Clock Spring”) brought suit alleging that Wrapmaster, Inc. (“Wrapmaster”) infringed the claims of U.S. Patent No. 5,632,307 (“’307 Patent”) and violated section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A). The ’307 Patent claims methods for repairing damaged high-pressure gas pipes. On summary judgment the United States District Court for the Southern District of Texas held that the claims of the ’307 Patent were invalid due to obviousness and that the Lanham Act claim was without merit. We affirm the summary judgment of invalidity because we conclude that the claims of the ’307 Patent are invalid as a matter of law, due to prior public use. We do not reach the issue of invalidity due to obviousness. Additionally, we affirm the district court’s summary judgment determination that the false advertising claim is without merit.

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Tafas v. Doll

The United States Patent and Trademark Office (“USPTO”) appeals the April 1, 2008 decision of the United States District Court for the Eastern District of Virginia granting summary judgment that four recently promulgated rules exceed the scope of the USPTO’s rulemaking authority. Because we conclude that the four rules are procedural, but that Rule 78 is inconsistent with 35 U.S.C. § 120, we affirm-in-part, vacate-in-part, and remand.

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E-Pass Technologies, Inc. v. 3Com Corp

On the merits in this appeal, E-Pass Technologies, Inc. (“E-Pass”) challenges two final determinations of the U.S. District Court for the Northern District of California (i) concluding that three related cases filed by E-Pass were exceptional under 35 U.S.C. § 285 and (ii) awarding attorneys’ fees. E-Pass Techs., Inc. v. 3Com Corp., Nos. 00-CV-2255, 03-CV-4747, 04-CV-0528 (N.D. Cal. Nov. 21, 2006) (“Decision”); E-Pass Techs., Inc. v. 3Com Corp., Nos. 00-CV-2255, 03-CV-4747, 04-CV-0528, 2007 WL 4170514 (N.D. Cal. Nov. 14, 2007). We affirm those rulings today in a separate Judgment under Federal Circuit Rule 36. This opinion addresses Access Systems Americas, Inc.’s (formerly known as PalmSource, Inc.) (“PalmSource”) motion for sanctions, in which it argues that E-Pass’s appeal is frivolous as it pertains to PalmSource. We agree. Consequently, we grant the motion, but award a different sanction than the one requested.

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Henkel Corp. v. The Procter & Gamble

Henkel Corporation (“Henkel”) appeals from a final decision of the Board of Patent Appeals and Interferences (“the Board”), Henkel Corp. v. Procter & Gamble Co., Patent Interference No. 105,174 (B.P.A.I. Mar. 28, 2008) (“Board Decision”), which awarded priority of invention to The Procter & Gamble Company (“P&G”). Because the Board’s decision is supported by substantial evidence, we affirm.

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Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Products

This is a patent case. Larson Manufacturing Company of South Dakota, Inc. (“Larson”), appeals the final judgment of the United States District Court for the District of South Dakota dismissing its suit against Aluminart Products Limited and Chamberdoor Industries, Inc. (together, “Aluminart”), for infringement of claims 14 and 21 of Larson’s U.S. Patent No. 6,618,998 (the “’998 patent”). Ex Parte Reexamination Certificate U.S. Patent No. 6,618,998 C1 (the “’998 Reexamination Certificate”). The district court dismissed Larson’s suit after it held, following a bench trial, that the ’998 patent was unenforceable due to inequitable conduct during reexamination proceedings before the U.S. Patent and Trademark Office (“PTO”) relating to the patent. Larson Mfg. Co. v. Aluminart Prods. Ltd., 513 F. Supp. 2d 1102 (D.S.D. 2007) (“Inequitable Conduct Decision”). The court found that Larson failed to disclose to the Reexamination Panel three items of prior art and two office actions issued in the prosecution of a continuation application that grew out of the application that resulted in the ’998 patent. The court rejected Larson’s argument that the three items of prior art were cumulative of prior art which already was before the Reexamination Panel and therefore were not material, as well as its argument that the office actions were not material because all of the critical references noted in them already had been disclosed to the Reexamination Panel. After finding that Larson intended to deceive the Reexamination Panel, the court balanced its findings of materiality and intent and found inequitable conduct.
Aluminart has filed a cross-appeal. In it, Aluminart argues that the district court erred in declining to find the case exceptional under 35 U.S.C. § 285 (1952). Larson Mfg. Co. v. Aluminart Prods. Ltd., 529 F. Supp. 2d 1059 (D.S.D. 2007) (“Fees Decision”).
For the reasons set forth below, we conclude that the district court erred in finding that the three undisclosed items of prior art were material because they were not cumulative of prior art already before the Reexamination Panel. As a result, although we agree with the district court that the two office actions that Larson failed to disclose to the Reexamination Panel were material, we vacate the court’s finding of inequitable conduct and its resulting judgment in favor of Aluminart by reason of unenforceability of the ’998 patent. We do so because the district court did not analyze Larson’s deceptive intent separately for each of the three items of prior art and two office actions. Rather, its determination that Larson intended to deceive the Reexamination Panel was based upon its finding that Larson failed to disclose collectively three items of prior art and two office actions, all of which the court determined were material. We hold today, however, that the three items of prior art which were not disclosed were cumulative of prior art already before the Reexamination Panel. Hence, they were not material. In contrast, we affirm the district court’s determination that the two office actions were material. Under these circumstances, the district court must redetermine the issue of intent and then, if it finds intent, balance anew materiality and intent to arrive at an ultimate conclusion as to whether there was inequitable conduct. We therefore remand the case to the district court for further proceedings. Our decision renders Aluminart’s cross-appeal moot.

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Clearvalue, Inc. v. Pearl River Plymers

ClearValue, Inc. (“ClearValue”), Richard Alan Haase (“Haase”), and attorney Gordon Waggett (“Waggett”) (together, “Appellants”) appeal the December 21, 2007 amended final judgment of the United States District Court for the Eastern District of Texas, entering judgment against ClearValue and Haase and imposing sanctions on Appellants in connection with ClearValue and Haase’s suit against Pearl River Polymers, Inc. (“Pearl River”); Polychemie, Inc.; SNF, Inc.; Polydyne, Inc.; and SNF Holding Company (together, “Appellees”), for infringement of U.S. Patent No. 6,120,690 (the “’690 patent”) and for misappropriation of trade secrets. ClearValue, Inc. v. Pearl River Polymers, Inc., No. 6:06-CV-197 (E.D. Tex. Dec. 21, 2007). The district court:
1. Struck ClearValue’s and Haase’s pleadings, under Fed. R. Civ. P. 37 and the court’s inherent powers, and entered judgment for Appellees on ClearValue’s and Haase’s claims and Appellees’ counterclaims. Among other things, this action resulted in the ’690 patent being rendered invalid.
2. Awarded Appellees recovery of attorney’s fees, costs, and expenses incurred between November 29, 2005, and June 28, 2007 as follows:
a. $121,107.38 in attorney’s fees, under Fed. R. Civ. P. 26 and 37, against Appellants jointly and severally;
b. $306,863.87 in attorney’s fees and $613,410.74 in costs and expenses, under the court’s inherent powers, against Appellants jointly and severally;
c. $1,628,039.05 in attorney’s fees, under 35 U.S.C. § 285, against Appellants jointly and severally; and
d. $47,677.30 as costs, under 28 U.S.C. § 1920, against Appellants jointly and severally.

The district court thus imposed monetary sanctions in the total amount of $2,717,098.34. The amended final judgment followed the court’s Memorandum Opinion and Order of June 28, 2007 in which the court found that Appellants had engaged in sanctionable conduct. ClearValue, Inc. v. Pearl River Polymers, Inc., 242 F.R.D. 362 (E.D. Tex. 2007) (“Sanctions Decision”).
For the reasons set forth below, we
1. Affirm the finding of sanctionable conduct;
2. Affirm the award of $121,107.38 in attorney’s fees under Rules 26 and 37 as to ClearValue and Haase, but reverse as to Waggett;
3. Reverse the order under Rule 37 and the court’s inherent powers (1) striking ClearValue and Haase’s pleadings and (2) entering judgment in favor of Appellees on ClearValue and Haase’s claims and Appellees’ counterclaims;
4. Reverse the award of attorney’s fees, costs, and expenses under the court’s inherent powers;
5. Reverse the award of attorney’s fees under 35 U.S.C. § 285; and
6. Reverse the award of costs under 28 U.S.C. § 1920.

We thus affirm-in-part and reverse-in-part the amended final judgment. The case is remanded to the district court for further proceedings consistent with this opinion.

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Situation Management Systems v. ASP Consulting

The plaintiff consulting company, as part of its services to domestic and international clients, uses copyrighted training materials of several hundred pages geared toward teaching techniques for effective communication and negotiation within the workplace. It sued a competitor saying that the competitor had copied and used training materials substantially similar to plaintiff's in violation of the copyright laws.

This case concerns the proper application of two definitional criteria for what subject matter is eligible for copyright protection. The first is the originality requirement, see 17 U.S.C. § 102(a) ("Copyright protection subsists . . . in original works of authorship . . . ."), which is a constitutional prerequisite for copyright protection. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 351 (1991). The second is the statutory codification of the exclusion from copyright protection for processes and systems. See 17 U.S.C. § 102(b) ("In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."). Indeed, the statutory restriction in § 102(b) is a codification of "[t]he most fundamental axiom of copyright law . . . that '[n]o author may copyright his ideas or the facts he narrates.'" Feist, 499 U.S. at 344-45 (second alteration in original) (quoting Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 556 (1985)).

Here, the district court considered the plaintiff's works "largely noncopyrightable because they are devoted to describing a process or because they are not original." Situation Mgmt. Sys. v. ASP Consulting Group, 535 F. Supp. 2d 231, 240 (D. Mass. 2008). To reach this conclusion, the district court treated the originality requirement as functionally equivalent to a novelty standard. E.g., id. at 243 (finding that the plaintiff's work "does not constitute original expression because it is merely a summary of common-sense communication skills"). It read the statutory exclusion of processes and systems from copyright protection as barring protection for descriptions of processes and systems. E.g., id. at 240 (finding the plaintiff's works largely unprotected by copyright because "they focus on concepts and teach a noncopyrightable process"). The court also found the plaintiff's works noncopyrightable based upon its own subjective assessment of the works' creative worth. E.g., id. at 239 (describing SMS's works as "fodder for sardonic workplace humor" and as "aggressively vapid").

A brief from amici, an industry association along with another company that produces corporate training materials, argues that the district court's conclusions have implications far beyond the dispute between the parties to this case and put at risk the legitimate copyright expectations of the more than $100 billion management training industry. Indeed, amici argue that under the district court's approach, those in the training industry would have difficulty obtaining effective copyright protection for their works. We vacate the district court's finding of noninfringement and remand for further proceedings consistent with this opinion.

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Jones v. Blige

Plaintiffs-Appellants Leonard Jones and James E. White (collectively, “Plaintiffs”) sued Mary J. Blige, a singer, Asiah Lewis and Luchana M. Lodge, lyricists, and Universal-MCA Music Publishing, Inc. and Universal Music Group, Inc. (“Universal”) (collectively, “Defendants”) for copyright infringement. Plaintiffs claim that a song by Blige, “Family Affair,” infringed a song created by Plaintiffs, “Party Ain’t Crunk,” that Plaintiffs submitted to Universal on a demo compact disc (“CD”) prior to the release of Blige’s song. The district court granted summary judgment to all Defendants. Plaintiffs appeal that ruling, and Defendants Blige and Universal appeal the district court’s denial of their motion for attorneys’ fees. For the reasons set forth below, we AFFIRM the district court’s decisions.

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