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In re Owens

Timothy S. Owens, et al. (“Owens”) appeal a decision of the United States Patent and Trademark Office (“PTO”) Board of Patent Appeals and Interferences (“Board”), Ex parte Owens, No. 2010-5622 (B.P.A.I. Dec. 1, 2011) (“Board Op.”), affirming a rejection of his design patent application, U.S. Design Patent Application No. 29/253,172 (filed Feb. 2, 2006) (“’172 application”). For the reasons set forth below, we affirm.

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Power Integrations v. Fairchild Semiconductors Int'l, Inc.

This is an appeal from a final judgment of the United States District Court for the District of Delaware finding that Fairchild Semiconductor International, Inc. and Fairchild Semiconductor Corporation (collectively, “Fairchild”) willfully infringed several valid patents belonging to Power Integrations, Inc. (“Power Integrations”). After two jury trials, a bench trial, and post-trial proceedings including a motion for remittitur, the district court entered final judgment in favor of Power Integrations and awarded compensatory and enhanced damages in the amount of $12,866,647.16. Fairchild on appeal asserts that the district court erred in its claim construction, in denying Fairchild’s motion for judgment as a matter of law that one of Power Integrations’ claimed inventions would have been obvious, in formulating its remitted damages award, and in finding Fairchild’s infringement willful. On cross-appeal, Power Integrations argues that it was error for the district court to grant Fairchild’s motion for remittitur, thereby reducing the jury’s original damages award by eighty-two percent. Power Integrations asserts further error in the district court’s exclusion of evidence related to price erosion prior to the date Fairchild was notified of its infringement, and in the district court’s denial of Power Integrations’ motion for a post-verdict accounting.

For the reasons set out below, we affirm the district court’s finding of non-obviousness; we affirm-in-part and reverse-in-part on claim construction; we vacate the district court’s order of remittitur and its attendant damages award; we find error in the district court’s exclusion of evidence related to pre-notice price erosion and in its refusal to grant Power Integrations a postverdict accounting; we vacate the district court’s finding of willful infringement; and we remand to the district court for further proceedings consistent with this opinion.

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Checkpoint Sys., Inc. v. All-Tag Sec. S.A.

Checkpoint Systems, Inc. (“Checkpoint”) sued All-Tag Security S.A., All-Tag Security Americas, Inc., and an All- Tag customer Sensormatic Electronics Corporation (collectively, “All-Tag”) for infringement of U.S. Patent No. 4,876,555 (“the ’555 patent”), entitled “Resonance Label and Method for its Fabrication.” A jury found the ’555 patent not infringed, invalid, and unenforceable. The district court entered judgment on the verdict, held the case “exceptional” in terms of 35 U.S.C. §285, and awarded the defendants approximately $6.6 million in attorney fees, costs, and interest. The patent term has expired, and only the award of attorney fees is appealed. We reverse the award, for the requirements of §285 were not met.

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Abbott Labs v. Cordis Corp.

Cordis Corporation appeals from the decision of the United States District Court for the Eastern District of Virginia granting Abbott Laboratories’ motion to quash two subpoenas duces tecum issued pursuant to 35 U.S.C. § 24. We conclude that section 24 only empowers a district court to issue a subpoena for use in a “contested case,” and that contested cases are limited to those in which the regulations of the United States Patent and Trademark Office (“PTO”) authorize the parties to take depositions. Since the PTO does not provide for depositions in inter partes reexamination proceedings, such proceedings are not “contested cases” within the meaning of section 24, and subpoenas under section 24 are not available. We affirm.

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Federal Trade Commission v. AbbVie Products LLC

Several years ago, Appellee Federal Trade Commission (“FTC”) began investigating a settlement between Appellant AbbVie Products LLC, then known as Solvay Pharmaceuticals (“Solvay”), and several other pharmaceutical companies. The settlement, the FTC believed, violated the antitrust laws because the companies effectively had colluded to preserve the monopoly profits from Solvay’s highly lucrative patent on AndroGel, a topical testosterone gel. During the course of the investigation, Solvay voluntarily disclosed a confidential document called the Project Tulip Financial Analysis (“Tulip FA”), which projected AndroGel’s profits and also discussed the appropriate terms of, and benefits from, a settlement between Solvay and its competitors. The FTC filed an antitrust suit against Solvay and the other pharmaceutical companies based on the settlement and attached the Tulip FA as the sole exhibit to its complaint.

In 2010, Solvay convinced a district court judge in the Northern District of Georgia to issue a protective order sealing the Tulip FA because the document contained sensitive financial information that could be harmful to Solvay’s business interests. The district court eventually dismissed the FTC’s suit, and a panel of this Court affirmed. FTC v. Watson Pharm., Inc., 677 F.3d 1298 (11th Cir. 2012). In 2012, however, the Supreme Court issued a writ of certiorari to review this Court’s decision in Watson, and the FTC returned to the district court and asked for the Tulip FA to be unsealed so that the FTC and its amici could discuss the document openly in the Supreme Court. The district court did so, based in large part on its finding that the harms Solvay would suffer from the Tulip FA’s being made public have been reduced in the intervening three years. Solvay appeals the district court’s decision to modify the earlier protective order and unseal the Tulip FA. Because we conclude that the district court did not abuse its considerable discretion to modify its own protective order, we affirm.

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Columbia Pictures Industries v. Fung

The panel affirmed in part and vacated in part the district court’s judgment in favor of film studios, which alleged that the services offered and websites maintained by the defendants induced third parties to download infringing copies of the studios’ copyrighted works.

Affirming the district court’s summary judgment, the panel held that under Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 545 U.S. 913 (2005), the defendants were liable for contributory copyright infringement on an inducement theory because the plaintiffs established (1) distribution of a device or product, (2) acts of infringement, (3) an object of promoting the product’s use to infringe copyright, and (4) causation in the defendants’ use of the peer-to-peer file sharing protocol known as BitTorrent.

The panel held that the defendants were not entitled to protection from liability under any of the safe harbor provisions of the Digital Millennium Copyright Act, including safe harbors provided by 17 U.S.C. § 512(a), (c), and (d) for transitory digital network communications, information residing on systems or networks at direction of users, and information location tools.

The panel nonetheless rejected the argument that inducement liability is inherently incompatible with protection under the safe harbors. Reversing and modifying in part the district court’s permanent injunction, the panel held that certain provisions of the injunction were too vague to meet the notice requirements of Fed. R. Civ. P. 65(d), and certain provisions were unduly burdensome.

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Kirtsaeng v. John Wiley & Sons, Inc.

Held: The “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. Pp. 7–33.

(a) Wiley reads “lawfully made under this title” to impose a geographical limitation that prevents §109(a)’s doctrine from applying to Wiley Asia’s books. Kirtsaeng, however, reads the phrase as impos- ing the non-geographical limitation made “in accordance with” or “in compliance with” the Copyright Act, which would permit the doctrine to apply to copies manufactured abroad with the copyright owner’s permission. Pp. 7–8.

(b) Section 109(a)’s language, its context, and the “first sale” doctrine’s common-law history favor Kirtsaeng’s reading. Pp. 8–24. (1) Section 109(a) says nothing about geography. “Under” can logically mean “in accordance with.” And a nongeographical interpretation provides each word in the phrase “lawfully made under this title” with a distinct purpose: “lawfully made” suggests an effort to distinguish copies that were made lawfully from those that were not, and “under this title” sets forth the standard of “lawful[ness]” (i.e., the U. S. Copyright Act). This simple reading promotes the traditional copyright objective of combatting piracy and makes word-by- word linguistic sense.

In contrast, the geographical interpretation bristles with linguistic difficulties. Wiley first reads “under” to mean “in conformance with the Copyright Act where the Copyright Act is applicable.” Wiley then argues that the Act “is applicable” only in the United States. However, neither “under” nor any other word in “lawfully made under this title” means “where.” Nor can a geographical limitation be read into the word “applicable.” The fact that the Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad does not mean the Act is inapplicable to copies made abroad. Indeed, §602(a)(2) makes foreign-printed pirated copies subject to the Copyright Act. And §104 says that works “subject to protection” include unpublished works “without regard to the [author’s] nationality or domicile,” and works “first published” in any of the nearly 180 nations that have signed a copyright treaty with the United States. Pp. 8–12.

(2) Both historical and contemporary statutory context indicate that Congress did not have geography in mind when writing the present version of §109(a). A comparison of the language in §109(a)’s predecessor and the present provision supports this conclusion. The former version referred to those who are not owners of a copy, but mere possessors who “lawfully obtained” a copy, while the present version covers only owners of a “lawfully made” copy. This new language, including the five words at issue, makes clear that a lessee of a copy will not receive “first sale” protection but one who owns a copy will be protected, provided that the copy was “lawfully made.” A nongeographical interpretation is also supported by other provisions of the present statute. For example, the “manufacturing clause,” which limited importation of many copies printed outside the United States, was phased out in an effort to equalize treatment of copies made in America and copies made abroad. But that “equal treatment” principle is difficult to square with a geographical interpreta- tion that would grant an American copyright holder permanent control over the American distribution chain in respect to copies printed abroad but not those printed in America. Finally, the Court normally presumes that the words “lawfully made under this title” carry the same meaning when they appear in different but related sections, and it is unlikely that Congress would have intended the consequences produced by a geographical interpretation. Pp. 12–16.

(3) A nongeographical reading is also supported by the canon of statutory interpretation that “when a statute covers an issue previ- ously governed by the common law,” it is presumed that “Congress intended to retain the substance of the common law.” Samantar v. Yousuf, 560 U. S. ___, ___. The common-law “first sale” doctrine, which has an impeccable historic pedigree, makes no geographical distinctions. Nor can such distinctions be found in Bobbs-Merrill Co. v. Straus, 210 U. S. 339, where this Court first applied the “first sale” doctrine, or in §109(a)’s predecessor provision, which Congress enacted a year later. Pp. 17–19.

(4) Library associations, used-book dealers, technology compa- nies, consumer-goods retailers, and museums point to various ways in which a geographical interpretation would fail to further basic constitutional copyright objectives, in particular “promot[ing] the Progress of Science and useful Arts,” Art. I, §8, cl. 8. For example, a geographical interpretation of the first-sale doctrine would likely re- quire libraries to obtain permission before circulating the many books in their collections that were printed overseas. Wiley counters that such problems have not occurred in the 30 years since a federal court first adopted a geographical interpretation. But the law has not been settled for so long in Wiley’s favor. The Second Circuit in this case was the first Court of Appeals to adopt a purely geographical interpretation. Reliance on the “first sale” doctrine is also deeply embedded in the practices of booksellers, libraries, museums, and retailers, who have long relied on its protection. And the fact that harm has proved limited so far may simply reflect the reluctance of copyright holders to assert geographically based resale rights. Thus, the practical problems described by petitioner and his amici are too serious, extensive, and likely to come about to be dismissed as insignificant— particularly in light of the ever-growing importance of foreign trade to America. Pp. 19–24.

(c) Several additional arguments that Wiley and the dissent make in support of a geographical interpretation are unpersuasive. Pp. 24– 33.

654 F. 3d 210, reversed and remanded.

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Frolow v. Wilson Sporting Goods Co.

Jack L. Frolow appeals from the final judgment of the U.S. District Court for the District of New Jersey in favor of Wilson Sporting Goods Co. (Wilson). Among other issues, Mr. Frolow challenges the district court’s entry of summary judgment in favor of Wilson and the court’s entry of judgment as a matter of law (JMOL) at the close of Mr. Frolow’s case. Because the district court erred when it granted summary judgment, we reverse and remand for the reasons set forth below. We affirm the district court’s judgment for all other issues raised on appeal.

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Aristocrat Tech., Australia v. Int'l Game Tech.

Aristocrat Technologies Australia PTY Limited and Aristocrat Technologies, Inc. (collectively, “Aristocrat”) and International Game Technology and IGT (collectively, “IGT”) compete in the casino gaming machine industry. In 2006, Aristocrat brought the current action against IGT in the Northern District of California alleging that IGT directly and indirectly infringes two of Aristocrat's patents—U.S. Patent No. 7,056,215 (“the ’215 patent”) and U.S. Patent No. 7,108,603 (“the ’603 patent”). The asserted patents generally relate to gaming machines, such as slot machines, and claim methods for awarding a progressive prize through a bonus game that may appear in addition to the main game. Aristocrat accuses IGT gaming devices that feature various bonus games in which a player may win progressive prizes. Following remand from a previous appeal, IGT moved for summary judgment of noninfringement.

On May 13, 2010, the district court granted IGT’s motion for summary judgment of noninfringement as to all asserted claims of both patents explaining that IGT's accused products require two separate actors: (1) the casino via the gaming machine and (2) the player. Under our decision in Muniauction, the district court found that the lack of a single entity performing all of the steps of the asserted claims precludes direct infringement as a matter of law. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1330 (Fed. Cir. 2008). While Aristocrat’s appeal of the district court’s claim construction and sum-mary judgment ruling was pending, we issued our en banc decision in Akamai Technologies, Inc. v. Limelight Net-works, Inc., 692 F.3d 1301 (Fed. Cir. 2012). We affirm the district court’s claim constructions and its ruling on direct infringement and, in light of our decision in Akamai, we vacate and remand the portion of the district court’s ruling on indirect infringement.

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Synqor, Inc. Artesyn Techs., Inc.

The United States District Court for the Eastern District of Texas granted SynQor, Inc. (SynQor) partial summary judgment of infringement against nine power converter manufacturers (Defendants) on U.S. Patents Nos. 7,072,190 (’190 Patent); 7,272,021 (’021 Patent); 7,564,702 (’702 Patent); 7,558,083 (’083 Patent); and 7,269,034 (’034 Patent). Specifically the District Court determined the “isolation” limitations of the asserted claims of the ’190 Patent, ’021 Patent, ’702 Patent, and ’083 Patent appear in Defendants’ products. SynQor, Inc. v. Artesyn Techs., Inc. (Claim Construction Order), No. 07-CV-0497, 2010 U.S. Dist. LEXIS 74808, at *27 (E.D. Tex. July 26, 2010); SynQor, Inc. v. Artesyn Techs., Inc. (Summary Judgment Order), No. 07-CV-0497 (E.D. Tex. Dec. 12, 2010). The trial court denied Defendants’ motions for judgment as a matter of law (JMOL) or new trial after a jury found all asserted claims infringed, not invalid, and awarded lost-profits damages of over $95 million. SynQor, Inc. v. Artesyn Techs., Inc., No. 07-CV-0497 (E.D. Tex. Aug. 17, 2011). The court awarded supplemental and enhanced damages for post-trial infringement. SynQor, Inc. v. Artesyn Techs., Inc. (Supplemental Dam-ages Order), No. 07-CV-0497 (E.D. Tex. July 11, 2011). Based on a review of the record evidence, this court affirms.

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