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Hyatt v. Lee

Gilbert P. Hyatt appeals from the district court’s decision that it lacked subject matter jurisdiction over his Administrative Procedure Act (“APA”) claims against the Patent and Trademark Office (“PTO”) and its acting Director under 5 U.S.C. § 701(a)(2) and, alternatively, that the PTO would have been entitled to summary judgment for these claims. For the reasons discussed below, we affirm the district court’s alternative holding that the PTO would have been entitled to summary judgment.

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ABT Sys., LLC v. Emerson Elec. Co.

This is a patent case. The University of Central Florida (“University”) is the assignee of U.S. Patent No. 5,547,017 (“the ’017 patent”), titled “Air Distribution Fan Recycling Control.” The patent is licensed to ABT Systems, LLC (“ABT”). ABT and the University sued Emerson Electric Co. (“Emerson”) and three other defendants in the United States District Court for the Northern District of Illinois for infringement of claims 1–5 of the ’017 patent. Eventually, the case was transferred to the United States District Court for the Eastern District of Missouri and proceeded to trial before a jury against Emerson alone after its three co-defendants settled. Following trial, the jury found the asserted claims not invalid by reason of obviousness and infringed by Emerson’s “Big Blue” thermostats. Based on a royalty rate of $2.25 per unit, the jury awarded damages in the amount of $311,379 on sales of 138,891 thermostats. ABT Sys., LLC v. Emerson Elec. Co., No. 4:11-cv-00374-AGF, 2013 WL 5567713, at *2 (E.D. Mo. Oct. 9, 2013).

ABT appeals three rulings of the district court relating to damages. It contends these rulings were erroneous and impacted its damages award. For its part, Emerson cross-appeals the district court’s denial of its motion for judgment as a matter of law (“JMOL”) that claims 1–5 of the ’017 patent are invalid by reason of obviousness. See id. at *3.

For the reasons set forth below, we hold that the district court erred in denying Emerson’s motion for JMOL of invalidity. We therefore reverse the judgment of noninvalidity, vacate the judgment of infringement, and remand the case to the district court for dismissal of the complaint. In view of this disposition, it is not necessary for us to address ABT’s appeal, which is rendered moot.

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JVC Kenwood Corp. v. Nero, Inc.

JVC Kenwood Corporation (“JVC”) sued Nero, Inc. and Arcsoft, Inc. for contributory and induced infringement (“indirect infringement”) of certain JVC patents directed to various uses of DVD and Blu-ray optical discs. The charge of indirect infringement is based on Nero’s sale of software to end users of DVD and Blu-ray discs, who allegedly directly infringe the JVC patents. The district court summarized JVC’s infringement theory as follows: JVC’s theory of infringement rests on the compliance of Nero’s software with the same DVD and Blu-ray standards deemed essential to the manufacture, sale, and use of the licensed DVD and Blu-ray optical discs. This theory states that each Patent is essential to playing, copying, and recording data on an optical disc compliant with the DVD or Blu-ray standard. The Nero software must practice the Patents because the Nero software is used in conjunction with standardscompliant DVD or Blu-ray optical discs. JVC Kenwood Corp. v. Arcsoft, Inc., 966 F. Supp. 2d 1003, 1014 (C.D. Cal. 2013) (“Dist. Ct. Op.”). The district court did not accept JVC’s theory. The court held, on summary judgment, that JVC is “barred from asserting claims of direct infringement against end users for use of Nero software with DVD and Blu-ray optical discs made or sold by a party whose products have been expressly released from claims of infringement by JVC with regard to the Patents.” Id. at 1018. The court held that, absent direct infringement, Nero cannot be liable for indirect infringement. Id. The court alternatively held that: “End users’ use of Nero software with DVD and Blu-ray optical discs licensed under the Patents is subject to the complete affirmative defense of patent exhaustion with regard to infringement of the Patents.” Id.

We conclude that the district court correctly held that, on JVC’s theory and proffered evidence of infringement, summary judgment of non-infringement was properly granted. However, facts material to the issue of patent exhaustion were insufficiently developed to warrant summary judgment on that alternative ground.

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Personalized User Model, LLP v. Google, Inc.

Google Inc. (“Google”) appeals from the decision of the United States District Court for the District of Delaware granting judgment as a matter of law in favor of Personalized User Model, LLP (“PUM”) and Yochai Konig (“Konig”) (collectively, “Appellees”) on Google’s breach of contract counterclaim. Order, Personalized User Model LLP v. Google Inc., C.A. No. 09-525-LPS (D. Del. Sept. 17, 2014), ECF No. 724. PUM cross-appeals from the district court’s decision construing the claims of U.S. Patents 6,981,040 (“the ’040 patent”) and 7,685,276 (“the ’276 patent”). Personalized User Model LLP v. Google Inc., C.A. No. 09-525-LPS, 2012 WL 295048, at *15–16 (D. Del. Jan. 25, 2012). Because the district court did not err in granting judgment as a matter of law, we affirm the district court’s decision appealed by Google. Moreover, we dismiss the cross-appeal because we lack jurisdiction over the issue as raised.

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WesternGeco L.L.C. v. Ion Geophysical Corp.

WesternGeco L.L.C. (“WesternGeco”) filed suit against ION Geophysical Corp. (“ION”) for infringement of, inter alia, U.S. Patent Nos. 6,691,038 (“the ’038 patent”), 7,080,607 (“the ’607 patent”), 7,162,967 (“the ’967 patent”), and 7,293,520 (“the ’520 patent”). The jury found infringement and no invalidity with respect to all asserted claims for each of the four patents, and awarded $93,400,000 in lost profits and $12,500,000 in reasonable royalties.

ION appeals, arguing that WesternGeco is not the owner of the ’607, ’967, and ’520 patents and therefore lacks standing to assert them; that the district court applied an incorrect standard in granting summary judgment as to claim 18 of the ’520 patent under 35 U.S.C. § 271(f)(1) and that this ruling infected the trial with respect to liability for all other claims; and that lost profits were impermissibly awarded for conduct abroad.

WesternGeco conditionally cross-appeals, arguing that, if we find in favor of ION with respect to any of its appealed issues, we should set aside the damages award because the district court erred in preventing WesternGeco’s damages expert from testifying on the issue of a reasonable royalty. WesternGeco also challenges the district court’s refusal to award enhanced damages for willful infringement.

We affirm in all respects, except that we reverse the district court’s award of lost profits resulting from conduct occurring abroad.

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SpeedTrack, Inc. v. Office Depot, Inc.

Depot, Inc., CDW Corporation, Newegg Inc., and PC Connection, Inc. (together, “Appellees”) alleging infringement of U.S. Patent No. 5,544,360 (“the ’360 Patent”), which is directed to a computer filing system for accessing files and data according to user-designated criteria. Specifically, SpeedTrack alleged that Appellees’ online retail websites infringe the ’360 Patent by using software developed by Endeca Technologies, Inc. (“Endeca”): the Endeca Information Access Platform (“IAP” or “IAP software”).

Appellees moved for summary judgment on grounds that SpeedTrack’s claims were precluded by a prior lawsuit where we affirmed the district court’s judgment that the same IAP software did not infringe the ’360 Patent. SpeedTrack, Inc. v. Endeca Techs., Inc., 524 F. App’x 651 (Fed. Cir. 2013) (“Walmart”). The district court granted judgment as a matter of law in favor of Appellees, finding that SpeedTrack’s claims are barred in part by res judicata and in full under the Kessler doctrine as announced in Kessler v. Eldred, 206 U.S. 285 (1907). SpeedTrack, Inc. v. Office Depot, Inc., No. 4:07-cv-3602, 2014 WL 1813292 (N.D. Cal. May 6, 2014). Because we agree that the Kessler doctrine precludes SpeedTrack’s infringement claims in full, we affirm.

 

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King Drug Co of Florence Inc, v. Smithkline Beecham Corp.

In this appeal from the grant of a motion to dismiss for failure to state a rule-of-reason claim under Sections 1 and 2 of the Sherman Act under Federal Rule of Civil Procedure 12(b)(6), we are asked to determine whether FTC v. Actavis, 133 S. Ct. 2223 (2013), covers, in addition to reverse cash payments, a settlement in which the patentee drug manufacturer agrees to relinquish its right to produce an “authorized generic” of the drug (“no-AG agreement”) to compete with a first-filing generic’s drug during the generic’s statutorily guaranteed 180 days of market exclusivity under the Hatch-Waxman Act as against the rest of the world.

In Actavis, the Supreme Court held that unexplained large payments from the holder of a patent on a drug to an alleged infringer to settle litigation of the validity or infringement of the patent (“reverse payment”) “can sometimes violate the antitrust laws.” Id. at 2227. The Court rejected the near-irrebuttable presumption, known as the “scope of the patent” test, that a patentee can make such reverse payments so long as it is paying potential competitors not to challenge its patent within the patent’s lifetime.

Plaintiffs here, direct purchasers of the brand-name drug Lamictal, sued Lamictal’s producer, Smithkline Beecham Corporation, d/b/a GlaxoSmithKline (“GSK”), and Teva Pharmaceutical Industries Ltd. (“Teva”2 ), a manufacturer of generic Lamictal, for violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2.3 In earlier litigation, Teva had challenged the validity and enforceability of GSK’s patents on lamotrigine, Lamictal’s active ingredient. Teva was also first to file an application with the FDA alleging patent invalidity or nonenforceability and seeking approval to produce generic lamotrigine tablets and chewable tablets for markets alleged to be annually worth $2 billion and $50 million, respectively. If the patent suit resulted in a judicial determination of invalidity or nonenforceability—or a settlement incorporating such terms—Teva would be statutorily entitled to a valuable 180- day period of market exclusivity, during which time only it and GSK could produce generic lamotrigine tablets. (The relevant statute permits the brand to produce an “authorized generic” during the exclusivity period. Mylan Pharm., Inc. v. FDA, 454 F.3d 270, 276-77 (4th Cir. 2006); Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d 51, 55 (D.C. Cir. 2005); see also Sanofi-Aventis v. Apotex Inc., 659 F.3d 1171, 1175 (Fed. Cir. 2011).)

After the judge presiding over the patent litigation ruled the patent’s main claim invalid, GSK and Teva settled. They agreed Teva would end its challenge to GSK’s patent in exchange for early entry into the $50 million annual lamotrigine chewables market and GSK’s commitment not to produce its own, “authorized generic” version of Lamictal tablets for the market alleged to be worth $2 billion annually. Plaintiffs contend that this “no-AG agreement” qualifies as a “reverse payment” under Actavis because, like the cash reverse payments the Court there warned could face antitrust scrutiny, GSK’s no-AG commitment was designed to induce Teva to abandon the patent fight and thereby agree to eliminate the risk of competition in the $2 billion lamotrigine tablet market for longer than the patent’s strength would otherwise permit.

We believe this no-AG agreement falls under Actavis’s rule because it may represent an unusual, unexplained reverse transfer of considerable value from the patentee to the alleged infringer and may therefore give rise to the inference that it is a payment to eliminate the risk of competition. As the Court noted, these kinds of settlements are subject to the rule of reason.

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Mohsenzadeh v. Lee

Hossein Mohsenzadeh appeals the district court’s entry of summary judgment in favor of the government on the issue of whether the United States Patent and Trademark Office (“PTO”) properly calculated patent term adjustments for two patents that issued from divisional applications. Because we find that the district court did not err in affirming the PTO’s denial of Mohsenzadeh’s requests for patent term adjustments, we affirm.

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Gaymar Indus., Inc. v. Cincinnati Sub-Zero Prods., Inc.

Cincinnati Sub-Zero Products, Inc. (“CSZ”), the prevailing party in this patent infringement case, appeals the district court’s denial of attorney’s fees under 35 U.S.C. § 285. In holding that this was not an “exceptional case,” the district court found that plaintiff Gaymar Industries, Inc.’s (“Gaymar”) litigation position was not objectively baseless. In assessing the totality of the circumstances, the district court relied on several instances of defendant CSZ’s purported litigation misconduct as a basis for finding that the case was not exceptional. We affirm the district court’s finding of a lack of objective baselessness. We reverse the exceptional case finding insofar as it was based on CSZ’s purported misconduct, and remand.

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Lighting Ballast Control LLC v. Philips Electronics, NA

This case returns to us on remand from the Supreme Court of the United States and was returned to the panel for reconsideration in light of Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U.S. ___, 135 S. Ct. 831 (2015). Appellant Universal Lighting Technologies, Inc. (“ULT”) appeals four issues. We affirm.

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