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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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LIFE TECHNOLOGIES CORP. ET AL. v. PROMEGA CORP.

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.

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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 http://www.itcblog.com/images/ 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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MPHJ Technology Investments, LLC v. Ricoh Americas Corp.

MPHJ Technology Investments, LLC appeals the decision of the Patent Trial and Appeal Board (“Board” or “PTAB”), on Inter Partes Review, that claims 1–8 of MPHJ’s U.S. Patent No. 8,488,173 (“the ’173 Patent”) are invalid on the grounds of anticipation or obviousness.1 On appellate review, we affirm the Board’s decision. To determine the validity of a patented invention, the meaning and scope of the claims are first determined. See Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 1353 (Fed. Cir. 1999) (“[T]he first step in any validity analysis is to construe the claims of the invention to determine the subject matter for which patent protection is sought.”). As ratified by the Supreme Court in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), when unexpired patents are reviewed by the Board, the claims are given their broadest reasonable interpretation consistent with the specification and the prosecution history, from the viewpoint of persons skilled in the field of the invention.

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United States v. Bowers

Defendant Donald Bowers was previously involved in a civil trade secret misappropriation case that was litigated in the United States District Court for the District of Utah. During the course of that litigation, Bowers willfully and repeatedly violated a permanent injunction issued by the district court presiding over the case, and also refused to purge himself of civil contempt. His actions resulted in findings of civil contempt against him, judgments against him for the plaintiff’s attorneys’ fees, and, ultimately, a criminal referral to the United States Attorney for the District of Utah. A federal grand jury subsequently indicted Bowers on two counts of contempt, in violation of 18 U.S.C. § 401(3). The case proceeded to trial, where a jury found Bowers guilty of both counts. Bowers was sentenced to a term of imprisonment of fifteen months, to be followed by a thirty-six month term of supervised release. He was also directed, as a condition of supervised release, to make monthly payments on the outstanding amount owed by him to the plaintiff in the underlying civil case.

Bowers now appeals, arguing that the district court erred in (1) imposing a special condition of supervised release requiring him to make monthly payments on the outstanding judgments owed to the plaintiff in the civil case, (2) denying his motion for disclosure of the criminal referral, and (3) sentencing him to a term of imprisonment that exceeded six months. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm in all respects.

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Shire Development, LLC v. Watson Pharmaceuticals, Inc.

Plaintiffs (collectively, Shire) sued Defendants (collectively, Watson) for infringing claims 1 and 3 of U.S. Patent No. 6,773,720 by filing Abbreviated New Drug Application No. 203817 with the Food and Drug Administration seeking to market a generic version of Shire’s mesalamine drug, LIALDA®. Because Watson’s ANDA Product does not satisfy the Markush group requirements in claim 1(b), we reverse and remand with instructions to enter judgment of non-infringement.

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Flo & Eddie v. Sirius XM Radio

Defendant-Appellant Sirius XM Radio, Inc., appeals from the November 14, 2014 and December 12, 2014 orders of the United States District Court for the Southern District of New York (McMahon, J.) denying its motions, respectively, for summary judgment and for reconsideration in connection with Plaintiff-Appellee Flo & Eddie, Inc.’s copyright infringement suit. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5784 (CM), 2014 WL 7178134 (S.D.N.Y. Dec. 12, 2014) (denial of motion for reconsideration); Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F. Supp. 3d 325 (S.D.N.Y. 2014) (denial of motion for summary judgment). We previously concluded that the appeal raised a significant and unresolved issue of New York law that is determinative of this appeal: Is there a right of public performance for creators of pre-1972 sound recordings under New York law and, if so, what is the nature and scope of that right?

We certified this question to the New York Court of Appeals. Flo & Eddie, Inc. v.Sirius XM Radio, Inc., 821 F.3d 265 (2d Cir. 2016). The Court of Appeals accepted certification and responded that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2016 WL 7349183 (N.Y. Dec. 20, 2016).

In light of this ruling, we REVERSE the district court’s denial of Appellant’s motion for summary judgment and REMAND with instructions to grant Appellant’s motion for summary judgment and to dismiss the case with prejudice.

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ACTOS End-Payor Antitrust Litigation

Plaintiffs allege that the defendants-appellees (collectively “Takeda”) prevented competitors from timely marketing a generic version of Takeda’s diabetes drug ACTOS by falsely describing two patents to the Food and Drug Administration. Plaintiffs claim that these false patent descriptions channeled Takeda’s competitors into a generic drug approval process that granted the first-filing applicants a 180-day exclusivity period, which in turn acted as a 180- day “bottleneck” to all later-filing applicants. Of the ten generic applicants, nine took that route. However, one generic manufacturer, Teva Pharmaceutical Industries, Ltd. and Teva Pharmaceuticals USA, Inc. (collectively “Teva”), sought approval via another regulatory mechanism, but was thwarted when the FDA announced that all generic manufacturers would be required to take the bottlenecked route. The FDA’s announcement was expressly based on Takeda’s representations that it had correctly described its patents. Thereafter, Takeda settled pending patent infringement suits with the three first-filing generic manufacturers and Teva on terms that kept them out of the market until August 2012 (though Teva, unlike the three firstfiling generics, could only enter the market as an authorized distributor at that time), and with the other six later-filing generic manufacturers on terms that kept them out of the market for another 180 days after that, i.e., until at least February 2013.

Plaintiffs and the class they seek to represent are drug purchasers who allege that they were wrongfully obliged to pay monopoly prices for ACTOS from January 2011, when Takeda’s patent on the active ingredient in ACTOS expired, to at least February 2013, when the mass of generic market entry occurred.

The district court dismissed plaintiffs’ antitrust claims for failing to plausibly allege that Takeda’s false patent descriptions caused any delay in generic market entry. The district court reasoned that, inter alia, plaintiffs failed to identify a viable regulatory route for generic drug approval that would have avoided the 180-day bottleneck, and that even if they had, they failed to plausibly allege how the generic manufacturers would have avoided Takeda’s infringement lawsuits, all of which were voluntarily settled. Plaintiffs appealed.

To the extent plaintiffs’ theory posits a delay in the marketing of generic alternatives to ACTOS by all the generic applicants other than Teva, we affirm, because plaintiffs’ theory presupposes that these applicants were aware of Takeda’s allegedly false patent descriptions when they filed their applications, which is not supported by well-pleaded allegations. However, because plaintiffs’ theory as to Teva does not require any knowledge of the false patent descriptions, we reach other issues as to Teva and find that plaintiffs plausibly alleged that Takeda delayed Teva’s market entry. We therefore vacate the judgment of the district court to that limited extent.

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