By Steven Wilfong
Multimedia car system patents ruled as unenforceable based on inequitable conduct
The United States Court of Appeals for the Federal Circuit in American Calcar, Inc. v. American Honda Motor Co., 13-1061 (Fed. Cir. September 26, 2014) affirmed the United States District Court for the Southern District of California’s finding that three multimedia car system patents (U.S. Patents #6,330,497, 6,438,465, and 6,542,795) were unenforceable because the defendant had proved inequitable conduct. Calcar at 12. The court applied the two-pronged standard it established in Theranese, which requires a defendant alleging inequitable conduct to demonstrate that a patent applicant “(1) misrepresented or omitted information material to patentability, and (2) did so with specific intent to mislead or deceive the PTO.” Id. at 5, citing Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d. 1333, 1344 (Fed. Cir. 2013). The district court found that information withheld during the patent application process would have caused the PTO to reject the claims, id. at 8, and that one of the inventors “possessed undisclosed information, . . . knew it was material, and deliberately decided to withhold [it] from the PTO.” Id. at 10. The Federal Circuit held that neither conclusion was clearly in error, and that both the materiality and the intent prongs of the Theranese standard were thereby satisfied. Id. at 11–12. Law360 provides an in-depth discussion of the ruling.
ITC’s ruling that uPI violated Consent Order affirmed
The United States Court of Appeals for the Federal Circuit in uPI Semiconductor Corporation v. ITC, 13-1157 (Fed. Cir. September 25, 2014) affirmed the International Trade Commission’s ruling that uPI violated a Consent Order, uPI at 3, and reversed the Commission’s finding that the violation did not extend to “products allegedly developed and produced after entry of the Consent Order,” id. at 5. The Consent Order mandates that uPI will not “knowingly aid, abet or induce importation” of DC current converter products infringing three patents (U.S. Patents #7,315,190, 6,414,470, 7,132,717). Id. at 4. Appealing the Commission’s findings, uPI argued that the Consent Order cannot apply to third-party imports absent a general exclusion order, citing Kyocera Wireless Corp. v. International Trade Commission, 545 F.3d 1340 (Fed. Cir. 2008). Id. at 10. They also argued that the Commission did not prove that the imports in question did not derive from sales prior to the Consent Order being issued. Id. at 10-11. The Federal Circuit found that Kyocera did not necessitate an exclusion order, id. at 13, and that evidence related to upstream sales, downstream sales, and import lag times were sufficient to establish that sales of accused products occurred after the Consent Order issued. Id. The Federal Circuit also ruled that the uPI’s evidence of compliance for post-Consent Order products was “grossly inadequate,” and reversed the Commission’s finding that these products were independently developed. Id. at 19.
Court rules that VeriFone devices did not infringe on payment terminal software patents
The United States Court of Appeals for the Federal Circuit in CardSoft, LLC v. VeriFone, Inc., 14-1135 (Fed. Cir. October 17, 2014), reversed the United States District Court for the Eastern District of Texas’s ruling that VeriFone devices infringed two patents describing payment terminal software (U.S. Patents #6,934,945 and 7,302,683). CardSoft at 2-3. The Federal Circuit found that the district court’s construction of the term “virtual machine” as “a computer programmed to emulate a hypothetical computer for applications relating to transport of data” was incomplete, id. at 6, citing Cardsoft, Inc. v. VeriFone Holdings, Inc., No. 2:08-cv-98, 2011 WL 4454940, at *8 (E.D. Tex. Sept. 29, 2011), because this definition omits reference to a virtual machine’s “ability to run applications that [do] not depend on any specific underlying operating system or hardware,” id. at 7. The court described this ability as a virtual machine’s “defining feature.” Id. The Federal Circuit reversed because of the district court’s construction of the term, id. at 5. Because CardSoft did not address Appellants’ argument of no infringement under an updated construction, the court granted judgment of no infringement as a matter of law. Id. at 10. Law360 provides a discussion of the ruling.