Federal Circuit Flash Digest – Cases in Brief

Presumption of “Means-Plus-Function” Can Be Overcome If the Term Recites Sufficient Structure

Skky, Inc. v. MindGeek s.a.r.l., No. 2016-2018 (Fed. Cir. June 7, 2017)

In its recent opinion Skky, Inc. v. MindGeek s.a.r.l., No. 2016-2018 (Fed. Cir. June 7, 2017), the Federal Circuit affirmed the decision of the Patent Trial and Appeal Board (PTAB) that a claim term reciting sufficient structure does not qualify as a means-plus-function term invoking 35 U.S.C. § 112 ¶ 6 (2006), even if the clause explicitly uses the word “means.”

Skky’s patent describes “a method of wirelessly delivering . . . audio and/or visual files . . . to one or more wireless device means comprising . . . transmitting to said wireless device means . . . audio and/or visual files wirelessly. . . .” U.S. Patent 7,658,875, col. 33 ll. 14–32 (emphasis added). While the Examiner interpreted the term “wireless device means” to be a means-plus-function term invoking Section 112 Paragraph 6 (prior to the amendment by the American Invents Act of 2011) during the patent prosecution, the Federal Circuit did not defer to the Examiner’s interpretation because the court was not bound by it.

Instead, the court followed its precedent in Williamson, finding  the essential inquiry into whether a claim term invokes Section 112 Paragraph 6 to be “whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite means as the name for structure.” Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1348 (Fed. Cir. 2015) (en banc in relevant part). Here, although the word “means” triggers a presumption that the term is one of means-plus-function, the court found that “wireless device” was used in common parlance to designate structure rather than functionality. The court did not find the claims to recite any function for the “wireless device means” to perform. Therefore, the court concluded that the PTAB did not err in finding that the term “wireless device means” fails to invoke Section 112 Paragraph 6.

Matthew Bultman, writing for Law360, also summarized this case.

Litigation Conduct Need Not Be Sanctionable to Make a Patent Case “Exceptional” for Attorneys Fee Award

Rothschild Connected Devices Innovations, LLC v. Guardian Prot. Servs., No. 2016-2521 (Fed. Cir. June 5, 2017)

In Rothschild Connected Devices Innovations, LLC v. Guardian Prot. Servs., No. 2016-2521 (Fed. Cir. June 5, 2017), the Federal Circuit reversed and remanded the Eastern District of Texas District Court’s decision that Defendant did not merit attorney fees pursuant to 35 U.S.C. § 285 (2012) because Plaintiff had not engaged in conduct sufficient to make the litigation “exceptional.”

Plaintiff Rothschild Connected Devices Innovations, LLC (“Rothschild”) brought a patent infringement action against ADS Security, L.P. (“ADS”) among other Defendants. Rothschild’s patent recites a “system and method for creating a personalized consumer product.” U.S. Patent 8,788,090, Abstract. ADS filed an answer and counterclaims, sent an email to Rothschild alleging that the patent was invalid due to ineligible patent subject matter and prior art anticipation, and offered to settle if Rothschild paid ADS's attorney fees. Rothschild declined. ADS subsequently filed a motion for judgment on the pleadings. ADS also sent Rothschild a notice pursuant to Federal Rule of Civil Procedure 11(c)(2) (“Safe Harbor Notice”) that notified Rothschild of ADS’s intention to file Rule 11(b) motion for sanctions. In light of the Safe Harbor Notice, Rothschild voluntarily moved to dismiss its action. ADS opposed and filed a cross-motion for attorney fees pursuant to Section 285. The District Court granted Rothschild’s motion to dismiss and denied ADS’s motion for attorney fees.

The Federal Circuit held that the District Court abused its discretion on three aspects. First, the District Court misjudged the substantive strength of Rothschild’s litigation position . Rothschild asserted patent validity without examining the prior art provided by ADS and failed to provide evidence that it had even examined ADS’s allegedly infringing product. Such conduct contradicted Rothschild’s affidavit that it brought the action in good faith. Second, the District Court failed to consider Rothschild’s conduct in prior litigation. Rothschild had asserted the same patent in 58 cases against technologies ranging from video cameras to coffeemakers. Absent evidence of good faith, the Federal Circuit concluded, Rothschild’s vexatious litigation pattern warrants an affirmative exceptional case finding. Finally, the District Court improperly conflated Rule 11 with Section 285: whether a party engages in sanctionable conduct under Rule 11(b) is not the appropriate benchmark for fee award under § 285. Rather, a court may award fees when a party’s unreasonable conduct is exceptional, even though it may not be independently sanctionable. Judge Mayer concurred separately to emphasize that this case was exceptional because the patent was clearly ineligible for patentable subject matter, rendering the complaint and the lawsuit frivolous on its face.

Ryan Davis, writing for Law360, and Patrick J. Halloran, writing for LifeScienceIP, also reported on this case.

Specific Language Is Key in Establishing Personal Jurisdiction through Exclusive Licenses

New World Int’l, Inc. v. Ford Glob. Techs., LLC, No. 2016-2097 (June 8, 2017)

In New World Int’l, Inc. v. Ford Glob. Techs., LLC, No. 2016-2097 (June 8, 2017), the Federal Circuit held that an exclusive license imposing no meaningful obligations to enforce or defend the licensed patents cannot serve as a basis for establishing personal jurisdiction over a non-resident patent holder.

New World International, Inc. and National Auto Parts Inc., (collectively, “New World”) filed a declaratory judgment of noninfringement and invalidity against Ford Global Technologies, LLC (“FGTL”) after receiving several cease-and-desist letters from FGTL. FGTL is incorporated in Delaware and headquartered in Michigan. It does not do business or have any offices or employees in Texas. However, FGTL granted an exclusive license for the two patents-in-suit to an entity that does business in all 50 states. Past Federal Circuit case law suggests that an exclusive license may serve as a basis for personal jurisdiction over a non-resident patent holder if the agreement imposes an obligation on the patent holder to enforce or defend the patent on behalf of the licensee who exploits the patent rights in the forum state. Here, FGTL's license agreement states that if the licensee learns of potential infringement, FGTL “will have the right to determine what action, if any, is to be taken in each such instance, but shall not unreasonably refuse a request by [the licensee] to enforce [the patents] against allegedly-infringing use . . . .”

The Federal Circuit affirmed the Northern District of Texas District Court’s decision to dismiss the complaint for lack of personal jurisdiction over FGTL, finding that FGTL retained complete control over how and when to handle enforcement of the patent against infringing third parties even if the enforcement action came at the request of the licensee. Thus, an exclusive license to a licensee doing business in the forum state does not necessarily impose a sufficient obligation on the patent holder regarding the enforcement of the patent rights to subject the patent holder to specific personal jurisdiction in that state. It turns on the specific language of the license.

Joseph Robinson and Robert Schaffer, writing for IPWatchDog, also provide an overview of the case.