• August 9, 2015

By: Gregory K. Gerstenzang

September Federal Circuit Review

As part of our ongoing effort to keep clients and friends informed of important legal updates, we are pleased to provide the L&A Federal Circuit Review, a monthly publication highlighting recent Federal Circuit and Supreme Court decisions. Each monthly review summarizes a few decisions and the key takeaways. Please contact your lead L&A attorney for additional details.

Media Rights Techs., Inc. v. Capital One Fin. Corp., No 2014-1218 (Indefiniteness)

In Media Rights, the Federal Circuit affirmed the judgment of the District Court for the Eastern District of Virginia that all claims of Media Rights’ U.S. Patent No. 7,316,033 (“’033 Patent”) are invalid for indefiniteness. The claims of the ’033 Patent are directed to methods, systems, and computer readable media for preventing the unauthorized recording of electronic media. The claims of the ’033 Patent require a “compliance mechanism,” which the Federal Circuit interpreted as a means-plus-function term. The court held that the specification disclosed insufficient structure for the recited “compliance mechanism,” rendering all claims of the’033 Patent invalid for indefiniteness.

When a claim term includes language such as “means for” performing a function, a rebuttable presumption arises that the claim term should be interpreted as a means-plus-function term. Conversely, when a claim term does not include such “means for” language, a rebuttable presumption arises that the claim term should not be interpreted as a means-plus-function term. This presumption can be overcome if a party demonstrates that the claim term fails to recite sufficiently definite structure for performing a stated function.

The district court found that the specification of the ‘033 Patent failed to disclose a sufficient structure or any specific algorithm for the claimed “compliance mechanism.” The specification and claims disclosed functions that were performed by the “compliance mechanism,” for example, controlling data output by diverting a data pathway, monitoring the controlled data pathway, managing an output path by diverting a data pathway, and stopping the play of media content. However, the patent did not disclose any particular algorithm or method utilized by the “compliance mechanism” to perform these functions. Because the structure for computer-implemented functions must be an algorithm, and the specification of the ’033 Patent failed to describe “an algorithm whose terms are defined and understandable,” the district court determined that the “compliance mechanism” term was indefinite and, therefore, the ’033 Patent was invalid.

On appeal, the Federal Circuit affirmed, finding that the term “compliance mechanism” has no commonly understood meaning and is not generally understood by one skilled in the art to connote a particular structure. As such, Capital One successfully rebutted the presumption against means-plus-function claiming. Further, the Federal Circuit found that nothing in the written description of the `033 Patent added sufficiently to the meaning of the term’s structure. The specification only described the term’s function and interaction with other parts of the disclosed computer system and failed to disclose an algorithm for performing the claimed function. Accordingly, the Federal Circuit found that the district court properly determined that “compliance mechanism” is a means-plus-function term, and that the specification fails to adequately disclose the structure to perform its functions, rendering all claims of the ’033 Patent invalid for indefiniteness.

Key Takeaway:

Claim terms having no conventionally understood meaning may be interpreted as means-plus-function terms if there is insufficient structure for such terms recited in the claims. Practitioners should be careful to include a description of a particular structure or a detailed embodiment for performing such functions in the specification of a patent to avoid a claim from being found invalid as indefinite.

Dow Chemical Co. v. NOVA Chemicals Corp., No. 2014-1431 (Issue Preclusion)

In Dow v. NOVA, the Federal Circuit held that an intervening change in the law of definiteness allowed the accused infringer to raise indefiniteness as an invalidity defense during an appeal of supplemental damages.

The Dow patent claimed certain ethylene plastic compositions. At trial, a jury found that NOVA infringed Dow’s claims, and that the claims were not invalid for indefiniteness. In 2012, the Federal Circuit affirmed the jury’s finding that the claims were sufficiently definite. The case then entered the damages phase. However, after supplemental damages were awarded on remand, and while the case was pending a second appeal on the issue of supplemental damages, the Supreme Court handed down its decision in Nautilus Inc. v. Biosig Instruments, Inc., which raised the bar for definiteness of a patent claim. NOVA argued that the supplemental damages award should be reversed because, under Nautilus, the Dow claims were indefinite and therefore invalid. Dow countered that NOVA’s invalidity defense could not be raised again, as it had already been finally decided.

On appeal, the Federal Circuit considered issue preclusion and the law of the case doctrines, which sometimes prevent the reconsideration of a previously resolved argument. Under the issue preclusion doctrine, an issue that has been decided against a party in the same or an earlier proceeding will be decided against that same party in a subsequent proceeding so long as there was a fair opportunity to be heard on the issue in the earlier proceeding. Under the “law of the case” doctrine, a court will generally be bound by its decisions earlier in a case and will not revisit those decisions absent compelling circumstances.

The court established a 3-part test for an exception to both doctrines. The doctrines do not apply when 1) the governing law was altered, 2) the earlier decision applied the old law, and 3) the change of law compels a different result under the facts of the particular case. Applying the test, the court found that: 1) Nautilus changed the governing law by replacing the “insolubly ambiguous” standard with the “reasonable certainty” standard, 2) the earlier decision applied the pre-Nautilus standard, and 3) the claims were definite under the pre-Nautilus standard but indefinite under Nautilus. Specifically, the claims were indefinite because they required determining a “slope of strain hardening coefficient,” which could be calculated by different methods to yield different values.

The Court also held that claim preclusion does not apply because the supplemental damages claim arose from a later act of alleged infringement than the act that had previously received a final, non-appealable judgment in connection with the original damages award.

Key takeaway:

Intervening changes in the law may allow a losing party to challenge a non-final application of the doctrines of issue preclusion or law of the case, so long as the change in the law alters the outcome of the earlier decision.

Ethicon Endo-Surgery v. Covidien, Inc., No. 2014-1205 (Design Patent Functionality)

In Ethicon v. Covidien, the Federal Circuit held that design patents were not invalid as functional simply because the primary features of the design could perform functions. The design patents were directed to surgical instruments that use ultrasonic energy to cut tissue and blood vessels. As shown below, the design patents depicted the whole device, but only claimed (in solid lines) portions of the device, such as the torque nob and the trigger portion:

Design Patents.jpg

On summary judgment, the district court held that the claimed torque nob and trigger of Ethicon’s design were “primarily functional” and, therefore, the design patents were invalid. In the alternative, the district court construed the design patents so as to “factor out” the allegedly functional torque nob and trigger. As a result, the court found that the design patent had no protectable scope and therefore also was not infringed by the accused Covidien device (shown above).

On appeal, the Federal Circuit reversed the district court’s invalidity determination, but affirmed the non-infringement ruling for different reasons. With regard to invalidity, the court held that “a claimed design [is] not invalid as functional simply because the ‘primary features’ of the design could perform functions.” Rather, a design patent is only invalid for being primarily functional “when the claimed design is ‘dictated by’ the use or purpose of the article.” Furthermore, “whether a claimed design is primarily functional should begin with an inquiry into the existence of alternative designs.” Where alternative designs are available for achieving the same function, the design patent likely is not primarily functional. Based on the fact that several alternative designs were available for the torque nob and trigger of Ethicon’s designs, the Federal Circuit reversed the invalidity determination.

With regard to claim construction, the Federal Circuit held that the district court erred by “factoring out” two elements claimed in the design for being functional. The court stated that it is improper to “factor out” individual design elements from a design patent simply because the design element involved an underlying function. Rather, courts should use claim construction to make clear that the scope of the claim is limited to the ornamental appearance of those elements, and does not extend to their functional capabilities. Here, the claim was construed to cover the ornamental appearance of the torque nob and trigger as claimed, but not extending to the functions of those design features.

Nevertheless, after correcting the claim construction, the Federal Circuit affirmed the finding of non-infringement, holding that the claimed design was simply too dissimilar to the accused product to warrant a jury trial.

Key Takeaway:

Design patents are only invalid for being primarily function when the design claimed in a design patent is dictated by the function of the article of manufacture. Furthermore, it is improper to “factor out” design elements that merely involve an underlying function. Rather, design patent claim constructions should seek to differentiate the “ornamental aspect” of the claimed design from the “functional aspect” of the claimed design.


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