L&A Federal Circuit Review

February 2015

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.

In re Cuozzo Speed Technologies, LLC, No.14-1301 (Inter Partes Review Proceedings)

In Cuozzo, the Federal Circuit held that a decision by the U.S. Patent and Trademark Office (PTO) to institute an inter partes review (IPR) is not appealable. Thus, the parties to an IPR can only appeal the P.T.A.B.’s final decision on the merits with respect to the grounds for which review was instituted by the Board. The Federal Circuit also addressed whether patent claims in IPR proceedings should be construed according to their “broadest reasonable interpretation” rather than their ordinary meaning to one of ordinary skill. The Court held that the “broadest reasonable interpretation” standard is proper for IPR proceedings because Congress was well aware of the standard when it passed the America Invents Act, and it therefore can “be inferred that Congress impliedly adopted the existing rule” for IPR.

Key Takeaway: Parties to an IPR cannot appeal the PTO’s decision to institute an IPR; they can only appeal the PTO’s final decision on the merits. The PTO will interpret patent claims subject to IPR according to their broadest reasonable interpretation.

Helferich Patent Licensing, LLC v. New York Times Co., No. 14-1196 (Patent Exhaustion)

In Helferich, the Federal Circuit addressed the issue of when patent rights are exhausted. Helfrich had licensed its patents relating to methods of operating handsets to a series of smart phone manufacturers, but later sued Internet content providers for violating distinct but related patents covering systems and methods of delivering content to the claimed handsets. The Court held that the sale of the smart phones did not exhaust the patent rights to the content- delivery inventions because the smart phones did not embody the claimed content delivery methods.

Key Takeaway: Patent license agreements should clearly specify which claims are being licensed and which claims fall outside the scope of the license. When drafting claims to a group of distinct but related systems and methods, care should be taken to clearly distinguish the acts performed by separate entities and, when possible, draft claims to cover each entity, separately.

Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., No. 13-854 (Partial Deference in Claim Construction)

In Teva, the Supreme Court addressed whether a district court’s finding of fact in the construction of a patent claim can be reviewed de novo by the Federal Circuit or whether the factual findings are entitled to deference. The Court ruled that when reviewing a district court’s subsidiary factual findings (e.g., extrinsic evidence or expert testimony) as part of claim construction, the Federal Circuit must give deference to the district court’s ruling unless it is clearly erroneous. The Court reasoned that deference was required under the Federal Rules of Civil Procedure, which state that “a court of appeals ‘must not . . . set aside’ a district court’s ‘[f]indings of fact’ unless they are ‘clearly erroneous.’” Fed. R. Civ. P. 52(a)(6).

Key Takeaway: A district court’s factual findings as part of claim construction are entitled to deference on appeal. Extrinsic evidence, such as learned treatises and expert opinions, may take on a more important role in the claim construction process.

Promega Corp. v. Life Technologies Corp., No. 13-1011 (Enablement, Inducement and Foreign Activity)

In Promega, the Federal Circuit held four patents invalid for lack of enablement because the claims used the term ‘comprising’ outside of the preamble to expand the scope the claims. The court further held that certain open-ended claim limitations were unsupported by the specification because the specification “did not support the infinite range of resistive changes encompassed by this claim limitation.”

Key Takeaway: Open-ended claim limitations that use the term “comprising” will be more susceptible to an enablement challenge. When drafting claims, practitioners should take care when using expansive terms, such as “comprising,” outside of the preamble of a claim and make sure that the patent disclosures can support an open- ended claim element.