L&A Federal Circuit Review

July 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 Techs., LLC, No. 14-1301 (Fed. Cir.) (Inter Partes Review)

In In re Cuozzo, the Federal Circuit denied rehearing en banc a decision holding that the broadest reasonable interpretation standard is the appropriate claim construction standard to apply in inter partes review (IPR) proceedings. IPR proceedings are one of the new post-grant proceedings introduced by the American Invents Act. IPR is a mechanism for a challenging party to invalidate a patent previously issued by the U.S. Patent and Trademark Office (PTO). In contrast to reexamination, the USPTO guarantees a final decision regarding validity of the patent within one year, should the USPTO decide to instate the IPR proceeding.

In denying the en banc rehearing request, the Federal Circuit affirmed that the broadest reasonable interpretation standard will be applied to construe claims in an IPR proceeding instead of the ordinary meaning standard applied by district courts during litigation. The court reasoned that “the broadest reasonable interpretation standard has been applied by the PTO and its predecessor for more than 100 years in various types of PTO proceedings” and that “[t]here is no indication that the AIA was designed to change the claim construction standard that the PTO has applied for more than 100 years.” From the point of view of a patentee, the broadest reasonable interpretation standard may result in a broader construction of the claims and, thereby, increasing the risk of the patent being invalidated. Consequently, patent challengers will likely find it easier to invalidate the patent with the BRI claim construction standard.

Key Takeaways: In IPR proceedings, the claims of the patent will be given their broadest reasonable interpretation.

TomTom, Inc. v. Adolph, No. 2014-1699 (Fed. Cir.) (Claim Construction)

In TomTom, Inc. v. Adolph, the Federal Circuit held that the preamble of a patent claim can only be construed substantively to the extent necessary to render an invention structurally complete. The ruling overturned the district court’s decision to construe each and every preamble clause of the claim as a substantive claim limitation, such as the clause – “[m]ethod for [g]enerating and [u]pdating [d]ata.” The Federal Circuit found that only some of the preamble clauses required an interpretation in order to resolve an issue of antecedent basis. The court held that only the clauses connected to subsequent claim limitations should be construed.

The Court also weighed in on the doctrine of prosecution disclaimer, holding that an alleged disavowal of claim scope made by the patentee during patent prosecution must be “clear and unambiguous” in order to narrow a claim. The patentee – Adolph – did make a disclaimer during prosecution by differentiating his invention from a prior art reference by “Saito.” Adolph argued that, unlike Saito, the claimed invention “allows even a single mobile unit to commence generating and storing data without the need for any initial information relating to existing road networks.” This disclaimer prompted the district court to interpret the claims as disallowing an initial map database. However, the Federal Circuit overruled the lower court, reasoning that Adolph’s prosecution history disclaimer was not as broad as the district court believed. “Instead, there is a disclaimer that the system does not require an initial map database.”

Lastly, the Federal Circuit held that a patent specification may not be used to substantively limit claim scope where the “plain and ordinary meaning” of the claim language is unambiguous. Specifically, the district court interpreted the language “storing section data in the storage device” to mean “storing section data in a separate storage device than the traveled distance data,” relying upon an illustrated figure in the specification depicting multiple storage devices. In overruling the lower court, the Federal Circuit held that unambiguous claim language must always be the starting point during claim construction. Where, as here, the plain and ordinary meaning of the claim language was clear, it was improper to import limitations into the claims from the specification.

Key Takeaway: First, claim preambles do not ordinarily form substantive limitations of the claim. If they provide antecedent basis, however, the preamble may be interpreted as a substantive limitation. Construction of the preamble may be limited to only those clauses referenced in the subsequent claim language. Second, the plain and ordinary meaning of unambiguous claim language should control during claim construction and should not be limited by the specification.

SpeedTrack, Inc. v. Office Depot, Inc., No. 14-1475 (Fed. Cir.) (Infringement)

In SpeedTrack, Inc. v. Office Depot, Inc., the Federal Circuit held that a finding of no infringement for one licensee of a product immunizes all of other licensees of the same product from future patent infringement lawsuits. The decision applied the rapidly-evolving Kessler doctrine, which holds that if a product is found to be non-infringing in a court of law, that product is immune to subsequent litigation, regardless of which company is manufacturing or distributing it.

Here, SpeedTrack sued Office Depot and several other defendants, accusing them of infringement based on their use of a third party e-commerce platform, called the “Information Access Platform,” that was offered by Endeca Technologies, Inc. However, SpeedTrack had previously sued Wal-Mart for infringing the same patents and based on Wal-Mart’s use of the same IAP platform. Wal-Mart prevailed in that lawsuit after the court granted summary judgment of non-infringement. In the Office Depot case, the district court held that the Kessler Doctrine applied in the Wal-Mart case.

On appeal, SpeedTrack argued that the Kessler doctrine can only be asserted by the manufacturer of the product at issue, not customers. However, the Federal Circuit disagreed, reasoning that “[a]lthough the Supreme Court in Kessler focused exclusively on the manufacturer’s rights, and expressed no opinion on whether a customer could assert the defense, it recognized the fact that the manufacturer and customer’s interests are intertwined…” Furthermore, “[a]llowing customers to assert a Kessler defense is consistent with the Court’s goal of protecting the manufacturer’s right to sell an exonerated product free from interference or restraint.”

Key Takeaway: If one licensee of a product defeats a patent infringement claim, then all other licensees of the same product may invoke the Kessler doctrine to immunize themselves from liability.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. This material may be considered advertising under certain rules of professional conduct.