L&A Federal Circuit Review

November 2014

As part of our ongoing effort to keep clients and friends informed of important legal updates, we are pleased to publish the L&A Federal Circuit Review, a monthly publication highlighting recent Federal Circuit decisions and key takeaways from the decisions. Should these overviews spark any questions, please contact your lead L&A attorney.

Azure Networks, LLC v. CSR PLC, No. 13-1459 (Licensing)

In Azure, the Federal Circuit addressed whether a license agreement that effectively assigned the patent-in-suit to Azure also divested the licensor of standing to join in a patent infringement suit. The Court held that the license’s “limited termination rights, and unfixed reversionary interest with only a very limited amount of time remaining on the patent” would not indicate a significant ownership interest in the licensed patent and licensor therefore did not have standing to join in the lawsuit.

Key Takeaway: If the parties intend for a patent licensor to join in future infringement lawsuits, they should carefully craft their license agreement to make certain that the licensor retains a significant proprietary interest in the licensed patent.

Halo Elecs., Inc. v. Pulse Elecs, Inc., No. 2013-1472, -1656 (Foreign Sales)

In Halo, the Federal Circuit addressed whether pricing discussions in the U.S. justify suit against accused devices manufactured, shipped and delivered outside the U.S. The Court held that pricing and contracting negotiations in the United States, alone, do not constitute a “sale” for purposes of infringement. Furthermore, the locations of the contemplated “sale” of the products also determine where the “offer for sale” takes place for purposes of infringement.

Key Takeaway: Under certain conditions, parties may be able to negotiate pricing and contract terms within the U.S. without necessarily converting a foreign transaction into a “sale” or “offer for sale” within the United States under the Patent Act.

Robert Bosch, LLC v. Snap-On Inc., No. 2014-1040 (Means-plus-function)

In Bosch, the Federal Circuit addressed whether the claim language “by means of the program recognition device” invoked means-plus-function claiming. The Court held that, unlike the phrase “means for,” the phrase “by means of” does not create a presumption of means-plus-function claiming. However, the Court nevertheless found that the term “program recognition device” was a means-plus-function claim term because it was a generic component with no particular claimed structure. The Court also held that the claim was indefinite because the specification provided insufficient corresponding structure for this generic component.

Key Takeaway: While the term “by means of” will not give rise to a presumption of means-plus-function claiming, practitioners should avoid claiming generic electronic components for performing a function without a detailed description of the claimed component within the specification.

AntiCancer, Inc. v. Pfizer, Inc., No. 2013-1056 (Fee-shifting sanctions)

In AntiCancer, the Federal Circuit addressed whether a fee-shifting sanction was an appropriate condition of permitting AntiCancer to supplement its defective preliminary infringement contentions. The Federal Circuit held that the fee-shifting sanction was improper. While the district court found that the preliminary infringement contentions were “woefully insufficient” and “disingenuous,” there was no finding of bad faith, which the Federal Circuit held was a pre-requisite for fee shifting under the circumstances.

Key Takeaway: AntiCancer may signal the Federal Circuit’s intention to take a more active role in reviewing sanctions awarded by district court judges for procedural missteps.