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Newsletters

Fish Federal Circuit Summary Service: Issue # 294

February 23, 2007

Newsletters

Fish Federal Circuit Summary Service: Issue # 294

February 23, 2007

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Permissive Interlocutory Appeal Granted Where Matters Are Intertwined With Issues in Pending Appeals
The Regents of the Univ. of Cal. v. Dako N. Am., Inc. v. 
Date: Feb 14, 2007
Panel: Lourie, Clevenger, Moore
Author: Lourie
District court: N.D. Cal.
Trial judge: Patel
Summary: Fed Cir grants the UC Regents’ consented petition for discretionary interlocutory appeal under 28 USC 1292(b) of a claim construction order certified by the district court. In two related appeals still pending in the Fed Cir, the UC Regents challenged the district court’s denial of its preliminary injunction motion based on certain claim constructions. While these related appeals were pending, the district court revisited its claim constructions, granted part of Dako’s summary judgment of noninfringement affecting the patents in the two related appeals, and certified the order for permissive appeal. Because the claim constructions issues in the certified order are already at issue in the related appeal, the Fed Cir reasoned that there is no risk of piecemeal appeals or premature reviews, and that the more complete record provided by the certified order further judicial efficiency. “Because the matters in the recent order are thus intertwined with the issues in the pending appeals, we determine that granting the petition in these unusual circumstances is warranted.”

KEY WORDS: KEY WORDS: INTERLOCUTORY APPEAL, CERTIFIED ORDER, CLAIM CONSTRUCTION

Fed Cir Closes Door To Possible Defenses To Inequitable Conduct and On-Sale Bar
Cargill, Inc. v. Canbra Foods, Ltd. v. 
Date: Feb. 14, 2007
Panel: Linn, Prost, Jordan
Author: Jordan
District court: D. Ore.
Trial judge: Mosman
Summary: Fed Cir affirms the summary judgment that two patents-in-suit are invalid based on the on-sale bar, affirms the judgment that two other patents-in-suit are unenforceable, and dismisses the cross-appeal as moot. The four patents-in-suit relate to canola oil. Inequitable conduct: Materiality: Applying the “reasonable examiner” standard, the Fed Cir ruled that two withheld documents — a research report and certain test data — were material because they contradicted the patentee’s representations during prosecution that the claimed canola oil exhibited properties superior to a prior art oil. Even though the withheld results may not be comparable to the data before the examiner because the research report used unusual conditions and the test data document did not show the testing conditions, “[a] reasonable examiner would certainly want to consider test data that is directly related to an important issue of patentability, along with the applicant’s interpretation of that data. Whether the examiner would have ultimately allowed the patent to issue is irrelevant ….” Slip op. at 9. Intent: The district court did not err in finding intent based on a number of circumstantial factors, including (i) the repeated nature of the omission, where “[a]n applicant should know information is material when the examiner repeatedly raises an issue to which the information relates,” id. at 10; (ii) the patentee’s motive to deceive, as long as “the district court did not rely solely on the applicant’s motive in drawing an inference of intent,” id. at 11; and (iii) the high degree of materiality of the undisclosed test data. The patentee’s good faith belief that the data did not need to be disclosed did not undermine the finding of intent, because “[e]ven if there were a mitigating explanation for the withheld data, it was no excuse for the applicant’s purposeful omission in this case.” Id. While recognizing “that subjective good faith can support a defense to inequitable conduct,” the Fed Cir ruled that “[w]hen an applicant knows or obviously should know that information would be material to the examiner, as was true here, but the applicant decides to withhold that information, ‘good faith’ does not negate an intent to manipulate the evidence. Indeed, self-serving manipulation of highly material evidence can hardly be called ‘good faith.'” Id. at 13. Balancing: The Fed Cir found no abuse of discretion in the district court’s conclusion of inequitable conduct. On-sale bar: Commercial offer for sale prong: The Fed Cir held that a pre-critical date letter to a third-party was a sale/offer for sale, because the “letter explicitly sets forth an amount of oil to be delivered to P&G, at a specified unit price, and under a standard contract designation, FOB (free on board), which allocates the risks and responsibilities of a buyer and a seller.” Id. at 16. In affirming the district court, the Fed Cir (i) relied on inconsistencies in the patentee’s arguments that the letter only shows the provision of samples for testing purposes or the response to P&G’s concerns about costs; (ii) ruled that “expressing a desire to do business in the future does not negate the commercial character of the transaction then under discussion;” (iii) dismissed the third-party’s failure to pay the agreed amount as irrelevant because “[t]here is no requirement that the sale be completed” for the on-sale bar to apply; and (iv) ruled that a declaration submitted in opposition to the summary judgment motion did not create genuine factual disputes. Ready for patenting prong: The patented oil was ready for patenting because it was reduced to practice and the evidence indicated that the patentee was aware of its utility. That the transacted oil was intended for experimental purposes was irrelevant, because “that does not mean that the invention had not been reduced to practice” and because the patentee’s lack of awareness of the specific characteristics making the invention useful did not contradict a finding of actual reduction to practice.

KEY WORDS: INEQUITABLE CONDUCT, MATERIALITY, INTENT, BALANCING, MOTIVE, ON-SALE BAR, COMMERCIAL OFFER FOR SALE, READY FOR PATENTING, REDUCTION TO PRACTICE (ACTUAL)

Plaintiff Is Free To Unilaterally Dismiss Action Until Proper Service of Answer; Service By Fax Ineffective Unless Party Expressly Consent in Writing
RFR Indus., Inc. v. Century Steps, Inc. v. 
Date: Feb. 16, 2007
Panel: Michel, Schall, Prost
Author: Prost
District court: N.D. Tex.
Trial judge: Kinkeade
Summary: Fed Cir vacates grant of judgment on the pleadings and reverses grant of attorney fees to Century. After RFR filed its infringement suit, Century filed its answer and faxed a copy to RFR’s attorney. In response, RFR filed a notice of dismissal without prejudice under FRCP 41(a)(1)(ii). Acting on Century’s opposition to the dismissal, the district court refused to dismiss without prejudice and granted Century’s motion for judgment on the pleadings under FRCP 12(c). Applying regional circuit law, the Fed Cir held that FRCP 41 granted the plaintiff a unilateral right to dismiss its action without leave of court in this case, because Century’s faxing of the answer did not constitute proper service under FRCP 5(b)(2) unless the other party had given express consent to such service in writing (RFR never gave that consent). Because the notice of dismissal ended the case without prejudice, the district court’s resolution of the case on the merits “was both improper and without effect.” As to the grant of attorney fees, the Fed Cir held “that a plaintiff’s voluntary dismissal without prejudice pursuant to Rule 41(a)(1)(i) does not bestow ‘prevailing party’ status upon the defendant.” Slip op. at 7. Since the plaintiff is free to refile its action, there was no “judicially sanctioned” change in the parties’ legal relationship, so that neither party acquired prevailing party status.

KEY WORDS: NOTICE OF DISMISSAL, FEDERAL RULE OF CIVIL PROCEDURE, FRCP, SERVICE, ATTORNEY FEES, PREVAILING PARTY .

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