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Fish Federal Circuit Summary Service: Issue #309

January 28, 2008

Newsletters

Fish Federal Circuit Summary Service: Issue #309

January 28, 2008

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Requirements of Process Steps Should Not Be Read Into Apparatus Claim; Fed Cir Reaffirms That The Article “A” or “An” Means “One or More” .
Baldwin Graphic Sys., Inc. v. Siebert, Inc.
Click here to download the case
Date: January 15, 2008
Panel: Michel, Rader, Moore
Author: Rader
District Court: N.D.Ill.
Trial Judge Moran
Summary: Fed Cir affirms-in-part and reverses-in-part summary judgment of noninfringement on patents relating to systems for cleaning a cylinder of a printing press using strips of cleaning fabrics.

Claim construction in reissued patent: The patentee challenged the construction of the article “a” to mean “a single,” and the interpretation of “sealed sleeve” to mean a specific form of sealing. Regarding the meaning of the article “a,” the Fed Cir disagreed: “That ‘a’ or ‘an’ can mean ‘one or more’ is best described as a rule, rather than merely as a presumption or even a convention. The exceptions to this rule are extremely limited: a patentee must ‘evince[ ] a clear intent’ to limit ‘a’ or ‘an’ to ‘one.'” Slip op. at 7 (brackets in original). This narrowing construction did not find support in the intrinsic evidence or in MPEP 2173.05(e)’s discussion of antecedent bases. As to the term “sealed sleeve,” the Fed Cir limited the term to a specific form of sealing because the specification only discloses this specific form, the PTO refused to allow an amendment to the specification during reissue that would have resulted in the addition of other forms of sealing, and a broad read of the term as encompassing other forms of sealing would have invalidated the patent as unsupported by the initial disclosure.

Mixing apparatus and method claims: The district court gave similar claim phrases appearing in two independent claims, one directed to an apparatus and the other directed to a method, the same narrow meaning. The Fed Cir disagreed: “Despite their similarities, these claims are directed toward different classes of patentable subject material under 35 U.S.C. § 101. Courts must generally take care to avoid reading process limitations into an apparatus claim, because the process by which a product is made is irrelevant to the question of whether that product infringes a pure apparatus claim.” Slip op. at 10 (internal citation omitted). The apparatus claims were thus not limited to any particular process or method. Moreover, the method claims did not require a specific sequence of steps or the added limitations, because (i) a method claim “is not limited to performance of the steps in the order recited, unless the claim explicitly or implicitly requires a specific order[,]” id. at 11-12, (ii) the additional limitation belonged to a dependent claim, (iii) a skilled artisan reading the specification would not read the claims so narrowly, and (iv) there was no disavowal of claim scope during prosecution.

KEY WORDS:CLAIM CONSTRUCTION (BROAD & NARROW), SINGLE, MPEP

Attorney Argument Does Not Constitute Rule 60(b)(3) Fraud or a Crime-Fraud Exception
Apotex Corp. v. Merck & Co., Inc.
Click here to download the case
Date: November 16, 2007
Panel: Newman, Rader, Prost
Author: Newman
District Court: N.D.Ill.
Trial Judge: Kennelly
Summary: Fed Cir affirms summary judgment refusing to vacate previous judgment in a related case under the fraud prong of FRCP 60(b)(3), and affirms denial of motion to compel production of privileged documents pursuant to the crime-fraud exception to the attorney-client privilege.

FRCP 60: Merck obtained a favorable judgment in a previous patent infringement case between the same parties. More than one year later, Apotex filed this suit seeking to have the previous judgment vacated pursuant to FRCP 60(b)(3), arguing that Merck obtained the previous judgment through false statements and factual misrepresentations to both the district court and the Fed Cir. Applying regional circuit law and reviewing the denial of relief under Rule 60(b)(3) under the abuse of discretion standard, the Fed Cir agreed that there was no fraud in the previous litigation because “[f]raud upon the court is typically limited to egregious events such as bribery of a judge or juror or improper influence exerted on the court, affecting the integrity of the court and its ability to function impartially.” Apotex, 507 F.3d at 1361. The Fed Cir noted that “if some aspect of Merck’s witness presentation or attorney argument at the trial had been defective or over-stated, then Apotex should have challenged it with contrary evidence and argument at trial. It is apparent that Apotex had the opportunity to challenge Merck’s position in the previous litigation, and indeed did so.” Id. However, “evidence that was adduced and argument presented at the trial does not establish corruption of the judicial process.” Id. at 1362.

Privilege issue: Reviewing the denial of Apotex’s motion to compel the production of privileged documents for an abuse of discretion, the Fed Cir agreed that the crime-fraud exception did not apply where the movant failed to make “a prima facie showing of some foundation for the asserted fraud.” Id. Although Apotex cited allegedly fraudulent statements made by Merck’s counsel during the previous litigation, the Fed Cir ruled that these “statements were simply attorney argument as to the inferences to be drawn from the evidence, and . . . falsity was not shown.” Id.

KEYWORDS: FRAUD (NO), RULE 60(b)(3) (NO), CRIME-FRAUD EXCEPTION (NO), ATTORNEY-CLIENT PRIVILEGE (YES), STANDARD OF REVIEW, CHOICE OF LAW

No Appellate Jurisdiction over Remand Orders Based on Declining Supplemental Jurisdiction
HIF Bio, Inc. v. Yung Shin Pharms. Indus. Co., Ltd.
Click here to download the case
Date: November 13, 2007
Panel: Michel, Gajarsa, Holderman (sitting by designation)
Author: Gajarsa
District Court: C.D.Cal.
Trial Judge: Pregerson
Summary: Fed Cir dismisses appeal of remand order for lack of appellate jurisdiction, holding that review of a remand order based on declining supplemental jurisdiction is barred by 28 U.S.C. § 1447(d). This was an issue of first impression for the Fed Cir. Plaintiffs filed suit in California state court seeking declaratory judgments for ownership and inventorship of the invention, and alleging a federal RICO violation and nine state law causes of action. Defendants removed the case to federal court and then filed a Rule 12 motion to dismiss. The district court dismissed the RICO claim under Rule 12(b)(6), declined supplemental jurisdiction over the remaining state law claims, and remanded the case to state court.

The Fed Cir dismissed the appeal for a lack of appellate jurisdiction. In general, 28 U.S.C. § 1447(d) bars appellate review of remand orders: “An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.” In a series of cases, however, the Supreme Court limited section 1447(d)’s bar on appellate jurisdiction to instances where the case was remanded for lack of subject matter jurisdiction. The district court in this case had federal question jurisdiction over the dismissed RICO claim and supplemental jurisdiction over the other claims, but used its discretion in declining supplemental jurisdiction. Disagreeing with nine other circuits that have decided this issue, the Fed Cir instead relied upon the Supreme Court’s recent opinion in Powerex v. Reliant Energy, 127 S. Ct. 2411 (2007), in concluding that it lacked appellate jurisdiction. The Fed Cir held that “because every § 1367(c) remand necessarily involves a predicate finding that the claims at issue lack an independent basis of subject matter jurisdiction, a remand based on declining supplemental jurisdiction can be colorably characterized as a remand based on lack of subject matter jurisdiction” and is “thus barred from appellate review by § 1447(d).” HIF Bio, 508 F.3d at 667.

KEYWORDS: APPELLATE JURISDICTION (NO), REMAND ORDER, SUPPLEMENTAL JURISDICTION, 28 U.S.C. § 1447, 28 U.S.C. § 1367.

Prior Litigation Between The Same Parties On The Same Patent Was Evidence of Knowledge Supporting Willfulness Claim; Sales Of Unrelated Company Should Not Be Included in Royalty Base
Mitutoyo Corp. v. Central Purchasing, LLC
Click here to download the case
Date: September 5, 2007
Panel: Mayer, Rader, Moore
Author: Mayer
District Court: N.D.Ill.
Trial Judge: Der-Yeghiayan
Summary: Fed Cir reverses-in-part judgment regarding willful infringement and damages, and affirms-in-part on the remaining issues. The patent-in-suit relates to a device for electronically measuring the movement of one object in relation to another.

Willfulness: The district court erred in dismissing the claim of willful infringement under FRCP 12(b)(6) where the patentee adequately pled that the defendant knew of the patent based on the defendant’s previous declaratory judgment suit seeking to invalidate and render the patent-in-suit unenforceable. This knowledge and the additional allegation that the current infringement was “willful and deliberate” was adequate under FRCP 8(a)(2). The district court further abused its discretion in dismissing the willfulness claim for failure to prosecute under FRCP 41(b), because the patentee’s failure to move for summary judgment “likely indicates its sense that issues of material fact exist, not an intent to abandon its willfulness claim[,]” slip op. at 9, and the patentee has appraised the court of its willfulness claim throughout the case. Damages: The district court correctly rejected lost-profit damages where the patentee failed to offer evidence that the parties’ products were directly competing in the same price range, and properly adopted a 29.2% royalty rate pegged to the patentee’s profit margin in light of the defendant’s willingness to pay and the contentious litigation history between the parties. The district court, however, erroneously determined the royalty base by adding to the defendant’s sales the sales made by a third party company which did not have any corporate relationship or common ownership with the defendant.

Other issues: The Fed Cir ruled that the district court properly applied the stipulated claim construction to the accused product, and that the defendant used an overly narrow read of the construction. The district court also correctly dismissed a licensee for lack of standing, where another licensee also had the right to import and sell products covered by the patent-in-suit.

KEYWORDS: WILLFULNESS (YES), KNOWLEDGE (YES), FEDERAL RULES OF CIVIL PROCEDURE, FAILURE TO PROSECUTE (NO), DAMAGES, ROYALTY RATE, LOST-PROFITS (NO), ROYALTY BASE, INFRINGEMENT (YES), STANDING (NO)

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