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Newsletters

Fish Federal Circuit Summary Service: Issue #313

February 11, 2008

Newsletters

Fish Federal Circuit Summary Service: Issue #313

February 11, 2008

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Claim Construction Excluding Disclosed Embodiment Was Erroneous Without Specification or Prosecution Disclaimer
Oatey Co. v. IPS Corp.
Click here to download the case
Date: January 30, 2008
Panel: Newman, Schall, Linn
Author: Newman
District Court: N.D.Ohio
Trial Judge: O’Malley
Summary: Fed Cir vacates summary judgment of noninfringement related to a patent directed to washing machine outlet boxes. The Fed Cir ruled that the district court improperly excluded an embodiment disclosed in the specification and figures in the absence of any disclaimer in the specification or prosecution.

KEYWORDS: CLAIM CONSTRUCTION (BROAD)

Confidentiality Agreement Preventing Public Use Bar May Be Implicit; No Convoyed Sale Where Components Sold Together Based on Customer’s Convenience Rather than Functional Relationship; Noninfringing Replacement Does Not Bar Lost Profits If Not Equivalent to Infringing Device
Am. Seating Co. v. USSC Group, Inc.
Click here to download the case
Date: January 29, 2008
Panel: Mayer, Bryson, Fogel (sitting by designation)
Author: Mayer
District Court: W.D.Mich.
Trial Judge: Cohn
Summary: Fed Cir affirms JMOL vacating portion of jury damages verdict based on convoyed sales, affirms denial of summary judgment of public use, and affirms denial of cross-motions for a new trial. The patent-in-suit relates to a wheelchair restraint system for use in mass transit vehicles. Validity: Inventors had placed various prototypes in an out-of-service bus in order to solicit feedback from friends and colleagues, but did not seek a written confidentiality agreement. “[T]he fact that the inventors revealed the prototype to a select group of individuals without a written confidentiality agreement is not dispositive. When access to an invention is clearly limited and controlled by the inventor, depending upon the relationships of the observers and the inventor, an understanding of confidentiality can be implied.” Slip op. at 6. The jury was therefore entitled to conclude that there was a general understanding of confidentiality among the people who saw the prototypes.

Convoyed sales: The jury awarded lost-profits based in part on the value of the claimed restraint system plus the value of an unpatented passenger seat. The Fed Cir agreed with the district court that the patentee has not demonstrated the required functional relationship to justify a convoyed sales award, because “[a] functional relationship does not exist when independently operating patented and unpatented products are purchased as a package solely because of customer demand.” Slip op. at 7. The “functional relationship” test is not met here where customers prefer to purchase all the items from a single supplier for ease of purchase, repair, uniform design and appearance. Moreover, the restraint and passenger seat do not form a functional unit because “[t]he evidence shows that passenger seats command a market value and serve a useful purpose independent of the patented product.” Id. at 9.

Noninfringing replacement: The jury awarded lost profits based in part on offers to sell the infringing restraint system, even though the defendant ultimately delivered a non-infringing restraint system. While the delivery of a noninfringing replacement product would normally preclude lost profit damages, the replacement had to be viewed by the buyer as an equivalent to the infringing products. The patentee offered evidence that the purchasers did not view the infringing and non-infringing restraint systems as equivalent, and the defendant did not rebut this evidence.

KEYWORDS: PUBLIC USE (NO), CONFIDENTIALITY (YES), CONVOYED SALES (NO), NONINFRINGING REPLACEMENT (NO)

Agreement To Assign May Require Separate Document to Effect Assignment; Agreement Made After Onset of Litigation May Be Considered in Determining Standing to Sue
IpVenture, Inc. v. ProStar Computer, Inc.
Click here to download the case
Date: September 28, 2007
Panel: Newman, Lourie, Bryson
Author: Newman
District Court: C.D.Cal.
Trial Judge: Fischer
Summary: Fed Cir reverses dismissal of lawsuit premised on lack of standing. The district court had concluded that the patentee lacked standing to sue because one of the co-inventors of the patent-in-suit, which related to the management of computers, was employed by Hewlett-Packard as a patent attorney and thus gave HP a right in the invention. While the co-inventor had signed an agreement requiring him to assign his rights to HP, the assignee and HP entered into a written agreement after the onset of the litigation in which HP disclaimed any rights in the patent-in-suit. The Fed Cir ruled that the district court erred in dismissing the lawsuit because (i) the inventor-HP assignment agreement was an “agreement to assign” and therefore did not automatically vest the invention rights in HP without a separate written document, and (ii) the district court erred in refusing to consider the HP-IpVenture agreement as an independent confirmation of the ownership of the patent.

KEYWORDS: OWNERSHIP, ASSIGNMENT, AGREEMENT TO ASSIGN, STANDING

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