Supplier Could Assert Walker Process Claim for Threats to its Customers Hydril Co. LP v. Grant Prideco LP Date: Jan. 25, 2007 Panel: Mayer (dissent), Friedman, Bryson Author: Friedman District court: S.D. Tex. Trial judge: Atlas Summary: Fed Cir reverses dismissal of Hydril’s Walker Process claims and its claims that Grant Prideco infringes its patent, and vacates dismissal of breach of contract claim. On the Walker Process claim, the district court erred in finding that threats against Hydril’s customers for Grant’s patent failed to create sufficient injury for Hydril: “Without customers, a supplier has no business.” The Fed Cir’s statements in prior cases about measuring antitrust injury by the standards for declaratory judgment jurisdiction do not change the result, nor does the recent Microchip Technology v. The Chamberlain Group decision. The majority exercised its discretion to avoid alternative grounds for affirmance raised by Grant Prideco and not yet addressed by the district court. On the patent infringement claim, Hydril did not waive its right to sue for infringement in a cross-license agreement where the parties waived “all rights and remedies relating to this Agreement,” since patent claims come from the patent laws rather than from agreements, and especially since (1) a long list in the agreement of exemplary waived issues did not include patent infringement, (2) the rest of the lengthy agreement also contained no such provision, and (3) a separate provision said that the parties were not losing any IP as a result of the agreement. In any event, the provision lost effect after Grant Prideco breached the agreement. The district court dismissed the breach of contract claim because of its dismissal of the other claims, so the Fed Cir brought that claim back too. In dissent, Judge Mayer noted that Hydril never alleged that it or its customers planned to make, use, sell, etc. the infringing product in the U.S., so there could be no injury as a matter of law. This was an issue the majority declined to reach, and one that will now need to be decided by the district court. He also disagreed on the patent issue, noting that the license waived rights specifically for actions sounding in tort and statute, which both apply to patent law, and the license used broad “relating to” language.
KEY WORDS: ANTITRUST, WALKER PROCESS, STANDING
District Court Erred in Limiting Claims That Had No Textual Hook for the Limitation; “Validity Construction Should be Used as a Last Resort” MBO Labs., Inc. v. Becton, Dickinson & Co. v. Click here to download the case Date: Jan. 24, 2007 Panel: Bryson, Clevenger, Gajarsa Author: Gajarsa District court: D. Mass. Trial judge: Lindsay Summary: Fed Cir vacates stipulated summary judgment of noninfringement, on a mixture of claim construction rulings. The patent relates to a hypodermic safety syringe that has a needle that is “relatively moved/slidably received” into a guard sleeve to “immediately” avoid pricks. “Immediately”: The district court was right to make this preamble term a limitation and to require coverage of the needle to occur simultaneously with its removal from the patient, since such a goal was stated in the Summary of the Invention portion of the specification when referring to “the present invention,” the rest of the specification said nothing to the contrary, and the prosecution history distinguished a prior art needle as not making the syringe immediately safe upon withdrawal from the patient. The term was a limitation because it was necessary to breathe life into the claim. The district court erred, however, in applying this limitation to two claims that did not contain the term “immediately,” because there was no textual “hook” to get the limitation into those claims. “relative movement/slidably received”: The district court erred by limiting these terms to only backward movement of the needle, and not forward movement of the guard under the rationale that such a broad reading would allow MBO to recapture in a reissue (where it plainly intended to cover both types of movement) subject matter that it already gave up. Rather, “validity construction should be used as a last resort,” and there was nothing ambiguous about the construction issue here. (The Fed Cir left open whether the claims might be invalid for recapture.) “adjacent”: The district court erred in requiring that a blocking flange be “contiguous or connected” with the guard body (it should only require “next to”), especially since such a construction would exclude two of the preferred embodiments. “proximity”: The district court erred in requiring that the needle be “flush with” the front of the guard, especially since this too would read out those preferred embodiments. The proper construction was “near.” “mounted on said body”: The district court erred in requiring that the mounting be to the body’s exterior even though the figures showed exterior mounting, since the patent is not limited to the preferred embodiments: “Limiting claims from the specification is generally not permitted absent a clear disclosure that the patentee intended the claims to be limited as shown.” Note: Query whether other judges on the court would have applied the “immediately” limitation to all the claims under the reasoning of cases like Scimed v. ACS. Of course, Judge Bryson wrote Scimed, but other judges are much more “holistic” than he is.
KEY WORDS: CLAIM CONSTRUCTION (NARROW), DUAL RULE (NARROW), THE PRESENT INVENTION (NARROW), PROSECUTION HISTORY CONSTRUCTION (NARROW), CLAIM CONSTRUCTION (BROAD), DUAL RULE (BROAD), RECAPTURE RULE
U Waives Sovereign Immunity for Appeal From Interference When it Files Interference Vas-Cath, Inc. v. Curators of the U. of Mo. v. Click here to download the case Date: Jan. 23, 2007 Panel: Newman, Lourie, Rader Author: Newman District court: W.D. Mo.
Trial judge: Fenner Summary: Fed Cir reverses dismissal of appeal from interference that was brought by the University between its application and Vas-Cath’s patent. The decision here was pretty simple because interferences are litigation-like proceedings, the U instituted the proceeding and actively fought throughout it, and the appeal to the district court was simply an extension of the process and not a new action (even though the district court appeal could involve witnesses with live testimony): “The principles of federalism are not designed for tactical advantage.” Also, it does not matter that the U’s bringing of the interference might have been somewhat compelled. However, the district court was right to keep the U’s curators out of the case under Ex parte Young.
KEY WORDS: SOVEREIGN IMMUNITY
Claim Preclusion Blocks Follow-Up Suit Against Customers When Supplier Fails to Pay Transclean Corp. v. Jiffy Lube Int’l, Inc. v. Click here to download the case Date: Jan. 18, 2007 Panel: Michel, Plager, Bryson Author: Plager District court: Trial judge: Magnuson Summary: Fed Cir affirms summary judgment of no liability for defendants who appeared in the case, and reverses judgment against defendants who defaulted. Transclean previously sued the company that supplied the defendants and won a lot of money, but collected nothing. So it sued defendants for their use of the product. The Fed Cir agreed with the district court that, although Birdsell v Shaliol, 112 U.S. 485 (1884), permits suits against suppliers and their customers to get full compensation, the doctrine of claim preclusion (applying 8th Cir law) generally requires that the suits be brought together. Because Transclean argued that the defendants were in privity with the prior defendant when it was trying to bind them to the earlier judgment (using issue preclusion), it could not now use lack of privity to avoid a finding of claim preclusion (even though the parties would not have otherwise been in privity), either because the 8th Cir treats privity as a fact issue that can be admitted, or because the doctrine of judicial estoppel applies (the 8th Cir has no law on whether judicial estoppel applies to legal issues). As for the defendants that never showed up, the district court should not have awarded damages because there is an exception to the requirement that claim/issue preclusion be pleaded, where the court has all the relevant evidence and justice requires such a result. The district court had applied issue preclusion in favor of the defaulting defendants and should have used the same reasoning to let them win on claim preclusion too.
Owner of Invention Covered by Only a Subset of Patent Claims Cannot Sue Without Joining Other Owners Israel Bio-Engineering Project v. Amgen Inc. v. Click here to download the case Date: Jan. 29, 2007 Panel: Bryson, Prost, Saris Author: Saris District court: C.D. Cal.
Trial judge: Saris Summary: Fed Cir affirms dismissal on summary judgment for lack of standing. Although the facts are complex, they boil down to this: IBEP was granted patent rights for all discoveries made by a joint venture during a certain period. Claim 1 of the patent-in-suit was invented during the contract period, but claims 2 and 3 were invented later. As a result, IBEP did not have a full ownership right in the patent-in-suit (it had merely a pro rata undivided ownership interest). Because the other owners refused to join the suit, there was no standing. The main dispute was over whether a certain contract (interpreted under Israeli law), which gave IBEP all rights “resulting from” a particular program, also gave rights from the program that came into being after the agreement expired. The answer: “no.” There was also a question of waiver, because IBEP had made the claim of ownership below, but had ginned up a new argument (relying first the first time on the “resulting from” clause) for supporting ownership on appeal.
The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.