Defendant Computer Packages, Inc. appeal from the judgment following a jury verdict finding willful infringement and rejecting CPi’s invalidity claims.  CPi provides Patent and Trademark Intellectual Property Management Systems and Patent Annuity Payment Services–the jury found that certain of CPi’s desktop, hosted, and online products infringed 5,895,468; 6,049,801; 6,182,078 and 6,981,007 patents.  The jury rejected all CPi’s invalidity arguments, found the infringement willful, and awarded over $8.3 million in damages.

This verdict came down last May, and the post trial motion practice has finally ended and the case ready for appeal.  Moreover, in late January the court ordered CPi to pay the judgment within 30 days or face an injunction.

UPDATE 20110219:  The Federal Circuit has granted a stay of the judgment pending the district court’s review of the sufficiency of CPi’s appeal bond.

Peter Zura at the 271 Patent Blog previously posted on this verdict and the fact that Whitserve has filed other suits on the ’468 and ’078 patents, including one against the law firm Benesch, Friedlander, Coplan & Aronoff.  As Peter pointed out, “WhitServe is founded by Wesley Whitmyer, Jr. who also practices as a patent litigator at St. Onge Steward Johnston & Reens.”

2011-1206 Judgment

2010-1125 Phoenix Solutions v. DirecTV Group

Phoenix appeals from the order of Judge Pfaelzer granting summary judgment of non-infringement to DirecTV relating to a series of patents generally directed to speech processing technology and natural language interactive voice response systems.  The accused systems include a website and telephone support lines that allegedly utilize the claimed technology.

DirecTV outsources the accused customer support operations to West Interactive Corporation, a non-party to the case.  According to the court's findings of fact, although DirecTV dictates the business rules and outcomes from these operations (i.e., the ability to order pay-per-view, etc.), it did not dictate, choose, or control West's operations.  Further, the actual operation of the services occur not on DirecTV servers, but on those of West's facilities.

According to the court, Phoenix alleged that DirecTV directly infringed–it did not allege indirect infringement.  The court thus turned to a string of cases of direct infringement liability where a third-party actually performed the infringing steps;  BMC Resources. LP v. Paymentech, Inc., 498 F.3d 1373 (Fed. Cir. 2007); and Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008).  These cases allow for direct infringement liability if the accused infringer "directs or controls" a third party's performance of the infringing steps.

The court also looks to several district court cases for further articulation of "direct and control," noting that the accused infringer must be the "mastermind" and controlling the third party "in its performance of the infringing steps" such that the third party acts as defendant's agent.  Emtel, Inc. v. Lipidlabs, Inc., 583 F. Supp. 2d 811 (S.D. Tx. 2008).  Order, Conclusions of Law ¶ 4.

Thus, after reviewing the law on joint and vicarious infringement, the court concludes:

DirecTV can not be liable for direct infringement of an asserted claim if the evidence demonstrates that DirecTV neither performs by itself nor directs nor controls a third party's performance of any one element of the claim. 

Order, Conclusions of Law ¶ 19 (emphasis added). 

The court found undisputed the fact that DirecTV does not control or mastermind West's operation of each and every element of any claim, and therefore concludes that DirecTV does not infringe (or isn't liable for any direct infringement).  In particular the court noted that it is not whether DirecTV controls or dictates the service in general, but whether it does so with respect to the allegedly infringing steps.

The court also rejects Phoenix's attempt to broadly read the NTP v Research in Motion, 418 F.3d 1282 (Fed. Cir. 2005) as imposing liability where a party "puts into service any given invention."  The court rejected such a broad reading and distinguished NTP as not a joint liability case, but rather a location case (i.e., inside U.S. or without).  

2010-1125 SJ Order

2010-1118 Altair v. LEDdynamics

Plaintiff Altair appeals from the grant of summary judgment by Judge Steeh finding that LEDdynamics LED fluorescent tube replacement bulb did not infringe certain asserted claims of 7,049,761.  While the result appears fairly easy based on the court's claim construction, Altair developed a new infringement theory during summary judgment briefing that the court refused to consider under the doctrine of judicial estoppel.

The relevant claims of the '761 patent required LED's "closely spaced," which the court construed as "not spaced apart, such that adjacent LEDs are sufficiently close together that another LED cannot fit in the space therebetween."  Order, p.1.  This was the construction proposed by LEDdynamics.

The accused device was a 48" light tube containing 36 LEDs, each about 0.25" wide and spaced about 1.25" apart.  Apparently both sides accepted this approach to the LEDs and accused product.  Because one could clearly have placed another 0.25" LED in the 1.25" space, the accused light tube clearly did not infringe.

However, Altair sought to argue that each 0.25" LED was actually composed of 6 LEDs in a tight 2×3 arrangement such that no additional LEDs could fit in between the 6.  Noting that Altair knew (or should have known) about this earlier, the court refused to consider that argument on the basis of judicial estoppel:

Altair’s only argument in response to LEDdynamics’ motion for summary
judgment is that it should be allowed to change the definition of LEDdynamics’ LEDs at this late juncture in the litigation. Altair is estopped from doing so. Transclean Corp. v. Jiffy Lube Int’l, Inc., 474 F.3d 1298, 1307 (Fed. Cir. 2007) (citing New Hampshire v. Maine, 532 U.S. 742, 750 (2001)).

Judicial estoppel prevents a party from taking inconsistent positions in the same or related litigation to protect the integrity of the court. Id. (citing Hossaini v. West Mo. Med. Ctr., 140 F.3d 1140, 1142-43 (8th Cir. 1998)). The Supreme Court has set forth several non-exclusive factors for courts to consider in deciding whether the doctrine of judicial estoppel applies. Id. (citing New Hampshire v. Maine, 532 U.S. at 750-51).  Those factors include:

“(1) the parties later position must be ‘clearly inconsistent’ with its earlier position,

(2) the party must have succeeded in persuading a court to adopt its earlier position, thereby posing a ‘risk of inconsistent court determinations’; and

(3) ‘the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.’” Id.

Each of these factors militate in favor of applying the doctrine of estoppel here to preclude Altair from altering its definition of LED in the accused product now from that which it used during the entire Markman proceeding.

Order, p. 5 [formatting changed for ease of reading].

The court found that Altair had original argued that the accused product contained only 36 LEDs (not 216), and the court says that it adopted Altair's definition of LEDs, Order, p. 6, although it doesn't say what is that definition. 

As to the third factor the court found it would be unfair to allow Altair to change arguments now, because it would require new claim construction and waste the court's time and prejudice LEDdynamics.  The court pointed out that it did the original claim construction "based on its understanding of the accused device."  Order, p. 7.

Lastly, the court denied Altair's request to amend its infringement contentions to include different claims from the '761 patent.  After discussing whether the standard is Fed. R. Civ. P. 15 (leave freely given) or 16 (good case)–it is the latter–the court found no good cause to allow the amendment at such a late date.

2010-1118 Order re SJ

2010-1110, 1131 Centillion Data v Qwest

Both sides appeal from the summary judgment order of Judge Larry McKinney finding that Centillon's patent 5,287,270 is not invalid but is also not infringed.  The '270 patent is directed to billing systems that may be utilized by a service customer to manipulate usage and cost information from a service provider, such as a credit card or telecommunications company.  The accused Qwest systems include its Logic, eBill Companion, and Insite products.

The asserted claims were written to cover systems with a central storage and processing component and a local, personal computer component.  In reality, different entities or users would control and operate the two components-a fact that saved the claims from invalidity but also precluded a finding of direct infringement against Qwest. 

Infringement:  Because different entities controlled the two components, no single entity practiced each element of the claims.  Thus, whether Qwest was a direct infringer turned on whether the actions of a third party were imputed or attributed to it.

The court began by analyzing the meaning of the term "use" under
§ 271(a).  Analyzing the Federal Circuit's decisions in NTP v. RIM, 418 F.3d 1282 (Fed. Cir. 2005), Cross Medical Products v Medtronic, 424 F.3d 1293 (Fed. Cir. 2005) and BMC Resources v. Paymenttech, 498 F.3d 1373 (Fed. Cir. 2008) (Order, pp. 17-24), the court concluded that the Federal Circuit had defined "use" broadly and allowed direct infringement even where some elements are practiced by a third party:

Therefore, the Court concludes that under BMC, CMP and NPT, a party is liable for direct infringement for the “use” of a system claim under § 271(a) if it, by itself or in combination with a third party directed by it, put each and every element of the system claim into service, i.e. exercised control over, and benefited from, the application of each and every element of the system claim. BMC, 498 F.3d at 1378-81; CMP, 424 F.3d at 1311; NTP, 418 F.3d at 1316-17.

Order, p. 24.  Unfortunately for Centillion, the court then concluded that there was no evidence that Qwest so directed its customers:

Centillion must demonstrate a genuine issue of material fact as to whether Qwest sufficiently “directed” its customers to “adapt [their personal computers] to perform additional processing on said individual transaction records.” ‘270 Patent, col. 31, ll. 67-68, col. 32, ll. 59-60. However, Centillion cannot meet this burden. Centillion admits Qwest’s customers are not obligated or contractually bound to perform additional processing on individual transaction records provided by Qwest. Rather, Qwest’s customers independently determine whether or not to perform additional processing on individual transaction records by Qwest. Moreover, Qwest does not control whether its customers load the Logic or eBill Companion client applications on their personal computers. Therefore, the Court concludes that Centillion has failed to raise genuine issues of material fact regarding whether Qwest directly infringed independent claims 1 and 8, and dependent claims 10 and 46.

Order p. 33.

Validity: Qwest pointed to an earlier billing system from NYNEX, called COBRA/TRACE, as invalidating the asserted claims under § 102(a) or (b).  The issue boiled down to whether the COBRA/TRACE system "allowed NYNEX’s customers to select, or make specific, the character of the collection of analyzed and/or reorganized data the customers received from NYNEX as subscribers of COBRA/TRACE."  Order, p. 26.

The court found no evidence that it did.  Interestingly, while NYNEX created a video that appeared to describe just such a capability, the court found that it merely showed only that NYNEX "may have anticipated allowing customers" to make such a selection, there was no evidence that any "NYNEX customers actually" did so.

[The court also mentions that there was no evidence that the video was ever shown to customers.  Perhaps this is why there is no suggestion that the COBRA/TRACE system coupled with the video invalidated the claims under § 103.]

2010-1110 Order re SJ

2010-1104 Takeda v Teva

Takeda and Ethylpharm appeal from the judgment following a bench trial before Judge Sue Robinson that Teva's ANDA filing for a generic form of PREVACID Solutab^tm does not infringe 5,464,632 related to a pharmaceutical formulation for an oral disintegrating tablet.  These tablets allow the oral administration of an active ingredient in tablet form but without the typical requirement of water to assist in swallowing. 

The claim limitation at issue provided "wherein said mixture of excipients comprises a disintegrating agent and swelling agent."  The court (Opinion, pp. 9-13) construed this as requiring at least one substance that causes disintegration and at least one substance that causes swelling.  The court further concluded that these must be different agents.  The court also discussed the distinction made in the specification and prosecution history between agents that "cause" disintegration versus those that merely "facilitate" it.

Turning then to infringement, the court found that the ANDA's disintegrating tablet mechanism–a product known as STARLAC from Meggle Gmbh and Roquette Frères, did not infringe.  STARLAC offers rapid disintegration through a combination of starch and lactose.  After sifting through the testimony of competing experts, the court found that this combination did not infringe (id. at 13-17).  Lactose is not a swelling agent and, because of prosecution history statements and perception in the art, could not be a disintegrating agent.  While starch is a swelling agent and could also possible be a disintegrating agent, the claim did not allow for the ingredient to be both the disintegrating agent and the swelling agent. 

2010-1104 Opinion

2010-1102 Allergan v. Exela PharmSci

Defendant Exela appeals from the judgment following a bench trial that its ANDA for a brimonidine solution for glaucoma treatment infringed several patents of Allergan.  Allergan markets its product as ALPHAGAN P.  The court also rejected a myriad of invalidity arguments.

Invalidity focused on the pH of Exela's proposed product.  The claims generally covered a solution buffered to a pH of 6.8 to 8.0, and Exela argued that its product would be in 6.5 to 6.7 range.

The court however sided with Allergan and its expert, who testified that the product would have to be produced and initially fall in the range of 7.0 or higher in order to account for pH drift–the tendency of the pH to fall while sitting on the shelf.  The court also found Exela's argument not credible because it had initially proposed a lower pH range (down to 5.5), but had amended it upward after the FDA questioned the equivalency of the lower pH.  Thus, in order to maintain the required pH for the entire shelf-life of the product, the court found that it would have to fall initially within the claimed pH range.

The court also addressed and rejected a number of defenses, including obviousness (Opinion, pp. 16-28), non-enablement (id. at 28-30), written description (id. at 30-32), best mode (id. at 32-34), indefiniteness (id. at 34-35), utility and operability (id. at 35-36), inventorship (id. at 36-38), and uneneforceability (id. at 38-40).
2010-1102 Opinion

2007-1296 Cardiac Pacemaker v. St Jude

The Federal Circuit is hearing the case, en banc, directed to a single question:

Does 35 U.S.C. § 271(f) apply to method claims, as well as product claims?

The panel relied on Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005) to answer in the affirmative, but some (St Jude, amici) argue that the Supreme Court's decision in Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007)–finding that software instructions were not "components"–mandates a different result.

Oral
argument is scheduled for Friday, May 29, 2009 at 2:00 P.M.,
Courtroom 201. 

§ 271(f) provides:

Summary of Argument from St Jude.  Jeffrey M. Olson from Sidley Austin LLP (Los Angeles, CA); Denis R. Salmon and H. Mark Lyon from Gibson, Dunn & Crutcher LLP (Palo Alto, CA); Mark A. Perry from Gibson, Dunn & Crutcher LLP Washington, D.C.) on brief.

PATracer Note: Let Kyle know if you would like the briefs for this case.

2008-1368 Blackboard v. Desire2Learn

Cross-appeals involving Blackboard’s 6,988,138 patent. The jury found Desire2Learn infringed claims 36-38, also finding those claims valid.  The court found claims 1-35 invalid for indefiniteness.  The ’138 is also currently in reexams, with the PTO having preliminarily rejected claims 1-44.

Oral argument is scheduled for Tuesday, March 31, 2009 at 10:00 A.M., Courtroom 201.  When it becomes available, an mp3 of the oral argument should be here.

Summary of the Argument from Desire2Learn.  George E. Quillin, Foley & Lardner (Washington, DC); Gregory S. Norrod, Jonathan R. Spivey, Jason J. Keener, Foley & Lardner (Chicago) on brief.

Summary of the Argument from Blackboard.  : Christopher D. Bright, McDermott Will & Emery LLP (Irvine, CA); Joel M. Freed, Michael S. Nadel, McDermott Will & Emery (Washington, D.C.) on brief.

The pdfs are too large to upload. If you want a copy of the briefs, send me an email and I will try and send them to you.

2009-1146 Schindler Elevator v. Otis Elevator
SD/NY 06-5377
Judge Colleen McMahon

Plaintiff Schindler appeals from Judge Colleen McMahon's grant of summary judgment of non-infringement to Otis.  Schindler's patent, 5,689,094, relates to a destination dispatching elevator (such as one where the passengers do not press any buttons on-board the elevator) and was asserted against Otis's elevators at 7 World Trade Center.  The claims generally require an information transmitter carried by the passenger and a recognition device, terms the court construed to operate "without requiring any sort of personal action by the passenger" (other than merely walking in proximity to the elevator).  The 7WTC elevator system assigns floor destinations based on (i) tenant's building IDs, an RFID card; (ii) passenger input to a keypad or (iii) building security.  Because each requires action by the passenger–(i) requires the passenger to remove the ID card and place it close to the reader–there is no literal infringement.  The court found that Schindler did not make any doctrine of equivalents argument.

More reading: SJ Opinion

2009-1147 Aspex Eyewear v. Clariti Eyewear
SD/NY 07-2373
Judge Denny Chin

Aspex appeals from Judge Denny Chin's grant of summary judgment on the defense of estoppel related to allegations of infringement of 6,109,747, a patent directed to clip-on eyewear that attaches to frames via magnets.  Applying A.C. Aukerman Co v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc), the court found plaintiff equitably estopped from asserting the '747.  The elements are:

a.
The patentee, through misleading conduct, leads the alleged infringer
to reasonably infer that the patentee does not intend to enforce its
patent against the alleged infringer. "Conduct" may include specific
statements, action, inaction, or silence where there was an obligation
to speak.

b. The alleged infringer relies on that conduct.

In 2003 Aspex counsel sent cease and desist letters alleging infringement of several patents, including the '747.  When Clariti's counsel requested more information including identification of the claims asserted, Aspex counsel responded as to some patents, but not the '747.  Aspex did write in late 2006 to again raise the '747, and then filed suit in 2007.  The court found undisputed that Aspex mislead (through silence), Clariti's reliance and prejudice. 

More reading: SJ Order

2009-1149 Microstrategy v. Crystal Decisions
D/DE 03-1124
Mag. J. Mary Pat Thynge

Microstrategy appeals from the Order of Judge Mary Pat Thynge granting in part defendant's motion for attorney's fees and expenses under § 285. The court previously found that the asserted claims were either not infringed or were invalid, a decision affirmed by the CAFC.  The fees decision is mixed and based on a claim-by-claim analysis, but the court did find that Microstrategy continued to press its case despite overwhelming evidence of invalidity.  The court used March 2005 as the time at which plaintiff should have stopped–this is the date at which rebuttal expert reports were exchanged.

More reading: Order

2009-1027 Kara Technology v. Stamps.com

Plaintiff Kara appeals from the orders of Judge Consuelo Marshall denying its post-trial motions and from the jury verdict of non-infringement in favor of Stamps.com.  The asserted patents were 6,505,179 and 6,735,575.

Stamps.com is an online postage stamp business, essentially an alternative to a stamp metering machine.  The accused product is Netstamps pre version 5.

Opening line from Little Women, Louisa May Alcott.  Nothing to do with the case, but I am writing this on Christmas Eve . . . . and I still have some shopping to do.

The JMOL boiled down to whether there was sufficient evidence that Netstamps did not have a "security indicia" with the "preestablished data."  Claim 1 of the '575 provides:

1. A method for establishing the validity of a display created by a
general purpose creation device, said method comprising the steps of:

placing
in said device media upon which information may be created, said media
having preestablished thereon data which is unique to said media; and

communicating
at least a portion of said preestablished data to a location
independent from said device, said independent location operable to
create on said media a security indicia, said security indicia created
in part by information contained in said preestablished media data and
whereby said security indicia is validatable at a subsequent time
partially under control of data contained in said preestablished media
data;

wherein said media is paper, and wherein said device is a general purpose printer;

wherein
said paper is divided into sections, each section adapted for printing
thereon information pertaining to a different function, each such
function having associated therewith a security indicia.

The court, without much explanation, found that the case could reasonably have gone either way—and thus the jury's verdict of non-infringement was supported by the evidence.

The court did rule in Kara's favor on Stamps.com's counterclaim of unenforceability due to inequitable conduct.  Because of the split ruling, the court also found that neither side was the "prevailing party."

More reading:

JMOL Order Inequitable Conduct