Intellectual Tech LLC v. Zebra Technologies Corp., No. 2022-2207 (Fed. Cir. (W.D. Tex.) May 1, 2024). Opinion by Prost, joined by Taranto and Hughes.
Intellectual Tech (IT) sued Zebra for patent infringement. Zebra moved to dismiss for lack of standing, citing a series of agreements and events involving IT, its parent (OnAsset Intelligence), and a lender (Main Street Capital Corporation).
Before the lawsuit, OnAsset had granted Main Street a security interest in the patent, and the terms gave Main Street certain rights that it could exercise if OnAsset defaulted. Later, Main Street notified OnAsset that it was in default.
Later, IT was formed as OnAsset’s subsidiary, and OnAsset assigned the patent to IT. IT then entered into a joinder agreement to the loan agreement between OnAsset and Main Street, and IT entered into its own security agreement with Main Street. IT then defaulted as well.
Based on these and other events, Zebra moved to dismiss for lack of standing, arguing primarily that OnAsset’s default triggered an immediate transfer of exclusionary rights to Main Street such that OnAsset had no exclusionary rights to transfer to IT. The district court rejected that argument but still granted Zebra’s motion as to constitutional standing because, according to the court, the fact that “Zebra could obtain a license on the … patent from Main Street” deprived IT of all its exclusionary rights. IT appealed.
The question on appeal was “whether IT demonstrated the irreducible constitutional minimum of an injury in fact.” The Federal Circuit explained that “all that requires here is that IT retained an exclusionary right—i.e., infringement would amount to an invasion of IT’s legally protected interest.” The court ruled that, “under the only reasonable reading of the patent and trademark security agreement, IT still retained at least one exclusionary right.”
Zebra argued that Main Street’s ability to license the patent deprived IT of all exclusionary rights, but the court disagreed, concluding that “IT retained exclusionary rights even though Main Street had the non-exclusive ability to license” the patent. “A patent owner has exclusionary rights sufficient to meet the injury-in-fact requirement even where, without more, it grants another party the ability to license.” Thus, the Federal Circuit reversed and remanded “because IT has constitutional standing.”
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SnapRays, d/b/a SnapPower v. Lighting Defense Group, No. 2023-1184 (Fed. Cir. (D. Utah) May 2, 2024). Opinion by Moore, joined by Lourie and Dyk.
LDG owns a patent that relates to a cover for an electrical receptacle. SnapPower is a Utah company that designs, markets, and sells electrical outlet covers in Utah, and SnapPower sells its products on Amazon.com.
Amazon offers a low-cost procedure called the Amazon Patent Evaluation Express (APEX) “to efficiently resolve claims that third-party product listings infringe utility patents.” Under APEX, a third-party determines whether a product sold on Amazon.com likely infringes a patent, and if so, Amazon removes the listing from the website. Amazon sends the APEX agreement to identified sellers, and the sellers must take certain actions to avoid automatic removal of their accused listings.
LDG submitted an APEX Agreement alleging that certain SnapPower products sold on Amazon.com infringed LDG’s patent. SnapPower then filed an action for declaratory judgment of noninfringement in the District of Utah.
LDG moved to dismiss for lack of personal jurisdiction. The district court granted the motion, concluding that LDG lacked sufficient contacts with Utah. The court found that LDG’s allegations of infringement were directed toward Amazon in Washington, where the APEX Agreement was sent. SnapPower appealed.
The Federal Circuit reversed and remanded. Applying the court’s three-factor test for specific personal jurisdiction, the Federal Circuit concluded that jurisdiction comports with due process. First, “LDG purposefully directed its activities at SnapPower in Utah, intending effects which would be felt in Utah.” For instance, “LDG knew, by terms of the APEX agreement, Amazon would notify SnapPower of the APEX agreement and inform SnapPower of the options available to it under APEX,” including that if SnapPower took no action, its listings would be removed, “which would necessarily affect sales and activities in Utah.”
Second, the claim arose out of or related to LDG’s activities with the forum. LDG argued that the APEX Agreement was sent to Washington, not Utah, but the Federal Circuit disagreed: “Because we hold LDG’s action of submitting the APEX Agreement was directed towards SnapPower in Utah and aimed to affect marketing, sales, and other activities in Utah, we also conclude SnapPower’s suit arises out of defendant’s activities with the forum.”
Third, LDG did not meet its burden to present “a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” The Federal Circuit ruled: “Parties who participate in APEX by submitting an Agreement will only be subject to specific personal jurisdiction where they have targeted a forum state by identifying listings for removal that, if removed, affect the marketing, sales, or other activities in that state.” Here, LDG did more than send a cease-and-desist letter. “LDG initiated a process that, if SnapPower took no action, would result in SnapPower’s listings being removed from Amazon.com, necessarily affecting sales activities in Utah.”
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Packet Intelligence LLC v. NetScout Systems, Inc., et al., No. 2022-2064 (Fed. Cir. (E.D. Tex.) May 2, 2024). Opinion by Stark, joined by Lourie and Hughes.
In a first wave of litigation in 2016, Packet Intelligence sued NetScout and others for patent infringement. Following a bench trial and jury verdict, the district court entered judgment for Packet Intelligence and awarded damages. On appeal, the Federal Circuit reversed the pre-suit damages award, vacated the district court’s enhancement, and remanded.
During the remand, the Patent Trial and Appeal Board issued IPR final written decisions finding the claims asserted in the NetScout litigation unpatentable as obvious. Packet Intelligence appealed the Board’s decisions, and NetScout moved in the district court to dismiss the lawsuit or, in the alternative, to stay it until the conclusion of Packet Intelligence’s appeal of the final written decisions. The district court denied NetScout’s motion and entered final judgment. NetScout appealed.
NetScout argued to the Federal Circuit that, if the court affirmed the Board’s final written decisions, the affirmance would have “an immediate issue-preclusive effect” on the district court’s judgment, leaving Packet Intelligence unable to “collect on an outstanding monetary damages award for patent infringement.” Packet Intelligence responded by arguing that the Federal Circuit’s earlier decision “rendered this case sufficiently final such that it is immune to the Board’s subsequent determination of unpatentability.”
The Federal Circuit disagreed with Packet Intelligence, ruling that, based on precedent, the “infringement judgment was not final before the Board’s unpatentability determinations were affirmed.” Thus, the court was “compelled to order that Packet’s patent infringement claims be dismissed as moot.”
The Federal Circuit explained that its precedent “leads inexorably to the conclusion that Packet’s infringement case against NetScout remains pending and, thus, is not immune to the Board’s now-affirmed findings of unpatentability.” The Federal Circuit’s earlier decision “plainly did not move this case to a stage that ‘leaves nothing for the court to do but execute the judgment.’” Thus, the case on remand was not “final.” Accordingly, the Federal Circuit vacated the district court’s final judgment and remanded with instructions to dismiss the case as moot.
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IOENGINE, LLC v. Ingenico Inc., Nos. 2021-1227, -1331, -1332 (Fed. Cir. (PTAB) May 3, 2024). Opinion by Chen, joined by Lourie and Stoll.
Ingenico filed a series of IPR petitions challenging claims in three IOENGINE patents directed to a portable device configured to communicate with a terminal. The Patent Trial and Appeal Board issued final written decisions finding the challenged claims unpatentable, and IOENGINE appealed.
On appeal, IOENGINE argued that the Board incorrectly construed the claim term “interactive user interface,” incorrectly applied the printed matter doctrine, and erred in its anticipation and obviousness analyses.
First, the Federal Circuit determined that IOENGINE forfeited its proposed claim construction by proposing a new construction on appeal that it never proffered to the Board during the IPRs. Although IOENGINE argued that the two constructions “embody the same concepts,” the Federal Circuit disagreed.
Next, the Federal Circuit ruled that the Board’s anticipation determinations for certain claims were supported by substantial evidence, including testimony by Ingenico’s expert and the disclosures in the patents’ written description.
Addressing anticipation of certain other claims, the Federal Circuit agreed with IOENGINE that the Board incorrectly applied the printed matter doctrine to accord no patentable weight to claim limitations requiring “encrypted communications” and “program code.” According to the court, “printed matter is matter that is claimed for its communicative content—i.e., the content specifically being communicated.” “Printed matter encompasses what is communicated—the content or information being communicated—rather than the act of a communication itself.” Applying these concepts, the Federal Circuit disagreed with the Board that the claimed “encrypted communications” and “program code” constitute printed matter.
Lastly, the Federal Circuit addressed IOENGINE’s challenges to the Board’s obviousness determinations. IOENGINE argued that a skilled artisan would not have been motivated to combine the prior art references, that the combination was based on hindsight, and that the Board improperly mixed and matched embodiments disclosed in the references. The Federal Circuit disagreed with each argument, ruling that substantial evidence supported the Board’s findings.
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