Federal Circuit Review - February 2014

by Knobbe Martens

Defendant Bears Burden of Proof in Declaratory Judgment Case

In Medtronic, Inc. v. Mirowski Family Venture, LLC, Appeal No. 12-1128, the Supreme Court reversed the Federal Circuit’s determination that the burden of proving infringement shifts when the patentee is a defendant in a declaratory judgment action and the potential infringer seeks a judgment of noninfringement.

Medtronic and Mirowski entered into a license agreement permitting Medtronic to practice certain patents in exchange for royalty payments to Mirowski.  Years later, Mirowski notified Medtronic that it believed seven new Medtronic products violated claims of two licensed patents. Medtronic believed that its products did not infringe the patents, either because the claims did not cover the products or because the patents were invalid. Accordingly, Medtronic filed a declaratory judgment action seeking a declaration that its products did not infringe the Mirowski patents and that the patents are invalid.

The district court held that Mirowski, as the party asserting infringement, bore the burden of proving infringement. After a bench trial, the district court found that Mirowski had not met its burden of proof and declared that Medtronic’s products did not infringe the patents.  The Federal Circuit vacated and remanded the district court’s decision.  The Federal Circuit held that, when an infringement counterclaim by a patentee is foreclosed by the continued existence of a license, a licensee seeking a declaratory judgment of noninfringement and no consequent liability under the license bears the burden of persuasion. The Supreme Court granted certiorari to hear the appeal.

The Supreme Court reversed the Federal Circuit and held that, when a licensee seeks a declaratory judgment against a patentee to establish that the licensee’s products do not infringe the licensed patent, the patentee bears the burden of persuasion on the issue of infringement.

Functional Language Is a Claim Limitation

In Nazomi Communications, Inc. v. Nokia Corp., Appeal 2013-1165, The Federal Circuit affirmed grant of summary judgment of non-infringement.

Plaintiff-Appellant Nazomi sued hardware manufacturers, including Defendants-Appellees Western Digital and Sling Media, for infringingf two patents related to a hardware-based Java Virtual Machine (“JVM”).  All claims recite a CPU capable of processing both JVM-style, stack-based instruction sets and traditional, register-based instruction sets.  Western Digital and Sling sell devices with ARM CPU’s that process register-based instruction sets and include “Jazelle” hardware for processing stack-based instruction sets.  However, the Jazelle hardware of the ARM CPU’s cannot operate unless the product manufacturer licenses additional “JTEK” software from ARM and installs that software on the CPU’s.  Western Digital and Sling had not licensed or installed JTEK software on the ARM CPU’s of their devices.  Western Digital and Sling filed a motion for summary judgment of non-infringement, arguing that all claims require the CPU to perform the claimed functions, which their accused devices had not done.  Nazomi argued that the claims covered generic hardware that could process stack-based instructions, regardless of whether the device ever actually does so.  The district court construed the claims as requiring a combination of hardware and software, noted that the requisite software was not present on the accused devices, and granted summary judgment of non-infringement.

The Federal Circuit affirmed.  Analyzing the language of the claims (for example, a CPU “capable of executing a plurality of instruction sets comprising . . . a stack-based and a register-based instruction set”) and the specification, the Federal Circuit noted that the claims recite a CPU that is capable of performing particular functions.  The Federal Circuit stated that, because hardware cannot perform the claimed functions without enabling software, the claims require a hardware-software combination.  The Federal Circuit commented that “there is nothing unusual or improper in constructing device claims to require particular functionality.”  Responding to Nazomi’s arguments, the Federal Circuit distinguished the asserted claims from claims that include limitations describing the environment for operation and subsequently need not be present in an accused device.  Similarly, the Federal Circuit distinguished the accused products from those in Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197 (Fed. Cir. 2010), where the accused product was only capable of practicing the claimed limitations if unlocked by a product key.  By comparison, Western Digital and Sling’s products require the installation of additional software used to practice the functionality of the asserted apparatus claims.  Nazomi argued that installing additional software is not a “modification.”  The Federal Circuit disagreed.

Priority Claim Requires Specific Reference to Earlier Application

In Medtronic Corevalve, LLC v. Edwards Lifesciences Corp., Appeal No. 2013-1117, the Federal Circuit affirmed grant of partial summary judgment of invalidity.

Medtronic sued Edwards for infringing certain claims of a single patent.  Edwards moved for partial summary judgment that the asserted claims have a priority date no earlier than April 10, 2003, the filing date of one of the intermediate U.S. applications in the patent’s priority chain.  Edwards also moved for summary judgment of invalidity under 35 U.S.C. § 102 based on an earlier-filed French application in the patent’s priority chain.  The district court held that the patent’s priority chain “suffered from several defects for failure to comply with the requirements of 35 U.S.C. §§ 119 and 120” and granted Edwards’s motions.

Medtronic appealed the holding that the patent could not claim the benefit of an earlier priority date for failure to comply with the requirements of both §§ 119 and 120.  The parties agreed that affirmance of the district court’s determination under either § 119 or § 120 would “seal the fate of the . . . patent.”  The Federal Circuit chose to examine priority under § 120.  The Federal Circuit noted that it “recently clarified [in Encyclopedia Britannica, Inc. v. Alpine Elecs. of Am., Inc., 609 F.3d 1352 (Fed. Cir. 2010)] that the ‘specific reference’ requirement mandates ‘each [intermediate] application in the chain of priority to refer to the prior applications.’”  The Federal Circuit agreed with the district court that, because certain intermediate applications in the patent’s priority chain failed to specifically reference the earlier-filed applications in the priority chain, the patent is not entitled to claim the priority date of a particular preceding application under § 120.  Because the final judgment of invalidity rested entirely on the priority date determination, the Federal Circuit affirmed the finding that the asserted claims are invalid as anticipated.

“Receiver” Is Not a Means-Plus-Function Term

In EnOcean GMBH v. Face International Corp., Appeal No. 2012-1645, the Federal Circuit vacated and remanded a finding from the Board of Patent Appeals and Interferences that certain claims were means-plus-function claims and that certain claims lacked support in priority applications.

EnOcean owns the rights to a U.S. Patent directed to a self-powered switch.  The BPAI found that certain claims were unpatentable under 35 U.S.C. § 103 in view of a PCT application to Burrow in combination with several other references.  EnOcean argued that its patent was entitled to the benefit of the filing date of earlier-filed parent applications, namely German and PCT applications, that antedated the Burrow reference and thus eliminated the Burrow reference as prior art.  

The BPAI found that certain claims reciting a “receiver” element were means-plus-function claims under 35 U.S.C. § 112, sixth paragraph, and were not supported by the disclosure in the parent applications.  These claims lacked the word “means,” and thus were entitled to the presumption that they were not means-plus-function claims.  Despite this presumption, the BPAI found that these claims were means-plus-function claims because the BPAI reasoned that the claims defined the recited receiver solely in terms of functional language and not structural language.  Next, the BPAI found that these receiver claims, as well as other claims that EnOcean did not dispute were means-plus-function claims, were not entitled to the benefit of priority of the parent applications because they lacked adequate written description support for the recited receivers.  The German application’s only reference to a receiver stated “a typical scenario is that all the switches, for example light switches, upon actuation, emit one or a plurality of radio frequency telegrams which are received by a single receiver and the latter initiates the corresponding actions . . . .”  The BPAI found that this disclosure did not describe the structure, materials, acts, or equivalents corresponding to the recited receiver.  At issue on appeal was whether (1) the BPAI erred in finding that certain claims invoked § 112, sixth paragraph, and (2) the BPAI erred in finding that certain claims were not entitled to the benefit of priority of the parent applications. 

The Federal Circuit reversed on both issues.  First, the Federal Circuit found that the receiver limitation was reasonably well understood in the art as a name for a structure which performs the recited function.  The Federal Circuit reasoned that the term receiver connotes sufficiently definite structure to those of skill in the art.  Thus, the Federal Circuit held that these claims did not invoke § 112, sixth paragraph.  Second, the Federal Circuit found that the disclosure of “a single receiver” connoted enough structure to support the receiver claims.  The Federal Circuit reasoned that a person of ordinary skill in the art could understand the bounds of the invention merely by reading the term receiver because the structure was well known as of the filing date.  Thus, the inventors were not obliged to expressly describe the structure of the receiver.  Therefore, the Federal Circuit found that receiver limitations were adequately supported by the parent applications for purposes of claiming priority.



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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