Fresh From the Bench: Precedential Patent Cases From the Federal Circuit

Schwabe, Williamson & Wyatt PC
Contact

Schwabe, Williamson & Wyatt PC

In Nichia the Circuit affirms the denial of a permanent injunction because Nichia failed to prove irreparable injury. In RecogniCorp the panel throws out as not being directed to patentable subject matter claims directed to facial image transmission technology allegedly used in Nintendo’s Wii gaming system. The Circuit says in Helsinn v. Teva that the AIA did not change the law to require that the details of an invention need to be made public in order to be an invalidating sale.

We will include in next week’s report today’s Affinity Labs case affirming the PTO’s refusal to dismiss ‎pre-AIA ex parte and inter partes reexaminations despite a prior validity ruling in co-pending district ‎court litigation.‎

Pete

Nichia Corp. v. Everlight Americas, Fed. Cir. Case 2016-1585, 2016-1618 (April 28, 2018)

Despite the defendant’s failure to invalidate any of the three patents in suit and its unsuccessful noninfringement arguments, the Circuit affirms the denial of a permanent injunction requested by LED maker Nichia due to its dominant share of the market, its failure to identify a single lost sale to Everlight, and its widespread licensing of the patents to other low cost competitors. This affirmance is based solely on the lack of a showing of irreparable injury, without consideration of the other three eBay factors.

The panel first reviews the district court’s bench-trial findings as to claim construction, infringement and obviousness, and holds that the evidence supports the district court’s findings. However, the most interesting part of the opinion relates to Nichia’s motion for permanent injunction. After setting forth the four-factor eBay test, the panel notes eBay’s statement that, historically, courts have granted injunctive relief upon a finding of infringement in the vast majority of patent cases.  The opinion then points out that the Circuit has similarly observed that “while a patentee is not entitled to an injunction in every case, ‘it does not follow that courts should entirely ignore the fundamental nature of patents as property rights granting the owner the right to exclude.’”

Nichia challenges the district court’s finding that it failed to establish that it will suffer irreparable harm absent an injunction. The court’s conclusion relied on several findings, each weighing against Nichia. Specifically, the court found that (1) there is an absence of meaningful competition; (2) Nichia had failed to establish past irreparable harm, or the likelihood of irreparable harm in the future based on lost sales or price erosion; and (3) Nichia’s licensing of the patents to major competitors suggested that harm from infringement of the patents-in-suit is not irreparable.

The panel finds that there is abundant support for these factual findings. As to the absence of meaningful competition, the district court found that Everlight generally sells to distributors rather than directly to customers, as Nichia does. The court explained that Everlight’s competition accounted for “the proverbial ‘drop in the bucket’” when compared to Nichia’s total sales. Nichia identified 516 sales opportunities, with Everlight as a competitor in only 3. As to the one and only alleged instance of a lost sale, the evidence showed several other lower-priced, licensed competitors for the same opportunity. 

Nichia also had alleged that it suffered price erosion because of Everlight’s infringement in a sale to General Electric. While Nichia eventually won the GE contract at a price lower than it originally offered, Nichia’s lower-price sale had been required by GE, so Nichia was going to have to lower its prices regardless of Everlight’s competition. Further, the court found that several licensed competitors had offered products at lower prices, which drove down prices. There was therefore no clear error in the finding that Nichia failed to establish price erosion.

Nichia argues that the court wrongly found that its licensing activities precluded a finding of irreparable harm.  To the extent the district court adopted a categorical rule, the panel agrees with Nichia. But the panel agrees that Nichia’s prior licenses weigh against a finding of irreparable harm.  

Because the panel finds no clear error in the district court’s finding that Nichia failed to prove that it would suffer irreparable harm absent the injunction, and this is one of the four equitable factors, the court did not abuse its discretion in denying Nichia’s request for an injunction.

This refusal of the panel to see a need to evaluate the other three eBay factors is consistent with some and inconsistent with other Circuit and district court decisions, which often have evaluated all four factors and then decided whether injunctive relief is appropriate. 

Read the full opinion

RecogniCorp, LLC v. Nintendo Co., Ltd., Fed. Cir. Case 2016-1499 (April 28, 2016)

RecogniCorp sued Nintendo for infringement of a patent directed to facial image transmission allegedly used in Nintendo’s Wii video gaming system. The Circuit affirms a determination of invalidity by Judge Jones of the Western District of Washington under § 101, holding that the claims are directed to the abstract idea of encoding and decoding image data, and the claims do not contain an inventive concept sufficient to render the patent eligible.  

Representative claim 1 recites:

  1. A method for creating a composite image, comprising:

    displaying facial feature images on a first area of a first display via a first device associated with the first display, wherein the facial feature images are associated with facial feature element codes;

    selecting a facial feature image from the first area of the first display via a user interface associated with the first device, wherein the first device incorporates the selected facial feature image into a composite image on a second area of the first display, wherein the composite image is associated with a composite facial image code having at least a facial feature element code and wherein the composite facial image code is derived by performing at least one multiplication operation on a facial code using one or more code factors as input parameters to the multiplication operation; and

    reproducing the composite image on a second display based on the composite facial image code.

Under the first step of Alice, the panel holds that claim 1 is directed to the abstract idea of encoding and decoding image data. This method reflects standard encoding and decoding, an abstract concept long utilized to transmit information.  

The panel rejects RecogniCorp’s citation of Diehr, noting that Diehr is distinguishable because, outside of the math, claim 1 of the patent is not directed to otherwise eligible subject matter. Adding one abstract idea (math) to another abstract idea (encoding and decoding) does not render the claim non-abstract. The panel also distinguishes Enfish. Unlike Enfish, claim 1 does not claim a software method that improves the functioning of a computer. The panel holds that this case is similar to Digitech, where the claims were directed to the abstract idea of organizing information through mathematical correlations.

Proceeding to the second step of Alice, the panel finds that these claim elements do not transform the nature of the patent claims into a patent-eligible application. Distinguishing DDR Holdings, the panel holds that claim 1 contains no inventive concept. Nor does the presence of a mathematical formula dictate otherwise. Claims that are directed to a non-abstract idea are not rendered abstract simply because they use a mathematical formula. But the converse is also true: A claim directed to an abstract idea does not automatically become eligible merely by adding a mathematical formula.

The opinion notes that in BASCOM, the patent owner alleged that an inventive concept can be found in the ordered combination of claim limitations that transform the abstract idea of filtering content into a particular, practical application of that abstract idea. That allegation was found to be sufficient to survive a motion to dismiss similar to the motion at issue here, where all facts had to be construed in the patent owner’s favor. However, RecogniCorp has not alleged a particularized application of encoding and decoding image data. In fact, claim 1 does not even require a computer; the invention can be practiced verbally or with a telephone.   

Read the full opinion

Helsinn Healthcare v. Teva, Fed. Cir. Case 2016-1284, 2016-1787 (May 1, 2017)

The Circuit reverses the district court and finds that four patents directed to a drug for reducing chemotherapy-induced nausea and vomiting are invalid as being on sale prior to the critical date, thus permitting Teva to introduce a generic substitute for Helsinn’s popular Aloxi® product. In doing so, the Circuit refuses to accept the argument that the AIA changed on-sale law to require that the details of an invention be made public prior to the critical date by the addition of the language “or otherwise available to the public.”

The panel first addresses whether the invention of the ’724, ’725, and ’424 patents was subject to a sale or offer for sale prior to the critical date. Helsinn admits that the Supply and Purchase Agreement was binding as of its effective date, April 6, 2001, and that, if the FDA approved the 0.25 mg dose and/or the 0.75 mg dose of palonosetron, the agreement obligated Helsinn to sell and MGI to purchase those products. The fact that an agreement covered one party’s requirements as opposed to a specified quantity does not prevent application of the on-sale bar.

The panel also rejects Helsinn’s argument that at the critical date it was uncertain whether the FDA would approve the 0.25 mg dose, pointing out that absence of FDA approval before the critical date does not prevent a sale or offer for sale from triggering the on-sale bar.   

Helsinn also argues that, even if the agreement of sale for the 0.25 mg dose could be an invalidating sale, the agreement was uncertain because it covered the 0.25 mg dose, the 0.75 mg dose, and both doses. However, the panel rules that even if the agreement had given the purchaser the option of choosing between the two doses, there would still be a binding agreement.

The panel next turns to the issue of whether the AIA changed the meaning of the on-sale bar under § 102 so that there was no qualifying sale as to the ’219 patent. Before the AIA, § 102(b) barred the patentability of an invention that was “patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent.” By enacting the AIA, Congress amended § 102 to bar the patentability of an “invention that was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1). Helsinn argued that the “otherwise available to the public” phrase changed the law, which now does not encompass secret sales and requires that a sale make the invention available to the public in order to trigger application of the on-sale bar.

Apart from the additional statutory language, this argument primarily relies on floor statements made by individual members of Congress that dealt more with public use, which is not now before the Circuit. The panel notes that as to offers for sale, requiring public disclosure of the details of the claimed invention as a condition of the on-sale bar “would work a foundational change in the theory of the statutory on-sale bar.” It is sufficient that, if the existence of the sale is public, the details of the invention need not be publicly disclosed.

Finally, the panel addresses the issue of whether, under the Supreme Court’s Pfaff v. Wells case, the invention was ready for patenting as of the critical date. The panel rejects the holding of the district court and the argument of Helsinn that in order for the invention to be ready for patenting, it had to meet the FDA standard, which requires finalized reports with fully analyzed results from successful Phase III trials. The panel finds that before the critical date of January 30, 2002, it was established that the patented invention would work for its intended purpose.

Read the full opinion

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.

© Schwabe, Williamson & Wyatt PC | Attorney Advertising

Written by:

Schwabe, Williamson & Wyatt PC
Contact
more
less

Schwabe, Williamson & Wyatt PC on:

Readers' Choice 2017
Reporters on Deadline

Related Case Law

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.