PATENT CASE OF THE WEEK 

General Electric Co. v. United Techs. Corp., Appeal No. 2017-2497 (Fed. Cir. July 10, 2019)

The Case of the Week focuses on standing to bring an appeal of an adverse decision by the PTAB in an IPR. The Federal Circuit held that GE did not have standing to appeal a decision by the PTAB that certain challenged claims were not invalid. But the opinion exposed a split within the Federal Circuit on the issue.

The patent in the case was directed to a gas turbine engine such as a kind used in aircraft. The patent is owned by UTC. GE filed an IPR challenging seven claims of the patent. The PTAB found that five of the asserted claims were not invalid. GE appealed.

UTC moved to dismiss the appeal for lack of standing, asserting that GE failed to demonstrate a sufficient injury in fact from losing the IPRs. GE responded with a declaration that stated, in part, “that designing around the ’605 patent restricts GE’s design choices and forced GE to incur additional research and development expenses.” GE further argued that it suffered injury because of the statutory estoppel provision concerning IPRs, because of “economic loss, future threat of litigation, and competitive harm.” UTC responded that it had not sued or threatened to sue GE for infringement and that GE had not developed an engine that practices the claims of the ’605 patent. Following oral argument, GE was allowed to submit a supplemental declaration. In that declaration, GE further stated that Boeing had requested information from GE for aircraft, and GE had researched a design that “would potentially implicate” the ’605 patent. Ultimately, GE did not submit that design to Boeing, but did not explain why. GE also declared that, in order to stay competitive, it needs to be able to meet customer needs with a design that may implicate the patent.

The Federal Circuit dismissed the appeal, finding that GE did not have constitutional standing as required by Article III. Specifically, it had had failed to meet its burden of showing “injury in fact.” The Court held that the competitive injuries are “too speculative to support constitutional standing.” The declarations, for example, failed to show that GE lost bids to competitors because it could not produce an engine that infringed the patented design, or that it submitted only a non-infringing design to Boeing because of the patent. Rather, “GE asserts only speculative harm untethered to the ’605 patent.”

In support, the Court relied on its recent decision in AVX Corp. v. Presidio Components, Inc., 923 F.3d 1357 (Fed. Cir. 2019), which we covered here. That case set a bar for “competitor standing” requiring that government action “alter the status quo.” Because “the Board’s upholding of claims 7-11 of the ’605 patent did not change the competitive landscape for commercial airplane engines,” there was no “competitor standing.” The Court also relied on JTEKT Corporation v. GKN Automotive Ltd., Appeal No. 2017-1828 (Fed. Cir. Aug. 3, 2018) (our write-up here) for the principle that a party that has no “concrete plans for future activity that creates a substantial risk of future infringement” does not have standing. Finally, the Court reiterated that the statutory estoppel provision does not provide standing.

The opinion was short, at only eight pages.

But Judge Hughes issued a strong opinion objecting to the precedent the Court had set to date on the issue of standing. He concurred in the result only because of the Court’s prior precedent, but stated that he believed the prior decisions were in error. His opinion, longer than the majority opinion, asserts that AVX was incorrectly decided. He opined that in the highly competitive market, in which the parties are direct competitors, and particularly with long lead times for projects, GE will face injury due to the IPRs. He also opined that the estoppel provisions provide a basis for standing, at least on this fact pattern.

Judge Hughes’s opinion suggests that future en banc or Supreme Court petitions may be forthcoming on the issue of standing in IPR appeals.

The opinion can be found here.

ALSO THIS WEEK

Samsung Electronics Co., Ltd. v. Infobridge Pte. Ltd., Appeal Nos. 2018-2007, -2012 (Fed. Cir. July 12, 2019)

In an appeal from an inter partes review, the Court addressed whether the Board erred in its conclusion that a cited reference did not qualify as prior art based on the “printed publication” provisions of pre-AIA 35 U.S.C. 102 based on having been emailed to a listserv of over 250 individuals. The Court held that the Board erred by confusing the question of actual access with the question of possible accessibility—the petitioner need not establish that specific persons actually accessed or received a work to show that the work was publicly accessible.

The court also addressed an issue concerning standing. The court held that Appellant, being a contributor of a patent pool with a fixed royalty, had standing to challenge another patent in the pool since it could receive a higher proportion of the fixed royalty on invalidation of that patent.

The opinion can be found here.

SRI International, Inc. v. Cisco Systems, Inc., Appeal No. 2017-2233 (Fed. Cir. Op. Modified July 12, 2019)

Following a petition for rehearing en banc, the Federal Circuit panel that issued this March 20, 2019 opinion issued a modified opinion. In the original opinion, the Court vacated the district court’s decision on willful infringement, allowing retrial on that issue. It then awarded attorneys’ fees as an exceptional case. Cisco apparently petitioned for rehearing because willfulness was one factor the court used to find the case exceptional. With willfulness being remanded, Cisco complained that the exceptional case finding could not stand. Accordingly, following the petition for rehearing en banc, the panel issued a modified opinion, remanding the exceptional case determination for further consideration, but agreeing with the district court’s rationale on its exceptional case finding in all other respects. Upon issuing the modified opinion, the petition for rehearing en banc was denied.

The opinion can be found here.

Indivior Inc. v. Dr. Reddy’s Laboratories., S.A., Appeal Nos. 2017-2587, 2018-1010, -1058, -1062, -1114, -1115, -1176, -1177 (Fed. Cir. 2019); and Indivior Inc. v. Alvogen Pine Brook, LLC, Appeal Nos. 2018-1949, -2045 (Fed. Cir. July 12, 2019)

The Federal Circuit affirmed multiple decisions concerning the construction, validity, and infringement of patents pertaining to pharmaceutical films, such as films administered by placing them under the tongue, and methods of making them. On infringement, the Court’s findings included that film drying techniques repeatedly disparaged in the specification were thereby disclaimed, and that films prepared with methods employing only the disparaged drying techniques did not infringe. The Court also found that the district court did not abuse its discretion in denying the Rule 59 motion of one defendant found to infringe, where that defendant did not request a narrow construction of the drying limitation.

On invalidity, among other things, the Court affirmed the district court’s finding of a “compromise” level of ordinary skill in the art, which included some experience in coating films despite that the specific field of pharmaceutical films was nascent at the time of the invention. However, the Court also affirmed a finding indicating that the emergent nature of the field at the time of the invention weighed against a skilled artisan’s reasonable expectation of success in combining asserted prior art. The Court also vacated as moot the district court’s judgment of invalidity as to certain claims, in light of an affirmed inter partes review decision invalidating the same claims.

The opinion can be found here.

TQ Delta, LLC v. Dish Network, LLC, Appeal No. 2018-1799 (Fed. Cir. July 10, 2019)

In this appeal from the PTAB of an inter partes review (“IPR”) brought by Dish Network, the Federal Circuit addressed whether TQ Delta’s procedural rights under the Administrative Procedure Act (“APA”) were violated by the Board’s reliance on a new claim construction in its Final Written Decision. The Court found TQ Delta’s APA rights were not violated because the PTAB never construed the term at issue in its Decision to Institute, and therefore, did not change course by construing the term later, especially since TQ Delta was on notice of how the PTAB was interpreting the construction of the term based on arguments made and questions asked at oral hearing. The Court also held that the PTAB properly construed the new term, and affirmed the Final Written Decision that the challenged claims were obvious over the prior art.

The opinion can be found here.

Cisco Systems, Inc. v. TQ Delta, LLC, Appeal Nos. 2018-1806, 2018-1917 (Fed. Cir. July 10, 2019)

In this related appeal from the PTAB of two IPRs on the same patent as the IPR above brought by Dish Network (“the Dish Network IPR”), the Federal Circuit again addresses issues relating to claim construction obviousness. In the IPRs being appealed here, certain claims that were found obvious by the Board in the Dish Network IPR were found not obvious by the Board in the IPRs here. Thus, due to the conflicting findings and the Court’s affirmation of the decision in the Dish Network IPR, the Court here first held that the appeal is moot as relates to claims found obvious by the Court in the companion appeal. As to the remaining claims, the Court vacated and remanded the Board’s decision because the Board did not apply the broadest reasonable interpretation of the term at issue in light of the specification. Specifically, the Court found that while the claim term at issue only appeared in the claims, the specification and the claims themselves provided sufficient description and context such that the construction provided by the Board was too restrictive.

The opinion can be found here.

Stephen Quake v. Yuk-Ming Dennis Lo, Appeal Nos. 2018-1779, -1780, -1782 (Fed. Cir. July 10, 2019)

In an appeal from the PTAB ruling of unpatentability for lack of written description as part of three interference proceedings, the Federal Circuit agreed with the PTAB that the inventors’ patent and patent application did not satisfy the written description of 35 U.S.C. 112. In general, the written description requirement prevents an applicant from later claiming something that they did not invent. The Federal Circuit affirmed the PTAB’s finding that a citation to a reference and a single sentence in Quake’s specification coupled with no description of the final claimed comparison step as related to the newly claimed feature were insufficient to describe the claimed method and failed to satisfy the written description requirement. It held this is especially true when, as here, claim amendments were made in response to developments by others.

The opinion can be found here.