Each week, Troutman Sanders’ Federal Circuit review summarizes the Federal Circuit precedential patent opinions from the prior week.
This week:
- Docket Error Deemed Insufficient For Extending or Re-opening Appeal Period
- Federal Circuit Declines to Reconsider Standard for Willful Infringement
- Federal Circuit Affirmed Infringement and Non-Obvious Ruling for Aqueous Acetaminophen Formulations
Docket Error Deemed Insufficient For Extending or Re-opening Appeal Period
Two-Way Media LLC v. AT&T, Inc. et al., No. 2014-1302, 2015 U.S. App. LEXIS 4416 (Fed. Cir. Mar. 19, 2015) (O’Malley, J.). Click Here for a copy of the opinion.
Two-Way Media sued AT&T Inc. and its subsidiaries (collectively, AT&T), for infringing U.S. Patent Nos. 5,778,187 and 5,983,005, which relate to live-streaming technology for broadcasting audio and video over the Internet. A Texas jury found that AT&T infringed Two-Way’s patents under the doctrine of equivalents and that the asserted patent claims were neither anticipated nor obvious. The jury gave Two-Way a $27.5 million damage award for reasonable royalties, which was raised to about $40 million with interest. Final judgment reflecting the jury’s verdict was entered on October 7, 2013.
AT&T timely filed four motions for judgment as a matter of law (JMOL) or a new trial, regarding non-infringement, invalidity, and damages. Three of the four motions contained confidential information, and AT&T moved to file those motions under seal. On November 22, 2013, the court denied all of AT&T’s motions, granted Two-Way’s request for costs, and entered judgment against AT&T. When the court initially docketed these decisions, it identified the three orders addressing the confidential motions as granting the motions to seal, without indicating that the same orders denied the underlying motions on the merits. At the same time, the court correctly docketed its order denying the fourth, non-confidential JMOL motion. On November 25, 2013, the court updated the description of the orders on its docket, but did not send new notices of these updates to the parties.
After the 30 day appeal period expired, AT&T discovered that the November orders actually were final judgments that denied all of its post-trial motions. AT&T immediately filed a motion to extend or reopen the appeal period pursuant to Federal Rules of Appellate Procedure 4(a)(5) and (6). The district court denied AT&T’s motion and AT&T appealed.
The Federal Circuit affirmed. AT&T failed to show good cause or excusable neglect to warrant extending the appeal period under Rule 4(a)(5). Its reliance on the court’s PACER/ECF docket and email notification, which misidentified the court’s final order, was insufficient to excuse AT&T’s delay. Notice of electronic filings were sent to 18 attorneys at the two firms representing AT&T. Assistants at those firms downloaded copies of all of the orders onto each firm’s internal systems. The Court noted particularly that “it is the responsibility of every attorney to read the substance of each order received from the court and that it is not sufficient to rely on the email notifications received from the electronic filing system.” Further, the contemporaneous order denying the non-confidential JMOL motion was accurately labeled in the original docket entry and email notice.
In these circumstances the neglect was not excusable, and the district court properly refused to extend the appeal period under Rule 4(a)(5). The Court also declined to reopen then appeal period under Rule 4(a)(6), because AT&T actually received notice of the entry of judgment when it received and downloaded those judgments, and because Two-Way Media would be prejudiced by a belated appeal.
Federal Circuit Declines to Reconsider Standard for Willful Infringement
Halo Electronics, Inc., v. Pulse Electronics, Inc., No. 2013-1472, -1656, 2015 U.S. App. LEXIS 4696 (Fed. Cir. Mar. 23, 2015) (Taranto, J.). Click Here for a copy of the opinion.
Halo moved for reconsideration or en banc rehearing of an earlier panel decision of the Court. The panel held inter alia that Pulse had not willfully infringed Halo’s patents. The panel decision was discussed in Issue 32 of the Troutman Sanders Federal Circuit Review.
The Federal Circuit denied reconsideration and rehearing in a per curium order, issued without an opinion. Concurring and dissenting opinions were filed with the Court’s order. These opinions discuss whether recent Supreme Court cases that modified the willfulness standard for awarding attorney’s fees should be applied to modify the willfulness standard for awarding enhanced damages (up to three times the actual damages).
Previously, the Federal Circuit applied an objective/subjective test, which required that there be an objectively high likelihood that the defendant’s product infringed a patent, and that the defendant subjectively knew or should have known the infringement was likely. This standard was based on the Federal Circuit’s interpretation of the Supreme Court’s decision in Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc, which interpreted willfulness in a non-patent context. In the last term, the Supreme Court issued the Octane Fitness and Highmark decisions, which overturned the Federal Circuit’s willfulness standard for awarding attorney’s fees. Octane Fitness was discussed in Issue 17 of the Troutman Sanders Federal Circuit Review. The concurring and dissenting opinions in Halo indicate a common view that the Federal Circuit’s willfulness standard for enhanced damages should be revised to follow Octane Fitness and Highmark.
Judge O’Malley, joined by Judge Hughes, dissented from the denial to reconsider Halo. In her opinion, Octane Fitness and Highmark necessitated a change the Federal Circuit’s willfulness standard, which should be less rigid in awarding enhanced damages. Neither the statute for attorneys fees (§ 285) nor enhanced damages (§ 284) uses the term “willfulness,” and for this reason, the test for enhanced damages should mirror the totality of the circumstances standard for attorney’s fee awards announced in Octane. Further, appellate review should be for abuse of discretion by the district court, in a manner consistent with Highmark.
Judge Taranto, joined by Judge Reyna, filed a concurring opinion. The concurrence agreed that there are significant unanswered questions in the Court’s willfulness cases, but concluded that a rehearing was properly refused because Halo was not an appropriate vehicle for answering those questions.
Federal Circuit Affirmed Infringement and Non-Obvious Ruling for Aqueous Acetaminophen Formulations
Cadence Pharmaceuticals Inc. v. Exela Pharmsci Inc., No. 2014-1184, 2015 U.S. App. LEXIS 4700 (Fed. Cir. Mar. 23, 2015) (Linn, J.). Click Here for a copy of the opinion.
Cadence sued Exela for infringement of U.S. Patent Nos. 6,028,222 and 6,992,218 after Exela filed an ANDA with a Paragraph IV certification, seeking approval for a generic equivalent of Ofirmev, an injectable acetaminophen product. Claim 1 of the ‘222 patent recites, inter alia, “[a] stable, liquid formulation consisting essentially of acetaminophen dispersed in an aqueous medium containing a buffering agent…” The district court construed “buffering agent” to mean “an agent that helps the formulation resist change in pH.” The Federal Circuit affirmed, concluding that “nothing in the intrinsic record warrants adding requirements of effective concentration or resistance to material change” to the plain and ordinary meaning of “buffering agent.” The statement in the specification that the concentration of buffer “may be” between 0.1 and 10 mg/ml was not limiting since “it would not be proper to import from the patent’s written description limitations that are not found in the claims themselves.” Furthermore, an amendment showed that “a buffering agent is necessary” did not alter the scope and meaning of the term. Because the district court’s claim construction was correct, the Federal Circuit affirmed that Exela infringed the ‘222 patent.
The ‘218 patent disclosed a method for obtaining stable acetaminophen formulations by deoxygenating solutions with an inert gas. The district court found that Exela’s process of deoxygenating the solvent before adding the active ingredient did not literally infringe because the claim covered “only the method of first dissolving an active ingredient to form a solution and then deoxygenating the solution.” However, Exela infringed under the doctrine of equivalents because the timing for adding the active ingredient did not matter.
The Federal Circuit affirmed, citing Cadence’s expert: “adding acetaminophen before or after the deoxygenation step would have no impact on the stability of the final product.” Exela likewise had acknowledged that its formulation is stable. Exela argued that deoxygenating after adding the active ingredient is the “antithesis” of deoxygenating before adding the active ingredient, and such a reversal would “vitiate” the claimed limitation. The Court disagreed and held that “[t]he determination of equivalence depends not on labels like ‘vitiation’ and ‘antithesis’ but on the proper assessment of the language of the claimed limitation and the substantiality of whatever relevant differences may exist in the accused structure.” In this case the difference was found to be insubstantial.
Claim 1 of the ‘218 patent recites “[a] method for preparing an aqueous solution . . . comprising deoxygenation of the solution…, and optionally the aqueous solution . . . is topped with an inert gas atmosphere heavier than air and placed in a closed container . . . .” The Federal Circuit affirmed that “optionally” applies to both the “topped with an inert gas” step and the vacuum stoppering step (“placed in a closed container”). The specification contained “examples that exhibit prolonged stability even without vacuum stoppering.” The prosecution history did not provide “clear and unmistakable disavowal of the unambiguous recitation of the vacuum stoppering step as being optional.” While the applicants mentioned vacuum stoppering in arguing over a reference during prosecution, the applicants were comparing “the degree to which the level of oxygen was reduced” in the reference to the claims. There was “no clear indication that the vacuum stoppering step was the ‘contrast’ that applicants were trying to make over the cited reference.” In other words, the claim could not be read as requiring the “optional” vacuum stoppering step.
Finally, the Court affirmed the ruling of non-obviousness. Acetaminophen degrades primarily by hydrolysis and not oxidation, which was the mechanism described in the disputed prior art. Secondary considerations also supported a finding of non-obviousness. The claimed process achieved unexpected stability and was licensed to third parties, which was probative of non-obviousness.
The following opinions are not reported in this newsletter:
Senju Pharmaceutical Co., Ltd., v. Lupin Ltd., No. 2013-1630, 2015 U.S. App. LEXIS 4541 (Fed. Cir. March 20, 2015) (increased in corneal permeability was a product of routine optimization, i.e., not unexpected or surprising, and therefore re-examined claims were obvious). Click Here for a copy of the opinion.
Stryker Corp. v. Zimmer, Inc., No. 2013-1668, U.S. App. LEXIS 4737 (Fed. Cir. March 23, 2015) (granting a rehearing to clarify the standard of review for the objective recklessness prong of willful infringement). Click Here for a copy of the opinion.
Kennametal, Inc., v. Ingersoll Cutting Tool Com., No. 2014-1350, U.S. App. LEXIS 4832 (Fed. Cir. March 25, 2015) (substantial evidence supported the Board’s findings of anticipation and obviousness). Click Here for a copy of the opinion.
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Each week, we succinctly summarize the preceding week of Federal Circuit precedential patent opinions. We provide the pertinent facts, issues, and holdings. Our Review allows you to keep abreast of the Federal Circuit’s activities – important for everyone concerned with intellectual property. We welcome any feedback you may provide.
– Joe Robinson, Ryan Schneider, Bob Schaffer, Nicole Sullivan, John Morrissett, Parker Hancock and Tinh Nguyen.
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