Justia Patents Opinion Summaries

ISE asserted infringement of its patent, “Automated Exchange for Trading Derivative Securities,” directed to an automated exchange for trading options contracts that allocates trades among market professionals and assures liquidity. It distinguishes an “automated” exchange from the traditional, floor-based “open outcry” system for trading options contracts. The Chicago Board Options Exchange’s accused product, the “Chicago Board Options Exchange,” uses the Hybrid Trading System, which includes a fully screen-based trading system called “CBOEdirect” integrated with traditional, open outcry trading. On appeal, the Federal Circuit construed the term “automated exchange” as “a system for executing trades of financial instruments that is fully computerized, such that it does not include matching or allocating through the use of open-outcry” and found that the patentee disavowed all manual or partially automated systems of trading. On remand, ISE stipulated to noninfringement because it concluded that the district court’s pretrial rulings, including a statement that “it will be a jury question whether CBOEdirect is a stand alone automated exchange alongside a floor-based system or whether it is a system that includes matching or allocating through open outcry,” prevented it from proving that the accused product met the “automated exchange” limitation. The Federal Circuit affirmed the judgment of noninfringement, but reversed a finding that one claim was indefinite.View "Chicago Bd. Options Exch., Inc. v. Int'l Secs., LLC" on Justia Law

Calcar’s patents share a common specification, are derived from a priority application filed in 1997, and describe and claim a multimedia system to access vehicle information and control vehicle functions. Calcar accused Honda’s computerized navigation systems of infringement. Calcar claimed that the accused systems included additional infringing features beyond providing travel directions. Honda sought a finding of inequitable conduct, based on the actions of Calcar’s founder, Obradovich. Among coinventors, Obradovich was responsible for the patent application. Honda alleged that he deliberately withheld prior art that was material to patentability; Obradovich disclosed the existence of the 1996 Acura RL navigation system, but did not disclose additional information that would have led the PTO to deny the patent as anticipated or rendered obvious. When that system was introduced, Calcar Published “Quick Tips” booklets with condensed information from a car’s owner’s manual. In developing a guide for the 96RL, Obradovich drove the car and operated the navigation system. Calcar personnel took photographs of the system and owner’s manual. Obradovich acknowledged that the system was the basis of Calcar’s inventions. Honda argued that the operational details that he did not disclose were those that were the claimed in the patents at issue: the use of the system to display the status of vehicle functions and to search for information about the vehicle. The district court granted Honda’s inequitable conduct motion and found the patents unenforceable. The Federal Circuit affirmed. View "Am. Calcar, Inc. v. Am. Honda Motor Co." on Justia Law

uPI and Richtek design and sell DC-DC controllers that convert direct current from one voltage to another, and are embodied in chips for downstream devices such as computer motherboards. uPI was founded by former Richtek employees; its chips are imported into the U.S. either directly or as incorporated in downstream devices. Richtek complained to the International Trade Commission that uPI misappropriated Richtek’s trade secrets and infringed Richtek’s U.S. patents, in violation of the Tariff Act, 19 U.S.C. 1337. uPI offered to enter into a consent order and to cease importation of products produced using or containing Richtek’s trade secrets or infringing Richtek’s patents. Over Richtek’s objection, the ALJ entered the consent order substantially as drafted by uPI. The Commission terminated the investigation. A year later Richtek filed an Enforcement Complaint. An ALJ distinguished between products that were accused in the prior investigation and products allegedly developed and produced after entry of the Consent Order, finding violations as to the formerly accused products and that the post- Consent Order products infringed two patents, but were independently developed and not produced using Richtek’s trade secrets. The Commission affirmed with respect to the formerly accused products and reversed in part with respect to the post-Order products. The Federal Circuit affirmed concerning the formerly accused products, but reversed the ruling of no violation as to the post-Consent Order products.View "UPI Semiconductor Corp. v. Int'l Trade Comm'n" on Justia Law

MRC owns the 488 patent, claiming an ornamental design for a football jersey for a dog, and the 487 patent, which claims a similar baseball jersey. Cohen is the named inventor and principal shareholder of MRC and assigned his rights to that company. Hunter is a retailer of licensed sports consumer products, including pet jerseys and previously purchased pet jerseys for dogs from Cohen through companies with which he was affiliated. Cohen claims that in 2009 he designed another pet jersey, known as the “V3” jersey, which later became the subject of the 488 patent. Hunter began purchasing the V3 jersey in 2009. In 2010, Cohen filed a patent application for the V3 jersey and the baseball equivalent that became the subject of the 487 patent. Cohen informed Hunter that he no longer intended to do business with Hunter because Hunter was having difficulty making payments. Hunter sought proposals from other companies to manufacture and supply it with pet jerseys like the V3 and contracted with CDI. MRC sued Hunter and CDI for willful infringement. The district court granted summary judgment in favor of Hunter and CDI, finding both patents invalid as obvious under 35 U.S.C. 103(a). The Federal Circuit affirmed.View "MRC Innovations, Inc. v. Hunter Mfg., LLP" on Justia Law

In 2006, Allen and Gillman agreed to adapt Allen’s electronic payment system, then used in the automotive industry, to process health care claims. Their contracts provided that Allen’s company, StoneEagle, owned the new system technology. StoneEagle licensed the technology to Talon, which was responsible for marketing. Allen applied for a patent on the system, listing himself as the sole inventor. Gillman had some role in drafting the application and in the application process. Although not listed as an inventor, Gillman had an ownership interest in the patent application until at least July 2010, when he assigned his interest to StoneEagle. The patent issued in September 2010. By 2011, the relationship had soured. StoneEagle sought a declaratory judgment that Allen was the sole inventor and owner of the patent and asserted state law trade secret misappropriation claims. The court issued a preliminary injunction prohibiting use or disclosure of StoneEagle’s trade secrets and confidential information. StoneEagle terminated the license agreement, but Talon and Gillman allegedly started a competing venture. The district court denied a contempt order and clairifed the injunction. The Federal Circuit remanded with instructions to dismiss, finding that the court lacked jurisdiction over the case when StoneEagle initiated the lawsuit because it did not did not allege an actual controversy concerning inventorship.View "Stoneeagle Servs., Inc. v. Gillman" on Justia Law

Hauge and his former employer, ERI, disputed ownership of intellectual property rights related to “pressure exchangers,” a type of energy recovery device used in reverse osmosis. In 2001 they entered into an Agreement. The district court adopted the Agreement, holding that ERI was to be the sole owner of three U.S. patents and one pending patent application. After expiration of the Agreement’s non-compete clause, in 2004, Hauge filed a patent application, titled “Pressure Exchanger,” and a utility application. The patent issued in 2007, describing “[a] pressure exchanger for transferring pressure energy from a high-pressure fluid stream to low-pressure fluid stream.” In 2009, Hauge’s new company, Isobarix, unsuccessfully attempted to reach a new agreement with ERI. Isobarix began selling a pressure exchanger, called “XPR.” Hauge entered into a consulting agreement with two ERI employees. ERI sought an Order to Show Cause, in 2012, submitting an expert’s declaration that Isobarix was using pressure exchanger technology from pre-March 19, 2001 in design and manufacture of XPR, which is “virtually identical to the ERI pressure exchanger” in operation. The court entered a Contempt Order, finding that allowing Hauge to develop new products using technology he assigned to ERI solely because the new inventions post-date the Agreement would render the Agreement useless. The Federal Circuit vacated, finding that Hauge did not violate the “four corners” of the 2001 Order.View "Energy Recovery, Inc. v. Hauge" on Justia Law

Danisco and Novozymes compete as suppliers of Rapid Starch Liquefaction products, genetically modified industrial enzymes that convert plant-based material into ethanol. They have patents that claim α-amylase enzymes, genetically engineered through substitution of amino acids in the peptide sequence to improve liquefaction performance. Novozymes has sued Danisco several times. Once Novozymes amended a pending patent application to claim one of Danisco’s new products, and sued Danisco the same day that the patent issued. Danisco owns the 240 patent, issued 2011 and claiming priority from a 2008 provisional application, claiming a variation for increased viscosity reduction in a starch liquefaction assay; it is the active ingredient in Danisco’s RSL products. After the PTO issued a Notice of Allowance, Novozymes amended a pending application to claim the enzyme, and contested entitlement to priority, arguing that its amended claim covered the same invention as the 240 patent. After Danisco’s 240 patent issued, Novozymes requested continued examination and made comments about its refusal to “acquiesce.” Upon issuance of Novozymes’s 573 patent, Danisco sought declaratory judgments that its products did not infringe and that the 573 patent was invalid, or that its 240 patent had priority under 35 U.S.C. 291. The district dismissed, acknowledging that Novozymes’s 573 patent presented a substantial risk to Danisco, but that Danisco’s action was filed before Novozymes could take action to enforce its rights. The Federal Circuit reversed, holding that the totality of the circumstances established a justiciable controversy. View "Danisco U.S. Inc. v. Novozymes A/S, Inc." on Justia Law

Ancora’s patent, entitled “Method of Restricting Software Operation within a License Limitation,” describes a method of preventing unauthorized software use by checking whether a program is operating within its license and taking remedial action if it is not. Methods for checking license coverage of software were known at the time of application, but some were vulnerable to hacking, while others were expensive and inconvenient to distribute. The specification claims to overcome those problems by using memory space associated with the computer’s basic input/output system (BIOS), rather than other space, to store encrypted license information for the verification process. While the contents of BIOS space may be modified, the level of expertise needed to do so is unusually high, and the risk of accidentally rendering the computer inoperable is too high for the ordinary hacker. The method eliminates the expense and inconvenience of using additional hardware. Ancora sued, alleging that products running Apple’s iOS operating system infringed the patent. Ancora stipulated to non-infringement under the district court’s construction of the claim term “program” and appealed that construction. Apple cross-appealed. The Federal Circuit reverses the construction of “program” as limited to application programs, affirmed a conclusion that the terms “volatile memory” and “non-volatile memory” are not indefinite, and remanded.View "Ancora Tech., Inc. v. Apple, Inc." on Justia Law

Align’s Invisalign System, an alternative to conventional braces, uses a series of clear dental aligners that are worn sequentially over time to adjust the position of a patient’s teeth. The aligners must be custom-designed for the patient’s unique teeth. Align’s asserted patents are directed to methods and treatment plans using digital data sets. In 2005, Align’s founder and former CEO founded OrthoClear and used former Align employees to manufacture dental aligners. Align filed a complaint with the International Trade Commission, alleging that OrthoClear violated 19 U.S.C. 1337 by importing, selling for importation, or selling within the U.S., aligners that infringe Align’s patents, and by misappropriating Align’s trade secrets. A 2006 settlement required OrthoClear to assign its entire intellectual property portfolio to Align. The Commission entered the Consent Order and terminated the investigation. Suspecting that OrthoClear and others were violating the Consent Order, Align sought an enforcement proceeding. Rather than issuing an “initial determination,” the ALJ issued an order, denied a motion to terminate and scheduled a trial. The Commission concluded that the order constituted an “initial determination,” subject to its review, reversed, and terminated the enforcement proceeding, finding that the accused digital data sets were not covered by the scope of the consent order. The Federal Circuit vacated, finding that the Commission erred in reviewing the order. View "Align Tech., Inc. v. Int'l Trade Comm'n" on Justia Law

Stauffer, pro se, filed a qui tam action against Brooks Brothers under the then-version of the false-marking statute, 35 U.S.C. 292, claiming that Brooks Brothers marked its bow ties with expired patent numbers. In 2011, while the action was pending, the President signed into law the America Invents Act, 125 Stat. 284A, which eliminated the false-marking statute’s qui tam provision, so that only a “person who has suffered a competitive injury” may bring a claim. The AIA also expressly states that marking a product with an expired patent is not a false-marking violation and that the amendments apply to all pending cases. Stauffer argued that the AIA amendments were unconstitutional because they amounted to a pardon by Congress, violating the doctrine of separation of powers, and also violated the common-law principle that prohibits use of a pardon to vitiate a qui tam action once the action has commenced. The district court dismissed for lack of standing. The Federal Circuit affirmed, finding that the amendments did not constitute a pardon and that even if the law had not changed, Stauffer might have lost his lawsuit, and, therefore, could not have acquired a private-property interest in his share of the statutory penalty. View "Stauffer v. Brooks Brothers, Inc." on Justia Law