Justia Patents Opinion Summaries

Articles Posted in Legal Ethics
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Hyatt is a prolific patent filer and litigant. In 1995, Hyatt filed “hundreds of extraordinarily lengthy and complex patent applications,” including the four at issue; he adopted an approach "that all but guaranteed indefinite prosecution delay” in an effort to submarine his patent applications and receive lengthy patent terms. The examination of these patents has cost the Patent and Trademark Office (PTO) millions of dollars. After adverse results regarding the patents at issue, Hyatt sued the PTO under 35 U.S.C. 145. The PTO moved to dismiss the actions for prosecution laches. The district court ordered the PTO to issue a patent covering some of the claims.While an appeal was pending, Hyatt sought attorney’s fees under the Equal Access to Justice Act as a “prevailing party” 28 U.S.C. 2412(b). The district court granted this motion in part. The Sixth Circuit vacated, holding that the PTO had carried its initial burden of demonstrating prosecution laches. The PTO sought reimbursement of its expert witness fees. Under 35 U.S.C. 145, “[a]ll the expenses of the proceedings shall be paid by the applicant.” The district court noted the American Rule presumption against fee-shifting and denied expert fees. The Federal Circuit vacated. Hyatt is not entitled to attorney’s fees under 28 U.S.C. 2412(b) and cannot be considered a prevailing party. The court affirmed the denial of expert fees because section 145 does not specifically and explicitly shift expert witness fees. View "Hyatt v. Hirshfeld" on Justia Law

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The Navy began a program to design and build littoral combat ships (LCS) and issued a request for proposals. During the initial phase of the LCS procurement, FastShip met with and discussed a potential hull design with government contractors subject to non-disclosure and confidentiality agreements. FastShip was not awarded a contract. FastShip filed an unsuccessful administrative claim, alleging patent infringement. The Claims Court found that the FastShip patents were valid and directly infringed by the government. The Federal Circuit affirmed.The Claims Court awarded FastShip attorney’s fees and expenses ($6,178,288.29); 28 U.S.C. 1498(a), which provides for a fee award to smaller entities that have prevailed on infringement claims, unless the government can show that its position was “substantially justified.” The court concluded that the government’s pre-litigation conduct and litigation positions were not “as a whole” substantially justified. It unreasonable for a government contractor to gather information from FastShip but not to include it as part of the team that was awarded the contract and the Navy took an exceedingly long time to act on FastShip’s administrative claim and did not provide sufficient analysis in denying the claim. The court found the government’s litigation positions unreasonable, including its arguments with respect to one document and its reliance on the testimony of its expert to prove obviousness despite his “extraordinary skill.” The Federal Circuit vacated. Reliance on this pre-litigation conduct in the fee analysis was an error. View "FastShip, LLC v. United States" on Justia Law

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ECT sued ShoppersChoice for infringement of its 261 patent, directed “to systems and methods that notify a party of travel status associated with one or more mobile things. ShoppersChoice challenged claim 11 as patent-ineligible, 35 U.S.C. 101. ShoppersChoice moved to join a patent eligibility hearing set in a parallel lawsuit, in which ECT alleged claim 11 infringement against other companies. The court conducted a consolidated hearing and invalidated claim 11 as directed to the abstract idea of providing advance notification of the pickup or delivery of a mobile thing. The Federal Circuit affirmed, holding that “the claim only entails applying longstanding commercial practices using generic computer components and technology.” ShoppersChoice sought attorney fees, citing evidence that ECT sent standardized demand letters and filed repeat infringement actions to obtain low-value “license fees” and force settlements. Before the court ruled, a California District Court awarded attorney fees against ECT in another case related to the patent.The Federal Circuit vacated a holding that the case was not exceptional. A pattern of litigation abuses characterized by the repeated filing of patent infringement actions for the sole purpose of forcing settlements, with no intention of testing the merits of one’s claims, is relevant to a district court’s exceptional case determination. The court clearly erred by failing to consider the objective unreasonableness of ECT’s alleging infringement of claim 11 against ShoppersChoice. View "Electronic Communication Technologies, LLC v. ShoppersChoice.Com, LLC" on Justia Law

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Almirall markets ACZONE®, a prescription medication used to treat acne. Almirall’s 926 and 219 patents are listed in the FDA Orange Book as claiming ACZONE. Before seeking approval to market a generic version of ACZONE, Amneal sought inter partes review (IPR), challenging claims of the patents. Amneal filed its Abbreviated New Drug Application with the FDA. Almirall sued, alleging infringement of only the 219 patent. Amneal counterclaimed that the 926 patent is invalid and is not infringed. Almirall offered to enter into a covenant-not-to-sue on the 926 patent upon the dismissal of the IPR. With the parties unable to reach a settlement, the underlying IPR on the 926 patent proceeded. The Patent Board found claims of the 926 patent not unpatentable. Amneal appealed but later moved to voluntarily dismiss its appeal.Almirall agreed to the dismissal but argued that Amneal litigated in an unreasonable manner by continuing to pursue the IPR after the covenant-not-to-sue was offered, and Almirall sought removal of the patent from the Orange Book. Almirall sought (35 U.S.C. 285) fees and costs incurred from the date settlement negotiations ended to the date of the IPR trial. The Federal Circuit denied the request. Even if section 285 is not limited to district court proceedings, the plain meaning of its reference to “[t]he court” speaks only to awarding fees incurred during, in close relation to, or as a direct result of, judicial proceedings, not to fees incurred for work in Patent Office proceedings before the court asserted jurisdiction. View "Amneal Pharmaceuticals LLC v. Almirall, LLC" on Justia Law

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Hitkansut owns the patent, entitled “Methods and Apparatus for Stress Relief Using Multiple Energy Sources.” While the application that later issued as that patent was pending, Hitkansut entered into a non-disclosure agreement with Oak Ridge National Laboratory (ORNL) and provided ORNL with a copy of the then-unpublished patent application. ORNL staff prepared research reports, received funding, authored publications, and received awards for research, based upon unauthorized use of the patent. Hitkansut sued ORNL, alleging infringement under 28 U.S.C. 1498. The Claims Court determined that certain claims of the patent were invalid but that other claims were valid and infringed. Although Hitkansut originally sought a royalty between $4.5-$5.6 million, based on a percentage of the research funding obtained by ORNL, the Claims Court awarded $200,000, plus interest, as the hypothetically negotiated cost of an up-front licensing fee. The Federal Circuit affirmed.Hitkansut then sought attorneys’ fees and expenses under 28 U.S.C. 1498(a). The Claims Court awarded $4,387,889.54.The Federal Circuit affirmed. Section 1498(a) provides for the award of attorneys’ fees under certain conditions, unless “the court finds that the position of the United States was substantially justified.” The “position of the United States” in this statutory provision refers to positions taken during litigation and does not encompass pre-litigation conduct by government actors, but the examples of conduct cited by the Claims Court demonstrate that the position of the United States was not substantially justified even under this narrow definition View "Hitkansut LLC v. United States" on Justia Law

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Dragon sued 10 defendants, alleging patent infringement. Based on petitions by DISH and SXM (collectively, “DISH”), the Board instituted inter partes review (IPR) of the patent. The district court stayed proceedings as to DISH but proceeded as to the other defendants. After the court issued a claim construction order, Dragon, DISH, and the other defendants stipulated to noninfringement as to the accused products. The court entered judgment in favor of all defendants. In the parallel IPR, the Board issued a final decision holding unpatentable all asserted claims.DISH sought attorneys’ fees under 35 U.S.C. 285 and 28 U.S.C. 1927. Before the motions were resolved, Dragon appealed both the judgment of noninfringement and the Board’s decision. The Federal Circuit affirmed the Board’s decision and dismissed the district court appeal as moot. On remand, the district court vacated the judgment of noninfringement as moot but denied DISH’s motions for attorneys’ fees, holding that “success in a different forum is not a basis for attorneys’ fees” in the district court. The Federal Circuit vacated. The judgment of noninfringement was vacated only because DISH successfully invalidated the claims in parallel IPR proceedings, rendering moot Dragon’s infringement action. DISH’s success in obtaining a judgment of noninfringement, although later vacated because of its success in IPR, supports holding that they are prevailing parties. View "Dragon Intellectual Property LLC v. DISH Network LLC" on Justia Law

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After licensing negotiations with Timney failed, Mossberg sued Timney for patent infringement. Instead of answering the complaint, Timney filed for inter partes reexamination. The district court granted a stay. The Patent Office rejected certain claims. Mossberg canceled the rejected claims and added new claims. Before the inter partes reexamination proceeded further, the Patent Office vacated its institution decision because Timney had not identified the real party in interest in its petition. In 2014-2015, Timney filed three ex parte reexamination requests. The examiner ultimately rejected all pending claims over prior art. The Patent Trial and Appeal Board affirmed. Throughout these reexaminations, the district court maintained the stay despite several motions by Mossberg to lift it.Mossberg filed a notice of voluntary dismissal under Rule 41(a)(1)(A)(i). The district court entered a docket text order stating that the case was dismissed without prejudice under Rule 41(a)(1)(A)(i). Timney moved to declare the case exceptional so that it could pursue attorney’s fees, 35 U.S.C. 285. The Federal Circuit affirmed the denial of the motion. Timney was not a “prevailing party” because a Rule 41 dismissal without prejudice is not a decision on the merits and thus cannot be a judicial declaration altering the legal relationship between the parties. View "O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC" on Justia Law

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IV alleged infringement of patents directed to filtering data files (such as email messages) based on content. The court severed the defendants. During claim construction in the Symantec action, IV’s expert consistently opined that a “characteristic” as used in asserted claims is “an attribute of the document such as whether it contains a virus or is SPAM or bulk email or includes copyrighted content.” The court adopted that construction. At the Symantec trial, IV’s expert changed his opinion, testifying that bulk email was not a characteristic. During a clarification hearing, IV’s counsel maintained that the expert had not changed his opinion and that bulk email “never was” within the scope of claim 9. The court clarified its claim constructions, stating that it “learn[ed] only at the last minute” that IV understood the construction to mean “that bulk email was excluded from claim 9 when it was clearly in the other claims ... a surprise inconsistent with the representations from” IV, and not what was intended. The court granted Micro judgment in part, holding the asserted claims invalid, canceled the Micro trial, and concluded that IV’s conduct was exceptional “solely with respect to” the changed testimony but that the case overall was not exceptional under 35 U.S.C. 285 and awarded Micro $444,051.14 in attorney fees.The Federal Circuit vacated. The district court should have determined whether the circumstances surrounding the expert’s changed opinion were such that, when considered as part of the totality of circumstances, the case stands out as exceptional, i.e., the case stands out among others with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated. View "Intellectual Ventures I LLC v. Trend Micro Inc." on Justia Law

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Blackbird sued HIM for infringement of a patent relating to exercise equipment. Blackbird is owned and controlled entirely by attorneys, whose business model consists of purchasing patents and monetizing them “through litigation.” Nineteen months later, after a transfer of venue, Blackbird offered to settle for $80,000. HIM declined, asserting that the infringement allegations lacked merit and that HIM believed there was a strong likelihood that Blackbird would be ordered to pay attorney fees. Blackbird made another t offer, for $50,000. Again, HIM declined. Months later, Blackbird offered to settle for $15,000. HIM declined, again requesting that Blackbird pay some of its expenses. Blackbird then offered a “walk-away” settlement whereby HIM would receive a license to Blackbird’s patent for zero dollars, and the case would be dismissed. HIM declined. During discovery, HIM moved for summary judgment. After the motion was briefed and without notifying HIM in advance, Blackbird filed a notice of voluntary dismissal with prejudice, executed a covenant not to sue, and moved to dismiss for lack of subject matter jurisdiction. The district court dismissed Blackbird’s claims with prejudice, denied Blackbird’s motion to dismiss, and authorized HIM to seek costs, expenses, and attorney fees. The Federal Circuit affirmed an award to HIM of fees and expenses in the requested amount ($363,243.80), upholding findings that Blackbird’s litigation position was “meritless” and “frivolous.” Blackbird litigated in an unreasonable manner and the court properly considered the need to deter future abusive litigation. View "Blackbird Tech LLC v. Health in Motion, LLC" on Justia Law

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The Patent Act provides two methods for challenging an adverse decision by the Patent and Trademark Office (PTO): direct appeal to the Federal Circuit, 35 U.S.C. 141, or a new civil action against the PTO Director in the Eastern District of Virginia, section 145. Under section 145, the applicant must pay “[a]ll the expenses of the proceedings.” NantKwest filed a section 145 civil action after its patent application was denied. The Federal Circuit affirmed summary judgment in favor of the PTO, which moved for reimbursement of expenses, including the pro-rata salaries of PTO attorneys and a paralegal who worked on the case. The Federal Circuit and the Supreme Court affirmed the denial of the motion, concluding that the statutory language referencing expenses was not sufficient to rebut the “American Rule” presumption that parties are responsible for their own attorney’s fees. Reading section 145 to permit an unsuccessful government agency to recover attorney’s fees from a prevailing party “would be a radical departure from longstanding fee-shifting principles adhered to in a wide range of contexts.” The phrase “expenses of the proceeding” would not have been commonly understood to include attorney’s fees at the time section 145 was enacted. The appearance of “expenses” and “attorney’s fees” together across various statutes indicates that Congress understands the terms as distinct and not inclusive of each other. View "Peter v. NantKwest, Inc." on Justia Law