Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

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Zinus’s patent is directed to “[a]n assemblable mattress support” that “can be shipped in a compact state with all of its components compactly packed into the headboard.” Cap sought a declaratory judgment that the patent was invalid and not infringed. Zinus counterclaimed, alleging infringement and unfair business practices under California state law. The district court granted summary judgment that claims 1 and 3 were invalid as obvious over prior art. The Federal Circuit vacated. The district court subsequently granted partial summary judgment that claims 1–3 were not invalid, in part because Cap had abandoned the “bed in a box” prior art reference that the court had relied on in its previous determination. Cap stipulated to the entry of a final judgment in favor of Zinus, with $1.1 million in damages and a permanent injunction.Thereafter, Cap discovered evidence (in an unrelated suit) that the deposition testimony of Zinus's then-president had been false concerning the prior art. Cap successfully moved to vacate the judgment and injunction under Rule 60(b)(3), which provides grounds for relief for “fraud . . . , misrepresentation, or misconduct by an opposing party.” The Federal Circuit affirmed. The court did not abuse its discretion in determining that the misrepresentations prevented Cap from fully and fairly presenting its case and that Cap satisfied the due diligence requirement. View "Cap Export, LLC v. Zinus, Inc." on Justia Law

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In 1989, Bilzerian was convicted on nine counts of securities fraud, making false statements to the Securities and Exchange Commission, and conspiracy to commit certain offenses, and defraud the SEC and the Internal Revenue Service (IRS). The Southern District of New York sentenced Bilzerian to four years in prison, imposed a $1.5 million fine, and ordered him to disgorge $62,337,599.53.In 2012, Bilzerian’s wife, Steffen, filed a pro se complaint in the Claims Court seeking an $8,243,145 tax refund under 26 U.S.C. 1341. The dispute stems from transactions that Bilzerian made in 1985-1986 related to the purchase and sale of certain common stocks, for which he was convicted of securities fraud. Steffen and Bilzerian later filed a second amended complaint as joined parties.In 2018, the court dismissed that complaint with prejudice. The Federal Circuit affirmed. The plaintiffs cannot establish a reasonable belief of having an unrestricted right to the disputed funds when the money was first reported as income. A reasonable, unrestricted-right belief cannot exist where a taxpayer knowingly acquires the disputed funds via fraud. The “taxpayer’s illicit hope that his intentional wrongdoing will go undetected cannot create the appearance of an unrestricted right.” View "Steffen v. United States" on Justia Law

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Deacero challenged the Department of Commerce’s final results in the 2014–2015 administrative review of the antidumping duty order covering carbon and certain alloy steel wire rod from Mexico. The Trade Court sustained Commerce’s determination to apply total facts available with an adverse inference but remanded to Commerce twice for further explanation or reconsideration of Commerce’s selection of 40.52 [percent] as the adverse facts available (AFA) rate. Commerce had employed AFA, reasoning that Deacero had “mischaracterized the nature of its [revised Section D database],” “withheld critical information from [Commerce]” when it submitted the revised database by representing that the changes were “minor,” and, despite further “opportunity to explain the revisions,” “Deacero’s response” remained “not satisfactory.”After Commerce placed additional information on the record corroborating the 40.52 percent rate, the Trade Court sustained Commerce’s second remand result. The Federal Circuit affirmed. Commerce’s selection and corroboration of Deacero’s AFA rate is supported by substantial evidence and otherwise in accordance with law. View "Deacero S.A.P.I. de C.V. v. United States" on Justia Law

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Flores-Vazquez served on active duty in the Navy, 1984-1988. In 1998, he sought service connection for depression for which he received treatment while onboard the U.S.S. Kitty Hawk. Flores-Vazquez claimed that he had witnessed several accidental deaths during service, including “a man being sucked inside the nose of an airplane.” Flores-Vazquez did not then submit service department records verifying the incidents. Flores-Vazquez did not appeal the denial of his claim. In 2005, Flores-Vazquez sought to reopen his claim. A medical examiner diagnosed bipolar disorder with depression and determined that the condition was “due to or the result of in[-]service illness.” The regional office denied service connection, reasoning that the medical opinion was “appeared to be based on the veteran’s unsupported report.”In 2008-2009, while Flores-Vazquez’s appeal to the Board of Veterans’ Appeals was pending, the VA received the 1986-1987 command histories of the Kitty Hawk. In 2010, the Board decided that, while the evidence was not compelling, service connection was warranted. The Board relied primarily on the 2005 medical report, not the command histories, and granted an effective date of January 2005. On remand from the Veterans Court, the Board found that 38 C.F.R. 3.156(c) did not apply because the Board’s 2010 award of benefits “was not based on” the new service department records. The Federal Circuit affirmed. The command histories submitted in 2008 played no role in the grant of service connection; the favorable resolution turned on a 2005 VA opinion that was based on service medical records that were always part of the claims file. View "Flores-Vazquez v. McDonough" on Justia Law

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The Equal Access to Justice Act (EAJA), 28 U.S.C. 2412, requires that if statutory requirements are met, the federal government must reimburse attorneys’ fees of a party who prevails in a lawsuit against the government. Smith, dissatisfied with the VA’s decision regarding his claims for veterans’ benefits, took an appeal to the Veterans Court. He was successful on the merits in part of his case and requested an EAJA award for his appellate counsel. The Veterans Court agreed to an award which included fees for 18 hours the attorney spent on an initial review of the 9,389-page agency record. The court imposed a reduction in that part of the award because Smith prevailed on some but not all of the issues that were litigated. The Veterans Court reasoned that this reduction was required as a matter of law by the EAJA.The Federal Circuit reversed in part. The Veterans Court undervalued the importance of the initial review of the case, a review that is necessary before appellate counsel could determine what bases existed for an appeal. That decision was contrary to the purpose and law of the EAJA. The court noted that if Smith had brought only the successful claim, the hours would have been fully compensated. View "Smith v. McDonough" on Justia Law

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10X filed a complaint with the International Trade Commission, alleging that Bio-Rad’s importation and sale of microfluidic systems and components used for gene sequencing or related analyses violated the Tariff Act of 1930, 19 U.S.C. 1337, which prohibits importation and sale “of articles that . . . (i) infringe a valid and enforceable United States patent.”An ALJ determined that Bio-Rad violated the statute with respect to all three patents finding that Bio-Rad infringed the patent claims and that 10X practiced the claims, satisfying the requirement of a domestic industry “relating to the articles protected by the patent.” The ALJ rejected Bio-Rad’s defense that it could not be liable for infringement because it co-owned the asserted 10X patents under assignment provisions that two of the named inventors signed when they were employees of BioRad (and its predecessor), even though the inventions were not made until after the employment.The Commission and Federal Circuit affirmed. Substantial evidence supports findings that Bio-Rad infringed the asserted claims and that 0X’s domestic products practice the asserted claims. The court rejected Bio-Rad’s indefiniteness challenge. The assignment provisions did not apply to a signatory’s ideas developed during the employment solely because the ideas ended up contributing to a post-employment patentable invention in a way that supports co-inventorship of that eventual invention. View "Bio-Rad Laboratories, Inc. v. International Trade Commission" on Justia Law

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Janssen challenged Customs and Border Protection’s classification of Janssen’s product darunavir ethanolate, the active ingredient in Prezista®, is a medication for the treatment of the human immunodeficiency virus (HIV) under the Harmonized Tariff Schedule of the United States (HTSUS) and the Pharmaceutical Appendix to the Tariff Schedule. Customs had applied subheading 2935.00.95, “Sulfonamides: Other: Drugs: Other,” for a duty rate of 6.5 percent ad valorem, Janssen alleged that it has paid approximately $100 million in duties for entries of darunavir ethanolate that should have received duty-free treatment. The Trade Court concluded that the subject merchandise was properly classified under HTSUS subheading 2935.00.60 and subject to duty-free treatment under the Pharmaceutical Appendix. The Federal Circuit affirmed. The court held that darunavir ethanolate was properly classified under HTSUS subheading 2935.00.60 because it belongs to the sulfonamides class or kind of organic compounds. View "Janssen Ortho, LLC v. United States" on Justia Law

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Morse served in the Navy, 1970-1972; including six months in Da Nang, Vietnam. In 1999, Morse filed a claim for compensation, listing several disabilities, including PTSD. A VA regional office granted him a nonservice-connected pension in 2001, based on joint disease. He later obtained Social Security disability benefits. In 2002, the regional office denied Morse’s claim of service connection for PTSD, finding "no credible evidence of verification of the claimed stressors.” In 2004, Morse sought to reopen his PTSD claim. The regional office received service department records in 2005, showing that in 1972 a psychiatrist reported that Morse appeared “moderately depressed” about personal problems. An examiner concluded that Morse was unable to provide convincingly relate symptoms to his reported military exposure. The Board of Veterans’ Appeals affirmed.In 2009, Morse sought to reopen his claim. A VA examiner diagnosed Morse as suffering from PTSD. The Joint Services Records Research Center (JSRRC) coordinator's memo noted that the events “reported by the veteran" are "consistent" with the conditions of service "even though we were unable to locate official records of the specific occurrence.” Morse was granted service connection for PTSD, effective in 2009. The Board in 2016 affirmed; because no additional service records had been obtained since the Board’s 2008 decision, the VA was not required to conduct another reconsideration. In 2018, the Board found that the 2010 JSRRC memorandum did not constitute an “official service department record”; Morse was “essentially attacking the merits of" the 2008 Board decision, "which is final.”The Veterans Court and Federal Circuit affirmed; the “VA’s obligation to reconsider the PTSD claim upon receipt of new service department records was exhausted in 2008.” The 2010 JSRRC memorandum did not constitute a service department record that triggered a renewed obligation to reconsider Morse’s claim. View "Morse v. McDonough" on Justia Law

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The Housing Act, 42 U.S.C. 1437g, provides funds for public housing. The Department of Housing and Urban Development (HUD) allocates amounts in the fund to eligible public housing agencies (PHAs). Each of the 553 plaintiff-PHAs executed an Annual Contributions Contract (ACC) with HUD, which requires HUD to “provide annual contributions to the [PHA] in accordance with all applicable statutes, executive orders, regulations, and this ACC” and requires the PHA to develop and operate covered projects in compliance with the ACC and all applicable statutes, executive orders, and regulations. The standard form ACC incorporates 24 C.F.R. 990.210(c), which provides HUD with “discretion to revise, on a pro-rata basis, the amounts of operating subsidy to be paid to PHAs” where “insufficient funds are available.”In 2012, Congress funded only 80% of the total operating subsidies and directed HUD to “take into account" PHA excess operating fund reserves in determining their 2012 operating subsidy. HUD considered the excess reserves and did not prorate the available funding under 24 C.F.R. 990.210(c) and the ACCs. Some PHAs received more funding than they would have if HUD prorated the available funding. The plaintiffs received less than they would have and brought suit under the Tucker Act, 28 U.S.C. 1491(a)(1). The Federal Circuit affirmed summary judgment for the PHAs. Their claim was contract-based and the “strings-attached” nature of the operating subsidy did not preclude the court from exercising Tucker Act jurisdiction over the claim. The PHAs sought compensatory damages for their losses from the government’s failure to meet a past-due obligation and not equitable relief to enforce a regulatory obligation; their claim is based on a breach of contract and not a statute. View "Boaz Housing Authority v. United States" on Justia Law

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Raytheon’s patent is directed to gas turbine engines, which generally consists of a fan section, a compressor section, a combustor section, and a turbine section. On inter partes review, the Patent Trial and Appeal Board found two claims unpatentable as obvious in view of the Knip reference, which discloses the claimed power density limitation for a geared gas turbine engine. During the proceeding, Raytheon submitted unrebutted evidence establishing that Knip’s disclosure of highly aggressive performance parameters for a futuristic turbine engine relied on the use of nonexistent composite materials. The petitioner never supplied any evidence suggesting a skilled artisan could have made a turbine engine with the power density recited in the claims.The Federal Circuit reversed. The relied-upon prior art fails to enable a skilled artisan to make and use the claimed invention. There is no absolute requirement for a relied-upon reference to be self-enabling in the section 103 context if the overall evidence of what was known at the time of invention establishes that a skilled artisan could have made and used the claimed invention. If an obviousness case is based on a non-self-enabled reference, and no other prior art reference or evidence would have enabled a skilled artisan to make the claimed invention, the invention cannot be said to have been obvious. View "Raytheon Technologies Corp. v. General Electric Co." on Justia Law