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

Ford retained Versata to develop specialized software to manage its vehicle configuration processes, resulting in two main products: Automotive Configuration Manager (ACM) and Materials Cost Analytics (MCA). The parties entered into a licensing agreement in 2004, which eventually expired in 2014 without renewal. Ford then released its own software, PDO, which Versata alleged incorporated its proprietary trade secrets from ACM and MCA. Disputes arose when Ford sought a declaratory judgment of non-infringement and non-misappropriation, while Versata counterclaimed, alleging trade secret misappropriation under the Defend Trade Secrets Act (DTSA) and the Michigan Uniform Trade Secrets Act (MUTSA), as well as breach of contract.The United States District Court for the Eastern District of Michigan excluded Versata’s damages expert’s testimony regarding trade secret damages, limiting Versata to a reasonable royalty model based solely on the parties’ prior licensing history. At trial, the jury found Ford liable for misappropriating three ACM trade secrets and breaching the licensing agreement, awarding Versata $22,386,000 for trade secret misappropriation and $82,260,000 for breach of contract. However, the district court subsequently reduced these awards: it set trade secret damages to zero, citing insufficient evidence regarding the time required for Ford to independently develop the misappropriated trade secrets, and reduced breach of contract damages to $3, finding Versata’s evidence insufficient to support the jury’s calculation.On appeal, the United States Court of Appeals for the Federal Circuit vacated the district court’s judgment on trade secret damages and remanded for a new trial, holding that Versata was entitled to seek unjust enrichment damages under both the DTSA and MUTSA, and that the district court erred in precluding consideration of alternative damages models. The Federal Circuit also reversed the reduction of the breach of contract damages, reinstating the jury’s $82,260,000 award, and affirmed the denial of Ford’s motion for judgment as a matter of law on trade secret misappropriation liability. View "VERSATA SOFTWARE, LLC v. FORD MOTOR COMPANY " on Justia Law

Two companies, both joint owners of several patents related to warm-mix asphalt paving, entered into a licensing agreement in 2008 granting an exclusive, worldwide, royalty-bearing license to another company (and, after a reorganization, its successor). The agreement allowed the licensee to manufacture, use, sell, and sublicense the patented products, but required that sublicensing terms be subject to the patent owners’ prior review and approval (not to be unreasonably withheld). The patent owners retained certain rights, including the right to sue for infringement (with shared or independent control depending on the circumstances), receive royalties, and veto sublicenses. The patent owners also kept limited rights to practice the invention for research and to use products purchased from the licensee.In 2024, the patent owners sued two defendants, alleging infringement of the six patents. The defendants moved to dismiss for lack of Article III standing. The United States District Court for the District of Delaware granted the motion, finding that the patent owners had transferred away all exclusionary rights through the license, and that their retained right to sue was not sufficient for constitutional standing. The district court relied on previous decisions holding that a bare right to sue, separated from other substantial patent rights, did not confer standing.On appeal, the United States Court of Appeals for the Federal Circuit reversed. The Federal Circuit held that the patent owners retained an exclusionary right sufficient for Article III standing, namely the right to sue for infringement that was not rendered illusory by the licensee’s rights. The court concluded that the combination of the right to sue, the right to veto sublicenses, and the continuing royalty interest demonstrated a concrete, non-illusory exclusionary interest. The case was remanded for further proceedings. View "A.L.M. HOLDING COMPANY v. ZYDEX INDUSTRIES PRIVATE LTD. " on Justia Law

The appellant, a veteran who served in the Marine Corps from 1983 to 1987, sought service-connected disability benefits for several conditions, including PTSD, migraine headaches, and frostbite injuries to his hands and feet. Over the years, he received increasing ratings for these conditions and was awarded special monthly compensation (SMC) at the (l) rate for aid and attendance needs due to PTSD. In April 2020, he filed a notice of disagreement regarding a VA regional office decision. The Board of Veterans’ Appeals later granted him additional SMC awards, including at the (o) and (r) rates, for combinations of his disabilities, but did not assign effective dates for these new awards, instead leaving that determination to the regional office.Following a joint motion for partial remand, the Board reconsidered and again awarded the additional SMC ratings but still withheld assigning effective dates. The appellant challenged this before the United States Court of Appeals for Veterans Claims, arguing the Board was required to decide the effective dates for the new SMC awards. The Veterans Court concluded that determining the effective date for an SMC award is a separate, downstream issue from entitlement and that the Board was not required to decide this issue when awarding SMC. Therefore, it dismissed the appeal for lack of jurisdiction.The United States Court of Appeals for the Federal Circuit reviewed the case and held that the Veterans Court did not commit legal error in its jurisdictional determination. The Federal Circuit agreed that the assignment of effective dates for SMC awards is a downstream issue for the regional office to decide and is not automatically before the Board unless specifically appealed. Consequently, the Federal Circuit affirmed the Veterans Court’s dismissal in part and dismissed the remainder of the appeal for lack of jurisdiction. View "DAVIS v. COLLINS " on Justia Law

The case concerns a patent dispute involving a company that owns a patent for a unified electronic banking system. After most of the patent’s claims were found unpatentable in an inter partes review (IPR) before the Patent and Trademark Office, only four claims remained. The company then sued a bank in the United States District Court for the Southern District of Florida, alleging infringement of these remaining claims. The allegations were supported by claim charts and references to the bank’s online services.The district court first struck the original complaint as a “shotgun pleading” and allowed an amended complaint. The amended complaint was also challenged by the defendant, who argued that the remaining claims were invalid for obviousness and, alternatively, for claiming ineligible subject matter, and that the infringement allegations were inadequate. The district court dismissed the case with prejudice, finding the asserted claims invalid for obviousness as they did not add anything patentably distinct from those already invalidated in the IPR, and also held that infringement was not adequately pleaded. The court denied leave to further amend the complaint and subsequently awarded attorneys’ fees to the defendant under 35 U.S.C. § 285, finding the case “exceptional,” and imposed sanctions on plaintiff’s counsel under 28 U.S.C. § 1927 for alleged bad faith litigation.On appeal, the United States Court of Appeals for the Federal Circuit affirmed the dismissal of the complaint, upholding the finding that the patent claims at issue were invalid for obviousness. However, the appellate court reversed the awards of attorneys’ fees and sanctions, holding that the record did not support a finding that the case was exceptional or that counsel acted in bad faith, as required by the respective statutes. Each party was ordered to bear its own costs. View "MCOM IP, LLC v. CITY NATIONAL BANK OF FLORIDA " on Justia Law

An employee of the United States Postal Service (USPS) worked as an Operations Industrial Engineer beginning in 2013. He alleged that, shortly after starting, he was harassed by a mentor on the basis of his national origin, race, and religion, and that after he complained, his work environment became more hostile. He also claimed to have faced retaliation for whistleblowing about safety violations and wastefulness. Over time, he received a Letter of Warning, was placed on a Performance Improvement Plan, and issued a Letter of Concern, all of which he believed were retaliatory. The situation resulted in medical issues, leading him to take medical leave, request reasonable accommodation, and ultimately remain on leave for several months. During this time, he filed an Equal Employment Opportunity Commission (EEOC) complaint, and while it was pending, he resigned, attributing his departure to the intolerable environment and alleged retaliation.The EEOC eventually granted summary judgment in favor of USPS, finding no evidence of unlawful discrimination or that the employee suffered an adverse employment action. Nearly four years after resigning and shortly after the EEOC’s decision, he appealed to the Merit Systems Protection Board (the Board), asserting that his resignation was involuntary due to duress and coercion by USPS. The Board’s administrative judge found that he failed to non-frivolously allege that his resignation was coerced, misinformed, or otherwise involuntary, noting he could have continued to pursue remedies instead of resigning. The Board affirmed the dismissal for lack of jurisdiction.The United States Court of Appeals for the Federal Circuit reviewed the case to determine if the employee had made non-frivolous allegations of involuntary resignation that would entitle him to a hearing. The court held that he had not, emphasizing that the facts did not show the agency effectively imposed his resignation or deprived him of reasonable alternatives. The court affirmed the Board’s dismissal for lack of jurisdiction. View "TAVAKKOL v. MSPB " on Justia Law

A group of family trusts, managed by a corporate trustee, owned two C corporations with significant appreciated assets, including farmland and investment portfolios. In the early 2000s, the trusts sought to sell these corporations. To maximize after-tax proceeds, they pursued a stock sale rather than an asset sale, aiming to avoid double taxation on built-in gains. The trusts conducted an auction and ultimately sold the corporations’ stock to a newly formed entity, Humboldt Shelby Holding Corporation (HSHC), which financed the purchase with substantial loans. After the transaction, HSHC promptly liquidated the corporations’ assets and engaged in tax shelter transactions to offset the resulting gains, resulting in no taxes paid. The IRS later determined these losses were artificial and assessed taxes, penalties, and interest against HSHC, which went unpaid. The IRS then sought to hold the trusts liable as transferees of HSHC under federal law.The United States Court of Federal Claims found that, under New York’s Uniform Fraudulent Conveyance Act, the trusts could be held liable as transferees. The court determined that the stock sale and subsequent asset sales should be treated as a single transaction and that the trusts had constructive knowledge of the entire scheme to avoid taxes. The court also held the trusts liable for the full amount of HSHC’s unpaid taxes, penalties, and interest, and rejected the trusts’ argument that their liability should be limited to the value received.On appeal, the United States Court of Appeals for the Federal Circuit affirmed the Court of Federal Claims’ rulings. The Federal Circuit held that the trusts had constructive knowledge of the fraudulent scheme, upheld the imposition of transferee liability for the full amount owed, including penalties, and rejected the claim for refund of interest accrued after a deposit was made with the IRS, finding the IRS did not act unlawfully or abuse its discretion in handling the deposit. View "DILLON TRUST COMPANY LLC v. US " on Justia Law

The case concerns the United States Postal Service’s contract for canine explosive-detection services. The USPS awarded the contract to K2 Solutions, Inc. (“K2”), while Global K9 Protection Group (“Global K9”) and Michael Stapleton Associates, Ltd. were unsuccessful bidders. Global K9 filed a bid protest in the United States Court of Federal Claims, initially challenging the evaluation of its bid but not directly alleging misconduct by K2. K2 received notice of the original complaint and chose not to intervene, believing the government would adequately defend its interests.The Claims Court case evolved when Global K9 filed an amended complaint under seal, adding new allegations that K2 had materially misrepresented its capabilities during the bidding process. Contrary to court rules and the protective order, Global K9 did not file a redacted public version of the amended complaint, and K2 did not receive notice of these new allegations. The Claims Court ultimately found that K2 had made a material misrepresentation and issued an injunction disqualifying K2 from contract performance. After learning of the injunction, K2 moved to intervene, but by then, the USPS had terminated K2’s contract for default, relying in part on the court’s findings.K2 appealed the denial of its motion to intervene. The United States Court of Appeals for the Federal Circuit held the case was not moot because K2’s interests in contesting the misrepresentation finding remained live in separate proceedings. However, the appellate court affirmed the Claims Court’s decision that K2’s motion to intervene was untimely, as K2 could have sought intervention upon learning of the amended complaint’s existence. The Federal Circuit also found that K2 was not a necessary party because it failed to act promptly to protect its interests. The judgment of the Claims Court was affirmed. View "GLOBAL K9 PROTECTION GROUP, LLC v. US " on Justia Law

Actelion Pharmaceuticals Ltd, holder of patents for pharmaceutical compositions involving epoprostenol, alleged that Mylan Pharmaceuticals Inc.’s proposed generic drug infringed its patents by manufacturing a bulk solution with a pH of 13 or higher, as claimed in the patents. The dispute centered on whether Mylan’s bulk solution met this pH threshold, either literally or under the doctrine of equivalents. Actelion argued that pH should be measured at the solution’s actual (refrigerated) temperature, while Mylan maintained that its product’s pH, when measured at industry standard temperature, did not meet the claimed threshold.The United States District Court for the Northern District of West Virginia held a bench trial after remand from the United States Court of Appeals for the Federal Circuit, which had previously vacated a judgment based on incorrect claim construction. On remand, the district court construed “a pH of 13 or higher” to mean a pH measurement of 12.98 or higher at standard temperature (25±2°C), relying on both intrinsic and extrinsic evidence. The court found no literal infringement, as Mylan’s bulk solution did not meet this threshold at standard temperature. It also ruled that Actelion was barred from asserting infringement by an equivalent due to prosecution history estoppel and the disclosure-dedication rule, and that Actelion had not proven equivalence.On appeal, the United States Court of Appeals for the Federal Circuit reviewed claim construction de novo and factual findings for clear error. The court affirmed the district court’s claim construction, finding that “a pH of 13 or higher” refers to standard-temperature measurement, supported by industry standards and patent evidence. It also upheld the district court’s application of prosecution history estoppel and the disclosure-dedication rule, barring Actelion’s equivalents argument. The judgment for Mylan was affirmed. View "ACTELION PHARMACEUTICALS LTD v. MYLAN PHARMACEUTICALS INC. " on Justia Law

Bissell, Inc. and Bissell Homecare, Inc. accused Tineco Intelligent Technology Co., Ltd. and related entities of importing and selling wet dry surface cleaning devices that allegedly infringed certain claims of two U.S. patents concerning surface cleaning apparatuses. After the complaint was filed with the United States International Trade Commission, Tineco introduced redesigned versions of the accused products, which were also evaluated for infringement. The key patent claims at issue involved limitations related to a battery charging circuit being disabled during a self-cleaning mode.An Administrative Law Judge (ALJ) at the International Trade Commission conducted an evidentiary hearing. The ALJ found that Tineco's original products infringed the asserted patent claims but that the redesigned products did not, as they did not meet the requirement that the battery charging circuit remain disabled during the automatic cleanout cycle. The ALJ also found that Bissell’s domestic industry products practiced the relevant claim limitations, and that all accused products met other disputed limitations. The Commission adopted the ALJ’s findings and issued a limited exclusion order barring importation of only the original infringing products.On appeal, in the United States Court of Appeals for the Federal Circuit, Bissell challenged the finding of non-infringement for the redesigned products, while Tineco cross-appealed on domestic industry findings and certain infringement determinations. The Federal Circuit affirmed the Commission’s Final Determination, holding that substantial evidence supported the findings that Tineco’s redesigned products did not infringe the relevant patent claims, that Bissell’s domestic industry products met the asserted limitations, and that the accused products satisfied the “brushroll within the recovery pathway” and “suction nozzle” limitations. The court affirmed the exclusion order for the original products and denied relief on all appeals. View "BISSELL, INC. v. ITC " on Justia Law

An employee of the Department of Veterans Affairs (VA), serving as an Associate Director, was removed from his position following allegations of inappropriate conduct, including harassment and creating a hostile work environment. After the agency conducted an investigation and found lapses in professionalism, the acting director proposed removal based on these findings. The employee, who had previously raised concerns about personnel decisions and filed whistleblower complaints, alleged that his removal was in retaliation for his protected disclosures and challenged the process as procedurally flawed.The initial challenge was reviewed by an administrative judge of the Merit Systems Protection Board (MSPB), who sustained the charge of inappropriate conduct, finding that the VA had proved its case by a preponderance of the evidence. The administrative judge also found that, although the employee engaged in protected whistleblower activity, the VA demonstrated by clear and convincing evidence that it would have removed him regardless of his disclosures. Additionally, the administrative judge found no harmful procedural error in the agency’s investigation and removal process. The full MSPB denied the employee’s petition for review, adopting the administrative judge’s findings and affirming the removal.Upon appeal, the United States Court of Appeals for the Federal Circuit reviewed the MSPB’s decision. The court applied the appropriate standards of review, considering whether the agency’s actions were supported by substantial evidence and adhered to proper legal procedures. The court held that substantial evidence supported the findings that the VA would have removed the employee independent of his whistleblower activity and that there was no harmful procedural error in the removal process. The Federal Circuit affirmed the MSPB’s decision, upholding the removal. View "OLIVA v. DVA " on Justia Law