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

Bitmanagement Software GmBH ("Bitmanagement") developed software for rendering three-dimensional graphics, specifically "BS Contact Geo," which was used by the United States Navy ("Navy") in conjunction with its SPIDERS 3D platform. Initially, Bitmanagement provided the Navy with 100 seat licenses, allowing installation on 100 computers. In 2012, the Navy switched to a floating license, permitting installation on multiple computers but limiting simultaneous users to 20, monitored by a tracking application called Flexera. However, Flexera failed to limit usage, and the software was installed on over 429,000 Navy computers.The United States Court of Federal Claims initially found no liability for copyright infringement. Bitmanagement appealed, and the Federal Circuit held that the Navy's failure to use Flexera breached a material condition of the implied license, constituting copyright infringement. The case was remanded to the Court of Federal Claims to calculate damages. On remand, the court awarded Bitmanagement $154,400, based on a hypothetical negotiation for a combination of seat and floating licenses, rather than per-copy damages.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the lower court's decision. The Federal Circuit held that the Court of Federal Claims did not abuse its discretion in awarding damages based on the Navy's actual usage of the software rather than the number of copies made. The court found that the hypothetical negotiation would have resulted in a primarily usage-based licensing scheme, supported by the parties' past licensing practices and the evidence presented. The court also upheld the admission of the government's damages expert's testimony and found no error in the burden of proof allocation. View "BITMANAGEMENT SOFTWARE GMBH v. US " on Justia Law

CeramTec GmbH manufactures artificial hip components made from zirconia-toughened alumina (ZTA) ceramic, which contains chromium oxide (chromia) and is marketed under the name "Biolox Delta." The addition of chromia gives the ceramic a pink color. CeramTec held U.S. Patent 5,830,816 (the '816 patent) for the chemical composition of Biolox Delta until it expired in January 2013. In January 2012, CeramTec applied for trademarks for the pink color of its ceramic hip components, which were registered on the Supplemental Register in April 2013. CoorsTek Bioceramics LLC, a competitor, manufactures similar ceramic hip implants and filed a lawsuit and a cancellation petition with the Trademark Trial and Appeal Board (the Board) in 2014, arguing that the pink color was functional and should not be trademarked.The Board found in favor of CoorsTek, concluding that the pink color was functional for ceramic hip components. The Board analyzed the functionality under the four factors from In re Morton-Norwich Products, Inc., and found that CeramTec's patents and public communications disclosed the functional benefits of chromia, including increased hardness. The Board also found that there was no probative evidence of functionally equivalent designs and conflicting evidence regarding the cost of manufacturing. The Board rejected CeramTec's unclean hands defense, which argued that CoorsTek should be precluded from challenging the trademarks due to its previous statements about chromia's lack of material benefits.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Board's decision. The court held that the Board's findings were supported by substantial evidence and that the Board correctly applied the burden of proof. The court also addressed CeramTec's arguments regarding the Board's analysis of the Morton-Norwich factors and the unclean hands defense, finding no reversible error. The court concluded that the pink color of CeramTec's ceramic hip components was functional and not eligible for trademark protection. View "CERAMTEC GMBH v. COORSTEK BIOCERAMICS LLC " on Justia Law

Honeywell International Inc., Telit Cinterion Deutschland GmbH, and Sierra Wireless, ULC (collectively, "Honeywell") appealed a decision by the Patent Trial and Appeal Board (PTAB) regarding U.S. Patent No. 7,319,718 (the '718 patent). The '718 patent involves a coding method for Channel Quality Indicator (CQI) in third-generation mobile communication systems. The PTAB had declined to hold claims 1, 2, 4-7, 9-13, and 15-23 of the '718 patent unpatentable as obvious.The PTAB found that Honeywell had not shown that a person of ordinary skill in the art would have been motivated to switch the last two bits in the basis sequence table of the Philips reference to provide more protection to the most significant bit (MSB). The PTAB also held that even if such a motivation existed, it had not been demonstrated that this change would be desirable. Honeywell argued that the PTAB's decision was based on multiple legal errors and was not supported by substantial evidence.The United States Court of Appeals for the Federal Circuit reviewed the PTAB's decision. The court found that the PTAB improperly based its conclusion on the '718 patent's primary motivation to maximize system throughput rather than minimizing root-mean-square error or bit error rate. The court noted that the motivation to modify a prior art reference need not be the same as the patentee's motivation. The court also found that the PTAB's finding that Honeywell had not shown a motivation to switch the bits was not supported by substantial evidence, as the Philips reference itself recognized the benefit of protecting the MSB.The court concluded that the PTAB's decision was based on a misunderstanding of the relevant standards for obviousness and anticipation. The court held that the PTAB erred in requiring a consensus among the working group members and in failing to recognize that the claimed modification needed only to be desirable, not the best or preferred approach. The decision of the PTAB was reversed. View "HONEYWELL INTERNATIONAL INC. v. 3G LICENSING, S.A. " on Justia Law

Teva Branded Pharmaceutical Products R&D, Inc., Norton (Waterford) Ltd., and Teva Pharmaceuticals USA, Inc. (collectively, Teva) filed an NDA for their ProAir® HFA Inhalation Aerosol, which contains the active ingredient albuterol sulfate. Teva listed several patents in the FDA's Orange Book, including patents related to the inhaler's dose counter and canister. Amneal Pharmaceuticals of New York, LLC, Amneal Ireland Ltd., Amneal Pharmaceuticals LLC, and Amneal Pharmaceuticals, Inc. (collectively, Amneal) filed an ANDA to market a generic version of ProAir® HFA, asserting that their product did not infringe Teva's patents.The United States District Court for the District of New Jersey ruled in favor of Amneal, ordering Teva to delist its patents from the Orange Book. The court found that Teva's patents did not claim the active ingredient albuterol sulfate but were directed to components of the inhaler device. Teva appealed the decision, arguing that their patents were properly listed because they claimed parts of the NDA product.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the district court's decision. The Federal Circuit held that for a patent to be listed in the Orange Book, it must claim the drug for which the application was submitted and approved, which includes the active ingredient. The court rejected Teva's argument that a patent claims the drug if it reads on any part of the NDA product. The court concluded that Teva's patents, which claimed only the device components of the inhaler, did not meet the statutory requirement of claiming the drug, as they did not claim the active ingredient albuterol sulfate. Therefore, the court affirmed the order requiring Teva to delist its patents. View "TEVA BRANDED PHARMACEUTICAL PRODUCTS R&D, INC. v. AMNEAL PHARMACEUTICALS OF NEW YORK, LLC" on Justia Law

CloudofChange, LLC sued NCR Corporation, alleging infringement of U.S. Patent Nos. 9,400,640 and 10,083,012, which disclose an online web-based point-of-sale (POS) builder system. The system allows non-expert business operators to assemble and manage POS systems. NCR's product, NCR Silver, was accused of infringing these patents. NCR Silver is a web-based POS solution that requires merchants to use their own internet connection and POS hardware, although NCR occasionally provides the hardware.The United States District Court for the Western District of Texas found that NCR's merchants' use of the system could be attributed to NCR under principles of vicarious liability and denied NCR's motion for judgment as a matter of law (JMOL) of no direct infringement. The jury found NCR directly infringed the asserted claims, awarded CloudofChange $13.2 million in damages, and found NCR's infringement willful. NCR renewed its motion for JMOL, arguing that it did not use the claimed system as a matter of law, but the district court denied the motion.The United States Court of Appeals for the Federal Circuit reviewed the case and reversed the district court's denial of JMOL. The Federal Circuit held that it is NCR's merchants, not NCR, who use the claimed system by putting it into service and benefiting from it. The court also concluded that NCR is not vicariously liable for its merchants' use of the system, as NCR does not direct or control the merchants' actions in putting the system to use. Consequently, the Federal Circuit vacated the jury verdict and reversed the district court's decision. View "CLOUDOFCHANGE, LLC v. NCR CORPORATION " on Justia Law

Palo Alto Networks, Inc. (PAN) petitioned for inter partes review (IPR) of claims 1–18 of Centripetal Networks, LLC’s U.S. Patent No. 10,530,903, asserting that the claims were unpatentable for obviousness based on three prior-art references. The United States Patent and Trademark Office Patent Trial and Appeal Board (the Board) concluded that PAN had not established by a preponderance of the evidence that the claims would have been obvious over the relevant prior art combination.The Board found that PAN’s argument regarding the motivation to combine the references was not sufficiently articulated in the petition. Specifically, the Board determined that PAN had not provided sufficient evidence to show that a person of ordinary skill in the art would have been motivated to modify Paxton’s computing system to include Sutton’s step of transmitting a notification of malicious activity after Paxton’s correlation step. The Board concluded that PAN had not established that the claims would have been obvious.The United States Court of Appeals for the Federal Circuit reviewed the case and found that the Board erred by failing to clearly explain its holding or rationale regarding the motivation to combine and whether the proposed combination teaches the final limitation of claim 1. The court noted that the Board did not make a clear finding on whether a person of ordinary skill in the art would have been motivated to modify Paxton by adding Sutton’s step of transmitting a notification of malicious activity after Paxton’s correlation step. The court vacated the Board’s decision and remanded the case for further proceedings to clarify and explain its holding on the motivation to combine the references. View "PALO ALTO NETWORKS, INC. v. CENTRIPETAL NETWORKS, LLC " on Justia Law

Crown Packaging Technology, Inc. and CarnaudMetalbox Engineering Ltd. (collectively, “Crown”) sued Belvac Production Machinery, Inc. (“Belvac”) for infringing claims of U.S. Patent Nos. 9,308,570, 9,968,982, and 10,751,784, which relate to necking machines used in manufacturing metal beverage cans. Belvac argued that the patents were invalid under pre-AIA 35 U.S.C. § 102(b) because a necking machine embodying the invention was on sale in the U.S. before the critical date. Both parties sought summary judgment on this issue.The United States District Court for the Western District of Virginia granted summary judgment to Crown, ruling that the patents were not invalid under the on-sale bar, and denied Belvac’s motion. After a jury trial, the court entered a judgment that the asserted claims were not invalid and not infringed. Crown appealed the noninfringement judgment, and Belvac appealed the no invalidity judgment.The United States Court of Appeals for the Federal Circuit reviewed the case. The court held that the letter sent by Crown to Complete Packaging Machinery constituted a commercial offer for sale in the U.S. before the critical date, thus invalidating the patents under § 102(b). The court reversed the district court’s summary judgment in favor of Crown and remanded for entry of judgment in Belvac’s favor. The court did not address the issue of infringement due to the invalidity finding. View "Crown Packaging Technology, Inc. v. Belvac Production Machinery, Inc." on Justia Law

DDR Holdings, LLC (DDR) sued Priceline.com LLC and Booking.com B.V. (collectively, Priceline.com) for infringement of U.S. Patent No. 7,818,399 (’399 patent). The ’399 patent relates to generating a composite web page that combines visual elements of a “host” website with content from a third-party “merchant.” The dispute centered on the construction of the claim terms “merchants” and “commerce object.” DDR argued that “merchants” should include purveyors of both goods and services, while Priceline.com contended it should be limited to purveyors of goods alone.The United States District Court for the District of Delaware construed “merchants” as “producers, distributors, or resellers of the goods to be sold” and “commerce object” to exclude services. Following this construction, the parties stipulated to non-infringement, agreeing that the accused instrumentalities did not infringe the asserted claims of the ’399 patent under the court’s claim constructions. The district court entered final judgment in favor of Priceline.com, and DDR appealed.The United States Court of Appeals for the Federal Circuit reviewed the district court’s claim construction de novo. The court affirmed the district court’s construction of “merchants” as purveyors of goods, not services, noting the significant deletion of any reference to services in the final specification of the ’399 patent compared to the provisional application. The court also affirmed the construction of “commerce object” as “a product, a product category, a catalog, or an indication that a product, product category, or catalog should be chosen dynamically,” consistent with the construction of “merchants.”The Federal Circuit concluded that the district court correctly construed the disputed terms and affirmed the judgment of non-infringement in favor of Priceline.com. View "DDR Holdings, LLC v. Priceline.com LLC" on Justia Law

Galderma Laboratories, L.P. and TCD Royalty Sub LP (collectively, Galderma) own and market Oracea®, a doxycycline-based treatment for rosacea. They hold U.S. Patent Nos. 7,749,532 and 8,206,740 (the Asserted Patents), which cover a specific formulation of doxycycline. Lupin Inc. and Lupin Ltd. (collectively, Lupin) filed an abbreviated new drug application (ANDA) to market a generic version of Oracea®, claiming bioequivalence. Galderma sued Lupin for patent infringement under the Hatch-Waxman Act, asserting that Lupin’s product infringed the Asserted Patents.The United States District Court for the District of Delaware held a three-day bench trial and found that Lupin’s ANDA product did not infringe the Asserted Patents. The court concluded that Galderma failed to prove that Lupin’s product met the specific formulation requirements of the Asserted Patents, particularly the immediate release (IR) and delayed release (DR) portions of doxycycline. The court also found that Galderma did not demonstrate infringement under the doctrine of equivalents.The United States Court of Appeals for the Federal Circuit reviewed the case. Galderma argued that the district court erred in disregarding dissolution test data from Lupin’s ANDA, admitting evidence from a rebuttal batch, imposing additional claim limitations, and not finding infringement under the doctrine of equivalents. The Federal Circuit found no clear error in the district court’s findings. It held that the district court correctly determined that the two-stage dissolution test did not represent in vivo behavior and that Galderma did not prove its theory of infringement. The court also found no abuse of discretion in admitting the rebuttal batch evidence and no imposition of additional claim limitations. Finally, the court upheld the district court’s finding that Galderma did not prove infringement under the doctrine of equivalents.The Federal Circuit affirmed the district court’s decision, concluding that Lupin’s ANDA product did not infringe the Asserted Patents. View "Galderma Laboratories, L.P. v. Lupin, Inc." on Justia Law

PS Products, Inc. and Billy Pennington (collectively, PSP) own a U.S. Design Patent for a long-spiked electrode for a stun device. They filed a lawsuit in the Eastern District of Arkansas against Panther Trading Company, Inc. (Panther) for patent infringement. Panther responded with a Rule 11 letter and a motion to dismiss, arguing the infringement claims were frivolous and the venue was improper. PSP did not respond to these communications and later moved to voluntarily dismiss the case with prejudice. Panther then sought attorney fees and sanctions, claiming the lawsuit was frivolous.The United States District Court for the Eastern District of Arkansas dismissed the case with prejudice and awarded Panther attorney fees and costs under 35 U.S.C. § 285, deeming the case exceptional. The court also imposed $25,000 in deterrence sanctions on PSP under its inherent power, citing PSP's history of filing meritless lawsuits. PSP filed a motion for reconsideration of the sanctions, which the district court denied.The United States Court of Appeals for the Federal Circuit reviewed the case. PSP appealed the $25,000 sanctions, arguing the district court lacked authority to impose them in addition to attorney fees and that the court applied the wrong legal standard. The Federal Circuit held that the district court did not err in imposing sanctions under its inherent power, even after awarding attorney fees under § 285. The court found that PSP's conduct, including filing a meritless lawsuit and citing the wrong venue statute, justified the sanctions. The Federal Circuit affirmed the district court's decision and declined Panther's request for attorney fees for the appeal, determining the appeal was not frivolous as argued. View "PS Products, Inc. v. Panther Trading Co., Inc." on Justia Law