Justia U.S. Federal Circuit Court of Appeals Opinion SummariesArticles Posted in Legal Ethics
O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC
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
Keith Manufacturing Co. v. Butterfield
Keith sued its former employee, Butterfield, after he filed a patent application for what eventually issued as the 520 patent. The employer alleged that the patent was based on inventions made during Butterfield’s employment and sought declaratory judgments of noninfringement and invalidity; alleged breach of contract and misappropriation of trade secrets; and sought correction of inventorship. Butterfield later sent the employer a covenant not to sue and moved to dismiss in part, arguing that the covenant not to sue mooted the declaratory judgment claims and that the applicable statutes of limitation and the doctrine of laches barred the state-law claims. The court dismissed the declaratory judgment claims but allowed the state-law claims to proceed. The parties later filed a stipulation of dismissal with prejudice (Rule 41(a)(1)(A)(ii)), which required no court order.Days later, Butterfield moved for attorney’s fees under Fed. R. Civ. P. 54(d). In denying the motion, the court cited the 2017 Supreme Court decision, “Microsoft” and held that Rule 54 requires a judgment, “a decree and any order from which an appeal lies,” and that the parties’ stipulation to dismiss did not satisfy Rule 54’s judgment requirement because it was not an appealable order. The Federal Circuit vacated, holding that Microsoft did not apply. Judgment in the context of Rule 54 does not raise the same concerns about finality and piecemeal litigation that motivated the Microsoft opinion. View "Keith Manufacturing Co. v. Butterfield" on Justia Law
Fourstar v. United States
Fourstar, a federal prisoner, filed a Tucker Act Complaint with a Motion for Leave to Proceed In Forma Pauperis. He claimed that the government is mismanaging certain Indian properties and resources. The Claims Court denied his motion to proceed in forma pauperis, citing 28 U.S.C. 1915(g), which provides: In no event shall a prisoner bring a civil action or appeal ... under this section if the prisoner has, on 3 or more prior occasions, while incarcerated or detained in any facility, brought an action or appeal in a court of the United States that was dismissed on the grounds that it is frivolous, malicious, or fails to state a claim upon which relief may be granted, unless the prisoner is under imminent danger of serious physical injury,” Prison Litigation Reform Act, 110 Stat. 1321. Fourstar did not pay the filing fee. The court dismissed his complaint. Fourstar was released from prison and later filed a Notice of Appeal. He later filed a statement that he was subsequently arrested and detained and unsuccessfully moved to proceed in forma pauperis on appeal. Because Fourstar was not a prisoner at the time of filing his appeal, section 1915 is not applicable. The Federal Circuit affirmed that the three-strikes rule was met by Fourstar’s litigation history and that Fourstar was not subject to the “imminent danger” exception. View "Fourstar v. United States" on Justia Law
Shealey v. Wilkie
Shealey served on active duty in Vietnam. He sought service connection for a cervical spine disability and major depressive disorder. The Board of Veterans’ Appeals held that Shealey was dishonorably discharged. Before Shealy filed his third motion for reconsideration, the Army Board for Correction of Military Records upgraded his discharge to “under honorable conditions.” The Board denied reconsideration. Shealey sought assistance from Veterans Legal Advocacy Group (VetLAG), a nonprofit law firm; VetLAG would not charge a fee and if the Veterans Court granted attorney’s fees, VetLAG could keep the full amount. Shealey agreed that VetLAG could apply for attorney’s fees and litigation expenses under the Equal Access to Justice Act, 28 U.S.C. 2412(d) (EAJA), and he would provide assistance. VetLAG represented Shealey before the Veterans Court for three months until a pre-briefing conference, where the government stated its intent to move for dismissal. The attorneys advised Shealey to file a new claim to reopen his case. Shealey disagreed, discharged them, and obtained new counsel. The court vacated the Board’s decision. The government did not dispute that Shealey was the “prevailing party” and did not oppose VetLAG's EAJA motion seeking $4,061.60. Shealey opposed the application. The court determined that VetLAG lacked standing. The Federal Circuit affirmed. Under EAJA’s plain text, the attorneys lack any substantive rights sufficient to confer standing. Affording standing to the attorneys over Shealey’s objections would contravene the policies on which the third-party standing doctrine is based. The fee agreement did not constitute an assignment. View "Shealey v. Wilkie" on Justia Law
Intellectual Ventures I LLC v. Trend Micro Inc.
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
Blackbird Tech LLC v. Health in Motion, LLC
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
B.E. Technology, L.L.C. v. Facebook, Inc.
B.E. sued Facebook for infringement of B.E.’s 314 patent. Approximately a year into the case, Facebook and two other parties B.E. had accused of infringement, Microsoft and Google, filed petitions for inter partes review of the asserted claims. The district court stayed its proceedings. The Patent Board instituted review and held the claims unpatentable. The Federal Circuit affirmed. Facebook then moved in the district court for a dismissal with prejudice and costs under Rule 54(d). B.E. agreed that dismissal was appropriate but argued that the claims should be dismissed for mootness, rather than with prejudice. The district court agreed with B.E., issuing an Order holding that, in light of the cancellation of claims, B.E. no longer had a basis for the lawsuit. The court ultimately awarded costs under Rule 54(d). The Clerk of Court held a hearing and taxed $4,424.20 in costs against B.E.; the court affirmed, holding that, although the case was dismissed for mootness, Facebook “obtained the outcome it sought: rebuffing B.E.’s attempt to alter the parties’ legal relationship.” The Federal Circuit affirmed, finding Facebook to be the prevailing party in B.E.’s lawsuit. View "B.E. Technology, L.L.C. v. Facebook, Inc." on Justia Law
ATEN International Co., Ltd. v. Uniclass Technology Co., Ltd.
Uniclass and ATEN make and sell switch systems that allow a user to control multiple computers from a single keyboard, video device, and mouse. ATEN sued Uniclass and the customer defendants alleging infringement of its 141 and 289 patents. A jury found that Uniclass did not infringe the asserted claims and that the asserted claims of the 141 patent were invalid as anticipated (35 U.S.C. 102) without specifying which reference was the basis for its finding. The Federal Circuit reversed as to invalidity and affirmed as to infringement. The court affirmed the denial of Uniclass’s motion to declare the case exceptional under 35 U.S.C. 285. Uniclass argued that ATEN did not conduct an adequate pre-filing investigation, unnecessarily increased the costs of claim construction, drastically increased discovery costs by frequently changing counsel and infringement positions, and engaged in unreasonable litigation behavior requiring additional motion practice and leading to an expensive and disproportionate trial. The court noted that note that ATEN’s primary argument on appeal—that the court improperly gave claim construction disputes to the jury—was rejected because ATEN did not timely raise the issue below and found that ATEN’s positions were not so objectively unreasonable or exceptionally meritless as to stand out from other cases. View "ATEN International Co., Ltd. v. Uniclass Technology Co., Ltd." on Justia Law
Westech Aerosol Corp. v. 3M Co.
Westech sued 3M in the Western District of Washington, alleging infringement. 3M moved to dismiss the original and amended complaints. While 3M’s motion was pending, the Supreme Court decided, in TC Heartland, that under the patent venue statute, 28 U.S.C. 1400(b), a corporation “resides” only in its state of incorporation. 3M amended its motion to argue improper venue. Westech sought to amend its complaint and argued that the presence of sales representatives and 3M’s sales in Washington supported venue and that 3M had a “principal place of business” and other business locations at various Washington addresses. At the time of the original complaint, 3M did not own, lease, use, or maintain property at any of the specified locations, and, at the time of the motion did not occupy any of the locations. The district court denied 3M’s motion without prejudice and allowed Westech amend its complaint. In the interim, the Federal Circuit held that section 1400(b) requires a defendant to have a physical place in the district that serves as a regular and established place of business. The district court then dismissed the case. On appeal, 3M sought attorneys’ fees and double costs, arguing that Westech’s appeal was frivolous. The Federal Circuit affirmed the dismissal but denied the motion for fees and costs. Westech’s behavior on appeal bordered on sanctionable, but Westech pursued the appeal when the question of who shoulders the burden of establishing proper venue was unanswered. View "Westech Aerosol Corp. v. 3M Co." on Justia Law
ThermoLife International, LLC v. GNC Corp.
ThermoLife, the exclusive licensee of four Stanford University patents, claiming methods and compositions involving the amino acids arginine and lysine, to be ingested to enhance vascular function and physical performance, filed an infringement suit against several defendants. Stanford was a co-plaintiff. A bench trial was held and the district court found all asserted claims invalid and later granted defendants’ motions for attorney’s fees under 35 U.S.C. 285, which authorizes an award to a prevailing party in “exceptional” cases. The court found the cases exceptional, not based on an assessment of the validity position taken by plaintiffs or how they litigated but on its conclusion that plaintiffs were unjustified in alleging infringement in the first place, having failed to do an adequate pre-filing investigation. The Federal Circuit affirmed. These are unusual cases in that the basis for the fee award had nothing to do with the only issues litigated to reach the merits judgment: Infringement had not been adjudicated and even discovery on infringement had been postponed so that validity could be litigated first. Nevertheless, there was no abuse of discretion in the district court’s determination of exceptionality based on plaintiffs’ inadequate pre-suit investigation of infringement. View "ThermoLife International, LLC v. GNC Corp." on Justia Law