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

Following a long history of disputes between the United States and Canada, the countries entered into the 2006 Softwood Lumber Agreement that requires that for seven years after October 12, 2006, Canada will, in certain circumstances, impose export charges on softwood lumber exported to the U.S. to offset its subsidization of that lumber. The Department of Commerce refunded duties collected on softwood lumber from Canada after May 22, 2002. The agreement required Canada to distribute some of the returned duties to various groups in the U.S.; $500 million was to be distributed to lumber producers identified as members of the Coalition. Appellants are U.S. lumber producers that were not members of the Coalition and not eligible for the funds. The Court of International Trade dismissed a challenge to the Agreement. The Federal Circuit reversed, concluding that the lower court erred in finding that the Agreement was not enacted under the Trade Act of 1974, 19 U.S.C. 2411 and that it, therefore, lacked jurisdiction over the "political question."

The patents concern vehicle computer systems. The car-mail patents cover systems for notifying owners about the condition of the vehicle; the radio patent relates to the entertainment system. Service provider patents concern maintenance; search patents and status patents allow searches of vehicle systems. A notable-condition patent relates to emergent situations. The district court found the status patent, the car-mail patent, and notable condition patent unenforceable due to inequitable conduct; granted summary judgment of noninfringement of the car-mail patents, service provider patents, and the radio patent; and granted summary judgment of infringement of the notable condition patent. The Federal Circuit affirmed the determinations of noninfringement, reversed with respect to validity of the notable condition patent, and vacated and remanded the decision on inequitable conduct. To prove inequitable conduct, the accused infringer must provide evidence that the applicant misrepresented or omitted material information with specific intent to deceive the patent office. The district court applied the wrong standard in finding intent and failed to make a finding that the withheld information would have blocked issuance of the patents.

Plaintiff and defendant had co-pending patents relating to innovations in dietary supplements, particularly formulations that increase the bioavailability of creatine, an amino acid derivative naturally present in muscle tissue. Plaintiff sought a declaratory judgment that the defendant's patent was invalid and not infringed; defendant responded alleging infringement and seeking declaratory judgment that plaintiff's patent was invalid. The district court ruled in favor of defendant. The Federal Circuit affirmed in part and reversed in part. Defendant's patent is not invalid and is infringed, but the court lacked jurisdiction with respect to plaintiff's patent. The court applied the correct standard under 35 U.S.C. 282: each claim of patent is presumed valid, an accused infringer must prove invalidity by clear and convincing evidence. The plaintiff did not establish prior invention or disclosure in prior art. Plaintiff offered no argument as to why or how the process it employed did not infringe defendant's patent. Plaintiff never accused defendant of infringement; defendant has, at most, an economic interest in clarifying its customers' rights under plaintiff's patents. Absent a substantial controversy between the parties, the court lacked declaratory judgment jurisdiction.

The U.S. Department of Energy breached its agreement to accept spent nuclear fuel from nuclear power utilities, including plaintiff, a Wisconsin power cooperative, no longer in operation. Plaintiff maintains 38 metric tons of spent uranium on its property. Had DOE not breached the agreement, the material would have been removed in 2006. Plaintiff joined a consortium of 11 utilities to develop a private repository. The district court awarded about $37.6 million: $16.6 million for maintaining the fuel on-site from 1998 to 2006, $12 million for investment in the consortium, and $6.1 million for various overhead costs associated with mitigation. The Federal Circuit vacated in part. The claims court properly determined that plaintiff was entitled to damages for the entire period, 1999-2006; properly awarded overhead; properly offset the consortium costs; but should have limited the award with respect to the consortium to expenses incurred for mitigation.

In 1968, petitioner sustained a gunshot wound to his thigh. In 1995 he was granted service connection for the thigh wound, shrapnel wounds on forehead, and post-traumatic stress disorder. Petitioner appealed the rating, referring to pain and the inability to stand. The Veterans' Court remanded for an examination to determine muscle injury. The rating did not change; the board and the court affirmed, rejecting an argument that a change in diagnostic code to represent an injury to a different muscle group was an impermissible severance of service connection under 38 U.S.C. § 1159, which provides that service connection in force for ten or more years shall not be severed, except upon proof of fraud or that the veteran did not have the requisite service or discharge. The Federal Circuit affirmed, reasoning that a diagnostic code is most similar to the level of disability element of a claim for benefits and is not protected by the statute. The disability remains the same and remains service-connected.

Plaintiff holds a patent on formulations of a hypnotic sleep-inducing drug that is one of a class of compounds known as benzodiazepines. Pharmacological formulations of the drug have been marketed internationally for the treatment of insomnia since the 1970s, and in the United States since 1981. Plaintiff responded to an FDA filing by a competitor by filing an infringement claim. The district court found plaintiff's patents invalid on grounds of obviousness. The Federal Circuit affirmed. The only limitation of the disputed claims that was not fully disclosed by the prior art capsules is the lower dosage; those skilled in the art (physicians) have an undisputed preference for prescribing the lowest effective dose.

An anti-dumping petition claimed that Chinese firms were exporting frontseating service valves at less than fair value. The Department of Commerce calculated normal value of the valves by using India as a surrogate market economy and identifying brass bars as a primary raw material; it valued the labor factor of production using regression analysis that included wage rates and gross national income data from sixty-one market economy countries. Commerce issued a final determination that calculated the surrogate value for brass bar without excluding the imports from Japan, France, and the UAE. The Court of International Trade upheld the determination. The Federal Circuit vacated and remanded for revaluation of labor, not using the regression approach, and reconsideration of sales at issue for calculating the relevant total dumping margin. Commerce’s reading of the evidence was reasonable in including data on imports from Japan, France, and the UAE, to calculate the surrogate value of brass bar.

In 2000 the plaintiff acquired CMP and its subsidiary; in 2002 it acquired RGS and its subsidiary. Plaintiff acquired all liabilities; the companies and subsidiaries became part of a group of affiliated companies filing consolidated income tax returns pursuant to I.R.C. sect. 1501. Prior to the acquisition, the subsidiaries had overpaid taxes in some years. The plaintiff had underpaid and, after paying the deficiency and interest, requested a refund of interest, claiming entitlement to a net interest rate of zero on its deficiency because sect. 6621(d) allowed it to offset its underpayment with the overpayments by the subsidiaries. The IRS ignored the request. The Court of Federal Claims rejected the claim, finding that the plaintiff was not the "same" taxpayer as had overpaid. The Federal Circuit affirmed, reasoning that the taxpayer must be the same at the time of the overpayments and underpayments.

In November 2001, the U.S. Department of Commerce issued an anti-dumping duty order on certain hot-rolled carbon steel flat products from Thailand, found that the company was selling the subject merchandise at less than normal value and assigned a dumping margin of 3.86%. In 2006 the order was partially revoked, as to the company, but remained in effect with respect to other exporters and producers. Commerce received a complaint that dumping had resumed and initiated changed circumstances review (CCR), despite the company's assertion that it lacked authority to so. The Court of International Trade (CIT) dismissed the company's suit for an injunction in 2009. Commerce reinstated the order with respect to the company; CIT affirmed. The Federal Circuit affirmed, holding that Commerce reasonably interpreted and acted on its revocation and CCR authority under 19 U.S.C. 1675(b, d) as permitting conditional revocation and reconsideration.

The imported back-mounted packs, used for outdoor activities and athletics, allow the user to drink without interrupting activity. U.S. Customs and Border Protection liquidated and classified the merchandise under subheading 4202.92.30, HTSUS, as "Trunks, . . . traveling bags, insulated food or beverage bags, . . . knapsacks and backpacks, . . . sports bags . . . and similar containers . . . of textile materials: . . . With outer surface of sheeting of plastic or of textile materials: . . . travel, sports and similar bags" at a rate of duty of 17.8%. The company argued that the insulated beverage bag established essential character and that the items were properly classified as either "insulated food and beverage bags . . . whose interior incorporates only a flexible plastic container of a kind for storing and dispensing potable beverages through attached flexible tubing" (4202.92.04) or "insulated food and beverage bags . . . other" (4202.92.08), dutiable at 7%. The Court of International Trade affirmed. The Federal Circuit reversed and remanded. The item is a composite product that includes features substantially in excess of those within the common meaning of "backpack." The essential character of the item is a disputed question of fact.