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

District court properly awarded “exceptional case” legal fees. In 2005, Dow filed an infringement action against NOVA, which argued that its product did not infringe and that Dow lacked standing because it had transferred ownership of the patents. In 2010, the district court entered judgment against NOVA for $61 million. The Federal Circuit affirmed. In a separate appeal from an award of supplemental damages, the Federal Circuit found the asserted claims invalid as indefinite under the Supreme Court’s intervening “Nautilus” standard, but did not disturb the 2010 judgment relating to preverdict infringement. NOVA became aware of evidence allegedly showing that Dow had committed fraud in obtaining the 2010 judgment but was time-barred from moving to set aside that judgment. In 2013, NOVA filed a separate action in equity for relief from the 2010 judgment, asserting misrepresentation of Dow’s ownership of the asserted patents, based on the testimony of a former Dow employee in an unrelated tax case and on the testimony of Dow’s expert, about testing on the accused product during separate Canadian litigation. The Federal Circuit affirmed dismissal. The district court awarded Dow $2.5 million under 35 U.S.C. 285, which allows courts to award “reasonable attorney fees to the prevailing party” in “exceptional cases.” The court noted the weakness of NOVA’s litigating position and the manner in which NOVA pursued the case. The Federal Circuit affirmed. View "Nova Chemicals Corp. v. Dow Chemical Co." on Justia Law

AT&T’s patent is directed to a method of compressing and transmitting transform coefficients in a manner that does not rely on scanning the coefficients in any particular order; all of the coefficients in a block are transmitted at once. Days before the America Invents Act inter partes review procedures went into effect, LG requested inter partes reexamination of the patent, alleging anticipation. Before the PTO decided whether to initiate reexamination, LG asked the PTO to suspend its rule prohibiting a requester from filing documents between requesting inter partes reexamination and the PTO’s initial office action on the merits so that it could file a second request, requesting denial of its initial request. LG did not withdraw, nor did it withdraw its reexamination request. The PTO granted LG’s initial request and declined to suspend the rules. The examiner found new grounds of rejection. While discussions between AT&T and the examiner were ongoing, LG withdrew. The examiner suspended the prohibition against interviews during inter partes reexamination proceedings. Before any amendment, the examiner issued an Action Closing Prosecution that explained a different basis for finding the patent anticipated. The Board and the Federal Circuit affirmed. The Board did not exceed its statutory authority when instituting the reexamination and substantial evidence supported the finding of anticipation. View "In re: AT&T Intellectual Property II" on Justia Law

Claims in patent relating to fiber optic communication signals were unpatentable for lack of written description support. Cirrex’s 082 patent is directed to the field of fiber optic communication signals that use light energy made up of multiple different wavelengths within one fiber optic cable. Cisco requested inter partes reexamination of the patent. The Patent and Trademark Office found certain claims patentable and rejected other claims for lack of written description support. The Board affirmed. The Federal Circuit affirmed in part and reversed in part, finding that, under the correct claim construction for the equalization and discrete attenuation claims, all the claims on appeal unpatentable for lack of written description support. View "Cisco Systems, Inc. v. Cirrex Systems, LLC" on Justia Law

Shareholders lacked standing to challenge, as an illegal exaction, U.S. government’s acquisition of AIG stock as loan collateral. In 2008, during one of the worst financial crises of the last century, American International Group (AIG) was on the brink of bankruptcy and sought emergency financing. The Federal Reserve Bank of New York granted AIG an $85 billion loan, the largest such loan to date. The U.S. Government received a majority stake in AIG’s equity under the loan, which the Government eventually converted into common stock and sold. One of AIG’s largest shareholders, Starr, filed suit alleging that the Government’s acquisition of AIG equity and subsequent actions relating to a reverse stock split were unlawful. The Claims Court held that the Government’s acquisition of AIG equity constituted an illegal exaction in violation of the Federal Reserve Act, 12 U.S.C. 343, but declined to grant relief for either that or for Starr’s reverse-stock-split claims. The Federal Circuit vacated in part, holding that Starr and the shareholders it represented lack standing to pursue the equity acquisition claims directly, as those claims belong exclusively to AIG, rendering the merits of those claims moot. The court affirmed as to Starr’s reverse-stock-split claims. View "Starr International Co. v. United States" on Justia Law

Veterans Access, Choice, and Accountability Act (VACAA) provisions vesting significant authority in administrative judges violates Appointments Clause. In 2014, Congress investigated reports that senior executives in the Department of Veterans Affairs (DVA) had manipulated hospital performance metrics by maintaining secret wait lists of veterans who needed care. The resulting VACAA established new rules for the removal of DVA Senior Executive employees, 38 U.S.C. 713. Previously, senior DVA executives could only be removed under the Civil Service Reform Act, 5 U.S.C. 1101, and were entitled to appeal to the Merit Systems Protection Board (MSPB), to a hearing, and to attorney representation. Section 713 created an accelerated timeline for MSPB appeals and required the MSPB to refer all appeals to an administrative judge (AJ) for decision within 21 days. Helman, the Director of the Phoenix Veterans Affairs Health Care System, was removed from her position under section 713. An MSPB AJ affirmed. Helman sought review from the full Board. Citing section 713(e)(2), the Board refused to take any further action. The Federal Circuit remanded, holding that, by prohibiting Board review under section 713(e)(2), Congress vested significant authority in an AJ in violation of the Appointments Clause. Section 713(e)(2) and two related sections are severable, leaving the remainder of the statute intact. View "Helman v. Department of Veterans Affairs" on Justia Law

Tightened security at base, preventing access by contractor's ex-felon employees, did not justify contract adjustment. Malmstrom Air Force Base in Great Falls, Montana, houses intercontinental ballistic missiles. Garco's contract to construct base housing incorporated Federal Acquisition Regulation 52.222-3, providing that contractors may employ ex-felons and requiring contractors to adhere to the base access policy. Malstrom’s access policy indicated that it would run the employees’ names through the National Criminal Information Center. “Unfavorable results will be scrutinized and eligibility will be determined on a case-by-case basis.” Garco’s subcontractor, JTC, experienced difficulty bringing its crew onto the base. JTC used workers from a local prison’s pre-release facility. JTC had not encountered access problems in its performance of other Malmstrom contracts over the preceding 20 years. Security had been tightened after an incident where a prerelease facility worker beat his manager. JTC requested an equitable adjustment of the contract, stating that its inability to use convict labor greatly reduced the size of the experienced labor pool so that it incurred $454,266.44 of additional expenses; JTC did not request a time extension. The Federal Circuit affirmed the Armed Services Board of Contract Appeals’ denial of the claim, rejecting a claim of constructive acceleration of the contract. The court concluded that there was no change to the base access policy. View "Garco Construction, Inc. v. Secretary of the Army" on Justia Law

Trade Court abused its discretion in waiving the exhaustion requirement in appeal of antidumping order. The Department Commerce initiated an investigation into whether oil country tubular goods (OCTGs) from Saudi Arabia and other countries were sold for less than fair value in the U.S. Commerce selected Duferco as the mandatory respondent; preliminarily found dumping; determined to treat Duferco and three affiliates as a single entity; and determined that Duferco is affiliated with JESCO, the producer of the OCTGs. Duferco owns 10 percent of JESCO. JESCO participated as a voluntary respondent. Commerce published its final determination, concluding that Saudi OCTGs were being dumped and recalculating the duty margin at 2.69 percent. Following the final determination, JESCO identified an error in Commerce’s calculation of Constructed Value (CV) profit. Correcting this error lowered JESCO’s CV profit, reducing JESCO's dumping margin to 1.37 percent. Commerce issued an amended negative final determination, imposing no duties. U.S. companies appealed, arguing that JESCO’s sales to a Colombian distributor were intra-company transfers within the Duferco entity, not an appropriate basis to construct CV profit--an argument not made during the investigation. The Trade Court affirmed Commerce’s determination, declining to apply the exhaustion requirement because the parties did not know that Commerce was considering using the Colombian sales until the final determination. The Federal Circuit vacated. Commerce need not expressly notify interested parties when it intends to change its methodology between its preliminary and final determinations, given the inclusion of the relevant data in the record and the advancement of arguments related to that data. The parties had an opportunity to raise their single entity objection before Commerce. View "Boomerang Tube LLC v. United States" on Justia Law

Determination of tax year for theft loss depends on multiple factors. The Adkinses invested in securities through a company that was actually operating a “pump and dump” scheme. At their 2000 peak, the Adkinses’ investments were valued at $3.6 million. In 2001, the value of their investments declined to $9,849. In 2002, the Adkinses, discovering the fraud, submitted a claim to the National Association of Securities Dealers. Their hearing was postponed pending federal indictments, which were handed down in 2004. While the charges were pending, in 2006, the Adkinses claimed a tax-year 2004 deduction for a $2,118,725 theft loss under 26 U.S.C. 165, with excess refund portions carried back over 2001– 2003. The IRS disallowed the Adkinses’ refund claims for all tax years but 2002. The Claims Court concluded that the Adkinses agreed, citing 26 C.F.R. 1.165-1(d)(3) because the Adkins had not shown that, in 2004, they could have “ascertained with reasonable certainty that they would not receive reimbursement of their losses.” The Federal Circuit vacated. Unless the plaintiff has chosen abandonment (or settlement or adjudication) as the factual predicate for their loss date, the existence of an ongoing lawsuit or arbitration is only one factor to be considered among many in determining the tax year for the loss. View "Adkins v. United States" on Justia Law

Pre-AIA section 317(b) precluded argument that Patent and Trademark Office (PTO) was prohibited from maintaining reexamination of multiple claims where court upheld only two claims in parallel litigation. King requested ex parte reexamination of all claims of Affinity’s patent. Volkswagen requested inter partes reexamination based on additional, different asserted grounds of unpatentability; Apple requested inter partes reexamination of based on still different grounds. The PTO granted and merged the requests. Volkswagen subsequently received an adverse final judgment in a parallel district court proceeding, upholding the validity of claims 28 and 35. Affinity petitioned the PTO to vacate the entire merged reexamination proceeding, arguing that the estoppel provision in pre-America Invents Act (AIA) 35 U.S.C. 317(b) extended to all parties and all claims, not just litigated claims 28 and 35. The PTO denied Affinity’s request, but severed the Volkswagen reexamination and held that no rejection could be maintained in that reexamination as to claims 28 and 35. The Examiner evaluated the Volkswagen reexamination separately and issued a Right of Appeal Notice in each proceeding, rejecting numerous claims as unpatentable. The Patent Trial and Appeal Board and Federal Circuit affirmed, rejecting Affinity’s arguments that the PTO erred in maintaining the reexaminations, given the final decision that Volkswagen failed to prove invalidity of two claims, and that, assuming the reexaminations were properly maintained, the decisions were based on misreadings of asserted prior art and misevaluation of Affinity’s objective indicia evidence of nonobviousness. View "In re: Affinity Labs of Texas, LLC" on Justia Law

Estoppel provision of section 317(b) did not prohibit the Patent and Trademark Office (PTO) from maintaining a reexamination after court's dismissal, without prejudice, of invalidity claims..Apple requested reexamination after Affinity filed suit, alleging infringement of Affinity’s patent. While the reexamination was pending, the parties settled and filed a stipulation of dismissal with the district court. Affinity’s infringement action was dismissed with prejudice and Apple’s invalidity counterclaims were dismissed without prejudice. Apple filed notice of non-participation in the reexamination. Affinity petitioned the PTO to terminate the reexamination in view of the dismissal of Apple’s district court counterclaims pursuant to pre-America Invents Act (AIA) 35 U.S.C. 317(b), which prohibited the PTO from maintaining an inter partes reexamination after the party who requested the reexamination has received a final decision against it in a civil action concluding “that the party has not sustained its burden of proving the invalidity of any patent claim in suit.” The PTO dismissed Affinity’s request because it did not view the dismissal, without prejudice, as meeting section 317(b)’s required condition. The Examiner rejected all of the patent’s claims. The Patent Trial and Appeal Board and the Federal Circuit upheld the rejection, rejecting Affinity’s claims that the PTO improperly maintained the reexamination and that the Board’s finding that all claims are unpatentable was based on improper claim construction. View "In re: Affinity Labs of Texas, LLC" on Justia Law