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

In 2004-2006 Tyco imported 42 models of liquid-filled glass bulbs, commonly used as a temperature-dependent trigger component of fire sprinkler heads. When the sprinkler head is exposed to fire, the bulb is heated and the liquid inside the bulb expands until the bulb shatters. When the bulb breaks, the valve of the sprinkler system opens and releases a shower of water to extinguish the fire. The bulbs can also be used in water heaters. The bulbs break at different temperatures, depending on the liquid. Tyco used 39 models in fire sprinkler systems and three models as thermal release devices in water heaters. Customs and Border Protection classified the bulbs as “other articles of glass” under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 7020.00.60, which has a 5% rate of duty. Tyco protested, asserting that the bulbs would be more properly classified under subheading 8424.90.90, which includes “Other” “Parts” of goods classified under heading 8424 and is duty-free. Customs denied Tyco’s protest. The Trade Court upheld the ruling, finding that the bulbs are “of glass.” The Federal Circuit affirmed. While the liquid component is “the brains behind the operation,” the essential character of the product is glass. View "Tyco Fire Products, L.P. v. United States" on Justia Law

The Alfred E. Mann Foundation owns two patents that cover implantable cochlear stimulators and formed Advanced Bionics to manufacture implants. The patents are directed to an ear implant with telemetry functionality for testing purposes, and generally describe a two-part system comprising an external wearable system with a wearable processor (WP) and headpiece, and an internal implantable cochlear stimulator (ICS). Sound is transmitted from the headpiece to the WP, which processes the transmissions before sending them to the ICS. The ICS processes the sound to stimulate the cochlea––the organ that converts sound to nerve impulses––via implanted electrodes, thereby allowing the user to hear. The system allows testers, usually physicians, to measure and adjust various parameters of the implant to assess whether the device is functioning properly. The Foundation sued Cochlear Corporation for infringement. The court found certain claims invalid for indefiniteness, entered judgment as a matter of law of no willful infringement, and granted a new trial on damages. The Federal Circuit affirmed in part, upholding the infringement determination with respect to some claims, but vacated and remanded with respect to willfulness in light of the Supreme Court’s 2016 decision, Halo Electronics, Inc. v. Pulse Electronics, Inc. View "Alfred E. Mann Foundation for Scientific Research v. Cochlear Corp." on Justia Law

MOVA technology can capture an actor’s facial performance for use in motion picture special effects and video games; it is secured by trademarks, copyrights, and patents, and is reflected in hardware, source code, and physical assets. VGHL claims that Perlman, the head of Rearden, declined to acquire the MOVA assets from OL2 and proposed OL2 sell to a Rearden employee, LaSalle. Perlman introduced LaSalle to Rearden’s corporate attorney who helped LaSalle establish his own company, MO2, and negotiated with OL2. Perlman later demanded that LaSalle convey the MOVA assets to Rearden and terminated LaSalle’s employment when LaSalle refused. MO2 sold the MOVA assets to SHST, which hired LaSalle, and began selling the technology. The Rearden parties claimed that SHST never obtained ownership and that LaSalle was simply hired to handle the acquisition on Rearden’s behalf. SHST sued, alleging that Rearden had made “false or misleading representations ... concerning the ownership of the MOVA Assets ... to mislead the public and actual and prospective users and licensees” and had falsely recorded assignments of the MOVA patents. During discovery, SHST moved to compel Rearden to produce documents exchanged between MO2 and Rearden’s corporate attorney. The district court granted the request, concluding that Rearden had not shown entitlement to assert attorney-client privilege on behalf of MO2 and that LaSalle waived privilege when he shared documents. The Federal Circuit denied a petition for mandamus. Rearden's arguments failed to carry the high burden required on mandamus to overturn the court’s discovery determination. View "In re: Rearden, LLC" on Justia Law

In 1994, Rocky Mountain and the Bureau of Land Management entered into the Helium Contract, giving Rocky Mountain the right, for up to 25 years, to extract helium gas from roughly 21,000 acres of federal lands in Colorado and Utah. Rocky Mountain never extracted helium from the property and, after one year, stopped paying rent. In 2004, the Bureau informed Rocky Mountain that it had cancelled the contract due to nonpayment. The parties entered into a Settlement Agreement, under which the Bureau was required to provide Rocky Mountain with data about gas composition on the land covered by the Helium Contract and Rocky Mountain had to pay $116,579.90 (back rent) so that the Helium Contract would be reinstated. Rocky Mountain subsequently objected that the Bureau's information as incomplete, refused to pay the $116,579.90, and informed the Bureau that it wanted to pursue mediation under the Agreement. When the parties were unable to agree whether the information was complete, the Bureau sent a termination letter. The Claims Court rejected Rocky Mountain’s breach of contract suit for lack of jurisdiction and on the merits. The Federal Circuit agreed that the Helium Contract was terminated in 2004 and never reinstated, but found that the court had jurisdiction over the Settlement Agreement dispute. View "Rocky Mountain Helium, LLC v. United States" on Justia Law

Unwired’s patent, entitled “Subscriber Delivered Location-Based Services,” describes a system and method for providing wireless network subscribers (e.g., cell phone users) with prioritized search results based on the location of their mobile device (e.g., the nearest gas station). The specification describes how search results can be personalized for subscribers by taking into account, for example, “favorite restaurants; automobile service plans; and/or a wide variety of other subscriber information.” The specification also describes how search results can be ordered to give priority to “preferred service providers defined by the network administrator,” allowing the network to generate revenue by charging service providers to be put on the preferred-service-provider list. Prioritization based on subscriber information and preferred provider status is independent of a subscriber’s location; it can lead to service providers that are actually farther away from the subscriber being given priority over service providers that are nearer. On inter partes review and covered business method patent review, the Patent Board found certain claims invalid as obvious, 35 U.S.C. 103. The Federal Circuit affirmed, agreeing that the analogous prior art teaches prioritization that results in farther-over-nearer ordering and that a skilled practitioner would have been motivated to combine existing techniques. View "Unwired Planet, LLC v. Google, Inc." on Justia Law

On inter partes review, the Patent Trial and Appeal Board construed the term “perforated” and invalidated several claims of PST’s patent, finding that those claims were anticipated or would have been obvious over Japanese Application Publication No. H1033551 A (JP 551) and that JP 551 qualified as prior art under 35 U.S.C. 102(a). The Board rejected PST’s argument that the Board could not rely on JP 551 as filed because the petitioners (Olympus) failed to translate the bibliographic page containing the publication date. The Board also determined that PST failed to antedate JP 551 because it had not proven that the inventor of its patent was reasonably diligent in reducing his invention to practice. The Federal Circuit vacated and remanded. While the Board’s acceptance of Olympus’ submission of JP 551 was harmless, the Board erred in its claim construction. On remand, the Board must determine whether all of PST’s evidence, considered as a whole and under a rule of reason, collectively corroborates testimony that the inventor worked reasonably continuously within the confines of his occupation to diligently finalize the patent application during an 81-day critical period. View "Perfect Surgical Techniques, Inc. v. Olympus America, Inc." on Justia Law

In 2005, the Church, within five miles of the Illinois–Wisconsin border, began selling caps and shirts, emblazoned with the phrase “ADD A ZERO” as part of a fundraising campaign. The Church obtained two federal trademarks for the “ADD A ZERO” mark, based on actual use of the marks in commerce, not intent to use the marks in commerce. In 2009, Adidas sought a clothing trademark for the phrase “ADIZERO.” The Trademark Office refused the application for likelihood of confusion with the Church’s “ADD A ZERO” marks. Adidas brought an action; the Trademark Trial and Appeal Board cancelled the marks, based on the Church’s failure to use the marks in commerce before registration. The Board considered the Church’s proffered evidence of a cancelled check with a printed Wisconsin address for the sale of two “ADD A ZERO”-marked hats for $38.34 in February 2005, before the Church applied for its marks, but concluded that the “de minimis” sale did not evidence the requisite “use in commerce” under the Lanham Act. The Federal Circuit reversed. The Lanham Act defines commerce as all activity regulable by Congress; the Church’s sale to an out-of-state resident fell within Congress’s power to regulate under the Commerce Clause. View "Christian Faith Fellowship Church v. Adidas AG" on Justia Law

In 1999-2001, Diversified sold tax avoidance strategies to 192 clients: Option Partnership Strategy and the Financial Derivatives Investment Strategy. Each involved transactions, exercised by an individual client, to yield an artificial tax loss or deduction. Each client contributed the initial investment and paid a fee. Diversified did not register the services as tax shelters under 26 U.S.C. 61111. In 2002, the IRS began an audit of Diversified, and, in 2013, issued notices assessing penalties of $24,868,451 for failure to register OPS and $17,241,032 for failure to register FDIS. According to the IRS, the Strategies qualified as tax shelters because the computed tax shelter ratio was greater than 2:1 and each was a “substantial investment” under section 6111(c)(4). Diversified paid the assessments with respect to two clients, then unsuccessfully sought a refund. The Claims Court held, and the Federal Circuit affirmed, that it lacked jurisdiction because Diversified did not comply with the full payment rule. The courts rejected an argument that the penalties were divisible. Section 6707(a) provides that “if a person . . . fails to register such tax shelter . . . such person shall pay a penalty with respect to such registration.” Liability for a section 6707 penalty arises from the single act of failing to register. View "Diversified Group, Inc. v. United States" on Justia Law

NuVasive’s patent describes and claims implants for spinal fusion surgery. On inter partes review, the Patent Trial and Appeal Board cancelled all but one challenged claim under 35 U.S.C. 103, finding in one prior-art reference (Michelson), a spinal fusion implant that meets two of the claim requirements of the NuVasive patent—having a length both greater than 40 mm and at least 2.5 times its width. NuVasive argued that it did not receive adequate notice of or opportunity to address that reading of Michelson and its consequences for the overall obviousness analysis. The Federal Circuit vacated in part and remanded Medtronic’s petition put NuVasive on notice that Medtronic was relying on particular portions of Michelson to teach the NuVasive patent’s claimed long-and-narrow implants. Medtronic’s petition did not, however, notify NuVasive of the assertions about the pertinent portions of Michelson that later became critical; the Board’s ultimate reliance on that material, together with its refusal to allow NuVasive to respond fully once that material was called out, violated NuVasive’s rights under the Administrative Procedure Act. View "In re: NuVasive, Inc.." on Justia Law

REG’s patent is directed to paraffin compositions containing primarily even-carbon-number paraffins and methods of making them. Even-carbon-number paraffins are useful as phase change materials (PCMs), which can be used as insulation in a house; they can absorb heat during the warm portions of the day by undergoing a solid-liquid phase transition and return the heat during the cooler portions of the day by re-freezing. The thermal storage capacity of PCMs is determined by their latent heat of fusion, which is higher for even-carbon-number paraffins. The patent seeks to increase the production of compositions with higher percentages of even-carbon-number paraffins. One method disclosed in the patent is the hydrogenation and deoxygenation of naturally occurring fatty acids and esters, such as bio-oils, to produce primarily even-carbon-number paraffins. On inter partes review, the Patent Trial and Appeal Board excluded several REG exhibits based on hearsay and other grounds and found certain claims invalid as anticipated by other patents. The Federal Circuit affirmed that certain claims were anticipated, but reversed a finding that REG failed to establish conception of the invention prior to another patent’s filing date. The court remanded for further fact finding on diligence and reduction to practice and vacated the exclusion of certain exhibits. View "REG Synthetic Fuels, LLC v. Neste Oil Oyj" on Justia Law