IP Newsflash

A recent initial determination at the U.S. International Trade Commission (ITC) determined that claims directed to semiconductor chips with no lower bounds for recited gate pitch and width ranges (e.g., “less than or equal to about [X] nanometers”) were not enabled under 35 U.S.C. § 112. Specifically, it found that a person of ordinary skill could not practice the full scope of the claims, in particular at the lower bounds of the recited ranges, without undue experimentation.

The U.S. District Court for the District of Delaware recently rejected a plaintiff’s attempt to add to its complaint claims of induced infringement and enhanced damages based on pre-suit conduct. Specifically, the court held that allegations the defendant monitored competitor activity and shielded its employees from reading competitor patents did not support a plausible inference that the defendant knew or was willfully blind to the fact that it had infringed the asserted patents.

In anticipation of the Supreme Court’s decision in Cuozzo Speed Technologies v. Lee, which will determine the standard for claim construction during inter partes review before the Patent Trial and Appeal Board (PTAB), on April 19, 2016, the Federal Circuit reaffirmed that claim construction under the current broadest reasonable interpretation (BRI) standard “cannot be divorced from the specification and the record evidence.”

In a long-awaited en banc decision, the Federal Circuit ruled that the patent exhaustion doctrine does not apply to (1) initial sales with a single-use/no-resale restriction, or (2) foreign sales, whether restricted or not. In doing so, the court found that the Supreme Court’s Quanta and Kirtsaeng decisions did not overrule Federal Circuit precedent.

Lexmark sold its printer cartridges in the U.S. and abroad. Some of the foreign-sold cartridges and all of the U.S.-sold cartridges were sold subject to a “single-use/no-resale restriction.” Impression acquired and modified Lexmark’s cartridges for resale in violation of the Lexmark restriction. Impression not only resold the U.S. cartridges but imported the foreign-sold Lexmark cartridges for resale in the U.S.

In a case of first impression involving actual notice under 35 U.S.C. §154(d), the Federal Circuit affirmed the district court’s grant of summary judgment denying Plaintiff’s claim for pre-issuance damages.

Judge Gilstrap in the Eastern District of Texas recently held that plaintiff’s damages expert failed to properly apportion the royalty base “because he has failed to specify, distinguish, and then separate the value of BMC’s patented features from the unpatented features of ServiceNow’s products.” Plaintiff’s damages expert created his relevant royalty base by simply reducing defendant’s total revenue by 50%, then subtracting out the revenues he determined were subject to lost profits. The Court rejected plaintiff’s argument that the “original 50% reduction” was sufficient to isolate or apportion the incremental value associated with the infringement of the asserted patents. Although the Court recognized that the damages expert adequately identifies a portion of defendant’s revenue that is at risk, the Court rejected the asserted royalty base because the expert failed to apportion out any of the value of the unpatented features in the accused products. Relying on the Federal Circuit’s recent Ericsson opinion, the Court held that the “expert fails to provide an ultimate combination of royalty base and royalty rate based on the ‘incremental value that the patented invention adds to the end product.’” Ultimately, the Court carried defendant’s motion to exclude and ordered plaintiff to supplement its damages exert report to correct the deficiency within ten days, reserving the right to readdress this issue after supplementation.

In a January 22, 2016 decision, the Patent Trial and Appeal Board (PTAB) denied institution of covered business method (CBM) review of an ATM patent under 35 U.S.C. § 101. Petitioner NRT Technology sought review of U.S. Patent No. 6,081,792, which relates to a modified ATM terminal that allows a user to obtain cash from a bank account through one of multiple alternative networks. According to the patent, when a cardholder attempts to withdraw money via an ATM network and fails because she has exceeded her daily limit, the request is routed through a different type of transaction, such as a point-of-sale (POS) network. When the POS transaction is approved, the ATM terminal informs a nearby money location—for example, a hotel concierge or a cash window at a casino—of the approved transaction, and the cardholder obtains the money from that location instead of the ATM terminal itself.