Articles Posted in U.S. Federal Circuit Court of Appeals

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Taurus sued DaimlerChrysler, alleging that external websites infringed its patent for “a computer system for managing product knowledge related to products offered for sale by a selling entity.” Daimler Chrysler asserted license and release defenses, asserted a breach of contract counterclaim, and filed a contract claim against third-party defendants (including Orion), which, it claimed violated a 2006 patent licensing agreement between DaimlerChrysler and Orion, to settle prior patent infringement suits. The district court entered summary judgment, finding that the accused websites did not infringe any asserted claims and that certain claims were invalid as anticipated by prior art. The district court found the DaimlerChrysler suit to be exceptional under 35 U.S.C. 285, and awarded damages of $1,644,906.12, for costs incurred in Chrysler’s defense. With respect to remaining issues, the district court: found that certain third parties were alter egos and declined to dismiss for lack of jurisdiction; held that the 2006 agreement did not provide a release to the infringement alleged in the patent suit; held that issues of fact remained as to whether certain third parties had breached a warranty in the 2006 agreement; held that Orion had breached the warranty; and imposed sanctions on Orion and another for pre-trial witness tampering (those parties were not permitted to present evidence to support their defense that Chrysler did not rely on the warranty). The Federal Circuit affirmed, except with respect to attorney fees. View "Taurus IP, LLC v. DaimlerChrysler Corp." on Justia Law

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USM builds military boats. Working with VT Halter, USM designed a special-operations craft with a hull made out of composite materials for use in competing for the Navy's “MK V Special Operations Craft and Transporter System Contract.” With its 1993 bid, VT Halter submitted drawings stamped with a “Limited Rights Legend” to invoke Defense Federal Acquisition Regulations Supplement Section 252.227-7013(a)(15), which limits governmental use and disclosure of certain information. VT Halter won the contracts and delivered 24 Mark V special-operations craft. In 2004, the Navy awarded University of Maine a research grant to improve the ride and handling of the Mark V and provided detailed design drawings of the Mark V to contractors, stamped with the DFARS Limited Rights Legend, but did not obtain VT Halter’s consent for disclosure. The Navy awarded Maine Marine a contract to design and construct a prototype Mark V.1. USM sued under the Federal Tort Claims Act, 28 U.S.C. 1346(b), alleging misappropriation of trade secrets. The district court awarded damages, but the Fifth Circuit held that the matter lay exclusively within the jurisdiction of the Court of Federal Claims under the Tucker Act, 28 U.S.C. 1491(a)(1). The Fifth Circuit vacated the judgment and ordered transfer. The Federal Circuit affirmed. View "U.S. Marine, Inc. v. United States" on Justia Law

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AHG employed the inventors of the patents, which issued in 1991 and 1992 and are titled “Process for Distribution of Pieces such as Rivets, and Apparatus for carrying out the Process.” The patents claim priority to a French application filed in 1988, and relate to the dispensing of objects such as rivets through a pressurized tube with grooves along its inner surface, to provide a rapid and smooth supply of properly positioned rivets for such uses as the assembly of metal parts of aircraft. The invention “permits dispensing a very great number of pieces without risk of jamming in the tube and with a precise guiding permitting maintaining the alignment of the axes of the pieces.” AHG sued Brötje, asserting patent infringement, trade dress infringement, unfair competition, and intentional interference with prospective economic advantage. The district court ruled that the claims are invalid for failure to disclose the best mode of carrying out the invention, as required by 35 U.S.C. 112, but rejected Broetje’s argument that AHG abandoned the 339 patent by failing to pay the issue fee. The Federal Circuit reversed the judgment of invalidity, affirmed that the patent was not abandoned, and remanded for determination of remaining issues. View "Ateliers de la Haute-Garonne v. Broetje Auto. USA, Inc." on Justia Law

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Alexsam owns the 608 patent, which discloses a system for activating and using “multifunction card[s].” These cards include prepaid phone cards, used to pay for long-distance telephone calls, and electronic gift certificate cards. Such cards are typically distributed to retailers and displayed in stores in an inactive state, in order to deter theft, and are activated and assigned a cash value at the check-out counter. The claims at issue are drawn to a system for activating multifunction cards using a point-of-sale terminal, such as a cash register or a freestanding credit card reader. The district court held that certain of IDT’s systems infringed claims in the 608 patent and that these claims were not invalid, but that certain other systems were licensed under the claims. The Federal Circuit affirmed the judgment of no invalidity, reversed the jury’s finding of infringement with regard to IDT’s Walgreens and EWI systems, and affirmed the judgment of infringement with regard to IDT’s miscellaneous systems based on the district court’s discovery sanction. The court affirmed the judgment of noninfringement with regard to IDT’s SafeNet systems based on the license defense. View "Alexsam, Inc. v. IDT Corp." on Justia Law

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The 753 patent is directed to a heart rate monitor that purports to improve upon the prior art by effectively eliminating noise signals during the process of detecting a user’s heart rate. According to the patent, prior art monitors did not eliminate signals given off by skeletal muscles (EMG signals), which are brought about when users move their arms or squeeze the monitor with their fingers. Biosig, the assignee of the 753 patent, brought a patent infringement action against Nautilus. After claim construction of the disputed term ”space relationship,” the district court declared the patent invalid. The Federal Circuit reversed and remanded, finding the claims at issue not invalid for indefiniteness. View "Biosig Instruments, Inc. v. Nautilus, Inc." on Justia Law

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The 314 patent, its continuation, the 492 patent, and the 639 patent, relate to electronic commerce; products are offered and purchased through computers interconnected by a network. The patents arise from a software system called “Transact,” developed in 1996 by Open Market. In 2001 Open Market was sold, with the Transact software and patents, to Divine, which was unable to provide support for the complex product and declared bankruptcy. Soverain acquired the Transact software and patents, then sued seven online retailers for patent infringement. The defendants, except Newegg, took paid up licenses to the patents. Newegg declined to pay, stating that its system is materially different and that the patents are invalid if given the scope asserted by Soverain: similar electronic commerce systems were known before the system; the Transact software was generally abandoned; and Newegg’s system, based on the different principle of using “cookies” on the buyer’s computer to collect shopping data, is outside of the claims. The district court awarded Soverain damages and an ongoing royalty and held that the claims were not invalid as obvious. The Federal Circuit reversed in part, holding that claims in the all of the patents are invalid for obviousness. View "Soverain Software, LLC v. Newegg, Inc." on Justia Law

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Allflex sought a declaratory judgment that Avid’s patents were unenforceable due to inequitable conduct and that Allflex was not liable for infringement. Avid counterclaimed, alleging infringement. The patents relate to Radio Frequency Identification technology used in locator tags attached to animals or objects. The district court ruled that Avid should be sanctioned for failing to disclose the existence of pending reexamination proceedings. After construing the claims, the district court granted summary judgment of non-infringement and granted partial summary judgment in favor of Allflex on its inequitable conduct claim. The court held that Avid’s failure to disclose information about prior public use and offers to sell one of its products was material to inequitable conduct, but concluded that there was a genuine issue of fact as to whether Avid’s president had the requisite intent to deceive the PTO, an element of Allflex’s claim. The parties entered into a settlement agreement: Avid agreed to pay Allflex $6.55 million, reserving the right to appeal certain issues. The Federal Circuit dismissed as moot, rejecting a claim that a live controversy existed under a provision that Avid’s settlement payment would be reduced by $50,000 if Avid was successful on any of its appeals. View "Allflex USA, Inc. v. Avid Identification Sys., Inc." on Justia Law

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Parallel owns a patent, entitled “Method and Apparatus for Client-Server Communication Using a Limited Capability Client Over a Low-Speed Communications Link.” The application was filed in 1999 and addressed problems in using generic software applications on “handheld and credit-card-sized” computers, often operated over low-speed or wireless networks. Generic applications in that environment occupied considerable storage space on the host computer (they had to include capabilities for adapting to many different settings) and required multiple, data-intensive transfers of information between the server and the computer (they were not designed with the limitations of low-speed networks in mind). The patent’s solution was a “dynamically generated, transient applet,” a small program that typically performs one task. Applets and related technology, “plug-ins,” pre-dated the patent, and could be used to provide “dynamic” capabilities to web pages. The patent claimed a new type of applet, better suited to the needs of “limited capability clients.” Parallel sued 120 defendants with websites that provide applets in response to user requests in a manner that, according to Parallel, infringes the patent. The district court construed terms, including “executable applet,” “data interface capability,” and “dynamically generated” and ruled in favor of most of the defendants. The Federal Circuit affirmed. View "Parallel Networks, LLC v. Abercrombie & Fitch Co." on Justia Law

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Superior owns three patents, which claim priority to a 2006 application and cover a “Braced Telescoping Support Strut and System” that supports a portable conveyor assembly to transport and stockpile rock, sand, grain, and other aggregate material. Superior alleges its patents claim an improved undercarriage that enables portable conveyors to safely and stably operate at heights above previous conveyors by using cross bracing between the upper and lower support beams that does not interfere with the extension or retraction of upper support beams. Superior claims to have coined the term “fully braced” and owns the registered trademark “FB.” Thor competes in the portable conveyor market and, in 2007, filed a U.S. patent application for an “Undercarriage for a Telescopic Frame,” disclosing a telescoping frame similar to that claimed in the Superior patents. Thor issued a press release describing a conveyor system with a new “PATENT-PENDING FB Undercarriage.” Superior initiated a trademark infringement action that ended in a 2010 Consent Judgment, enjoining Thor from use of the “FB” trademark. Superior then sued for patent infringement. The district court dismissed, citing claim preclusion. The Federal Circuit reversed in part. Superior’s prior trademark infringement action did not arise from the same operative facts. View "Superior Indus., L.L.C. v. Thor Global Enter., Ltd." on Justia Law

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A jury found that Lawson infringes ePlus’s method and system claims for “electronic sourcing,” which is similar to online shopping. The specification explains that electronic sourcing systems existed in prior art, but those older systems only enabled the user to generate a single purchase order that would be submitted to a single vendor. One important feature of the claimed invention is ability to divide a single requisition (or shopping list) into multiple purchase orders. The patented invention includes a computer that maintains a catalog database of items available from at least two vendors. Vendors may be manufacturers, distributors, or resellers. The user can search vendor catalogs for items that match certain criteria, contact vendors to determine whether a particular product is available, and switch between different catalogs to look at equivalent items. The customer then purchases the desired items. A customer adds the desired item to an “order list;” once the customer is ready to make a purchase, the system uses the order list to build a “requisition,” then determines what inventory will be used to complete the requisition and generates “purchase orders,” which are submitted to vendors. The Federal Circuit reversed in part, finding the system claims indefinite. . View "ePlus, Inc. v. Lawson Software, Inc." on Justia Law