last the federalcircuit - finnegan...the federal circuit had ruled that sj of non-infringement had...

EDITED BY VINCE KOVALICK

This publication brings you a synopsis of patent cases decided last month by the United States Court of Appeals for the Federal Circuit based on slip opinions received from the court. You can review anddownload the full text of each opinion by visiting our website at www.finnegan.com

PROSECUTION DISCLAIMER MUST BE UNAMBIGUOUSAs a basic principle of claim interpretation, prosecution disclaimer promotes the public-notice function of the intrinsic evidence and protects the public reliance on definitive statements made during prosecution. OmegaEng’g, Inc. v. Raytek Corp., No. 01-1546 (Fed. Cir. July 7, 2003) . . . . . . . . . . . . . . . . .1

COURT REVERSES SANCTION OF ATTORNEYS’ FEESDistrict court improperly awarded attorneys’ fees against Plaintiffs and attorneys based on amisunderstanding of the governing trademarkand patent laws. Waymark Corp. v. Porta Sys.Corp., No. 03-1012 (Fed. Cir. July 10, 2003) . .2

COURT “SHIFTS” CLAIM CONSTRUCTION FOR BICYCLE GEAR SHIFT PATENTDistrict court improperly read limitations intoclaims from specification and incorrectly readprosecution-history statements as disclaimers.Sunrace Roots Enter. Co. v. SRAM Corp., No. 02-1524 (Fed. Cir. July 17, 2003) . . . . . .2

PATENT INVALID FOR SALE OF SOFTWAREEMBODYING THE INVENTION PRIOR TO CRITICAL DATE Court has discretion to reach an issue not decided below where there has been a judicialinterpretation of law, pending the appeal, which might materially alter the result. Minton v. National Ass’n of Sec. Dealers, Inc., No. 02-1560 (Fed. Cir. July 29, 2003) . . . . . .4

PROCEDURAL PROBLEMS PREVENT APPEALThe grant of an in limine motion with respect to damages evidence is not a final disposition ofa claim that can be certified pursuant to Fed. R.Civ. P. 54(b), but requires Federal Circuit consent pursuant to 28 U.S.C. § 1292(b). Ultra-Precision Mfg. Ltd. v. Ford Motor Co., No. 02-1622 (Fed. Cir. July 28, 2003) . . . . . .5

MERE DISCLOSURE OF POTENTIALLY MATERIAL ART DOES NOT AUTOMATICALLYLIMIT CLAIMSIDS reference was not admitted prior art and was improperly used to import limitations intoclaims to save their validity. Abbott Labs. v. Baxter Pharm. Prods., Inc., No. 02-1400 (Fed. Cir. July 3, 2003) . . . . . . . . . . . . . . . . .6

RES JUDICATA DOES NOT PREVENT INFRINGEMENT SUIT OVER TRADING CARDSTo be given preclusive effect, a judgment mustbe a final adjudication of the rights of the parties and must dispose of the litigation on the merits. Media Techs. Licensing, LLC v. The Upper Deck Co., No. 02-1555 (Fed. Cir. July 11, 2003) . . . . . . . . . . . . . . . . . . . . . . . .7

COURT STARTS WITH DICTIONARIES TO CONSTRUE “HIGH FREQUENCY”The district court did not err in looking to dictionary definitions before consulting the specification or the prosecution history to first determine the ordinary and customarymeaning of the term “high frequency.”Intellectual Prop. Dev., Inc. v. UA-ColumbiaCablevision of Westchester, Inc., No. 02-1248 (Fed. Cir. July 21, 2003) . . . . . . . . . . . . . . . . .8

VALIDITY OF A PROCESS PATENT DOES NOT TURN ON VALIDITY OF THE PRODUCTPATENTA process yielding a novel and nonobvious product may nonetheless be obvious; con-versely, a process yielding a well-known product may yet be nonobvious. Torpharm, Inc. v. Ranbaxy Pharms., Inc., No. 02-1590 (Fed. Cir. July 23, 2003) . . . . . . . . . . . . . . . .10

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Last month at The Federal Circuit

Prosecution Disclaimer Must BeUnambiguous

Timothy J. May

[Judges: Clevenger (author), Michel,and Schall]

In Omega Engineering, Inc. v. RaytekCorp., No. 01-1546 (Fed. Cir. July 7, 2003),the Federal Circuit rejected the districtcourt’s claim construction and reversed thedistrict court’s SJ of noninfringement. TheFederal Circuit remanded the case with abroader claim construction for further pro-ceedings.

Omega Engineering, Inc. (“Omega”)owns U.S. Patent Nos. 5,727,880 (“the’880 patent”), 5,823,678 (“the ‘678patent”), and 5,823,679 (“the ‘679patent”), which are based on a commonpriority application and relate to a laser-sighting system for use on infrared ther-mometers.

Claim limitations relating to the outlineor periphery of the energy zone measuredby the thermometer became the focus ofthe appeal. The district court had con-strued the phrases “to outline the energyzone,” “outline visibly” the energy zone,“to outline visibly the periphery,” andequivalent phrases as excluding a laserbeam directed inside the energy zone.

The Federal Circuit concluded that thedistrict court’s claim constructions wronglyincorporated the negative limitation thatthe claims may not cover a device directinga laser beam inside the energy zone. TheCourt began its analysis with claim 1 of the‘880 patent, which requires a “means forcausing” at least one laser beam “to strikethe periphery of the energy zone for visiblyoutlining said energy zone.” The FederalCircuit disagreed with the trial court’s find-ing that directing light inside the energyzone would contradict the stated purposeof “visibly outlining said entire energyzone” and concluded that the trial court

had incorrectly assumed that a laser beamdirected inside the energy zone could notat the same time outline that zone. Theplain words of the claims permissivelyrequire “at least one laser beam,” indicat-ing that the “means for causing” may acton another laser beam to strike inside thezone. Further, the claims do not requirethat the laser beam be both outside andinside the periphery at the same time.

The Federal Circuit also rejected RaytekCorporation’s (“Raytek”) arguments thatOmega had disclaimed during prosecutiona laser-sighting system directing a laserinside the energy zone. During prosecu-tion, Omega had repeatedly insisted thatits invention differed from the prior art byprecluding appreciable heat from enteringthe energy zone and affecting the temper-ature of the energy zone. While thesestatements narrowed the construction ofthe phrase “to visibly outline,” they did notpreclude projection of light into the interiorof the energy zone. Thus, the disclaimerwas not as comprehensive as Raytek hadargued.

The Federal Circuit also found that thedisclaimer made in the ‘880 patent extend-ed to the ‘678 and ‘679 patents, which arecontinuations-in-part of the ‘880 patent.

With respect to claim 16 of the ‘880patent, which requires a “means for caus-ing” the laser beam to identify the periph-ery and center of the energy zone, the dis-trict court had required that the laser beamstrike those points sequentially. TheFederal Circuit disagreed, finding that nei-ther the claims nor the written descriptionsupported adding the limitation “sequen-tially.” The district court justified its addi-tion of the sequential limitation by firstidentifying corresponding structure in thedisclosure of the ‘880 patent. The FederalCircuit concluded, however, that startingwith a structure and defining the functionin light of that structure, the lower courthad essentially turned the rule of construc-tion for means-plus-function claims upsidedown.

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Because Omega and Raytek disputedwhether the laser beam in the center of theenergy zone adds any appreciable heat,and given its new construction of theclaims, the Court found that triable issuesof fact remain and, therefore, reversed theSJ of noninfringement of claims 1 and 16 ofthe ‘880 patent and the asserted claims ofthe ‘678 and ‘679 patents.

Court Reverses Sanction ofAttorneys’ Fees

Vince Kovalick

[Judges: Dyk (author), Newman, andRader]

In Waymark Corp. v. Porta Systems Corp.,No. 03-1012 (Fed. Cir. July 10, 2003), theFederal Circuit reversed an award of attor-neys’ fees.

Waymark Corporation (“Waymark”)and the Caravello Family LimitedPartnership (“the Partnership”) sued PortaSystems Corporation (“Porta”) for infringe-ment of U.S. Patent No. 5,705,929 (“the‘929 patent”), and trademark and trade-dress infringement.

In a previous decision on the merits,the Federal Circuit had ruled that SJ of non-infringement had properly been grantedunder 35 U.S.C. § 271(a) but improperlygranted under 35 U.S.C. § 271(f)(2).

While the first appeal was still pending,the district court granted Porta’s motion forsanctions in the form of attorneys’ fees, butdid not set an amount. The Court imposedthe sanctions because: (1) Plaintiffs had notregistered the asserted trademark until wellafter filing suit; (2) an appropriate writtenexclusive license agreement had not beenprepared, such that Waymark did not havestanding to file suit; and (3) Plaintiffs hadbeen misleading about documents duringdiscovery.

After the first appeal, the case wasremanded back to the district court todetermine whether Porta had infringed

under § 271(f)(2) by shipping to Mexicocertain components that, if assembled,would infringe the patent. After additionaldiscovery and hearings on the issue, thePlaintiffs filed a stipulation of voluntary dis-missal. Before doing so, however, the dis-trict court entered a second sanctions orderreaffirming its earlier order and awarding asanction of $44,000 against the Plaintiffsand their lawyers.

The Federal Circuit reversed the sanc-tions order. As to the trademark issue, theCourt concluded that § 43(a) of theLanham Act provides a remedy for infringe-ment of both registered and unregisteredtrademarks. Because Plaintiffs provided useof their unregistered trademark, the Courtconcluded that the award of sanctions onthis issue was based on a misunderstandingof the governing law.

As to the standing issue to bring thepatent-infringement action, the FederalCircuit again found that the district courthad improperly applied the law, whichrequires assignments, not licenses, to be inwriting. Since the Partnership claimed awritten assignment of the ‘929 patent, ithad standing to bring the action, and itwas permissible to join Waymark as a plain-tiff under the alleged oral exclusive license.Indeed, Porta did not even press for thisaward on appeal.

Finally, as to the alleged failures to pro-duce documents, the Court noted thatsanctions cannot be based on the failure toproduce a document that does not exist.

Court “Shifts” ClaimConstruction for Bicycle GearShift Patent

Susanne T. Jones

[Judges: Bryson (author), Lourie, andGajarsa]

In Sunrace Roots Enterprise Co. v. SRAMCorp., No. 02-1524 (Fed. Cir. July 17,2003), the Federal Circuit reversed the dis-

trict court’s claim construction of the term“shift actuator,” finding the constructiontoo limiting, and remanded the case forfurther proceedings.

U.S. Patent No. 4,900,291 (“the ‘291patent”), owned by SRAM Corporation(“SRAM”), discloses and claims a gear-shifting mechanism for bicycles that uses ashift actuator designed to precisely controlmovement of a chain derailleur. The ‘291patent contains apparatus claims that recitea “shift actuator” with and without a “cammeans.”

Based on a letter by SRAM to SunraceRoots Enterprise Company, Ltd.(“Sunrace”) asserting that Sunrace wasinfringing its reexamined ‘291 patent,Sunrace filed a DJ action claiming that itdid not infringe the ‘291 patent and alsothat the ‘291 patent was invalid and unen-forceable. SRAM counterclaimed, assertinginfringement of claims 16 and 20 of the‘291 patent. The district court construedthe term “shift actuator” to mean “a mech-anism for controlling the changing of gearsthat contains a cam configured with aseries of lobes and valleys that rotates so asto engage a cam follower.” In providingthis construction, the parties and the dis-trict court agreed that the plain and ordi-nary meaning of “shift actuator” is “amechanism that controls the changing ofgears.” However, the district court adopt-ed a more limiting construction based onthe specification and the prosecution histo-ry, finding that the cam was integral to theinvention disclosed and stating that thespecification did not suggest that theinvention might be embodied in a struc-ture that does not use a cam. The districtcourt also found that the prosecution histo-ry of the ‘291 patent indicated that SRAMand the Examiner considered the “shiftactuator” to require the cam mechanism.

Based on the district court’s claim con-struction, the parties stipulated thatSunrace’s devices did not infringe claim 16,and the district court entered judgment on

that basis. SRAM appealed the districtcourt’s claim construction of claim 16, butnot claim 20.

The Federal Circuit reversed the districtcourt’s claim construction of the term “shiftactuator,” finding it unduly restrictive, andadopted instead the meaning that a “shiftactuator” is “a mechanism that controlsthe changing of gears.”

In so doing, the Federal Circuit beganwith the presumption that the plain andordinary meaning applies to disputed claimlanguage unless such presumption hasbeen overcome. In finding that the pre-sumption was not overcome in this case,the Federal Circuit turned first to the doc-trine of claim differentiation. The FederalCircuit noted that claim 24, which dependsfrom claim 16, specifically recites that the“shift actuator comprises a cam meansrotatably mounted on the bicycle handle-bar generally coaxially of the handlebar,”and that the “cam means” portion of claim24 was the only difference between claims16 and 24. The Federal Circuit furtherrelied on the fact that SRAM had canceledclaims 27 and 28 during reexaminationafter amending claim 16 to include thelimitations of those claims, but did not like-wise cancel claim 24, indicating that SRAMbelieved claim 16 was not limited to a shiftactuator including a cam means.

The Federal Circuit next considered thespecification to determine if SRAM haddefined “shift actuator” differently from itsplain and ordinary meaning. Reviewingportions of the specification that discussedvarious objects of the invention as includ-ing a cam structure and which the districtcourt had relied on in combination withthe absence of any disclosure of a shiftactuator that did not include a cam meansin order to narrow the scope of the term“shift actuator,” the Federal Circuit foundthat the various statements did not evi-dence an intent to depart from the ordi-nary meaning. Instead, the Federal Circuitdetermined that some of the statements

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detailed goals of the invention relating tothe apparatus claims, but that other goalsalso were set forth in the specification thatdid not relate to providing a cam mecha-nism. The Federal Circuit found that the‘291 patent specification does not indicatethat the cam aspect is the invention itself.

Considering the final piece of intrinsicevidence, the prosecution history, theFederal Circuit found no clear evidence ofdisclaimer. Regarding various statementsdescribing the ‘291 patent’s use of a camstructure that the district court had reliedon as effecting a disclaimer, the FederalCircuit concluded that those statementswere not specific to method claim 16 butrather appeared to relate to the apparatusclaims.

In finding that any ambiguity in theplain meaning could be resolved by theintrinsic evidence, the Federal Circuit alsorejected any consideration of extrinsic evi-dence in the form of inventor testimonythat Sunrace had offered in support of thedistrict court’s construction.

Patent Invalid for Sale ofSoftware Embodying theInvention Prior to Critical Date

Charles W. Chesney

[Judges: Lourie (author), Linn, andGajarsa (concurring)]

In Minton v. National Association ofSecurities Dealers, Inc., No. 02-1560 (Fed.Cir. July 29, 2003), the Federal Circuitaffirmed a final decision of the UnitedStates District Court for the Eastern Districtof Texas granting SJ of patent invalidityunder 35 U.S.C. § 102(b) because theclaimed subject matter was on sale morethan one year prior to the filing of thepatent application.

Vernon F. Minton is the sole inventorand owner of U.S. Patent No. 6,014,642(“the ‘642 patent”), which is directed to acomputerized securities-trading system.When using the system, individuals con-nect to a computer network through whichthey are able to post offers to trade securi-ties as well as to select and reply to postedoffers to cause trades to occur. In particu-lar, according to method claim 1, which isrepresentative, offers to trade a security aretransmitted over a network to an individ-ual’s computer, where the offers are rankedand displayed.

More than one year prior to the filingof the ‘642 patent, Minton leased a com-puter program and telecommunicationnetwork called “TEXCEN” to a brokeragefirm that performed similarly to what isclaimed in the ‘642 patent.

The district court granted SJ of invalidi-ty on two grounds: (1) Minton’s lease ofTEXCEN was an anticipatory on-sale barunder 35 U.S.C. § 102(b); and (2) theclaimed invention would have been obvi-ous over TEXCEN in view of anotherpatent.

Minton filed a motion for reconsidera-tion, in which he argued for the first timethat the lease of TEXCEN was experimentaland therefore not “on-sale,” but the districtcourt denied the motion.

On appeal, Minton raised two principalarguments that TEXCEN was not on-saleunder 35 U.S.C. § 102(b). First, Mintonargued that, as in In re Kollar, 286 F.3d1326 (Fed. Cir. 2002), the license of theTEXCEN process was not a commercialoffer for sale. Second, Minton argued thatthe district court failed to analyze theexperimental-use issue, even thoughMinton properly raised the issue for thefirst time in its motion for reconsideration.

The Federal Circuit found that, unlikethe transaction in Kollar, Minton conveyeda fully operational computer program

implementing and, thus, embodying theclaimed invention. Accordingly, theFederal Circuit held that Minton’s lease ofTEXCEN, thereby enabling the practice ofthe invention, was an offer for sale withinthe meaning of the on-sale bar.

With regard to Minton’s experimental-use argument, Minton argued that he prop-erly raised the issue in his postjudgmentbriefing after the Federal Circuit issued adecision in EZ Dock, Inc. v. Schafer Systems,Inc., 276 F.3d 1347 (Fed. Cir. 2002), whichMinton contended changed the landscapeof experimental-use law.

Disagreeing with Minton, the FederalCircuit concluded that the district court waswell within its discretion in declining toentertain Minton’s new argument on recon-sideration.

Procedural Problems PreventAppeal

S.H. Michael Kim

[Judges: Gajarsa (author), Newman, andProst]

In Ultra-Precision Manufacturing Ltd. v.Ford Motor Co., No. 02-1622 (Fed. Cir. July28, 2003), the Federal Circuit held that thegrant of an in limine motion with respect todamages evidence is not a final dispositionof a claim that can be certified pursuant toFed. R. Civ. P. 54(b). Instead, any suchappeal must follow the provisions of 28U.S.C. § 1292(b), which not only requiresdistrict court certification, but also requiresthe Federal Circuit’s consent.

This case involves air-conditioning com-pressor technology. In 1988, Ford MotorCompany (“Ford”) approached Ultra-Precision Manufacturing Ltd. (“UPM”) in aneffort to design a solution to noise, vibra-tion, and harshness problems associated

with Ford’s FX-15 air-conditioning compressors. In response, UPM designedretrofit pulse damper (“PD”) tubes andobtained two patents on the technology,which listed UPM employees as the soleinventors. Ford evaluated the UPM technol-ogy, but informed UPM that it was notinterested because the retrofit PD tubes didnot work well alone in Ford’s system due toconcerns such as slugging. In 1991, how-ever, Ford began working on and complet-ed the design of integral PD tubes, forwhich it obtained U.S. Patent No.5,236,312 (“the ’312 patent”), which listedFord employees as the sole inventors. Fordbegan using these PD tubes in its compres-sors in 1992.

In 2000, UPM determined that Ford wasusing these integral PD tubes in its com-pressors and filed an action alleging unjustenrichment, breach of contract, and com-mercial misappropriation under Michiganstate law, and also sought substitution ofinventorship in the ‘312 patent, allegingthat UPM’s employees were the sole inven-tors of the ‘312 patent. The district courtgranted Ford’s motions for SJ on all theclaims except unjust enrichment and substi-tution of inventorship. During the proceed-ings, however, UPM conceded that it wasonly seeking co-ownership of the ‘312patent, instead of sole ownership, as origi-nally pled. Accordingly, Ford filed twomotions in limine requesting (1) exclusionof evidence of damages for subject matterdisclosed but not claimed in UPM’s patents;and (2) exclusion of evidence for any use ofthe ‘312 patent, because, as a co-owner,Ford was not liable for damages under 35U.S.C. § 262. The district court grantedboth motions and certified them for inter-locutory appeal at UPM’s request pursuantto Fed. R. Civ. P. 54(b).

The Federal Circuit held that becausethe motions in limine did not enter finaljudgment as to the unjust-enrichment

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claim, the Court did not have jurisdictionto hear the interlocutory appeal under Fed.R. Civ. P. 54(b). Instead, the exclusion ofevidence only related to the quantum ofrelief UPM sought and did nothing to dis-pose of the issue of liability on the unjust-enrichment claim. Accordingly, because noclaims were final within the meaning ofFed. R. Civ. P. 54(b), the only option forUPM at this juncture was to appeal under28 U.S.C. § 1292(b), which, in addition tothe district court’s certification, requires adiscretionary ruling by the Federal Circuitthat grants the appealing party’s petitionfor permission to appeal the order.Because no such petition was filed in thiscase, however, the Federal Circuit did nothave jurisdiction to hear this appeal.

Mere Disclosure of PotentiallyMaterial Art Does NotAutomatically Limit Claims

Maureen A. Bresnahan

[Judges: Rader (author), Gajarsa, andDyk]

In Abbott Laboratories v. BaxterPharmaceutical Products, Inc., No. 02-1400(Fed. Cir. July 3, 2003), the Federal Circuitvacated the district court’s grant ofDefendants’ Baxter PharmaceuticalProducts, Inc. and Baxter Health CareCorporation (collectively “Baxter”) motionfor SJ of noninfringement because the dis-trict court erred in construing the assertedclaims. The case was remanded for furtheradjudication.

Abbott Laboratories and Central GlassCompany, Ltd. (collectively “Abbott”) ownU.S. Patent No. 5,990,176 (“the ‘176patent”), which claims compositions andmethods for preventing degradation ofsevoflurane anesthetic that combinesevoflurane with an effective amount of

certain Lewis acid inhibitors, includingwater. Baxter filed an ANDA with the FDAproposing to market a generic sevofluranewith no more than 130 ppm of water.Baxter certified under paragraph IV that itsproposed generic sevoflurane product doesnot infringe the ‘176 patent. Abbott thenfiled suit alleging infringement of the ‘176patent. The district court construed theclaims to require more than 130 ppm ofwater in order to preserve their validity inview of a sale described in an IDS thatAbbott submitted to the PTO in the ‘176patent and granted Baxter’s motion for SJof noninfringement.

The district court’s decision hinged onits construction of the phrase “amounteffective to prevent degradation [of thesevoflurane] by a Lewis acid.” The districtcourt acknowledged that neither the plainlanguage of the claims nor the specificationof the ‘176 patent—which disclosedamounts of Lewis acid inhibitors that “canbe used” and amounts “believed to be”effective—required a specific amount ofLewis acid inhibitor. Nevertheless, the dis-trict court construed the term “amounteffective” as requiring more than 131 ppmof Lewis acid inhibitor.

In support of this conclusion, the dis-trict court pointed to Abbott’s submissionof an IDS that referenced a sale of asevoflurane with no more than 130 ppmwater that occurred more than one yearbefore the effective filing date of the ‘176patent. According to the district court, thereferenced sale constituted admitted priorart and a surrender of the subject matter ofthe sale. Thus, in order to preserve thevalidity of the claims in view of theassumed invalidating sale, the district courtconstrued the term “effective amount” tomean an amount of inhibitor more than131 ppm. Because the district court limit-ed the claims of the ‘176 patent to compo-sitions comprising more than 131 ppm ofinhibitor, it concluded that the proposedgeneric product, which would have less

than 130 ppm of water, did not infringethe claims of the ‘176 patent and grantedSJ of noninfringement to Baxter.

On appeal, the Federal Circuit first con-strued the term “effective amount” ofinhibitor and determined that it is not lim-ited to concentrations of inhibitors greaterthan 131 ppm. The Federal Circuit con-cluded that the district court improperlyconstrued the term “effective amount” bydeviating from the customary usage of theterm and importing the “more than 131ppm” of inhibitor limitation into theclaims. More specifically, the FederalCircuit determined that, under its custom-ary usage, the term “effective amount,” asused in the ‘176 patent, means “theamount of Lewis acid inhibitor that willprevent the degradation of sevoflurane bya Lewis acid.” The Federal Circuit thennoted that the specification of the ‘176patent broadly defines the term “effectiveamount” as “an amount that prevents thedegradation of the fluoroether compoundby a Lewis acid” and teaches that thedegradation of sevoflurane varies depend-ing on environmental factors, such as thechemical composition of the container.The Federal Circuit further concluded thatthe reference to the previous sale in theIDS was not an admission of material priorart or a disavowal of claim scope. In sum,the Federal Circuit concluded that thespecification and the prosecution history ofthe ‘176 patent (including the IDS) did notsupport a meaning different from the cus-tomary meaning, and, therefore, the dis-trict court improperly imported the morethan 131 ppm limitation into the claims.

The Federal Circuit also determinedthat the effective amount of the Lewis acidinhibitor should be measured by referenceto a single species of the inhibitors recitedin the Markush group. Abbott had arguedthat the recitation of “a” Lewis acidinhibitor in the Markush group should beunderstood to mean that a compositionthat comprises an effective amount derived

from “more than one inhibitor would stillfall within the claim boundaries.” TheFederal Circuit disagreed. According to theCourt, although the word “a” indicates“one or more” in claims containing thetransitional phrase “comprising,” the com-bination of the word “a” with the phrase“consisting of” in a Markush group indi-cates only one member of the group.Hence, because the applicant did notexpressly indicate the selection of multiplemembers of the Markush group (e.g., byclaiming “and mixtures thereof” or “atleast one member of the group”), theclaims of the ‘176 patent are limited tocompositions in which a single inhibitorselected from the recited Markush groupcontributes an effective amount of aninhibitor. Thus, to prove literal infringe-ment on remand Abbott must prove that asingle species from the Markush group ispresent in Baxter’s proposed generic prod-uct in an amount effective to preventdegradation of the sevoflurane.

Res Judicata Does Not PreventInfringement Suit over TradingCards

Jill E. DeMello

[Judges: Mayer (author), Michel, andDyk]

In Media Technologies Licensing, LLC v.The Upper Deck Co., No. 02-1555 (Fed. Cir.July 11, 2003), the Federal Circuit reverseda district court’s decision barring the asser-tion of infringement for res judicata.

Adrian Gluck is the inventor of a patentdirected to memorabilia cards. Gluck hadassigned his patent to LNCJ, Ltd. (“LNCJ”),which in turn licensed the patent toTelepresence Technologies(“Telepresence”), a company for whomGluck was a principal. Telepresence

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brought an infringement action againstseveral of its competitors. Due to a defec-tive initial assignment by Gluck to LNCJ,the district court dismissed the case for lackof standing.

To remedy the assignment defect,Gluck created Media TechnologiesLicensing, LLC (“Media”), naming himselfas president of the company. Gluck thenperfected the assignment of his patentrights to LNCJ, terminated the licenseagreement between LNCJ andTelepresence, and assigned LNCJ’s recentlyacquired rights in the patent to Media. Inaddition, Gluck and Telepresence quit-claimed any interest they had in the patentto Media.

Media then initiated an action againstThe Upper Deck Company and others (col-lectively “Upper Deck”) for infringement.Upper Deck moved for SJ of claim preclu-sion. The district court granted themotion, and Media appealed.

Because the case turned on generalprinciples of claim preclusion rather than arule of law having special application topatent cases, the Federal Circuit applied thelaw of the Ninth Circuit. Claim preclusionin the Ninth Circuit requires the followingelements: (1) the prior litigation was termi-nated by a final judgment on the merits;(2) the prior litigation involved the sameclaim or cause of action; and (3) the sameparties, or their privities, were involved inthe prior litigation.

Media argued on appeal that the dis-trict court had erred in concluding that thedismissal of Telepresence’s prior action wasa final judgment on the merits. Applyingthe law of the Ninth Circuit, the FederalCircuit ruled that standing is a thresholdquestion that is resolved before proceedingto the merits of the case, and, therefore,dismissal based on lack of standing pre-cludes a ruling on the merits. Thus, thedistrict court had erred with respect to the

first element of claim preclusion—the priorlitigation had not been terminated by afinal judgment on the merits.

The Federal Circuit also concluded thatthe district court had erred in applyingclaim preclusion because Telepresence andMedia lacked privity. Privity extends toparties who have sufficient commonalitybetween them so that one may be boundby the prior decision if his interests werevirtually represented by the other party inthat action, the Court stated. In this case,Media was not the equivalent ofTelepresence coming back for a second biteof the apple; it was a later-created entitywith a perfected interest in the patent thatwas lacking before, and, therefore, it wasnot in privity with Telepresence because itsinterests could not have been virtually rep-resented by Telepresence’s unperfectedpatent rights.

Court Starts with Dictionariesto Construe “High Frequency”

Kenneth M. Lesch

[Judges: Schall (author), Gajarsa, andDyk]

In Intellectual Property Development, Inc.v. UA-Columbia Cablevision of Westchester,Inc., No. 02-1248 (Fed. Cir. July 21, 2003),the Federal Circuit affirmed the districtcourt’s SJ ruling that UA-ColumbiaCablevision of Westchester, Inc. and Tele-Communications, Inc. (collectively“Cablevision”) did not infringe U.S. PatentNo. 4,135,202 (“the ’202 patent”) assertedby Intellectual Property Development, Inc.and Communications Patents, Ltd. (collec-tively “IPD”). Further, the Federal Circuitreversed the district court’s SJ ruling ofinvalidity for indefiniteness of the ’202patent.

The ‘202 patent is directed to broad-casting systems with fiber-optic transmis-sion lines. The district court had initiallyconstrued the claim term “high frequency”to include the VHF range, i.e., 54 to 216MHz received by conventional televisionreceivers at the time, but later reconsideredand reconstrued “high frequency carrier”to be limited to 3 to 30 MHz. Based onthis construction, the district court grantedthe SJ of noninfringement, becauseCablevision’s systems only operate above30 MHz. IPD never argued thatCablevision met the “high frequency carri-er” limitation under the DOE.

The Federal Circuit reviewed the claimconstruction de novo by first analyzing thewords of the claim. The Federal Circuitheld that the district court did not err inlooking to dictionary definitions beforeconsulting the specification or the prosecu-tion history to first determine the ordinaryand customary meaning of the term “highfrequency.” The Federal Circuit agreedthat, based on the dictionary definitions of“high frequency,” one skilled in the art atthe time of the patent application wouldhave understood “high frequency” tomean a frequency between 3 to 30 MHz.Consulting the intrinsic record, the FederalCircuit found that the specification andprosecution history do not clearly suggest aspecial definition for the term “high fre-quency.” Rather, they support the ordinarymeaning as being 3 to 30 MHz.

IPD argued that the use of the phrase“conventional television receivers” in con-nection with “high frequency transmission”would have meant to a person skilled inthe art that the inventor was referring to aVHF system operating in at least a range of54 to 216 MHz, the operating frequenciesof conventional television receivers at thattime. The Federal Circuit, however, con-cluded that the ordinary meaning of “highfrequency” helps define the term “conven-tional television receivers,” not the reverse.

The district court had also found claim1 invalid under 35 U.S.C. § 112, paragraph2, as indefinite for two reasons. First, thedistrict court had found that the patentfails to disclose a structure clearly linked tothe claimed “light beam demodulationmeans.” The parties did not dispute thatthe structure in the specification linked tothe recited “photo-sensitive detectormeans” was the photo-sensitive detectordescribed and shown in the specification.IPD argued that this same structure corre-sponded to the “light beam demodulationmeans.” The district court had concluded,however, that the “photo-sensitive detectormeans” and “light beam demodulationmeans” could not be the same structurebecause if they were, they could not be“responsive to” each other, as recited inthe claim. The Federal Circuit disagreed,however, and, pointing to testimony byboth experts that identified the correspon-ding structure, concluded that one skilledin the art would determine that the photo-sensitive detector disclosed in the specifica-tion and figures performed the claimed“light beam demodulation.”

The district court also found claim 1invalid because the term “common opticalfiber“ was indefinite. Claim 1 reads: “acommon optical fiber . . . extendingbetween an electro-optical transducer atsaid central station . . . and photo-sensitivedetector means.” The district courtassumed that a common optical fiber mustbe common over the entire distancebetween the transducer and the detector,which was not disclosed in the patent.

The Federal Circuit determined that thecommon optical fiber is a fiber that carriessignals for a plurality of subscribers. Thus,even if the fiber were viewed as consistingof multiple segments with a segment offiber branching off from it (“fiber tap”), itwould not preclude a person skilled in theart from considering such a multisegmentfiber leading to the detector to be a single

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“optical fiber” that is common (i.e., sharedby) the end-users served by it.Accordingly, the Federal Circuit reversedthe district court’s SJ ruling of invaliditywith respect to the “common fiber” term.

Validity of a Process PatentDoes Not Turn on Validity ofthe Product Patent

Brian M. Burn

[Judges: Clevenger (author), Newman,and Gajarsa]

In Torpharm, Inc. v. RanbaxyPharmaceuticals, Inc., No. 02-1590 (Fed.Cir. July 23, 2003), the Federal Circuitreversed a district court’s SJ of invalidity ofU.S. Patent No. 5,670,671 (“the ‘671patent”) for obviousness and remanded forfurther proceedings.

Torpharm, Inc. (“Torpharm”) owns the‘671 patent, which discloses a process forpreparing “improved Form 1 ranitidine,”an antiulcer medication. The ‘671 patentclaims a process for producing improvedForm 1 ranitidine by crystallizing ranitidinefrom a lower alcohol solution. The claimsalso include density limitations for theimproved Form 1 ranitidine product. It isthese density limitations that provideacceptable filtration and drying characteris-tics, and that distinguish “improved” Form1 ranitidine from Form 1 ranitidine. Theimproved Form 1 ranitidine product isclaimed in U.S. Patent No. 5,523,423 (“the‘423 patent”), which issued from a divi-sional of the application leading to the‘671 patent. The ‘423 patent was the sub-ject of a separate litigation, in which a dis-trict court held that the product claim toimproved Form 1 ranitidine was invalid byreason of a prior sale.

Torpharm sued Ranbaxy Pharmaceu-ticals, Inc. (“Ranbaxy”) for infringing the‘671 patent, and Ranbaxy moved for SJ ofinvalidity, contending that the ‘671 patenthad been allowed only because Torpharmrepresented to the PTO that the allowanceof the ‘423 patent, directed to theimproved Form 1 ranitidine product, madethe ‘671 patent allowable. As a result,argued Ranbaxy, the subsequent invalida-tion of the ‘423 patent rendered the ‘671patent invalid by reason of prosecution his-tory estoppel and collateral estoppel. Thedistrict court agreed and granted SJ ofinvalidity.

Emphasizing that there are no per serules relating the patentability of a productto the patentability of a process, and viceversa, the Federal Circuit held thatRanbaxy’s position suffered from three seri-ous deficiencies. First, the Federal Circuitdid not agree that Torpharm representedto the PTO during prosecution of the ‘671patent that the process claims were allow-able simply because the product claim wasallowed in the ‘423 patent. The Courtnoted that Torpharm advanced a numberof arguments during prosecution, includingthe argument that the prior art failed todisclose the use of a lower alcohol solutionduring recrystallization. As a result, accord-ing to the Federal Circuit, the district courtwas incorrect in characterizing Torpharm’sposition before the PTO as relying exclu-sively on the novelty of improved Form 1ranitidine.

The second problem with Ranbaxy’sposition, according to the Federal Circuit,was purely logical. Even if Torpharm’s soleargument during prosecution of the ‘671patent was that if the improved Form 1ranitidine product is patentable over theprior art, the process of making improvedForm 1 ranitidine must also be patentable,the fact that the product is later found

unpatentable does not automatically ren-der the process unpatentable as well.

Finally, the Federal Circuit held thateven if the PTO allowed the process claimsonly because the product was novel, itdoes not necessarily follow that the PTOwould never have allowed the processclaims. The Court noted that it is not thedistrict court’s responsibility to determinewhether or not the PTO would haveallowed the process claims had the productclaims lacked novelty.

In reversing the district court’s SJ ofinvalidity, the Federal Circuit concludedthat regardless of how Ranbaxy character-

ized the prosecution history of the ‘671patent, collateral estoppel from the litiga-tion invalidating the ‘423 patent does notrelieve the district court from the necessityof performing a standard obviousnessinquiry into the claims of the ‘671 patent.


DISCLAIMER:The case summaries reflect the understanding ofthe authors only and are not meant to conveylegal opinions or advice of any kind. The firm dis-claims any liability for any errors or omissions inthese summaries. This promotional newsletterdoes not establish any form of attorney-clientrelationship with our firm or with any of ourattorneys.

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In Last month at The Federal Circuit, certain terms, titles, and names of fed-eral agencies that are frequently referred to in text, appear in abbreviatedforms or as acronyms. These abbreviated forms and acronyms are listed below.

ALJ Administrative Law Judge ANDA Abbreviated New Drug ApplicationAPA Administrative Procedures ActAPJ Administrative Patent Judge Board Board of Patent Appeals and InterferencesCommissioner Commissioner of Patents and Trademarks CIP Continuation-in-PartDJ Declaratory Judgment DOE Doctrine of EquivalentsFDA Food & Drug AdministrationIDS Information Disclosure StatementIP Intellectual PropertyITC International Trade CommissionJMOL Judgment as a Matter of Law MPEP Manual of Patent Examining ProcedurePCT Patent Cooperation TreatyPTO United States Patent and Trademark Office SEC Securities and Exchange CommissionSJ Summary JudgmentSM Special Master

last the federalcircuit - finnegan...the federal circuit had ruled that sj of non-infringement had...

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