Justia Civil Procedure Opinion Summaries

United owns three patents that recite systems for using a landline telephone connection for both voice communication and data transmission. They are directed to the use of exchanges that combine the voice and data components of the signal for transmission over the telephone line, and filters that separate those components so that they can be received as separate voice and data signals by a user. In 2002, United’s predecessor sued EarthLink, charging direct infringement because EarthLink offered its customers an Internet connection service based on a broadband digital communications technology, Asymmetrical Digital Subscriber Line (ADSL). EarthLink argued that the accused ADSL system did not include a “telephone device” as required by all asserted claims. The jury returned a general verdict of non-infringement. The Federal Circuit affirmed without opinion. In 2011, United sued CenturyTel and Qwest for infringing the same claims of the three patents. The district court dismissed on collateral estoppel grounds, noting that United did not articulate how the defendants’ systems were different from the systems that were the subjects of the Earthlink trial other than that the defendants’ services included telephone devices. The Federal Circuit reversed, reasoning that the earlier verdict could have been based on several grounds. View "United Access Techs., LLC v. CenturyTel Broadband Servs., LLC" on Justia Law

Teva’s patent covers a multiple sclerosis drug. When Sandoz tried to market a generic version of the drug, Teva sued for infringement. Sandoz countered that the patent was invalid because a claim that the active ingredient had “a molecular weight of 5 to 9 kilodaltons” was indefinite under 35 U. S. C. 112, for not stating which of three methods was used to determine that weight. The district court upheld the patent. Reversing, the Federal Circuit reviewed all aspects of claim construction de novo, including the determination of subsidiary facts. The Supreme Court vacated. When reviewing a district court’s resolution of subsidiary factual matters made during construction of a patent claim, the Federal Circuit must apply a “clear error,” not a de novo, standard of review. FRCP 52(a)(6) states: a court of appeals must not set aside “[f]indings of fact” unless they are “clearly erroneous.” Clear error review is particularly important in patent cases because a district judge has more opportunity to gain “familiarity with specific scientific problems and principles” than an appeals judge who must read a written transcript. When reviewing only evidence intrinsic to the patent, the judge’s determination is a determination of law, and the court of appeals will review that construction de novo; where the court needs to consult disputed extrinsic evidence to understand, for example, background science, courts need to make subsidiary factual findings about the extrinsic evidence. The ultimate construction of the claim is a legal conclusion subject to de novo review, but to overturn resolution of an underlying factual dispute, the appellate court must find that the judge, in respect to those findings, committed clear error. Here, the district court made a factual finding, crediting Teva’s expert’s account about how a skilled artisan would understand molecular weights. When the Federal Circuit reviewed the decision, it failed to accept that explanation without finding that the determination was “clearly erroneous.” View "Teva Pharma. USA, Inc. v. Sandoz, Inc." on Justia Law

In 2005, NeuroRepair retained Nath Law Group for prosecution of patent applications. NeuroRepair became dissatisfied and requested that Nath transfer its files to another law firm to continue prosecution before the USPTO. Nath withdrew from representation of NeuroRepair before the USPTO, but continued to assist NeuroRepair with other matters. NeuroRepair filed suit in 2009, alleging professional negligence, breach of fiduciary duty, breach of written contract, breach of oral contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, and false promise. Nath removed the case to federal court on the ground that it was “a civil action relating to patents.” After judgment in Nath’s favor in 2012, NeuroRepair appealed, challenging the court’s subject matter jurisdiction in light of the Supreme Court’s 2013 pronouncement in Gunn v. Minto. The Federal Circuit vacated, with instructions to remand to California state court; no federal issue is necessarily raised, because any federal issues raised are not substantial in the relevant sense. Federal court resolution of malpractice claims that do not raise substantial issues of federal law would usurp the important role of state courts in regulating the practice of law within their boundaries, disrupting the federal-state balance approved by Congress. View "NeoroRepair, Inc. v. Nath Law Grp." on Justia Law

ABB designs, produces, and sells exhaust-gas turbochargers and turbocharger parts, primarily for use in large, ocean-going vessels and in power plants. In 2012, ABB filed suit, accusing TurboUSA, Inc., and TurboNed Service B.V. of infringing two of ABB’s turbocharger-related patents. Claiming that the infringement was willful, ABB alleged that its former employee had improperly obtained and transferred to TurboUSA confidential information relating to ABB parts embodying its patented inventions. After filing its original complaint, ABB received information that, it alleges, suggested that Hans Franken, who worked for ABB until 1986 and is TurboNed’s former owner and TurboUSA’s current indirect owner, and his son Willem, who is TurboUSA’s current president, collaborated in the covert misappropriation of ABB’s trade secrets concerning the design, manufacture, servicing, and pricing of ABB’s turbochargers and parts, and added claims of misappropriation of trade secrets under Fla. Stat. 688.001–688.009 and of civil conspiracy to misappropriate trade secrets. Before discovery, the district court dismissed for failure to state a claim. The Federal Circuit reversed, concluding that the court relied on judgments about the merits that go beyond what is authorized at the complaint stage.View "ABB Turbo Sys. AG v. TurboUSA, Inc." on Justia Law

Versata sued Callidus, alleging infringement the 326, 304, and 024 patents, concerning management and tracking of sales information by a financial services company. Seven months after briefing on motions to dismiss or to transfer, the district court denied both. Callidus answered and counterclaimed, asserting its own patents against Versata and stated that it would seek post-grant review of Versata’s patents under the Transitional Program for Covered Business Method (CBM) Patents under the America Invents Act, 125 Stat. 284, 329–31. The district court declined to consider a stay until the Patent Trial and Appeal Board (PTAB) decided to institute CBM review. PTAB instituted CBM review for each patent, finding each challenged claim more likely than not directed to unpatentable subject matter. Callidus renewed its motion. The court granted a stay as to the 326 patent but denied it as to the other patents. The Federal Circuit reversed, finding that the court “clearly erred” in evaluating the burden-of-litigation factor exclusively through a backward-looking lens. The correct test focuses prospectively on the impact of the stay on the litigation, not on the past actions of the parties. Framed appropriately, it is clear that a stay will reduce the future burdens of litigation.View "Versata Software, Inc. v. Callidus Software, Inc." on Justia Law

AntiCancer, Inc. owns patents for technology related to the imaging of gene expression using a green fluorescent protein linked to a gene promoter. The fluorescent protein is derived from a species of green-glowing jellyfish, Aequorea victoria. The patented inventions are described as useful for drug discovery and evaluation in cancer control and treatment. The district court entered summary judgment of noninfringement, not on the substantive merits of any issue, but on a procedural aspect at the threshold of the litigation arising from application of the Patent Local Rules of the Southern District of California. The court imposed a fee-shifting sanction as a condition of permitting AntiCancer to supplement the Preliminary Infringement Contentions that found to be defective under Patent Local Rule 3.1. The Federal Circuit vacated the condition and remanded. Considering the language and purposes of the Local Rule, and the record of what Anti-Cancer disclosed in its Contentions and the limited, specific criticisms of the Contentions’ sufficiency, there was no reasonable basis for making the finding of bad faith that would be required to sustain the fees sanction.View "Anticancer Inc. v. Pfizer, Inc." on Justia Law

Benefit Funding sued Advance America, Regions Financial Corporation, CNU Online, and U.S. Bancorp, alleging infringement of the 582 patent, which covers a “system and method for enabling beneficiaries of retirement benefits to convert future benefits into current resources to meet current financial and other needs and objectives.” Several months into the litigation, U.S. Bancorp filed a petition with the Patent Trial and Appeal Board for post-grant review of the asserted claims under the Transitional Program for Covered Business Method Patents, America Invents Act, 125 Stat. 284, 329–31. The district court denied motions to stay. The Board instituted the requested covered business method review on the sole basis of subject matter eligibility under 35 U.S.C. 101, holding that “it is more likely than not that the challenged claims are unpatentable.” The district court then orally granted motions to stay. On interlocutory appeal, the Federal Circuit affirmed the stay. The only real argument against a stay concerned the authority of the Board to conduct the CBM review, those circumstances, so the district court did not abuse its discretion in granting the stay. View "Benefit Funding Sys., LLC v. Advance Am. Cash Advance Ctrs., Inc." on Justia Law

Jang assigned his patent rights to the companies in exchange for an upfront payment and a promise under defined circumstances to pay additional compensation if the companies sold stents covered by Jang’s patents. In 2005, Jang sued for breach of contract. In the first two appeals, the Federal Circuit addressed claim construction disputes relevant to whether the accused stents were covered by Jang’s patents. In the meantime, the companies sought ex parte reexamination with the U.S. Patent and Trademark Office, asserting invalidity. An examiner rejected the claims, which were canceled in issued reexamination certificates. In 2014, the district court denied the companies’ motion for summary judgment, finding that a patentee is not precluded from recovering royalties until the date the assignee first challenges the validity of the patent, so Jang could seek royalties prior to the challenge. The district court certified an interlocutory appeal. The Federal Circuit declined to transfer the petition to the Ninth Circuit despite the underlying contract claim and denied the petition for interlocutory review, stating that it is not clear that the identified legal issues will in fact be controlling, and each question depends on the resolution of factual issues not yet addressed by the district court.View "Jang v. Boston Scientific Corp." on Justia Law

Arlington manufactured and sold electrical connectors that could be snapped into place, including the Snap2It® brand connectors. Bridgeport sold a competing line of quick-connect fittings called Snap-In and Speed-Snap connectors. In 2002, Arlington filed suit, alleging that Bridgeport’s connectors infringed claim 1 of its 488 patent. Bridgeport signed a settlement agreement stating that the 488 patent was not invalid, was not unenforceable, and was infringed by Bridgeport’s 590-DCS and 590-DCSI Speed-Snap products. Bridgeport agreed to be “permanently enjoined from directly or indirectly making, using, selling, offering for sale or importing . . . the Speed-Snap products identified … 590-DCS and 590-DCSI or any colorable imitations.” The district court dismissed without prejudice and maintained jurisdiction to enforce the injunction. In 2005, Bridgeport redesigned its connectors to have a frustoconical leading edge and began selling the 38ASP and 380SP connectors (New Connectors), under the Whipper-Snap® brand. In 2012, Arlington filed a motion for contempt, alleging that Bridgeport’s New Connectors violated the 2004 Injunction. The district court acknowledged that the dispute centered around two limitations of claim 1 of the 488 patent, and construed those limitations, finding that Bridgeport directly and indirectly infringed the patent. The Federal Circuit dismissed an appeal for lack of jurisdiction because the contempt order is not a final judgment or otherwise appealable. View "Arlington Indus., Inc. v. Bridgeport Fittings, Inc." on Justia Law

The Board of Patent Appeals and Interferences declared an interference between Troy’s 451 patent, which claims priority to a provisional application filed in February 2005, and Samson’s 665 patent application, claiming priority to a provisional application filed in January 2005. Samson was named senior party. Troy’s priority motion alleged reduction to practice in early February 2004, conception prior to February 2004, inurement, and derivation. Samson’s motion alleged reduction to practice in late February or early March 2004 and conception in early February 2004. The Board concluded that Troy failed to prove actual reduction to practice in February 2004 and ordered all claims of the 451 patent cancelled. Troy had proffered new evidence of prior conception at the dates asserted, new evidence of actual reduction to practice in February 2004, and a claim that Samson engaged in “inequitable conduct” by including in its provisional application confidential drawings misappropriated from Troy. The district court affirmed, refusing to consider new evidence, not raised before the Board. The court acknowledged that Troy had proven, in state court, that Samson improperly submitted as its own at least one drawing of Troy’s and that Samson violated a confidentiality agreement in developing its inventions, but concluded that neither proved that Troy conceived all the elements and timely reduced them to practice. The Federal Circuit vacated. View "Troy v. Samson Mfg. Corp." on Justia Law