Articles Posted in US Court of Appeals for the Federal Circuit

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Under 42 U.S.C. 1485, the USDA's Rural Housing Service (RHS) makes loans for construction of affordable rental housing. From 1972-1982, each of 10 limited partnerships (with a common general partner, Olsen) entered into a 50-year loan agreement that stated that each borrower could pay off the loan and convert its properties to conventional housing after 15 or 20 years. The 1987 Emergency Low Income Housing Preservation Act, 42 U.S.C. 1472(c)), provided that before accepting prepayment, the USDA must attempt to enter into an agreement with the borrower. In 2002, Olsen was negotiating to sell to a nonprofit organization. He notified the RHS of “intent . . . to convert [some] units into conventional housing” and sought approval to pay off the mortgages. RHS responded with a checklist. Olsen did not proceed; the potential acquirer decided against purchasing the properties. In 2011, Olsen submitted more definite prepayment requests. RHS responded with an incentive offer concerning four properties, which Olsen accepted, remaining in the program. For three other properties, RHS informed Olsen that prepayment was not an option. Olsen purportedly believed that pursuing prepayment on any properties was futile. He did not submit additional applications. In 2013, the partnerships sued, alleging that the government, through the 1987 enactment or the 2011 correspondence, violated their prepayment rights. The Federal Circuit reversed the Claims Court's dismissal. The 2002 correspondence did not trigger the RHS’s duty to accept prepayment; RHS did not take any steps inconsistent with prepayment. The government did not breach its contractual obligation in 2002. Because the alleged breaches occurred no earlier than 2011, the contract claims are not barred by the six-year limitations period. The Claims Court implicitly premised the dismissal of takings claims on the same erroneous rationale. View "Airport Road Associates, Ltd. v. United States" on Justia Law

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AIA sued Avid for infringement of patents directed to research technologies stemming from the discovery of a genetic mutation that is associated with early-onset familial Alzheimer’s disease. Mullan is named as the sole inventor of both patents. Avid responded that AIA lacked standing to assert the patents and that Sexton, AIA’s founder, and Mullan orchestrated a scheme to appropriate for themselves inventions from Imperial College in London and the University of South Florida. AIA claimed that Dr. Mullan was properly named as sole inventor and that his employer, USF, waived any ownership rights. The district court held a jury trial on standing, in which 12 witnesses testified and over 200 exhibits were introduced. The jury determined that USF did not knowingly and intentionally waive its ownership rights and that Dr. Hardy was a co-inventor; the court found AIA lacked standing and entered judgment for Avid. The Federal Circuit summarily affirmed. Avid sought attorney’s fees. The district court allowed the parties to submit briefing, evidence, and declarations and held a hearing, then awarded Avid $3,943,317.70 in fees. The Federal Circuit affirmed, rejecting AIA’s argument that the Seventh Amendment requires a jury trial to decide the facts forming the basis to award attorney’s fees under Patent Act section 285. The district court did not err by making factual findings not foreclosed by the jury’s verdict on standing; AIA’s due process rights were not violated. View "AIA America, Inc. v. Avid Radiopharmaceuticals" on Justia Law

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The Biologics Price Competition and Innovation Act, 42 U.S.C. 262, establishes a scheme for adjudicating claims of patent infringement in the FDA's approval of “biological products.” To obtain FDA approval, the sponsor of a new biological product must demonstrate that it is “safe, pure, and potent.” For a “biosimilar” product based on an approved “reference” product, a party may submit an abbreviated “subsection (k)” application that “piggybacks” on the showing made for an approved reference product but must provide the reference product's sponsor with its subsection (k) application and information that describes the manufacturing process. The parties then collaborate to identify patents for immediate litigation. The second phase is triggered by the applicant’s notice of commercial marketing and involves any patents that were included on the lists but not previously litigated. Hospira's subsection (k) application sought approval of a biosimilar of EPOGEN®, Amgen’s FDA-approved product, Although Amgen asserted that Hospira failed to disclose the composition of the cell-culture medium used during manufacturing, the parties began identifying patents. Amgen claimed that it could not assess the reasonableness of asserting infringement claims concerning other patents for culturing cells and moved to compel discovery on the composition of Hospira’s cell-culture medium in its suit on listed patents. The court denied Amgen’s motion, stating that the information had no relevance to the asserted patents. Amgen appealed that interlocutory order. The Federal Circuit dismissed, holding that it lacked jurisdiction under the collateral order doctrine and that Amgen failed to satisfy the prerequisites for mandamus. View "Amgen, Inc.. v. Hospira, Inc.." on Justia Law

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NexLearn sued Allen in Kansas, alleging patent infringement and breach of contract. The companies had entered into a nondisclosure agreement to allow Allen to try NexLearn’s software, SimWriter®. Allen accessed SimWriter several times, then stated it was no longer interested in a deal with NexLearn, and developed its software, ZebraZapps. The agreement stated Kansas law governs the agreement. Allen, a Minnesota corporation with its principal place of business in Minnesota, argued it was not subject to Kansas jurisdiction, due to its limited contacts with the forum, which amounted to a single sale unrelated to ZebraZapps, and represented less than 1% of its five-year revenue. It argued the choice-of-law provision did not subject it to Kansas jurisdiction because NexLearn’s contract claim was supplemental to its patent claim, requiring NexLearn to establish personal jurisdiction over its infringement claim to bring its contract claim. NexLearn responded that Allen agreed to a License Agreement when it accessed SimWriter, specifying that “any dispute arising out of or related to this Agreement or the Product” must be brought in Kansas; that Allen “continually sent direct emails regarding ZebraZapps” to NexLearn employees; that Allen included Kansas in the dropdown menu on its ZebraZapps website; and summarized Allen’s activities with a trade association, which disseminated a magazine to Kansas residents that included Allen’s advertisement. The Federal Circuit affirmed dismissal for lack of jurisdiction. Allen’s website, plus its contacts with NexLearn create only an “attenuated affiliation” with Kansas, not a “substantial connection” as required for specific jurisdiction. View "NexLearn, LLC v. Allen Interactions, Inc." on Justia Law

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Presumptive service connection exists for veterans who served in the Persian Gulf War and have chronic: undiagnosed illness; medically unexplained chronic multisymptom illness (MUCMI); or any diagnosed illness as determined by the Secretary, 38 U.S.C. 1117(a)(2). VA regulations define MUCMI as “a diagnosed illness without conclusive pathophysiology or etiology, that is characterized by overlapping symptoms and signs and has features such as fatigue, pain, disability out of proportion to physical findings, and inconsistent demonstration of laboratory abnormalities. Chronic multisymptom illnesses of partially understood etiology and pathophysiology, such as diabetes and multiple sclerosis, will not be considered medically unexplained.”. Both the statute and regulation identify sleep disturbances and signs or symptoms involving the respiratory system as possible MUCMI manifestations. The VA revised its M21-1 Manual, changing the definition of MUCMI to require “both an inconclusive pathology, and an inconclusive etiology.” Under the subsection “Signs and Symptoms of Undiagnosed Illnesses or MUCMIs,” the VA added, “Sleep apnea cannot be presumptively service-connected (SC) under the provisions of 38 C.F.R. 3.317 since it is a diagnosable condition.” The Federal Circuit dismissed a veterans’ group’s petition for review for lack of jurisdiction, reasoning that the revisions are not binding and not reviewable under 38 U.S.C. 502. View "Disabled American Veterans v. Secretary of Veterans Affairs" on Justia Law

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Snyder represented a veteran, Beck, under a 2001 fee agreement (38 U.S.C. 5904). Eight months later, Snyder requested the Board of Veterans’ Appeals to cancel his fee agreement. In 2003 the VA awarded past-due benefits based on a 100% disability rating effective 1992. Snyder sought attorney fees. A VA regional officer (RO) determined that Snyder was entitled to $41,920.47, deductible from the past-due benefits. Beck filed notice of disagreement. Beck died. His widow sought to recover the disputed fees as accrued benefits. The RO denied that request. The Board dismissed Beck’s dispute over attorney fees, citing 38 C.F.R. 20.1302, and remanded Mrs. Beck’s claim. The RO determined Mrs. Beck could not recover the disputed attorney fees because her husband’s claim ceased to exist upon his death. She appealed. The VA’s General Counsel published a precedential opinion stating: A claim, pending at the time of a veteran’s death, challenging an attorney’s entitlement to payment of attorney fees under section 5904 from the veteran’s retroactive periodic monetary benefits may provide a basis for an accrued benefits claim under section 5121, because such a claim concerns entitlement to periodic monetary benefits allegedly due and unpaid to the veteran at the time of death. The Federal Circuit dismissed Snyder’s appeal. That 38 C.F.R. 20.1302 requires dismissal of a veteran’s appeal upon his death has no bearing on a claimant’s separate entitlement to accrued benefits under section 5121. The attorney fee dispute remains pending. View "Snyder v. Secretary of Veterans Affairs" on Justia Law

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The District Court for the Northern District of Texas dismissed, for lack of personal jurisdiction, New World’s declaratory judgment complaint against FGTL, a wholly owned subsidiary of the automaker Ford Motor Company. FGTL had previously filed an infringement suit against New World in the Eastern District of Michigan. The Federal Circuit affirmed the dismissal of the declaratory judgment action. Both FGTL and the Ford Motor Company are incorporated in Delaware and headquartered in Michigan. FGTL does no business in Texas and neither maintains an office nor has any employees in Texas. FGTL does not make or sell automobiles or automotive products; it owns, manages, and licenses intellectual property for Ford. FTGL’s pertinent contacts with Texas are limited to the cease and desist letters. While those letters may be sufficient to constitute minimum contacts with the forum, they are not sufficient to satisfy the fairness part of the test for specific personal jurisdiction. View "New World International, Inc. v. Ford Global Technologies, LLC" on Justia Law

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Rothschild alleged that ADS’s home security system infringed its 090 patent. Rothschild has filed numerous lawsuits against others alleging infringement of the 090 patent. ADS filed an answer and counterclaims and sent Rothschild an email alleging that the patent covered patent-ineligible subject matter (35 U.S.C. 1011) and that prior art anticipated claim 1 (35 U.S.C. 102(a)(1)). ADS offered to settle if Rothschild paid ADS $43,330 for attorney fees and costs. Rothschild rejected ADS’s offer. ADS moved for judgment on the pleadings, sending Rothschild an FRCP 11(c)(2) Safe Harbor Notice, with copies of a proposed Rule 11(b) motion for sanctions and prior art that purportedly anticipated the claim. Rothschild voluntarily moved to dismiss. ADS opposed and filed a cross-motion for attorney fees, arguing that Rothschild’s suit was objectively unreasonable because Rothschild knew or should have known that claim 1 covers patent-ineligible subject matter and was anticipated. The Federal Circuit reversed the holding that Rothschild had not engaged in conduct sufficient to make the litigation “exceptional” for purposes of section 285 attorney fees. Whether a party avoids or engages in sanctionable conduct under Rule 11(b) is not the appropriate benchmark; a court may award fees in the rare case in which a party’s unreasonable conduct—while not necessarily independently sanctionable—is so exceptional as to justify an award. View "Rothschild Connected Devices Innovations, LLC v. Guardian Protection Services, Inc." on Justia Law