last the federalcircuit - finnegan · 2012-04-27 · claim term “substantially constant” is not...

EDITED BY VINCE KOVALICK

This publication brings you a synopsis of patent cases decided last month by the United StatesCourt of Appeals for the Federal Circuit based on slip opinions received from the court. You canreview and download the full text of each opinion by visiting our Web site (www.finnegan.com).Given the small number of precedential decisions reported in November and December 2002, thisedition includes those decisions from both months.

CLAIM TERM “SUBSTANTIALLY CONSTANT” IS NOT SO INDEFINITE AS TO INVALIDATEThe fact that the parties disagree about claim scope does not of itself render claim invalid as indefinite. Verve, LLC v. Crane Cams, Inc., No. 01-1417 (Fed. Cir. Nov. 14, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . .1

“UNIFORM FLEXIBLE FILM” IS NOT LIMITED TO UNIFORM THICKNESSPatent terms have meaning at time of application and are not subject to later revision by a supply contract. Middleton, Inc. v. Minnesota Mining andMfg. Co., No. 02-1151 (Fed. Cir. Nov. 27, 2002) . . . . . . . . . . . . . . . . . . . .1

PATENTEE’S THREATENING LETTERS WERE NOT UNFAIR COMPETITIONPatentees do not violate the rules of fair competition by making accurate representations and are allowed to make representations that turn out to be inaccurate, provided they make them in good faith. Golan v. Pingel Enter., Inc., No. 01-1626 (Fed. Cir. Nov. 7, 2002) . . . . . . . . . . . . . . . . . . . .2

UNAMBIGUOUS TERM GIVEN ITS ORDINARY MEANINGAmong several common meanings, the specification serves to point awayfrom the improper meanings and toward the proper meaning. Inverness Med. Switz. GmbH v. Princeton Biomeditech Corp., No. 01-1188 (Fed. Cir. Oct. 31, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

DISTRICT COURT PROPER FOR GOVERNMENT-CONTRACTOR PATENT DISPUTE28 U.S.C. § 1498(a) provides an affirmative defense for a government contractor, not a jurisdictional bar. Toxgon Corp. v. BNFL, Inc., No. 02-1302(Fed. Cir. Dec. 10, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

COMBINED REEXAM PROCEEDINGS LEADS TO REJECTION OF CLAIMSUntil a PTO matter has been completed, the PTO may reconsider an earlier action. In re Bass, No. 02-1046 (Fed. Cir. Dec. 17, 2002) . . . . . . . . .6

COURT VACATES PRIOR DECISION FOR EN BANC REHEARINGElan Pharms., Inc. v. Mayo Found., 304 F.3d 1221 (Fed. Cir. 2002) . . . . . . . .7

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Claim Term “SubstantiallyConstant” Is Not So Indefiniteas to Invalidate

Gordon Klancnik

[Judges: Newman (author), Lourie, andClevenger]

In Verve, LLC v. Crane Cams, Inc., No. 01-1417 (Fed. Cir. Nov. 14, 2002), the FederalCircuit vacated a district court’s SJ of indefi-niteness under 35 U.S.C. § 112, ¶ 2,reversed a judgment of invalidity for antici-pation under 35 U.S.C. § 102, and remand-ed.

The patent-in-suit, U.S. Patent No.4,850,315 (“the ’315 patent”), relates tostronger push rods for internal-combustionengines used, for example, in automobiles.Push rods are part of the mechanism thatopen and close air intake and exhaust valveswithin the cylinders of engines. Specifically,the ’315 patent claims a hollow push rodmade from a single piece of metal with adiameter that is larger at the middle portionthan at either end.

The claims recite a hollow push rod hav-ing a “substantially constant wall thickness”throughout the length of the tube. Becausethe intrinsic evidence did not define “sub-stantially constant,” the district court heldthe claims invalid as indefinite. The FederalCircuit concluded that the district courtemployed the wrong standard, ruling thatthe district court should have focused onwhether a person of ordinary skill in the artwould understand the term rather than onwhether the intrinsic evidence alone provid-ed a clear definition. The Court observedthat “substantially” often serves a valid pur-pose in patent claims. In fact, the verynature of the invention may necessitate itsusage, so that the patentee can claim thetrue scope of the invention. Accordingly,the Court vacated the indefiniteness deci-sion and remanded.

The Federal Circuit also reversed the dis-trict court’s judgment of anticipation by twoJapanese patents. Notably, the asserted ref-erences merely disclosed hollow push rodshaving a uniform, cylindrical diameter withslightly narrower spherical-shaped ends.The Court essentially determined that theclaims, when properly construed, did notcover such a configuration. Accordingly, the’315 patent was not invalid for anticipation.

“Uniform Flexible Film” Is NotLimited to Uniform Thickness

Donald D. Min

[Judges: Rader (author), Clevenger, andLinn]

In Middleton, Inc. v. Minnesota Miningand Manufacturing Company, No. 02-1151(Fed. Cir. Nov. 27, 2002), the Federal Circuitreversed and remanded a SJ that U.S. PatentNo. 4,944,514 (“the ’514 patent”) was notinfringed, either literally or under the DOE.The Federal Circuit found that the districtcourt had failed to correctly construe theclaims and failed to determine whetherprosecution history barred Middleton, Inc.(“Middleton”) from relying on the DOE.

Middleton owns the ‘514 patent, whichis directed to a material for finishing the topsurface of a floor. The claims of the ‘514patent recite a floor covering having a“material for finishing” and a “uniform flexi-ble film.”

Minnesota Mining and ManufacturingCompany (“3M”) makes and sells a floor-covering product called Floorminders, whichis applied to a smooth floor, but uses a tex-tured surface film. Middleton sued 3M,alleging that the Floorminders productinfringed the ’514 patent. The district courtconstrued the phrase “uniform flexible film”to mean a film having a uniform thickness.However, the district court granted SJ of

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noninfringement based on a different claimlimitation (“material for finishing”). In aprevious decision, the Federal Circuit hadfound that the district court had erred in itsclaim construction of the phrase “materialfor finishing” and reversed the SJ of nonin-fringement. In that opinion, the FederalCircuit stated that the parties did not appearto dispute that the “uniform” limitationrequired a uniform thickness. On remand,the district court adopted this statement asits claim construction and granted SJ ofnoninfringement in favor of 3M, becausethe textured surface film of 3M’sFloorminders product did not have a uni-form thickness. Middleton appealed for asecond time.

The Federal Circuit found that the dis-trict court had erred in adopting this state-ment as its claim construction. Accordingly,the Court construed this phrase, de novo,based on the ordinary dictionary definitionand the intrinsic evidence.

The Federal Circuit ruled that the mostimportant indicator of the meaning of the“uniform” limitation was its usage in thecontext of floor coverings. In this context,that phrase encompassed a floor coveringhaving the same form throughout. TheFederal Circuit explained that many differenttypes of floor surfaces may have varyingthicknesses, but nonetheless, exhibit thesame form throughout.

The Federal Circuit also considered theprosecution history of the ‘514 patent.During the prosecution of a related patent,the applicant asserted that the claimed uni-form flexible film assured a uniform thick-ness required for the surfaces of bowlingalleys. However, the Federal Circuit foundthat these assertions were limited to thecontext of bowling-alley surfaces and didnot limit the broader claims of the ‘514patent that were directed toward floor sur-faces in general. Therefore, the FederalCircuit found that the “uniform” limitationas claimed in the ‘514 patent was entitledto an interpretation that included floor cov-

erings having a consistent nonuniform thick-ness or other “uniform” irregularities.

The Court also commented onMiddleton’s argument that contractsbetween 3M and its suppliers permittingmanufacturing tolerances should be used asevidence in construing the patent terms inthe claims. The Federal Circuit emphasizedthat the meaning of patent terms dependson the usage of those terms in context byone of skill in the art at the time of applica-tion. It noted that a contract may supplysome insight into the understanding ofskilled artisans at the time of invention, butthat no such evidence had been offered.

The Federal Circuit also found that theSupreme Court’s decision in Festo Corp. v.Shoketsu Kinzoku Kogyo Kabushiki Co., 122 S. Ct. 1831 (2002), required the districtcourt to consider infringement under theDOE.

Patentee’s Threatening LettersWere Not Unfair Competition

Andrea L. Anderson

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

In Golan v. Pingel Enterprise, Inc., No. 01-1626 (Fed. Cir. Nov. 7, 2002), the FederalCircuit affirmed the district court’s grant ofSJ dismissing Ilan Golan’s federal and stateantitrust claims on the ground that Golanhad introduced no evidence that PingelEnterprise, Inc. (“Pingel”) possessed monop-oly power in the relevant market. TheFederal Circuit also affirmed the districtcourt’s SJ dismissing Golan’s federal andstate unfair-competition claims and statetort claims because Golan did not presentsufficient evidence that Pingel made itsaccusation of patent infringement in badfaith. Finally, the Federal Circuit reversedthe district court’s grant of SJ on the federal

and state unfair-competition claims predi-cated upon Pingel’s allegations of trademarkinfringement because the district court hadapplied the wrong law.

Pingel and Golan manufacture after-market motorcycle fuel valves, called pet-cocks, designed for use with Harley-Davidson motorcycles. Pingel markets itspetcock under the POWER-FLO mark, andGolan uses the PEAK FLOW mark. Golanalso markets fuel filters for Harley-Davidsonmotorcycles under the PEAK FLOW mark. In1997, after receiving a promotionalbrochure from Rivera Engineering (“Rivera”)that advertised that Golan’s fuel filter wasflow rated at 6.3 gallons per minute, Pingelobtained a filter, tested it, and determinedthat it failed to exhibit the advertised flowrate. Pingel wrote to Rivera stating that ithad tested Golan’s PEAK FLOW filter andthat the filter would not flow at a rate of 6gallons per minute on any gravity system.

In 1998, Golan began selling its PEAKFLOW petcock. Pingel obtained a sampleand determined that it infringed a Pingelutility patent (U.S. Patent No. 4,250,921(“the ‘921 patent”)), a Pingel design patent(U.S. Patent No. 363,533 (“the ‘533patent”)), and Pingel’s POWER-FLO trade-mark. On October 30, 1998, through itspatent attorney, Pingel sent Golan a ceaseand desist letter claiming that the Golanpetcock infringed the ‘921 and ‘533 patentsand its POWER-FLO trademark. The letterthreatened Golan with legal action should itrefuse to cease manufacturing and sellingthe petcocks. Pingel also sent letters toeach of its twenty-two distributors allegingthat Pingel was taking immediate action tohalt the production and sale of this product.On February 5, 1999, Pingel, through itsattorney, sent a letter to Rivera demandingthat Rivera cease selling Golan’s PEAK FLOWpetcock.

After sending these letters, Pingel con-tacted two additional outside attorneys toassess the likelihood of prevailing in apatent-infringement action. The first attor-

ney issued an oral opinion. The secondattorney, in his written opinion, informedPingel that the issues were “close.” The sec-ond attorney also erroneously advised Pingelthat the ‘921 patent would expire on April23, 1999, twenty years after its filing.However, the ‘921 patent claimed priorityfrom a divisional application filed May 10,1978, and, therefore, the ‘921 patent hadalready expired on May 10, 1998, beforePingel sent the letters to its distributors,Rivera, or Golan.

In March 1999, Golan filed a DJ actionfor noninfringement of several patentsowned by Pingel, including the two patentsreferenced in Pingel’s cease and desist letterand for noninfringement of the POWER-FLOtrademark. Golan also asserted federal andstate antitrust claims and federal and stateunfair-competition claims, asserting thatPingel made false or misleading statementsregarding the performance of Golan’s pet-cock to Rivera, and that Pingel’s allegationof patent infringement was in bad faithbecause Pingel’s ‘921 patent had expired atthe time it wrote its letters to its distributors,Rivera, and Golan, and because Pingel neverhad an intent to bring a lawsuit againstGolan. Pingel asserted counterclaims forinfringement of the ‘533 design patent, andfor federal trademark infringement andunfair competition related to Golan’s use ofthe PEAK FLOW mark. Pingel admitted thatthe ‘921 patent expired on May 10, 1998,but that it lacked knowledge of whenGolan’s petcock was first offered for sale,although discovery later revealed that Golanmade its first sales of the accused petcockafter the expiration of Pingel’s patent.

Golan moved for partial SJ of nonin-fringement of the ‘533 design patent and ofthe ‘921 patent. In response, Pingel filed astatement of nonliability and covenantednot to sue Golan or any of its customers forinfringement of the expired ‘921 patent.The district court granted Golan’s motionfor SJ on the ‘533 design patent and dis-missed Golan’s DJ claim on the ‘921 patent

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as moot. Neither party appealed these deci-sions.

Pingel then moved for SJ on Golan’stort, unfair competition, and antitrustclaims. The district court held that the com-munications were not actionable and, there-fore, granted Pingel’s SJ. The district courtheld that Pingel’s communication withRivera regarding the Golan filter’s flow ratewas not actionable because Golan had pre-sented no evidence that Pingel’s statementwas untrue. The district court also held thatPingel’s communications with its distribu-tors, Rivera, and Golan regarding Golan’salleged patent and trademark infringementwere not actionable because Golan had notpresented clear and convincing evidencethat Pingel had made the assertions ofinfringement in bad faith.

The Federal Circuit affirmed the districtcourt’s grant of SJ on Golan’s state and fed-eral antitrust claims on the alternate groundthat Golan had failed to make the requisiteprima facie showing that Pingel possessedmonopoly power in the relevant marketunder both the Sherman Act, 15 U.S.C. § 1et seq., and the Cartwright Act, theCalifornia antitrust statute, Cal. Bus. & Prof.Code § 16700 et seq. The Federal Circuitalso affirmed the district court’s grant of SJon Golan’s federal and state unfair-competition claims and state tort claimsarising out of Pingel’s letter to Rivera regard-ing the flow rate of Golan’s filters becauseGolan failed to present evidence sufficient toraise a genuine issue of material fact thatPingel’s statement was false or misleading.Rather, Golan offered only the argumentthat Pingel’s statement could be interpretedas a comment on the performance of the fil-ter element found in the Golan fuel filter,which according to Golan, flowed at theadvertised rate. The Federal Circuit rejectedthis interpretation, noting that Pingel’s state-ment plainly referred to the flow rate of thefuel filter in a gravity system and not to aparticular element of the filter.

Regarding Golan’s federal and stateunfair-competition claims arising out of

Pingel’s accusations of patent infringement,the Federal Circuit noted that a finding ofbad faith is proper only where there is clearand convincing evidence that the patenteemade objectively false allegations withknowledge of their incorrectness or falsity,or with disregard for either. Here, the evi-dence revealed that Pingel had relied on itsattorneys’ calculations of the expiration dateof the patent and only learned that theadvice was incorrect after sending its letters.The Court also pointed out that, even if apatentee has no intention of initiating suit,allegations of infringement are not necessar-ily made in bad faith, because the decisionto initiate a suit often involves business-related concerns as well as an evaluation ofrelevant facts and legal issues. Thus, in theabsence of clear and convincing evidence ofbad faith, the Federal Circuit affirmed thedistrict court’s grant of SJ, dismissing thefederal and state unfair-competition claimspredicated upon Pingel’s accusations ofpatent infringement.

Finally, the Federal Circuit reversed thedistrict court’s grant of SJ on the federal andstate unfair-competition claims predicatedon Pingel’s assertion of trademark infringe-ment because the district court and the par-ties had erroneously presumed that FederalCircuit law governed these claims. TheFederal Circuit noted that Ninth Circuit lawshould govern any claims arising under theLanham Act, and that state law should gov-ern entirely the California unfair-competitionand business-tort claims. Accordingly, theCourt remanded.

Unambiguous Term Given ItsOrdinary Meaning

Carol L. Cole

[Judges: Dyk (author), Rader, and Bryson]

In Inverness Medical Switzerland GmbH v.Princeton Biomeditech Corp., No. 01-1188

(Fed. Cir. Oct. 31, 2002), the Federal Circuitvacated the district court’s judgment ofnoninfringement of U.S. Patent Nos.5,622,871; 5,602,040; and 5,656,503, andremanded the case for further proceedings.The Court held that the phrase“mobility . . . is facilitated” must be given itsordinary meaning of the capacity to makemovement easier at any stage. Under thisclaim construction, issues of material factremained regarding infringement.

Unipath Diagnostics, Inc. (“Unipath”) isthe assignee of the three patents, whichrelate to a pregnancy-testing device.Unipath initiated an action against PrincetonBiomeditech Corporation (“Princeton”) forinfringement of the claims of the threepatents. Princeton later filed a motion for SJof noninfringement, which was initiallydenied. On reconsideration, the districtcourt granted Princeton’s SJ motion, findingthat the accused product did not infringethe claims because it did not facilitatemobility at the point of release, as claimed.

The Federal Circuit determined that thesole issue of claim construction concernedthe proper interpretation of the phrase“mobility of said labeled reagent within saidtest strip is facilitated by . . . a material com-prising sugar, in an amount effective toreduce interaction between said test stripand said labeled reagent.” Unipath assertedthat mobility need only be facilitated eitherat the time of release or during the subse-quent transit of the reagent, i.e., at sometime during the operation. The claim con-struction adopted by the district court, how-ever, required the sugar to help or improvethe release of the labeled reagent from thetest strip.

The Federal Circuit looked to the dic-tionary to determine the ordinary meaningof the word “mobility.” Finding multipledefinitions, the Court compared these defi-nitions to the specification and determinedthat the word “mobility” means “the capac-ity or facility of movement.” Based on thismeaning, the Federal Circuit determined

that the ordinary meaning of the phrase“mobility . . . is facilitated” is properly inter-preted as the capacity to make movementeasier. The claim language relied upon bythe district court was not directed to therecited facilitation of mobility in the pres-ence of sugar and, therefore, did not limitthe meaning of “mobility.” Moreover, theconstruction of “mobility” in the independ-ent claims, as determined by the districtcourt, was found to be wholly inconsistentwith the use of the term in the dependentclaims and the specification.

Looking at two particular instances inthe prosecution history of the patents, theFederal Circuit found that neither the pat-entee nor the PTO interpreted the term“mobility” as meaning the same as“release.” Accordingly, the Court vacatedthe judgment of the district court andremanded the case for consideration in viewof the revised claim construction.

In a related decision, Inverness MedicalSwitzerland GmbH v. Warner Lambert Co.,No. 01-1147 (Fed. Cir. Oct. 31, 2002), theFederal Circuit again vacated a SJ of nonin-fringement on these same patents based onerroneous construction of other claim terms.The second issue of claim construction relat-ed to the proper interpretation of the phras-es “said labelled reagent is dry on said teststrip” and “drying said labelled reagentonto a portion of said test strip.” The dis-trict court construed the phrases to requiredisposition “in contact with the top or outersurface of said test strip.” On appeal,Unipath asserted that the phrases should bemore broadly construed to include disposi-tion of the labelled reagent within the teststrip.

The Federal Circuit found that the dis-trict court had erred in its claim constructionbecause the ordinary meaning of the termswas supported by dictionary definitions, thespecification, and the prosecution history.Upon finding multiple dictionary definitionsfor the word “onto,” which has as its ordi-nary meaning two relevant alternatives, the

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Court determined that the word must beconstrued to encompass both alternatives.However, to confirm that the word encom-passes both alternatives, the Court looked tothe specification and the prosecution historyto determine if only one of the multiplemeanings was intended.

The specification was not so limiting,teaching only a preferred embodiment, nota restricted scope. Moreover, the Court wasnot convinced that the prosecution historyforeclosed the broader dictionary definitionthat encompasses both surface and internalpositions. For this reason, the Court heldthat the ordinary meaning of “on” and“onto” must control, wherein disposition ofthe labelled reagent “on” or “onto” the teststrip means disposition as a surface layer orwithin the test strip.

District Court Proper forGovernment-Contractor PatentDispute

Vince Kovalick

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

In Toxgon Corporation v. BNFL, Inc., No.02-1302 (Fed. Cir. Dec. 10, 2002), theFederal Circuit vacated a district court’sdecision dismissing a lawsuit by ToxgonCorporation (“Toxgon”) for lack of subject-matter jurisdiction.

In 1998, BNFL, Inc. (“BNFL”) enteredinto a fixed-price contract with theDepartment of Energy (“DOE”) to develop aprocess for treating and immobilizing cer-tain radioactive waste. GTS Duratek(“Duratek”) was a designated subcontractorto BNFL. The contract provided for a twenty-month period for the developmentof the technology necessary to remove theradioactive material. BNFL and Duratekthen developed a process that included the

use of a “pilot melter,” which is a single-chamber vitrification system that convertsnuclear waste into glass.

In May 2002, Toxgon filed suit againstBNFL and Duratek (collectively the“Defendants”) for infringement of U.S.Patent No. 4,299,611. The Defendantsmoved to dismiss for lack of subject-matterjurisdiction, claiming that the litigation mustproceed in the Court of Federal Claimsunder 28 U.S.C. § 1498(a).

Citing numerous precedents, the FederalCircuit explained that § 1498(a) acts as acodification of a defense and not as a juris-dictional statute. In other words, the Courtstated, § 1498(a) provides an affirmativedefense for applicable government contrac-tors, rather than a jurisdictional bar. Thus,the Court ruled, the district court has juris-diction over this matter, and, if appropriate,a defense arising under § 1498(a) should beresolved by SJ under Fed. R. Civ. P. 56,rather than a motion to dismiss under Rule12.

Combined Reexam ProceedingsLeads to Rejection of Claims

Vince Kovalick

[Judges: Mayer (author), Clevenger, andRader]

In In re Bass, No. 02-1046 (Fed. Cir.Dec. 17, 2002), Robert T. Bass owns U.S.Patent No. 4,473,026 (“the ‘026 patent”)directed to a fishing boat. In 1996, a thirdparty requested a reexamination of the ‘026patent based on a prior art design patent toWilliam Cargile, several Cargile brochures,and a National Fisherman publication(“Lucander”). Shortly thereafter, the samethird party requested a second reexamina-tion based on several other references. TheExaminer merged the two reexaminationproceedings and rejected the claims. The

Board affirmed the rejection and Bassappealed.

On appeal, Bass contended that in thefirst reexamination proceeding, the Examinerhad indicated allowance before receiving thesecond request for reexamination. Therefore,the PTO had erred in considering the Cargileand Lucander prior art in the second reexami-nation proceeding because it did not presenta substantial new question of patentability.

The Federal Circuit rejected this argu-ment, explaining that until a PTO matter iscompleted, including the first reexaminationproceeding in this case, the PTO may recon-sider any earlier action. Because, in this case,the PTO had not reviewed the Lucander andCargile references in a prior proceeding, thePTO was free to reconsider and ultimatelybase a rejection upon them.

Court Vacates Prior Decision forEn Banc Rehearing

On December 18, 2002, the FederalCircuit issued an order vacating the panel’sdecision in Elan Pharmaceuticals, Inc. v. MayoFoundation, 304 F.3d 1221 (Fed. Cir. 2002),which had been entered on August 30, 2002.In addition, the Court granted a petition forrehearing en banc.

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DISCLAIMER:The case summaries reflect the understandingof the authors only and are not meant to con-vey legal opinions or advice of any kind. Thefirm disclaims any liability for any errors oromissions in these summaries. This promotion-al newsletter does not establish any form ofattorney-client relationship with our firm orwith any of our attorneys.

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 APA 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 AdministrationIP 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 · 2012-04-27 · claim term “substantially constant” is not...

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