Fresh From the Bench: Latest Precedential Patent Case
CASE OF THE WEEK
Sequoia Technology, LLC v. Dell, Inc., Appeal Nos. 2021-2263, -2264, -2265, -2266 (Fed. Cir. Apr. 12, 2023)
In an appeal from a stipulated judgment of noninfringement and invalidity following an adverse claim construction ruling from the U.S. District Court for the District of Delaware, the Federal Circuit addressed the lower court’s construction for “computer-readable recording medium” (CRM), “disk partition,” and “logical volume.” The Federal Circuit held that the district court’s claim construction for the CRM term was in error and so reversed the district court’s ineligibility determination under 35 U.S.C. § 101. However, the Federal Circuit agreed with the district court’s claim construction for “disk partition” and “logical volume,” and so affirmed the district court’s noninfringement determination.
The technology at issue is digital storage. The subject patent explains that servers with important data can use “Redundant Array of Independent Disks” (RAID) to store the same data on multiple hard disks. The specification further notes how a virtual disk drive—also known as a “logical volume”—can encompass multiple physical disk drives. A logical volume manager can implement the RAID technique with software to construct a logical volume. The patent explained that a problem with conventional logical volume managers is that metadata may be too large to manage in huge storage structures and processing speed is too slow when modifying metadata. When managing a logical volume, the huge size of metadata may delay system booting time and use too much memory.
ALSO THIS WEEK
Healthier Choices Management Corp. v. Philip Morris USA, Inc., Appeal No. 2022-1268 (Fed. Cir. Apr. 12, 2023)
In this case, the Federal Circuit reversed a decision from the Northern District of Georgia dismissing appellant Healthier Choice’s patent infringement complaint against Philip Morris, denying leave to amend, and awarding Philip Morris attorneys’ fees under 35 U.S.C. § 285. Healthier Choice’s asserted patent was directed to an electronic cigarette or pipe requiring “a combustion reaction” in the reservoir, and Philip Morris contended that its accused IQOS system, marketed as a “heat-not-burn” system, could not meet the “combustion” limitation in the claims. In support, Philip Morris pointed to its own self-reported “heat-not-burn” materials submitted to the Food and Drug Administration, which Healthier Choice had attached to its original complaint and which the district court had relied on in granting dismissal for failure to state a claim. However, both Healthier Choice’s original complaint and proposed amended complaint had contained detailed allegations—including as supported by an expert report with its proposed amended complaint—that its own testing showed that the IQOS system in fact involved a combustion reaction within the meaning of the claims.
In reversing the district court’s decision, the Federal Circuit provided a detailed analysis of Eleventh Circuit case law concerning the effect of statements in exhibits attached to complaints, and when allegations in the complaint contradicting or disavowing such statements should be read to control for purposes of a dismissal analysis. The Court concluded that the original complaint allegations were plainly concrete and specific enough to overcome any contradictory statements in the attached materials, and that the proposed amended complaint—which omitted any reference to the FDA materials and incorporated expert testimony supporting Healthier Choice’s contentions—presented an even stronger case against dismissal. The Federal Circuit thus reversed the dismissal and vacated the district court’s award of attorneys’ fees, but stopped short of reassigning the case to a different judge on remand as requested by Healthier Choice.
The opinion can be found here.
UCB, Inc. v. Actavis Laboratories UT, Inc., Appeal No. 2021-1924 (Fed. Cir. Apr. 12, 2023)
In a consolidated appeal from two rulings from the District Court of Delaware, the Federal Circuit addressed how to evaluate anticipation when a patent-in-suit and the prior art cover overlapping ranges, and when commercial success can overcome a presumption of obviousness. The patent-in-suit claimed a range of ratios, and the prior art disclosed an overlapping range of ratios. The district court had applied an analytical framework used when prior art discloses a point within a claimed range, not the framework used when prior art discloses a range overlapping a claimed range. The Federal Circuit found this to be legal error, and reversed the district court’s finding of anticipation. However, the Federal Circuit affirmed the district court’s finding that the patent-in-suit was obvious in light of prior art. A patent claiming a range is presumed obvious when prior art claims an overlapping range. To attempt to overcome this presumption, patentee UCB argued, among other things, that the commercial success of products embodying the patent-in-suit meant the invention was not obvious. The district court and the Federal Circuit disagreed, finding that UCB could not show a nexus between the patent-in-suit and the commercial success of the product, as necessary for commercial success to overcome the presumption of obviousness.
The opinion can be found here.
Sanderling Mgmt., Ltd. v. Snap Inc., Appeal No. 2021-2173 (Fed. Cir. Apr. 12, 2023)
In another case concerning Section 101, the Federal Circuit affirmed a district court dismissal of a litigation on the basis that the patents claimed ineligible subject matter. The patents concerned a “computerized method of distributing a digital image processing function.” The Court, agreeing with the district court, held that “the asserted patents are not directed to a specific improvement in computer functionality but, instead, to the use of computers as a tool; here, a tool to identify when a condition is met and then to distribute information based on satisfaction of that condition.” Sanderling argued that the district court erred in reading the claims at too high a level of distraction. The Federal Circuit disagreed, distinguishing McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1313 (Fed. Cir. 2016). Sanderling also complained that the district court failed to construe claim terms. But the Court held that “claim construction is not an inviolable prerequisite to a validity determination” and that “if claims are directed to ineligible (or eligible) subject matter under all plausible constructions, then the court need not engage in claim construction before resolving a Section 101 motion.” The Court further found that there were no fact disputes in relation to the second step of the analysis, and that the district court did not err by dismissing the case with prejudice, without granting leave to amend.
The opinion can be found here.
Arbutus Biopharma Corporation v. ModernaTX, Inc., Appeal No. 2020-1183 (Fed. Cir. Apr. 11, 2023)
In an appeal from an inter partes review final written decision finding a patent invalid as anticipated, the Federal Circuit affirmed. Arbutus’s U.S. Patent No. 9,404,127 (the ’127 Patent), naming three inventors, was directed to stable nucleic acid-lipid particles. Moderna filed a petition for inter partes review, relying on a different patent (the ’069 Patent) that was also owned by Arbutus. That patent names five inventors, including the three inventors of the challenged patent. While the ’127 Patent was filed during the pendency of the ’069 Patent, it does not claim priority to it. Certain publications were also incorporated by reference into both patents. Other publications were incorporated by reference into the ’069 Patent. The main issue was whether a claim limitation concerning 95% of particles having a non-lamellar morphology was inherently disclosed in the ’069 Patent. The PTAB found that, based on the varied disclosures of the ’069 Patent and its incorporated references, the 95% limitation was inherently disclosed. The Federal Circuit agreed that the ’069 Patent disclosure included the art that was incorporated by reference into it. The Court also agreed that the ’069 Patent inherently disclosed the 95% limitation. The Court disagreed that there was “only a probability” that the limitation would “result from controlling several variations of formulations and processes.” Rather “[t]his is a case where there are only a limited number of tools—five formulations and two processes—that a person skilled in the art would have to follow.” The Court also found that other claim limitations were inherently disclosed in the ’069 Patent. Of note, the Court addressed on oft-litigated issue concerning ranges, and when a disclosure of a single value or a range in prior art anticipates a range claimed in a patent.
The opinion can be found here.
Editors:
Nika Aldrich, IP Litigation Group Leader, Schwabe, Williamson & Wyatt, P.C.
Jason A. Wrubleski, Shareholder
Contributors:
Mario E. Delegato, Associate
Tyler Hall, Associate