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Rothwell Figg Attorney and Member Steve Lieberman Quoted in IP Law360 Article

Article analyzes the top rulings by the Federal Circuit this year and their potential Implications for intellectual property law

April 17, 2015

Rothwell Figg attorney and member Steve Lieberman recently was quoted in IP Law360 article analyzing the top rulings by the Federal Circuit this year and their potential Implications for intellectual property law.

Click here to read the article online.

5 Recent Fed. Circ. Rulings IP Attys Need To Know
by Ryan Davis

Law360, New York (April 17, 2015, 5:11 PM ET) -- The Federal Circuit handed down important patent decisions in recent months that set rules for claim construction and stays in America Invents Act reviews, indicated how the court will apply the U.S. Supreme Court's Teva ruling and made clear that not reading court orders is no excuse for missing a deadline.

Here's a roundup of the top rulings by the Federal Circuit since January and their potential implications for intellectual property law.

In re: Cuozzo Speed Technologies LLC

This February ruling, the first ever issued by the Federal Circuit in an appeal of an America Invents Act review decision, brought important clarity for the new proceedings by giving the appeals court's blessing to the Patent Trial and Appeal Board's rules.

The court affirmed the PTAB's invalidation of Cuozzo Speed Technologies LLC's speedometer patent and held that the board is correct to use the so-called broadest reasonable interpretation standard for claim construction in all AIA reviews. It also ruled that the board's decisions to institute reviews cannot be appealed.

The Federal Circuit's resolution of those key issues in the popular proceedings was highly significant, since the ruling applies to the thousands of AIA reviews now pending, attorneys say.

"That decision is head and shoulders above anything else this quarter," said Charles Shifley of Banner & Witcoff Ltd.

The board has been using the broad claim construction standard in every AIA case, but Cuozzo and other patent owners, who worry that the standard makes it too easy for the board to invalidate patents, have argued that the board should instead use the narrower standard used in district court. The Federal Circuit rejected that argument and held the broad standard is appropriate.

"What it did was remove any doubt that the PTAB is doing the right thing by having this standard," said Benjamin Horton of Marshall Gerstein & Borun LLP.

The claim construction standard, coupled with the Federal Circuit's holding that institution decisions cannot be appealed, favors petitioners and should inspire even more accused infringers to seek inter partes review, or IPR, he said.

"It's definitely adding fuel to the fire that is IPR practice," he said.

While the ruling answered some burning questions about AIA reviews for now, the issues it addressed are still in flux. Cuozzo has asked the court to rehear the case en banc, while Congress is considering legislation that would prevent the PTAB from using the broad claim construction standard.

"It's interesting that the Federal Circuit decided this even though Congress is contemplating an explicit change," Horton said.

Intellectual Ventures II LLC v. JPMorgan Chase & Co.

The Federal Circuit filled in another blank space regarding AIA reviews in this April decision holding that the court cannot hear appeals of district court decisions denying a stay in an infringement case in favor of an AIA review unless the review has actually been instituted.

The court dismissed an appeal by JPMorgan, which had sought to put Intellectual Ventures' infringement case against it on hold after it challenged the patents-in-suit under the AIA's covered business method patent, or CBM, program. The judge denied the request, saying he didn't want to halt the case just to see if the PTAB decided to review the patents.

The Federal Circuit said it couldn't hear JPMorgan's appeal of that ruling, since the AIA only gives the court jurisdiction over appeals when a stay is denied after a review has been instituted.

The ruling provides useful guidance for litigants in the rapidly evolving realm of AIA jurisprudence, said Maya Eckstein of Hunton & Williams LLP.

"There are still so many open questions about CBMs and IPRs, but at least now we have an answer to that question," she said.

Although the ruling means that accused infringers can't appeal the denial of stay until after a review is instituted, some judges are inclined to grant stays even before institution, she noted. As a result, seeking a stay before a PTAB decision can still be a useful strategy.

"There's still a benefit to filing a motion to stay in many cases to educate the judge, and make sure the judge understands that there are serious questions about validity," she said.

Two-Way Media LLC v. AT&T Inc.

In a rare Federal Circuit patent ruling that provides an important lesson for attorneys across all practice areas, the appeals court affirmed a lower court's ruling that AT&T cannot appeal a $40 million patent infringement verdict against it because its attorneys from Sidley Austin LLP missed the appeal deadline.

In a March ruling, the court rejected Sidley's argument that it only missed the deadline because the email docket entries sent by the court did not make clear that the post-trial motions had been resolved and the 30-day window for filing an appeal had begun. The court said the firm had an obligation to read the actual rulings and not rely on the email notices.

"This is the most obvious instruction anyone can give that you had better open the notices and read the documents yourself," said Eckstein, who called the ruling a "scared straight" moment for all attorneys.

The case raised red flags for attorneys because it could have happened to anyone, yet involved a major law firm and a large damages award, she said. As a result, everyone now knows that relying on the emailed docket entries is not enough.

"It happened to Sidley, an experienced law firm with excellent lawyers, so there has to be many lawyers who were doing the exact same thing," she said.

No one can run the risk of missing a deadline in a high-stakes case like that, according to Steven Lieberman of Rothwell Figg Ernst & Manbeck PC. Following the ruling, firms are going to have to review their policies to make sure that doesn't happen, possibly by assigning a paralegal to read every document that comes in and certify that they did so, he said.

"It's probably going to change the practice of the docketing department of every firm in the country," he said.

Pacing Technologies LLC v. Garmin International Inc.

The February ruling, which affirmed that Garmin did not infringe Pacing's patent on a method of aiding a person's pacing during exercise, marked possibly the first time that the court has ruled that the way the object of the invention is described in the patent's specification can narrow what it covers, which attorneys say could complicate claim drafting in the future.

The court found that the patent asserted by Pacing, which makes an iPhone application that lets users sync their running to the beat of a song, is limited to a device that produces a "sensible tempo" and that Garmin's device that lets users set a target pace does not infringe because it does not play music or produce a beat.

The "sensible tempo" limitation came not from the claims of Pacing's patent, but from the patent specification, which described the object of the invention as producing a tempo, which the Federal Circuit said was "a clear and unmistakable statement" that the patent can't cover anything that doesn't produce a tempo.

Patents often include a discussion in the specification of the objects of the invention, so the court's decision should have owners of such patents concerned that such statements can limit the patent's coverage, Shifley said.

"This case holds that what you write at the summary of the invention can result in clear disavowal of claim scope," he said. "I think that's going to give people fits."

Those drafting patents have learned not to use language like "the invention requires X" so as not to limit coverage, but now they have to worry about writing summaries of the invention so that it doesn't disavow claim scope in the way the Federal Circuit found here, he said.

"It's going to hurt those who write and try to enforce patents in the long term," he said.

In re: Papst Licensing

This February decision vacating a ruling that Panasonic Corp. and others did not infringe Papst's camera patents is not the most important decision, but it kicked off a series of rulings that indicate the Federal Circuit is not yet changing how it treats claim construction, despite the U.S. Supreme Court's ruling in Teva Pharmaceuticals USA Inc. et al. v. Sandoz Inc. et al.

Papst marked the first time the appeals court applied the high court's January decision, which held that factual findings made by a district court during claim construction are entitled to deference on appeal and rejected the Federal Circuit's old rule that all aspects of claim construction must be reviewed afresh.

The Federal Circuit held in Papst, and in over a dozen cases since, that the lower court did not make any factual findings entitled to deference, so it has continued to review claim construction rulings de novo.

"It seems that Teva has had very little impact," said Michael Sandonato of Fitzpatrick Cella Harper & Scinto.

Attorneys differ on whether this trend will continue as district courts begin to take Teva into account and decide whether to consider extrinsic evidence like expert testimony when making claim construction rulings.

Lieberman said that as a result of the Federal Circuit's rulings in Papst and others, judges have a clear incentive to make such factual findings during claim construction in order to ensure their rulings are reviewed with deference, making them difficult to reverse.

"It sends a clear signal to every district court judge that they should never again do claim construction without considering extrinsic evidence," he said.

Sandonato said he thinks judges will continue to rely on intrinsic evidence like the patent's claims and specification, rather than making factual findings in order to secure deference.

"I don't think this will cause judges to rely on extrinsic evidence," he said. "District courts by and large have a preference for relying on intrinsic evidence."

Editing by Katherine Rautenberg and Mark Lebetkin.