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Patent claims not at issue at trial can't be found invalid, even if mentioned in complaint

September 15, 2008
Post by Blog Staff

In a recent decision, the Federal Circuit reversed much of a district court's finding of willful infringement of a plaintiff's patents, tortious interference with the plaintiff's business relationships, and invalidity of the defendant's patents. Regarding the willful infringement, the Federal Circuit determined that the district court had improperly interpreted the claims of the plaintiff's patents-in-suit and had given them a broader interpretation than warranted. The Federal Circuit also held the claims were not objectively baseless, the tortious interference claim based on bad faith enforcement was preempted by federal law. Finally, the Federal Circuit held the district court finding that unasserted claims were invalid was not proper.

Patent practitioners will likely find one of the Federal Circuit's statements in its opinion amusing: "Though in claim construction matters we give due weight to a trial court's claim construction, ultimately claim construction is a matter of law the final responsibility for which lies with us."

More regarding 800 Adept, Inc. v. Murex Sec., Ltd. after the jump.The case involved patents regarding the routing of 1-800 numbers. Specifically, the patents relate to methods for spatially allocating calls to local service centers. The plaintiff, 800 Adept, and defendant, Targus, offer competing services for providing this routing service. In 2002, Adept sued Targus claiming that its service infringed several of Adept's patents. Adept also alleged tortuous interference with business relationships. Targus counterclaimed for infringement of several of Targus's patents.After a jury trial, the jury found Targus willfully infringed Adept's patents, Adept did not infringe the Targus patents, all claims (both asserted and not asserted) of the Targus patents were invalid, and Targus had tortiously interfered with Adept's business relationships. Targus appealed, claiming (1) the finding of infringement was incorrect because the claim construction of the Adept patents was incorrect, (2) the finding of invalidity of the unasserted claims was improper because the claims were not at issue, (3) the district court erred in failing to grant a new trial regarding the validity of its asserted claims, and (4) the tortious interference claim was preempted by federal patent law. The core issue regarding claim construction of the Adept patents was whether the computations for "mapping" the caller's number to the appropriate location must be performed before the call was placed, or if the mapping could take place after the call is initiated. Both parties agreed that the Targus process performed the mapping after the call was placed. The district court had instructed the jury that such a process was within the scope of the claims, and the jury returned a finding of infringement. The Federal Circuit reversed. The court considered the plain meaning of the claims, the language in the specification, and the arguments made during the prosecution and found that the patent requires that all assignment calculations be performed before the call is placed. On appeal, Adept argued that the statements made during prosecution did not rise to the level of "clear and unmistakable" disavowal of claim scope. The relevant passage from the prosecution history distinguished a prior art reference on the basis that the claimed invention made the calculations before the call is placed:

The major difference [between the present invention and the prior art reference] is that with the present invention all point of origin to point of termination calculations have already been performed by determining in which response zone (client-defined polygon) the call originated, and to which corresponding terminating number the call should be routed. The results of these calculations are stored in a database at the service provider’s location. Thus, the present invention eliminates the need to perform on-line-calculations to determine the appropriate terminating number.

In this case, the court held it was not using the statements for purposes of prosecution disclaimer, but instead "as support for the construction already discerned from the claim language and confirmed by the written description." As a result, the Federal Circuit held that under the proper construction, no reasonable jury could hold Targus infringed the Adept patents. The court therefore reversed the finding of willful infringement and award of attorney fees.The Federal Circuit then turned to the holding that the unasserted claims of Targus's patents were invalid. The Federal Circuit first looked at the complaint and found that "a reference in the complaint is not sufficient to support a judgment that particular claims are invalid; the specific validity of those claims must have been at issue during the trial and actually litigated by the parties." Next the court turned to the joint final pretrial statement which only identified three claims of the Targus patents to be at issue. Finally, the Federal Circuit noted that neither party presented evidence with respect to the unasserted claims, and that the validity of each claim must be considered separately. As a result, the Federal Circuit reversed the finding of invalidity regarding the unasserted claims as they were not at issue at trial.Regarding the asserted claims of the Targus patents, the Federal Circuit noted that Targus did not appeal the finding that the asserted claims were invalid, rather Targus appealed the district court's denial of a new trial regarding the asserted claims. Noting that the standard of review for denial of a new trial is abuse of discretion, the Federal Circuit considered the testimony of one of Adept's experts regarding on-line and real-time calculations. Finding the testimony misleading, the Federal Circuit reversed the denial of a new trial on the claims regarding on-line and real-time calculations and affirmed regarding the finding of invalidity on the rest of the asserted claims. Finally, the Federal Circuit addressed the issue of tortious interference. The key issue was whether this claim was preempted by the federal patent laws. The general premise applied was that the interference cause of action was preempted unless Targus had acted in "bad faith" in asserting its patents. In order to act in bad faith, Targus's claims would have to be "objectively baseless," meaning "no reasonable litigant could realistically expect success on the merits." Considering the record, the Federal Circuit found that "the evidence introduced at trial shows that many people, including the examiner who conducted the reexamination and even Adept's own patent attorney" understood that a key reference was not invalidating prior art. Additionally, the Federal Circuit determined that Targus adequately disclosed and reasonably believed that its prior work was experimental and not a sale before the statutory bar date. As a result, the Federal Circuit found that Adept had not met its burden of proof for showing that Targus had acted in bad faith when asserting its patents. As a result, the tortious interference claim was preempted by federal patent law, as the case was not objectively baseless.

To read the full decision in 800 Adept, Inc. v. Murex Sec., Ltd., click here.


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