En Banc Panel of the Federal Circuit Rules That Commercial Benefit and Stockpiling Do Not Alone Trigger the Section 102(B) On-Sale Bar

Authored by Georg Reitboeck, Michael Turner, and Kulsoom Hasan

Digest of The Medicines Co. v. Hospira, No. 2014-1469 (Fed. Cir. July 11, 2016) (precedential). On appeal from the United States District Court for the District of Delaware. Before Prost, Newman, Lourie, Dyk, O’Malley, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll (en banc).

Procedural Posture: Medco sued Hospira for patent infringement, and Hospira alleged the patents were invalid under the 102(b) on-sale bar. The district court found the asserted claims not infringed, and not invalid under the Pfaff framework for the on-sale bar because the claimed invention was not commercially offered for sale. Medco appealed the infringement ruling, and Hospira appealed the invalidity ruling. A merits panel of the Federal Circuit reversed the district court ruling regarding the on-sale bar, finding that a commercial sale took place where the sales were invoiced as manufacturing services and title did not change hands because the inventor commercially exploited the invention. The Federal Circuit granted rehearing en banc.

  • On-Sale Bar: Under the Pfaff framework, the on-sale bar applies when before the critical date, the claimed invention (1) was subject of a commercial offer for sale and (2) was ready for patenting. Whether an invention was subject of a commercial offer for sale is analyzed under the law of contracts and as understood in the commercial community.
  • On-Sale Bar: The mere sale of manufacturing services by a contract manufacturer to an inventor to create an embodiment of the patented product for the inventor does not constitute a commercial sale, where only manufacturing services were sold, not the invention, and the inventor retained control, in this case title, over the invention. Commercial benefit, even to both parties in a transaction, is not enough to trigger the on-sale bar, and “stockpiling” standing alone does not trigger the on-sale bar.

District Court’s Limiting Construction of “Head End System” Was Erroneous For Various Reasons

Authored by Georg C. Reitboeck and Olena Ierega

Digest of HBAC Matchmaker Media, Inc. v. Google Inc., Nos. 2015-1447, 2015-1478, 2015-1479, 2015-1480, 2015-1481, 2015-1521, 2015-1522, 2015-1523 (Fed. Cir. May 31, 2016) (non-precedential). On appeal from D. Del. Before Prost, Dyk, and Stoll.

Procedural Posture: Plaintiff appealed from stipulated final judgment of noninfringement. CAFC vacated and remanded.

Claim Construction: The district court erred in construing “head end system” to require a TV system that includes a conventional television set or set-top box, while excluding advertisement delivery over the internet. The district court’s construction created avoidable redundancy of the language of the claims because some independent claims specifically added a TV limitation. Further, since the term was not defined or recited in the specification, it is appropriate to consider extrinsic evidence; at the time of the invention, “head end” was not restricted to a conventional TV or cable system. Moreover, the preferred embodiment in the specification is not limiting.

Federal Circuit Finds Term “Communications Path” to Exclude Wireless Communications

Authored by Georg C. Reitboeck and Olena Ierega

Digest of Ruckus Wireless, Inc. v. Innovative Wireless Solutions, LLC, Nos. 2015-1425, 2015-1438 (Fed. Cir. May 31, 2016) (precedential). On appeal from W.D. Tex. Before Prost, Reyna, and Stark.

Procedural Posture: Patent Owner and defendant in a declaratory judgment action appealed district court’s claim construction and final judgment of noninfringement. CAFC affirmed.

  • Claim Construction: The Federal Circuit affirmed the district court’s construction of the term “communications path” to exclude wireless communications. No extrinsic evidence was introduced to support that a person of ordinary skill at the time of the invention would have understood the plain and ordinary meaning of the term to include wireless communications. The intrinsic record, including the name of the patent and language and embodiments in the specification that described the invention with wired connection, pointed against including wireless communication in the construction of the term.

Starkdissenting: 

  • Claim Construction: Judge Stark pointed out that in the district court, the parties agreed that the plain and ordinary meaning of “communications path” included wireless communication, but that appellees had previously argued for a disclaimer of claim scope. The lack of extrinsic evidence was explainable by the parties’ agreement on the term’s ordinary meaning. The case should be remanded to provide an opportunity for the parties to present extrinsic evidence.

Federal Circuit Reaffirms Earlier Judgment in Light of Supreme Court’s Commil v. Cisco Decision

Authored by Georg C. Reitboeck and Olena Ierega

Digest of Warsaw Orthopedic, Inc. v. Nuvasive, Inc., Nos. 2013-1576, 2013-1577 (Fed. Cir. June 3, 2016) (precedential). On appeal from S.D. Cal. Before Lourie, Dyk, and Reyna.

Procedural Posture: On vacatur and remand from the Supreme Court, for further consideration in light of Commil USA, LLC v. Cisco Systems, Inc., CAFC reaffirmed the district court’s judgment of plaintiff/counterclaim-defendants’ direct and indirect infringement of defendant/counterclaimant’s patent, affirmed the district court’s related award of ongoing royalty to defendant/counterclaimant, and reinstated its earlier judgment with respect to defendant’s infringement of plaintiff’s patent (which was unaffected by the Supreme Court’s order).

  • Inducement: The Federal Circuit reaffirmed that there was substantial evidence for the jury to conclude that counterclaim-defendant MSD induced doctors’ infringement of counterclaimant NuVasive’s patent by use of MSD’s medical device. In particular, a reasonable jury could have concluded that MSD’s non-infringement position was objectively unreasonable—the claim construction MSD asserted found no support in the intrinsic evidence and was inconsistent with other claim constructions MSD propounded—and that MSD must have known that the accused medical device meets the limitations of the patent claims. A reasonable jury could therefore have inferred that MSD must have known, or was willfully blind to the fact, that doctors using the device infringe those claims.

Reyna, concurring:

  • Claim Construction: Pointing out that MSD had never proposed in the district court the claim construction the majority discusses, and that the jury had never been presented with that claim construction position, Judge Reyna opined that the court “should not be in the business of creating claim constructions for defendants in induced infringement actions so that we may then assess whether the claim constructions are reasonable.” Judge Reyna further pointed to the paucity of evidence on MSD’s intent to induce infringement; the majority’s analysis, Judge Reyna states, “suggests that any time a defendant’s products are found to directly infringe, the plaintiff has sufficiently established the defendant’s intent to induce infringement.” This proposition would conflict with Global-Tech, Commill, and the Federal Circuit’s case law.

Federal Circuit Affirms Various Claim Constructions of Patents Related to Truck Unloader Systems

Authored by Georg C. Reitboeck and Olena Ierega

Digest of Superior Industries, Inc. v. Masaba, Inc., No. 2015-1594 (Fed. Cir. June 2, 2016) (non-precedential). On appeal from D. Minn. Before Reyna, Hughes, and Stoll.

Procedural Posture: Plaintiff appealed district court’s claim construction and summary judgment of noninfringement. CAFC affirmed.

  • Claim Construction: The Federal Circuit agreed with the district court’s construction of “support frame” to require the presence of an earthen ramp because the patent specification at issue and the claim language supported such construction. The Federal Circuit also agreed with the district court’s construction of “ramp section” to comprise a support frame and a ramp because this definition was explicitly provided in the patent specification. The Federal Circuit also found that the district court’s construction of “channel beam” to have four sides was supported by the specification and the claims of the patent. Because it affirmed the district court’s claim constructions, the Federal Circuit also affirmed the summary judgment of noninfringement.