Nuance Communications v. Abbyy USA Software House

The US Court of Appeals for the Federal Circuit ruled that a patent owner’s due process rights were not violated when a district court found that the defendant did not infringe all of the originally asserted patents, even though a trial was held on only a subset of those patents. Nuance Communications v. Abbyy USA Software House, Case No 14-1629 (Fed. Cir., Feb. 22, 2016) (Prost, CJ).

Nuance sued Abbyy alleging infringement of eight patents: three optical character recognition (OCR) patents and five non-OCR patents. The two groupings were treated separately for Markman. During Markman, Nuance suggested a procedure where representative claims would be used in a single trial. Nuance even opposed a motion by Abbyy for separate trials on the OCR and non-OCR patents.

A special master recommended that Nuance select four of the asserted patents for trial. Nuance did not object and ended up selecting only three of the asserted patents for trial. When the special master prepared the case management report recommending a single trial using representative claims from a subset of the asserted patents (with the claims and patents to be selected by Nuance), he did so “adopting” a procedure proposed by Nuance. The district court adopted the special master’s report without objection by either party. At trial, a jury found no infringement of the three patents tried.

Post-trial, Nuance tried to “reserve” its right to have another trial on the other asserted patents. After the district court rejected the request and entered judgment for Abbyy on all eight asserted patents, Nuance appealed.

Nuance argued that the district court violated its due process. The Federal Circuit rejected Nuance’s argument, noting that the single trial procedure was done at the request of Nuance. In the Court’s view, Nuance’s problem was that it did not preserve any objection to a single trial or object to the special master procedural ruling when it was made.

“Ultimately the responsibility was on Nuance to timely notify the district court as to any objection to the court’s procedures . . . Because it did not do so, and instead made the tactical litigation decision to move forward only on a subset of patents without contemporaneous objection, Nuance is not entitled to another trial on the remaining patents.”

The Federal Circuit further noted that “Nuance actively participated in structuring the winnowing process and never objected until it had already lost at trial.” As a consequence, the Court concluded there was “no due process violation and the district court properly found that Nuance was not entitled to a second trial on the unselected patents.”

Practice Note: Patent owners or plaintiffs that have an objection to a procedural report that sets a single trial, but is limited to a subset of the asserted patents and claims, should make their objection clearly and contemporaneously.