In this series of monthly updates, we summarize decisions where the Federal Circuit reversed or vacated PTAB or trial court rulings, which can provide guidance on how to succeed on appeal.

Quick takeaways:

  • The only authority for an intra-district re-transfer without full consent of the parties is 28 U.S.C. § 1404(a) and a district court's decision to re-transfer without performing the § 1404(a) analysis is an abuse of discretion.
  • Claims reciting a specific improvement to authentication – that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity – are patent eligible.
  • An appeal is moot if only one of multiple independent grounds is appealed since the Federal Circuit's decision as to the one ground, even if favorable, would not change the trial court’s judgment.
  • A design claim is limited to the article of manufacture identified in the claim and a prior art that discloses a different article does not anticipate.
  • The same construction applies to the term in a different patent where the relevant portions of the written descriptions appear in both patents.
  • An apparatus claim is patent ineligible if the invention centers on using a component that requires only basic mathematical calculations and not new.
  • Generally, a motion to transfer should be granted if the new venue is clearly more convenient and the convenience for potential witnesses is probably the most important factor in the transfer analysis.

In Re Apple Inc., Case No. 21-187, 2021 WL 4485016 (Fed. Cir. Oct. 1, 2021)

Fintiv sued Apple in the Waco Division of the Western District of Texas. The district court transferred the action to the Austin Division of the same district, where the same judge continued to preside over the case. One month before trial, however, the district court re-transferred the case back to Waco, citing the suspension of jury trials in the Austin courthouse due to the CoVID-19 pandemic as the reason.

The Federal Circuit stated that the only authority for an intra-district re-transfer without full consent of the parties is 28 U.S.C. § 1404(a). Under § 1404(a), a district court should not re-transfer except under the most impelling and unusual circumstances. Further, a re-transfer analysis should be based on the traditional factors bearing on a § 1404(a) analysis and should consider the reasons of convenience that caused the earlier transfer.

Because the district court did not perform the requisite § 1404(a) analysis and Austin remained the more convenient forum, the Federal Circuit found the district court’s decision to re-transfer the case back to the Waco Division amounts to be a clear abuse of discretion. The Federal Circuit therefore vacated the re-transfer order and instructed that the action shall proceed in the Austin Division.

CosmoKey Solutions GmbH & Co. v. Duo Security LLC, Case No. 20-2043, 15 F.4th 1091 (Fed. Cir. Oct. 4, 2021)

The district court entered judgment on the pleadings and held that the asserted claims were patent ineligible under § 101. The Federal Circuit reversed the decision, concluding that the claims were patent-eligible because they recited a specific improvement to a particular computer-implemented authentication technique.

Regarding Alice step 1, the district court held that the claims were directed to the abstract idea of authentication—the verification of identity to permit access to transactions. The Federal Circuit disagreed with that broad characterization. Rather, in the Federal Circuit's view, the focus of the claimed advance was activation of the authentication function, communication of the activation within a predetermined time, and automatic deactivation of the authentication function, such that the invention provides enhanced security and low complexity with minimal user input.

Regardless of whether the claims were directed to an abstract idea or a specific improvement in computer verification and authentication techniques, the Federal Circuit found that the claims satisfied Alice step 2. The patent disclosed a technical solution to a security problem in networks and computers. The claims and specification recited a specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity. The claims recite an inventive concept by requiring a specific set of ordered steps that go beyond the abstract idea identified by the district court and improve upon the prior art by providing a simple method that yields higher security.

Accordingly, the Federal Circuit reversed the decision of the district court.

Acceleration Bay LLC v. Take-Two Interactive Software, Case No. 20-1700, 15 F.4th 1069 (Fed. Cir., Oct. 4, 2021)

The district court granted motion for summary judgment of non-infringement for the four asserted patents. On appeal, while the Federal Circuit affirmed the district court’s decision as to two of the patents, it found the appeal moot with respect to the '344 and '966 patents.

Regarding the 344 and 966 patents, the district court granted summary judgment on two independent grounds: (1) the accused products did not meet the "m-regular" limitation, and (2) plaintiff's infringement theory failed because it was video game players, not defendant, that assembled the claimed system and introduced certain elements to the systems before the claims can be met. However, Acceleration Bay’s appeal only addressed the second ground. As a result, the Federal Circuit was unable to grant effectual relief, because regardless of how the Federal Circuit ruled on the second ground, it would leave the district court’s grant of summary judgment of non-infringement intact.

Accordingly, the Federal Circuit dismissed Acceleration Bay’s appeal as moot for the '344 and '966 patents, and affirmed the other issues appealed.

In Re SurgiSil LLP, Case No. 20-1940, 14 F.4th 1380 (Fed. Cir. Oct. 4, 2021)

SurgiSil appealed PTAB’s decision affirming an examiner’s rejection of SurgiSil's design patent application. The application claimed an "ornamental design for a lip implant as shown and described." The examiner rejected the claim as anticipated by a prior art that disclosed an art tool, which was affirmed by the Board. The Federal Circuit reversed PTAB’s decision because a design claim is limited to the article of manufacture identified in the claim, and It was undisputed that the prior art disclosed an art tool rather than a lip implant.

Snyders Heart Valve LLC v. St. Jude Medical, LLC, Case No. 19-2111, 2021 WL 4538670 (Fed. Cir. Oct. 5, 2021)

The Federal Circuit reversed the Board’s unpatentability finding of the ’297 Patent because it rested on an erroneous claim construction.

The claim term at issue was "sized and shaped for insertion." In a previous decision involving a related patent, the ’782 Patent, the Federal Circuit construed the same term to cover only the situations where the damaged native value was in place and not removed. Inserting the claimed artificial valve without removing the native valve was an improvement over prior art heat valves because it overcame the problems of using invasive procedure to remove the native valve. Because the claims and written descriptions in the '297 and '782 patents were the same in all relevant respects, the Federal Circuit adopted the same construction.

The purportedly different invalidity arguments for the '297 Patent were unhelpful. Those arguments were either based on the rejected claim construction or were directed to limitations other than the "sized and shaped" limitation. Because it was undisputed that the prior art required removal of the native valve before insertion of the artificial valve, the Federal Circuit reversed the Board’s unpatentability decision.

CardioNet sued InfBionics, accusing its cardiac monitoring device of infringement. In response, InfoBionic moved for judgment on the pleadings that the asserted claims were ineligible for patent under § 101. The district court denied the motion. Subsequently, the parties proceeded to litigate the infringement claim, and the district court then granted InfoBionic’s motion for summary judgment of non-infringement. CardioNet appealed the summary judgment of non-infringement decision and InfoBionic cross-appealed the court’s denial of its motion for judgment on the pleadings. The Federal Circuit found the claims patent ineligible.

Representative claim 1 recited a cardiac monitoring apparatus comprising a communications interface; a real-time heart beat detector; a frequency domain T wave filter; and a selector that activates the frequency domain T wave filter with respect to the real-time heart beat detector in response to a message, wherein the activated frequency domain T wave filter preprocesses a cardiac signal provided to the real-time heart beat detector.

Regarding Alice Step one, the Federal Circuit found that the invention was directed to the abstract idea of filtering patient heartbeat signals to increase accuracy. The very purpose of the invention centered on using T wave filter to filter data and filtering the data required only basic mathematical calculations. The use of a filter to perform mathematical functions was not a new activity. At step two, regardless of whether the T wave filter was innovative, a claim for a mathematical calculation was still an abstract idea. Aside from the T wave filter, the other claimed components were conventional. Additionally, although claim 20 was an apparatus claim, its ultimate focus was to preprocess a cardiac signal using a T wave filter, which was an abstract idea. Claims similar to the ones at issue were found to be patent ineligible.

Accordingly, the Federal Circuit concluded that the patent did not recite an inventive concept sufficient to transform the asserted claims into patent-eligible subject matter. The Federal Circuit remanded for the entry of judgment of no liability for InfoBionic on the ground that the district court should have granted the motion for judgment on the pleadings as to unpatentability, and vacated the district court’s summary judgment decision.

In Re Juniper Networks, Inc., 21-156 (Fed. Cir. Oct. 4, 2021); In Re Google LLC, 21-171 (Fed. Cir. Oct. 6, 2021); In Re Netscout Systems, Inc., 21-173, (Fed. Cir. Oct. 13, 2021); In Re Pandora Media, LLC, 21-172 (Fed. Cir. Oct. 13, 2021); In Re Dish Network LLC, 21-182 (Fed. Cir., Oct. 21, 2021)

In reviewing numerous decisions by the Western District of Texas denying motions to transfer, the Federal Circuit provided guidance for district courts when weighing the public and private factors controlling such questions. Generally, a motion to transfer should be granted if the new venue is clearly more convenient overall. Of the eight factors considered, the Federal Circuit reiterated that the convenience for potential witnesses is probably the most important factor in the transfer analysis.

According to the Federal Circuit, whether a witness is a party-witness or a non-party-witness does not change the weight that should be given to their convenience. Similarly, district courts should not assume that a party will not actually call particular witnesses without any specific evidence tending to show such a likelihood. Location of a witness and the inconvenience of travel should certainly be considered, but the distance in travel is less important than the time such travel may take. Many cases involve a witness living across the country or overseas and will require air travel regardless of whether a case proceeds in the original forum or is transferred to a new forum. While it is preferable to choose a forum in which witnesses may testify without leaving their homes or regular places of business, that may not be possible. In such cases, total time away traveling may only be incrementally different and thus there may not be much weight given when comparing inconveniences for witnesses that do not live in either forum. For example, travel time for a witness living in New York is not substantially different for a trial in the Western District of Texas or the Northern District of California.

Moreover, questions of compulsory process may be considered with respect to potential witnesses. An important point made by the Federal Circuit is that unless evidence is presented that a witness is likely to testify, the court should assume that the witness is unwilling and that compulsory process may be needed to compel testimony. As part of these considerations, the district court must also assess the relevance and materiality of the information that a particular witness may provide when deciding how much weight to afford the location of that particular witness in the context of compulsory processes.

With regards to documentary evidence, the source of proof factor should not be ignored simply because most documentation is stored or accessible electronically. While electronic storage and access assist with discovery and ease, at least some weight should be given to the location at which physical files and electronic records are kept.

Beyond witnesses and documentary evidence, district courts should also consider the local interest of the original forum compared to the proposed new forum. The Federal Circuit directed the district courts to consider the events behind the lawsuit when determining if a forum has a local interest. The local interest factor considers the significant connections between a particular venue and the events that gave rise to a suit. In many of these patent cases, the accused infringers had researched and developed the accused products in the forum to which the defendant was requesting transfer. Thus, the accused infringers often move to transfer the cases to the forum where the allegedly infringing accused product was developed.

The Federal Circuit also rejected a rationale that median time to trial between districts justifies denying transfer. The Federal Circuit has held that when other relevant factors weigh in favor of transfer or are neutral, then the speed of the transferee district court should not alone outweigh all of those other factors. Additionally, where the district court has relied only on median time-to-trial statistics to support its conclusion, the Federal Circuit characterizes this factor as the "most speculative" of the factors bearing on the transfer decision. Speculation about what might happen with regard to the speed of adjudication in a particular case is insufficient to warrant denying transfer to a more convenient forum.

Moreover, the Federal Circuit dismissed considerations of the delay associated with transferring the case to a new forum and noted that the Fifth Circuit has reiterated that the delay associated with transfer may be relevant only "in rare and special circumstances," and, most recently, clarified that "garden-variety delay associated with transfer is not to be taken into consideration when ruling on a § 1404(a) motion to transfer."

The Federal Circuit granted the petitions and ordered the district court to grant the transfer motions.