The US Court of Appeals for the Federal Circuit remanded a no willful infringement finding back to the district court to be reconsidered under the Supreme Court of the United States’ Halo decision. Alfred E. Mann Foundation v. Cochlear Corporation, Case Nos. 15-1580; -1606; -1607 (Fed. Cir., Nov. 17, 2016) (Hughes, J) (Newman, J, concurring in part, dissenting in part).

Alfred E. Mann Foundation sued Cochlear alleging infringement of its patents relating to an ear implant with telemetry functionality for testing purposes. The patents generally described a two-part system composed of an external wearable system having a wearable processor and headpiece, and an internal implantable cochlear stimulator.

After a jury trial, Cochlear was found to willfully infringe certain claims, and Alfred E. Mann Foundation was awarded about $130 million in damages. Several months later, the district court conducted a bench trial on equitable estoppel, laches, inequitable conduct, prosecution history and indefiniteness, and held all of the asserted claims, except one, invalid for indefiniteness. The district court denied Cochlear’s judgment as a matter of law (JMOL) of non-infringement as to that claim, granted Cochlear’s JMOL of no willful infringement and granted Cochlear a new trial on damages. Both parties appealed.

The Federal Circuit began its analysis by affirming the district court’s holding that the accused system infringed the claim that survived the indefiniteness challenge. The Court also affirmed the district court’s finding that certain means-plus-function claims were indefinite because the patent did not disclose an algorithm for performing the claimed logarithmic conversion function, noting that “[d]isclosing the broad class of [logarithmic conversion] does not limit the scope of the claim to the ‘corresponding structure, material, or acts’ that perform the function, as required by Section 112.” As to other challenged claims, the Court reversed, stating that the disclosure of Ohm’s law was “adequate defining structure to render the bounds of the claim understandable to one of ordinary skill in the art.” 

The Federal Circuit vacated the determination of no willful infringement, however, and remanded the issue for further proceedings consistent with Halo’s “preponderance of the evidence standard” (IP Update, Vol. 19, No. 6). As the Court explained, the district court must consider whether the infringement “constituted an ‘egregious case [] of misconduct beyond typical infringement’ meriting enhanced damages under § 284 and, if so, the appropriate extent of the enhancement.” 

Finally, the Court concluded that it lacked jurisdiction over the damages issue because the district court ordered a new trial on damages, which is not a final order that falls within Rule 54(b).

Judge Newman dissented-in-part, disagreeing with the majority’s holding that certain means-plus-function claims were indefinite and noting that experts for both parties agreed that logarithmic conversion was well-known and that a “known procedure is not rendered indefinite when there is more than one known way of carrying it out.” Newman voiced concern that as “computer-implemented technology continues to provide new public benefits, consistency of judicial view is essential to stability of the law and progress of the technology.” Newman also disagreed with the majority’s holding that it lacked jurisdiction over the damages issue, stating that precedent and sound practice establish the appellate obligation to review the district court’s grant of a new trial.