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

Quick takeaways:

  • Under the broadest reasonable interpretation, a claim construction is too narrow when a broader reading is reasonable and not foreclosed by the claim and the specification.
  • A phrase grammatically comparable to “a plurality of” at the start of a list of items joined together by “and” applied to each item in the list, not to the list considered as a whole.
  • When the claim language makes clear that two claimed elements are separate components, one element cannot be treated as part of the other.
  • Deposition-related costs incurred for convenience, rather than necessity, are not recoverable by a prevailing party.
  • While the doctrine of patent exhaustion covers products a licensed entity sells to customers, it does not necessarily apply to customer conduct after the license is terminated.
  • The PTAB must address whether the person of ordinary skill has a reasonable expectation of success of combining references when addressing obviousness, and the petitioner has the burden of establishing that fact.

Comcast Cable Comms. v. Promptu Sys. Corp., Case No. 19-2287 (Fed. Cir. Jan. 4, 2021) 

During IPR proceedings regarding the claim limitation "receiving said back channel to create a received back channel," the board found that while the prior art taught "receiving said back channel," it did not show "the creation of a received back channel." The board therefore concluded that the petitioner had not established the challenged claims unpatentable.

The Federal Circuit found the board's construction too narrow, because one may read the "received back channel" as merely the "back channel" after being received. Under such a reading, the phrase "to create a received back channel" describes the result of "receiving" the "back channel." Neither the claim's plain language nor the written description forecloses such a reading. Ultimately, the broadest reasonable interpretation of "received back channel" is a "back channel that has been received."

Because the board's final written decision was predicated on the narrow claim construction, the Federal Circuit vacated and remanded the case for the board to consider the arguments under the correct claim construction.

SIMO Holdings Inc. v. Hong Kong uCloudlink Network, Case No. 19-2411 (Fed. Cir. Jan. 5, 2021)

The District Court granted SIMO's motion for summary judgment of infringement. The case then proceeded to trial on validity, willfulness, and damages, resulting in a final judgment of more than $8 million. uCloud appealed on several aspects of the judgment. The Federal Circuit addressed only the claim construction and reversed.

First, the Federal Circuit found that the claim preamble was limiting because it supplies the only structure for the claimed apparatus, and the remaining claim body identifies nothing but functional properties of the claimed apparatus.

The determinative claim construction issue is the role of "a plurality of" in the phrase "a plurality of memory, processors, programs, communication circuitry, authentication data stored on a subscribed identify module (SIM) card and/or in memory and non-local calls database." The district court concluded that "a plurality of" requires only "at least two" members selected from the entire list of identified items (memory, processors, etc.). The Federal Circuit disagreed and held that "a plurality of" requires at least two of each of the listed items in the phrase.

The Federal Circuit's decision relied on SuperGuide Corp. v. DirecTV Enter., Inc., 358 F.3d 870 (Fed. Cir. 2004), holding that as a matter of ordinary and customary meaning, a phrase grammatically comparable to "a plurality of" at the start of a list of items joined together by "and" applied to each item in the list, not to the list considered as a whole. The court's conclusion was further supported by additional claim language that "at least one of the plurality of programs stored in the memory comprises instructions executable by at least one of the plurality of processors." Thus, the phrase "the plurality of" establishes that the earlier "a plurality of" does apply individually to at least some items in the list.

The district court's contrary conclusion hinged on its view of the statement in Oatey Co. v. IPS Corp., 514 F.3d 1271 (Fed. Cir. 2008). While Oatey stated that normally claim terms are not interpreted in a way that excludes embodiments disclosed in the specification, it is not a panacea, and does not require all claims to cover all embodiments. The precedent is replete with examples of subject matter that is included in the specification but is not claimed. In this case, the Federal Circuit's construction does not contradict the specification. It simply leaves out some alternative embodiments, while capturing one embodiment expressly described.

In concluding that no remand is warranted and that uCloudlink is entitled to a judgment of noninfringement, the Federal Circuit found that SIMO's limited response is not enough to justify a remand or to create a triable issue of fact on whether the accused product has the claimed limitation.

Olaf Soot Design, LLC v. Daktronics, Inc., Case No. 20-1009 (Fed. Cir. Jan 7, 2021)

In this case, the district court did not resolve the parties' dispute as to the scope of one claim limitation. The issue was instead tried to the jury, which found infringement of the disputed element under the doctrine of equivalents. The Federal Circuit first concluded that the district court's failure to resolve the claim construction dispute violated O2 Micro Int'l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351 (Fed. Cir. 2008).

The relevant claim recites that the "hollow hub and hollow drum [are] sized such that the screw can move into the hollow hub to allow the hollow drum to receive the screw." The dispute centered on whether the hub is part of the drum. The Federal Circuit found that this language makes clear that the hollow hub is not part of the hollow drum, because the claim language treats the hub and drum as two components, reciting that both "the hollow hub and hollow drum" are sized to receive the screw. That interpretation is confirmed by the specification, which treats the hub and the drum as separate components.

Under the proper construction, the Federal Circuit found that the accused product does not infringe the claim either literally or under the doctrine of equivalents, because the hollow drum of the accused product is not able to receive the screw. It also decided as a matter of law that the accused product does not meet the limitation under the doctrine of equivalents, as the accused product has no equivalent function. A finding of infringement under the doctrine of equivalents would impermissibly eliminate the requirement that the hollow drum be able to receive the screw.

Accordingly, the Federal Circuit reversed the final judgment of infringement.

Parallel Networks Licensing, LLC v. Microsoft Corp., Case No. 20-1669 (Fed. Cir. Jan. 8, 2021)

In this nonprecedential opinion, the Federal Circuit vacated an award of certain deposition related costs that has been awarded to Microsoft after it had prevailed on a verdict of non-infringement. This was because the district court had permitted all deposition costs, despite the fact that 28 U.S.C. § 1920(2) only allows for recovery of "[f]ees for printed or electronically recorded transcripts necessarily obtained for use in the case."

In this case, certain fees could be "fairly characterized as convenience, not necessary," including "costs such as realtime transcription or early transcripts," and costs for "laptop fees and litigation package[s]." Therefore, the deposition cost award might be appropriately adjusted on remand. The Federal Circuit affirmed the trial court's findings with regard to other costs, including trial exhibit and document production costs.

Evolved Wireless, LLC v. HTC Corp., Case No. 20-1335 (Jan. 26, 2021)

In this case, the Federal Circuit vacated-in-part a summary judgment of noninfringement against Evolve. Evolve's patent, the '373 patent, covered standards-essential-patent wireless technology for cellphone tower handover that was declared essential to 4G technology, and the defendants were several companies who made cellular phones, tablets, and other devices that incorporated Qualcomm chipsets. The '373 patent was originally owned by LG Electronics, Inc., who licensed the patent to Qualcomm. The patent was subsequently sold to TQ Lambda and then to Evolved, whose purchase of the patent was subject to Qualcomm's license. If the patents were within the scope of Qualcomm's license, the parties agreed that summary judgment of non-infringement was appropriate. Only patents necessary to make, sell, or use a "Subscriber Unit"—a defined term in the license—fall within the license's scope. The meaning of "Subscriber Unit" had been changed in the license over the course of several years.

On cross-motions for summary judgment, the district court found that the '373 patent fell within the scope of the Qualcomm license and that the doctrine of patent exhaustion precluded an infringement action against Qualcomm's customers. The Federal Circuit agreed with defendants that the defendants' products were "Subscriber Units" within the scope of the license, and that therefore the '373 patent was within the scope of the license for those products.

However, the district court's order ignored the fact that the Qualcomm license had been allegedly terminated on December 31, 2018, and thus might not have protected Qualcomm's customers against liability for infringement after that date. In the Federal Circuit's view, the district court improperly ignored evidence of this termination in rendering its decision on summary judgment, which had been provided promptly and had been discussed at the summary judgment hearing. The Federal Circuit remanded to have the district court to reconsider whether the termination issue was properly raised and, if so, to address whether the Qualcomm license (or a replacement license) was in effect after January 1, 2019. Therefore, the Federal Circuit affirmed the district court’s judgment of noninfringement for conduct before December 31, 2018, but vacated it for activity after January 1, 2019.

KEYnetik, Inc. v. Samsung Elec. Co., Ltd. Case No. 20-1271 (Fed. Cir. Jan. 27, 2021)

In this IPR appeal, the Federal Circuit affirmed obviousness findings on the substantial evidence standard as to certain claims of the patent-in-suit, but vacated the board's decision as to other claims and remanded for the board to make a determination of reasonable expectation of success.

The board had held that the Petitioner had no burden to "show that the POSITA would have had a reasonable expectation of success" in combining obvious references that applied to claims 4, 7, 15, and 18. That was error. Specifically, "[t]he [b]oard erred in assigning no burden to Samsung and making no finding as to reasonable expectation of success in combining the contested references." It therefore vacated and remanded on those claims so that the board could address the reasonable expectation of success issue.