Subpoenas pursuant to 35 U.S.C. § 24 cannot be issued in inter partes reexamination proceedings.

Abbott Laboratories v. Cordis Corp., No. 2012-1244 (Fed. Cir. Mar. 20, 2013).

The patentee applied for two subpoenas duces tecum pursuant to 35 U.S.C. § 24 in its inter partes reexamination proceeding against the accused infringer, and the district court granted the accused infringer’s motion to quash. The patentee appealed. On appeal, the Federal Circuit held that section 24 only empowered the district court to issue a subpoena for use in a “contested case,” and contested cases are those in which the PTO authorizes parties to take depositions. Because the PTO does not provide for depositions in inter partes reexamination proceedings, a subpoena pursuant to section 24 was unavailable. Therefore, the court affirmed.

First, the court looked to the word “contested” in light of its relationship with adjacent provisions of title 35 to conclude that a “contested case” is one in which depositions are authorized. Specifically, section 24 made subpoenas available from any matter “wherein testimony is to be taken for use in any contested case in the Patent and trademark Office.” 35 U.S.C. § 24. The legislative history also supported this interpretation, which demonstrated that the provision was enacted in part to alleviate problems created by the inability to compel testimony in interference proceedings. Additionally, Congress’ most recent amendment to the Patent Act further demonstrated this reading. In 2011, Congress replaced inter partes reexaminations with inter partes reviews in order to, in part, allow the limited use of depositions. This action “demonstrate[d] that depositions and section 24 subpoenas go hand in hand.”

Next, the court looked to determine whether the PTO’s regulations allowed parties to take depositions in inter partes reexaminations, and concluded that they did not. Simply put, the “PTO’s regulations for inter partes reexaminations make no provision for either party to take depositions.”

Finally, the court did not find that under the facts of the case, excluding compulsory production of testimony in inter partes reexamination proceedings raised a “serious constitutional problem.”

A copy of the opinion can be found here

The patentee sued on patents covering gaming machines using, in part, the theory that the gaming machine programmer and the ultimate user of the game together practiced all required steps of the asserted patent claims. However, there was no sufficient basis to conclude that one party directly infringed by performing each step required by those claims, either personally or though sufficient control or direction of another party.

Aristocrat Technologies Australia PTY Ltd. & Aristocrat Technologies, Inc. v. International Game Technology & IGT, No. 2010-1426 (Fed. Cir. Mar. 13, 2013).

Aristocrat Technologies Australia PTY Ltd. and Aristocrat Technologies, Inc. (collectively, “Aristocrat”) and International Game Technology and IGT (collectively, “IGT”) compete in the casino gaming machine industry. In 2006, Aristocrat brought the current action against IGT in the Northern District of California alleging that IGT directly and indirectly infringe two of Aristocrat’s patents relating to gaming machines: U.S. Patent No. 7,056,215 and U.S. Patent No. 7,108,603. The ‘215 patent relates to a system of linking gaming machines through an allegedly improved jackpot mechanism provided to a player. An additional prize may be awarded to a player through a secondary feature game appearing after the main game is completed. The second game is triggered by a combination of a random trigger and player selection. The ‘603 patent claims are substantially similar to the ‘215 patent claims, except they lack a step of “activating a user interface.” The removal of this step means that the ‘603 claims require the progressive jackpot be awarded to the player completely randomly, rather than requiring any input from the player.

In 2010, the district court granted IGT’s motion for summary judgment of noninfringement as to all asserted claims of both patents, explaining that use of IGT’s accused products require two separate actors to meet all requirements of the patent claims: (1) the casino, via the gaming machine; and (2) the player. The court found it was undisputed that the ‘215 patent’s “activating the user interface” step and the ‘215 and ‘603 patents’ “making a wager” step are performed by the player, not the gaming machine. Under the Federal Circuit’s Muniauction decision, the district court found that the lack of a single entity performing all of the steps of the asserted claims precludes direct infringement as a matter of law. While Aristocrat’s appeal was pending, the Federal Circuit issued its Akamai en banc decision.

The Federal Circuit affirmed the district court’s constructions and its ruling on direct infringement. In light of Akamai, in which the court held “for a party to be liable for direct patent infringement under 35 U.S.C. § 271(a), that party must commit all the acts necessary to infringe the patent, either personally or vicariously,” id. at 1307, the Federal Circuit vacated and remanded the portion of the ruling on indirect infringement.

The Federal Circuit affirmed summary judgment of no direct infringement. Under 35 U.S.C. § 271(a), for a party to be liable for direct infringement, that party must commit all the acts necessary to infringe the patent, either personally or vicariously. This control or direction standard is satisfied if the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party. Programming of a machine, even such that another’s actions in using the machine are the “natural, ordinary, and reasonable consequences” of that conduct, is insufficient to meet this standard. Here, no single actor performs or controls all the steps of the claimed method.

Finally, the Federal Circuit vacated and remanded the ruling on indirect infringement. The court explained that Aristocrat deserved the opportunity to press its indirect infringement theory with the benefit of the Federal Circuit’s clarification in Akamai regarding inducement.

A copy of the opinion can be found here

In action for declaratory judgment of non-infringement, the lower court finding of non-infringement was upheld, but the application of equitable estoppel was overturned because there was no misleading conduct by the patentee. Further, the alleged infringer’s attempt to base affirmation of the lower court decision on the patent’s invalidity was not permissible absent the filing of a cross appeal.

Radio Systems Corp., v. Lalor, No. 12-1233 (Fed. Cir. March 6, 2013).

The alleged infringer brought suit seeking declarations of non-infringement and invalidity of two patents for canine shock collars. Patentee counter claimed alleging infringement. The two patents at issue were allegedly infringed by four different collar designs. The District Court granted the alleged infringer’s motion for summary judgment, finding that three of the collar designs did not infringe, and the claims against the final collar design were barred by equitable estoppel. The District Court denied the accused infringer’s motion for summary judgment on invalidity.

The Court of Appeals affirmed the District Court’s findings of non-infringement regarding the first three designs, but it reversed the holding on equitable estoppel. It found that the District Court correctly applied the doctrine of equitable estoppel to the earlier patent, U.S. Patent No. 6,830,014 (‘014), but not to the later patent, U.S. Patent No. 7,267,082 (‘082). The ‘014 patent had been at issue in an earlier conflict between the patentee and the alleged infringer’s predecessor in interest. In that conflict, the patentee acted as if it was not going to enforce its patent claims and therefore satisfied the test for equitable estoppel. Because the ‘082 patent was not part of the earlier interaction between the two parties, however, there had been no misleading conduct as to patentee’s plans to enforce the ‘082 patent, and therefore the ‘082 claim was not barred by equitable estoppel.

Finally, the Court of Appeals found that it could not affirm the lower court’s judgment on a theory of invalidity because the lower court’s decision was based on non-infringement. In its responsive appellate brief, the alleged infringer argued invalidity as an alternative ground for affirming the lower court’s judgment. This was viewed as a different attack on the lower court judgment by the appellee because a judgment for invalidity is broader than a judgment of non-infringement. Thus, invalidity must be raised on a cross appeal rather than as an additional reason to affirm a lower court’s decision that was based on a finding of non-infringement. As invalidity was raised in a responsive appellate brief alone, the patentee’s motion to strike the alleged infringer’s alternative grounds for affirmance was granted.

A copy of the opinion can be found here.