How to Shoot for the Stars: Federal Circuit Clarifies EMVR Requirements

Power Integrations, Inc. v. Fairchild Semiconductor International, Fed. Cir. (July 3, 2018)

Patent damages law can be fairly complex—so much so that Daubert motions against damages experts are filed in nearly every case.  These motions often accuse damages experts of overreaching by failing to properly apportion damages or misapplying the entire market value rule (“EMVR”).  On Tuesday, the Federal Circuit’s opinion in Power Integrations, Inc. v. Fairchild Semiconductor International attempted to clarify these aspects of the patent damages analysis, vacating the jury’s $139.8 million damages award in the form of a reasonable royalty.

A patentee seeking damages for the sale of a multicomponent (or multifunction) product must typically take several steps to ensure that any alleged damages have been properly apportioned to exclude the value provided by the product’s noninfringing aspects.  First, the royalty base has to be determined on the smallest saleable patent practicing unit.  Second, that reduced royalty base needs to be apportioned to reflect only the value attributable to the patented technology.  A royalty based on the value of the entire multicomponent product will likely yield much higher damages, but such a royalty can be recovered only if the plaintiff satisfies the very strict requirements of the EMVR.

READ MORE

Seven Months’ Delay Too Much for Venue Transfer After TC Heartland…. Or Is It?

Order Granting Defendant’s Motion to Transfer for Improper Venue or, Alternatively, to Dismiss, Blue Rhino Global Sourcing, Inc. v. Best Choice Products a/k/a Sky Billiards, Inc., M.D.N.C. (June 20, 2018) (Judge Loretta C. Biggs) and Adrian Rivera v. Remington Designs, LLC, C.D. Cal. (June 19, 2018) (Judge John A. Kronstadt)

Courts continue to work through the backlog of venue motions created by the combo of TC Heartland and In re Micron Tech. rulings. In a pair of almost concurrently issued opinions two courts reached differing conclusions as to whether a seven month delay was sufficient to deem a venue transfer motion waived. READ MORE

Are Early Motions to Dismiss Under § 101 No Longer a Natural Phenomenon?

Illulmina, Inc. v. Natera, Inc., Case No. 18-cv-01662-SI (N.D. Cal. June 26, 2018 Order Denying Motion to Dismiss).

Confirming that the difficulty in interpreting 35 U.S.C. § 101 in order to determine which subject matter is patentable is not limited to abstract ideas, Judge Illston of the Northern District of California grappled with the problem of identifying unpatentable natural phenomena.

Pursuant to the two-step test established by the Supreme Court in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012) and enshrined in Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014), a patent claim is unpatentable if it is both directed to a patent-ineligible concept and fails to recite additional elements that transform the nature of the claim into a patent-eligible application by reciting an inventive concept. READ MORE

Patentee Cannot Recover Post-Judgment Damages Via a Late Motion for Accounting

Order Denying Motion for Accounting to Determine Supplemental Damages, Kaneka Corporation v. JBS Hair, Inc., N.D. Tex. (June 13, 2018) (Judge David Godbey)

In a long running dispute between Kaneka Corporation and Uno & Company over flame retardant polyester fibers for artificial hair, the patent owner Kaneka won nearly $6 million in lost profits damages in June 2013, and received an accounting of damages through the entry of judgment in November 2013. In March of 2015, Kaneka also received a permanent injunction against Uno precluding the company and others from further infringement of the asserted patents.

READ MORE

Third-Party Litigation Financing: When Can a Defendant Follow the Dollar Signs?

Order Denying Discovery Regarding Litigation Financing, Space Data Corp. v Google LLC, N.D. Cal. (June 11, 2018) (Magistrate Judge Nathanael M. Cousins)

In recent years, third-party litigation financing has become increasingly common.  Funding by an outside investor in exchange for a stake in any recovery has raised questions about the ethics of this practice as well as about whether such information must be disclosed in the litigation.  With the exception of class actions, courts often have concluded that information about actual or potential litigation funding is immune from disclosure under the attorney work product doctrine or common interest privilege.

READ MORE

Turning the Looking Glass at the Alice Inquiry

Orders Denying Petition for Rehearing En Banc, Aatrix Software, Inc. v. Green Shades Software, Inc., Fed. Cir. (May 31, 2018); Berkheimer v. HP Inc., Fed. Cir. (May 31, 2018)

Last week, the Federal Circuit denied petitions for rehearing en banc in two separate cases:  Berkheimer v. HP, Inc. and Aatrix Software, Inc. v. Green Shades Software, Inc.  Both cases involved the question of whether an invention was patent-eligible under 35 U.S.C. § 101.  That is, in Berkheimer a digital file archiving idea and, in Aatrix, a data manipulation idea.  In the prior panel decisions, the Federal Circuit had determined that there were factual questions regarding patent eligibility in both cases, reversing the district court’s grant of judgment on the pleadings in each instance.  Although the denials for rehearing en banc were made in per curiam orders, what is unusual and noteworthy is that they were accompanied by concurring and dissenting opinions that dealt squarely with the question of how properly to analyze patentability under 35 U.S.C. § 101.  READ MORE

Labrador, Labrado, Labradont – Patent for Method for Genotyping Labrador Retrievers Found Invalid

Order Granting Motion for Judgment of Law, Genetic Veterinary Sciences, Inc. d/b/a Paw Prints Genetics v. LABOklin GmbH & Co. KG et al., (E.D. Va. May 14, 2018) (Judge Henry Coke Morgan Jr.)

Imagine this: You’re enjoying a nice day out with your Labrador Retriever when you notice his little puppy nose looks a bit dry and crusty. As days pass, the symptoms worsen and your pup develops a dry, rough, gray-to-brown crustiness on the tip of his nose. A trip to the veterinarian’s office leaves you with bad news, your puppy has Hereditary Nasal Parakeratosis (HPNK), a genetic defect caused by a mutation in a gene that regulates differentiation of nose skin cells. This specific mutation was identified by defendants who developed a corresponding method for genotyping Labrador Retrievers – the subject of U.S. Patent No. 9,157,114 (“the ‘114 patent”). Specifically, the ‘114 patent teaches an in vitro method for genotyping Labrador Retrievers in order to discover whether the Labrador Retriever might be a genetic carrier of the disease HNPK. READ MORE

ITC’s Amended Section 337 Rules Streamline Investigations

Orrick’s Jordan Coyle and Diana Szego Fassbender co-authored an article for Law360 on the U.S. International Trade Commission’s long-awaited final amendments to its Rules of Practice and Procedure pertaining to investigations under Section 337 of the Tariff Act. The amended rules are designed to reduce the costs and burdens associated with Section 337 investigations for parties, third parties and the commission. Jordan and Diana describe the most significant amendments to the rules, comment on the circumstances surrounding some of the amendments and offer practice tips.

Read the full article here.

Potential Issues for “Not Yet Practicing” PTAB Petitioners: Constitutional Requirements for Appealing PTAB Decisions

Order Reversing-In-Part, Vacating-In-Part, and Remanding, Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., Appeal No. 2017-1487 (Fed. Cir. May 2, 2018) (Judge Evan J. Wallach)

Occasionally, a company may file a proceeding before the Patent Trial and Appeal Board (the “PTAB”), not with respect to its current use and practice of the contested patent, but for its potential future practice of the patent.  For example, a company may seek inter partes review (“IPR”) of a patent it does not use or infringe upon, purely for the purpose of clearing a pathway to use the patented technology several years down the line, before spending substantial resources to develop a product using that technology.   READ MORE

Federal Circuit Law Governs Venues in Patent-Infringement Suits, and Plaintiffs Bear the Burden to Establish Proper Venue

Order Granting Mandamus, In re: ZTE (USA) Inc., Fed. Cir. (May 14, 2018) (Judge Richard Linn)

In a rare grant of a mandamus petition, the Federal Circuit made two key holdings related to venue in patent cases in the wake of TC Heartland: (1) Federal Circuit law, not regional circuit law, governs patent-litigation venue; and (2) plaintiffs bear the burden to show proper venue. The court called these “basic” and “undecided” issues and found “exceptional circumstances” to grant the petition, vacating the district court’s denial of a motion to dismiss and remanding the case for application of the proper standard. This precedential order sets a nationwide rule in patent cases on which courts had been divided. READ MORE