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CAFC Weekly: April 22, 2011

by Orlando Lopez

The precedential patent-related opinions of this week include: one en banc opinion related to contempt hearings when a party makes redesign modifications to a product subject to an injunction; one opinion regarding claim interpretation; and, one opinion regarding contract interpretation and indefiniteness of claims.

In Tivo Inc. v. Echostar Corp., the CAFC reviewed a prior decision en banc, in order to “address the circumstances under which a finding of contempt by a district court would be proper as to infringement by newly accused products.” Tivo owns a patent for DRT hardware and software and sued Echostar for infringement.  At District Court, Echostar was found to be infringing and the Court issued a permanent injunction ordering Echostar to stop making and selling the infringing receivers, as well as to disable the infringing functionality in existing receivers.Echostar appealed to the CAFC and the CAFC affirmed the decision of infringement.  Echostar did not appeal the permanent injunction at that time.  After the decision on that appeal, Tivo moved the District Court to hold Echostar in contempt of the permanent injunction in view of a redesign that Echostar alleged would render the products non-infringing.  The District Court found that the redesigned products continued to infringe and that Echostar was in contempt, and levied sanctions against Echostar.  Echostar appealed the contempt decision to the CAFC.  Upon rehearing, the CAFC overruled the prior holding of KSM Fastening Sys., Inc. v. H.A. Jones Co.that utilized a two step inquiry.  The CAFC held, that what is “required for a district court to hold a contempt proceeding is a detailed accusation from the injured party [the one in whose favor the injunction was granted] setting forth the alleged facts constituting the contempt.” The injured party must prove that the corresponding features of the redesigned product are not sufficiently different from the features relied on for infringement, not different enough to create “a fair ground of doubt.” The CAFC also found that, by not raising the issues in the first appeal, Echostar waived arguments as to the over-breadth and vagueness of the injunction.  The CAFC vacated the judgment of contempt of the making and selling section of the injunction, but affirmed the judgment of contempt of the disablement section of the injunction.

In Lexion Medical v. Northgate Technologies, Lexion owns a patent related to a device for heating and humidifying gas for use during laparoscopic procedures and sued Northgate for infringement.  At the first trial, the jury found that Northgate induced and contributed to the infringement of the patent.  Northgate appealed.  In the first appeal, the CAFC interpreted terms in the claims differently from the District Court and remanded for further proceedings there.  On remand, Lexion filed for summary judgment of infringement.  The District Court’s interpretation of one limitation of the claims, granted summary judgment of infringement, based on an interpretation of one limitation of the claims.  Northgate appealed to the CAFC, which found that the record supported the District Court interpretation, and the CAFC affirmed the judgment of infringement.

In Rembrandt Data Technologies, LP v. AOL, LLC , Rembrandt had acquired, by assignment, patents related to some types of modems and sued a number of companies for selling products using an allegedly infringing chip set, made by Conexant.  The District Court granted summary judgment of patent exhaustion, since Conexant had a license for the patents and sold the allegedly patented items.  The District Court also granted summary judgment of invalidity for claims 3-11 of one patent due to indefiniteness, and claims 1-2 of the same patent due to failure to disclose the necessary algorithms.  Rembrandt appealed to the CAFC.  After exploring a tangled group of licenses and cross licenses, the CAFC found that Conexant was a licensee and affirmed the judgment of exhaustion.  Regarding the invalidity of claims 3-11 of one patent by what appeared to be a drafting or printing error of missing words, were mixed type claims – having both apparatus and method limitation in the independent claim, which renders the claim indefinite and unenforceable.  The CAFC affirmed the summary judgment of invalidity for claims 3-11.  Regarding claims 1 and 2, the District Court interpreted the claims as drafted in functional (means plus function) form; thereby, requiring disclosing an algorithm or structure to implement the function.  The CAFC found that for two limitations of claim 1 there are questions of material facts as to whether the limitations are drafted in functional form.  For the third limitation of claim 1, there are questions of material facts as to whether an algorithm was disclosed.  The CAFC reversed the summary judgment of invalidity for claims 1-2.

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