LKQ Corp., et al. v. GM Global Technology Operations LLC, No. 2021-2348 (Fed. Cir. (PTAB) May 21, 2024). En banc opinion by Stoll, joined by Moore, Dyk, Prost, Reyna, Taranto, Chen, Hughes, and Stark. Concurring opinion by Lourie.
In this appeal, the Federal Circuit sat en banc to address the standards for assessing obviousness of design patents under 35 U.S.C. § 103.
GM owns a design patent directed to a design for a vehicle’s front fender. LKQ filed an IPR petition challenging the patent’s claim, asserting anticipation under § 102 and obviousness under § 103. The Patent Trial and Appeal Board held that LKQ failed to establish anticipation. As for obviousness, the Board applied the Federal Circuit’s two-part Rosen-Durling test and held that LKQ failed to establish that the claim would have been obvious. LKQ appealed.
A panel of the Federal Circuit affirmed but then the court granted rehearing en banc.
The en banc court overruled the existing Rosen-Durling test for design patent obviousness. The court explained that the Rosen-Durling test “does not align with KSR, Whitman Saddle, and other precedent, both in terms of its framework and its threshold rigidity.” The court ruled that “Rosen-Durling is out of keeping with the Supreme Court’s general articulation of the principles underlying obviousness, as well as its specific treatment of validity of design patents.”
Having overruled the Rosen-Durling test, the Federal Circuit considered what the appropriate framework for evaluating obviousness of design patent claims should be. While staying “mindful of the differences between design and utility patents,” the Federal Circuit ultimately concluded that “invalidity based on obviousness of a patented design is determined based on factual criteria similar to those that have been developed as analytical tools for reviewing the validity of a utility patent under § 103, that is, on application of the Graham factors.”
The Federal Circuit explained that under Graham factor one, “the fact finder should consider the ‘scope and content of the prior art’ within the knowledge of an ordinary designer in the field of the design.” The court ruled that “an analogous art requirement applies to each reference.” But the court opted not to “delineate the full contours of the analogous art test for design patents,” instead leaving it “to future cases to further develop the application of this standard.”
Next, both Graham factor two (“determining the differences between the prior art designs and the design claim at issue”) and Graham factor three (resolving “the level of ordinary skill in the pertinent art”) continue to apply. The Federal Circuit explained that “in the design patent context,” analyzing whether a claim would have been obvious to a person of ordinary skill in the art “mean[s] that obviousness of a design patent claim is assessed from the viewpoint of an ordinary designer in the field to which the claimed design pertains.” The Federal Circuit also reaffirmed that the “inquiry focuses on the visual impression of the claimed design as a whole and not on selected individual features.”
Lastly, the Federal Circuit stated that, “consistent with Graham, the obviousness inquiry for design patents still requires assessment of secondary considerations as indicia of obviousness or nonobviousness, when evidence of such considerations is presented.”
After announcing the proper test, the Federal Circuit remanded for the Board to address whether the GM design patent would have been obvious under “the framework for evaluating obviousness of design patent claims set forth in this opinion.”
Judge Lourie concurred in the judgment and wrote separately to state that the court did not need to overrule Rosen and Durling. Instead, he explained, “all we needed to do in this case was make the Rosen and Durling precedents less rigid.” In Judge Lourie’s view, “Rosen and Durling should have been allowed to stand, as modified, rather than been decisively overruled.”
Dragon Intellectual Property LLC v. DISH Network L.L.C., et al., Nos. 2022-1621, -1622, -1777, -1779 (Fed. Cir. (D. Del.) May 20, 2024). Opinion by Moore, joined by Stoll. Opinion dissenting in part by Bencivengo.
Dragon sued DISH, SXM, and others for patent infringement. After a claim construction hearing, Dragon’s counsel withdrew and all parties stipulated to noninfringement, leading the district court to enter a judgment of noninfringement. Meanwhile, DISH had also filed an IPR petition that SXM joined. After the district court entered judgment, the Patent Trial and Appeal Board issued a final written decision finding all claims of the asserted Dragon patent to be unpatentable.
Both DISH and SXM moved for attorneys’ fees under 35 U.S.C. § 285 and 28 U.S.C. § 1927. Before the motions were resolved, Dragon appealed both the district court’s judgment and the Board’s final written decision. The Federal Circuit affirmed the Board’s decision, dismissed the district court appeal as moot, and remanded.
On remand, the district court partially granted the motion for attorneys’ fees under § 285. The district court permitted recovery of fees for time spent litigating but denied fees incurred solely during the IPR proceedings. The court also denied DISH and SXM’s attempt to recover the fees from Dragon’s counsel. DISH and SXM then appealed the denial-in-part of fees, and Dragon cross-appealed the grant-in-part of fees.
The Federal Circuit affirmed. After ruling that “the district court did not abuse its discretion in declaring these cases exceptional,” the court addressed DISH and SXM’s arguments that the district court erred by denying attorneys’ fees incurred during the IPR proceedings and by declining to hold Dragon’s counsel jointly and severally liable with Dragon for the fee award. The Federal Circuit disagreed with both arguments.
DISH and SXM argued that the attorneys’ fees incurred during the IPR proceedings should be recoverable because “the IPR proceedings were ‘part and parcel’ of the case, and the optional nature of IPR proceedings does not compel the denial of IPR fees.” The Federal Circuit rejected that view: “In cases where a party voluntarily elects to pursue an invalidity challenge through IPR proceedings, we see no basis for awarding IPR fees under § 285.” The Federal Circuit also explained that if “cases” under § 285 were interpreted to include IPR proceedings, “district court judges would be tasked with evaluating the exceptionality of arguments, conduct, and behavior in a proceeding in which they had no involvement.”
DISH and SXM next argued that the district court incorrectly held that Dragon’s counsel cannot be held jointly and severally liable with Dragon for attorneys’ fees under § 285. The Federal Circuit rejected this argument, holding that “liability for attorneys’ fees awarded under § 285 does not extend to counsel.” The court noted that “statutes and rules that expressly identify counsel as liable are more appropriate vehicles to recover fees from counsel.”
Judge Bencivengo of the Southern District of California, sitting by designation, dissented in part. She disagreed with the majority’s “categorical[] hold[ing] that § 285 does not entitle a defendant to recover fees incurred in IPR proceedings that the defendant sought to institute after being sued for infringement.” In her view, “[i]n a case such as this, where exceptionality is based on a determination that the case was objectively baseless from its inception, it should be within the discretion of the district judge to award all reasonable fees incurred by the prevailing defendant, including fees incurred in an IPR that resolved any invalidity defenses that were required to be asserted in response to the baseless complaint.”
Core Optical Technologies, LLC v. Nokia Corp., et al., Nos. 2023-1001, -1002, -1003 (Fed. Cir. (C.D. Cal.) May 21, 2024). Opinion by Taranto, joined by Dyk. Dissenting opinion by Mayer.
After Core Optical sued a group of defendants for patent infringement, Nokia moved for summary judgment arguing that Core Optical lacked standing to assert the patent. Nokia argued that an assignment by the named inventor, Dr. Core, to Core Optical was ineffective because Dr. Core had already assigned the patent to his employer, TRW Inc.
In the agreement between Dr. Core and TRW, Dr. Core had agreed to assign to TRW all of his inventions that “relate to the business or activities of TRW” and were “conceived, developed, or reduced to practice” during his employment with TRW. The agreement included an exception for inventions “developed entirely on [his] own time.”
During Dr. Core’s employment at TRW, he was accepted into TRW’s fellowship program for pursuing a PhD dissertation. Dr. Core admitted that his PhD research was “essentially identical” to the subject matter that issued as the patent-in-suit. The parties disputed whether Dr. Core’s “years-long, TRW-funded research” leading to the patent-in-suit occurred “entirely on [his] own time” or at least partially involved TRW’s time. The district court agreed with Nokia and entered summary judgment, ruling that Dr. Core’s PhD research was not “entirely on [his] own time” and therefore had been assigned to TRW under the agreement between Dr. Core and TRW. Core Optical appealed.
On appeal, the Federal Circuit vacated the district court’s summary judgment and remanded for further proceedings. The Federal Circuit concluded that “the entirely-own-time phrase does not unambiguously express a mutual intent to designate either all the time Dr. Core spent performing his PhD research as his own time (as Core Optical contends) or some of it as partly TRW’s time (as the district court, in agreement with Nokia, held).” The Federal Circuit thus remanded, explaining that “further inquiry into pertinent facts to resolve the ambiguity is needed.”
Judge Mayer dissented because, in his view, “the district court correctly granted Nokia’s motion for summary judgment after determining that, as a matter of California law, Core did not develop the patented invention ‘entirely on [his] own time.’”
Speck, et al. v. Bates, et al., No. 2023-1147 (Fed. Cir. (PTAB) May 23, 2024). Opinion by Dyk, joined by Bryson and Stoll.
The Patent Trial and Appeal Board initiated an interference proceeding between a Bates patent application and a Speck patent.
Pertinent to the interference, 35 U.S.C. § 135(b)(1) is considered to be “a statute of repose, placing a time limit on a patentee’s exposure to an interference proceeding.” Under § 135(b)(1), “claims in an application that are the ‘same as, or for the same or substantially the same subject matter’ and filed later than one year after the patent was issued (i.e., after the ‘critical period’) will be time-barred.” “However, there has been a long-standing exception to § 135(b)(1) when the applicant files its claim after the critical period but ‘had already been claiming substantially the same invention as the patentee’ during the critical period.” In such cases, those claims are not time-barred.
In this case, the Bates patent application was filed six days before the one-year anniversary of the issuance of the Speck patent. During prosecution of the Bates application, Bates “amended the claims after Speck’s critical date (one year after the [Speck patent] issued)” to include an additional limitation.
Speck relied on § 135(b)(1) during the interference proceeding, arguing that the claims of the Bates application were time-barred because the application had been amended after the one-year anniversary of the issuance of the Speck patent. The Board disagreed, ruling that the exception applied because the amended claims were substantially the same as the pre-critical date claims. Thus, the Board determined that the claims in the Bates application were not time-barred. In so ruling, the Board applied only a “one-way test” and declined to apply a “two-way test.” In other words, the Board “looked only to see if the post-critical date claims were narrower, not whether they were broader.”
The Federal Circuit disagreed with the Board’s approach and ruled that precedent “supports the application of a two-way test” for determining whether pre-critical date claims and post-critical date claims are materially different. Applying that test, the Federal Circuit “conclude[d] that as a matter of law under the two-way test the two sets of claims are materially different.” Thus, the Bates application was time-barred under § 135(b)(1). The Federal Circuit then remanded for further proceedings.