§ I. Patent Cases
I.a. Supreme Court decisions
Minerva Surgical, Inc. v. Hologic, Inc., 141 S. Ct. 2298 (2021)
Facts: This case concerns the conditions for applying assignor estoppel where a party who assigns its patent rights later asserts an invalidity defense to that patent.
In the late 1990s, Csaba Truckai invented a device for treating abnormal uterine bleeding using a moisture-permeable applicator head and assigned the patent application to his company Novacept. Hologic later acquired Novacept. Truckai also founded Minerva Surgical, and obtained a patent directed to an improved device to treat abnormal uterine bleeding using a moisture-impermeable applicator head. Meanwhile, Hologic filed for another patent in the same patent family as the Novacept application, and obtained a broad patent claim to applicator heads, without regard to whether they are moisture permeable.
Hologic sued Minerva for patent infringement of this newly obtained claim. In response, Minerva argued that Hologic’s patent was invalid because the new, broad claim to applicator heads did not correspond to the invention’s written description, which addressed applicator heads that were water permeable. Hologic then invoked the doctrine of assignor estoppel, arguing that Truckai and Minerva could not challenge patent validity. The District Court granted summary judgment to Hologic, holding that assignor estoppel barred Minerva’s invalidity defense, and the Court of Appeals for the Federal Circuit affirmed in relevant part. The Supreme Court granted certiorari.
Held: The doctrine of assignor estoppel is upheld, but the judgment was vacated and remanded. Assignor estoppel applies only when the assignor’s assertions of invalidity contradicts explicit or implicit representations the assignor made in assigning the patent.
Reasoning: The doctrine of assignor estoppel, which limits an inventor’s ability to assign a patent to another for value and later contend in litigation that the patent is invalid, is based on equitable principles. Assignor estoppel reflects a demand for consistency and fair dealing with others. A person should not be able to sell his or her patent rights—making an implicit representation that the patent at issue is valid—and later raise an invalidity defense, disavowing that implied warranty. But when an assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, then there is no unfairness in the assertion of invalidity and no ground for applying assignor estoppel.
The Court noted three situations where this may occur: 1) when an employee assigns patent rights to his or her employer in any future inventions he or she may develop during his or her employment; 2) when a later legal development renders the warranty given at the time of assignment irrelevant; and 3) when the assignees of a patent application make a post-assignment change that materially broadens the patent claims. In the last situation, relevant here, the assignor could not have warranted the validity of the broader claims. The Court noted that as long as there is no inconsistency in the assignor’s positions, then there is no basis for estoppel, and he or she can challenge the new claims in litigation. As a result, the Court vacated the decision and remanded the case to the Federal Circuit to determine whether Hologic’s new patent claim was materially broader than the claims originally assigned by Truckai.
The Court further noted that beyond promoting fairness, patent assignor estoppel furthers some policy goals, because assignors—with their knowledge of the relevant technology—are especially likely to be infringers. By preventing assignors from raising an invalidity defense in a later infringement suit, the doctrine gives assignees confidence in the value of what they have purchased. The Court further noted that even when an assignor is barred from asserting in an infringement suit that the patent is invalid, the assignor can still argue about how to construe the patent’s claims.
Justice Alito filed a dissenting opinion, stating that the question in this case cannot be decided without deciding whether Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U.S. 342 (1924)—which approved the use of assignor estoppel in the U.S.—should be overruled. Justice Barrett also filed a dissenting opinion, in which Justices Thomas and Gorsuch joined. The dissent noted that this case turned on whether the Patent Act of 1952 incorporated the doctrine of assignor estoppel and concluded that it did not.
I.b. Federal Circuit Decisions
Bot M8 LLC v. Sony Corp. of Amer., 4 F.4th 1342 (Fed. Cir. 2021)
Facts: This case concerns the pleading requirements for patent infringement.
Bot M8 owns five patents directed to video game machines. Bot M8 sued Sony for patent infringement based on Sony’s PlayStation 4 (“PS4”) console and accompanying game software. Following a transfer to the Northern District of California, a case management conference resulted in the district court sua sponte directing Bot 8 to file an amended complaint detailing “every element of every claim that [Bot M8] say[s] is infringed and/or explain why it can’t be done.” Bot M8 filed its 223-page first amended complaint. Sony moved to dismiss for failure to state a claim of infringement. The district court granted Sony’s motion as to four of the five patents.
The court then denied Bot M8’s second motion for leave to amend, reasoning that Bot M8 failed to raise concerns about the legality of reverse engineering Sony’s software at the time it was first ordered to file an amended complaint. For the same reasons, the court also denied Bot M8’s motion for reconsideration.
Applying Alice, the district court also found one claim of the last remaining patent to be patent ineligible. Alice Corp. v. CLS Bank International, 573 U.S. 208, 217-18 (2014).
Bot M8 and Sony then entered a joint stipulation dismissing the remaining claims without prejudice, and with Bot M8 reserving its right to appeal. On appeal, the Federal Circuit affirmed in part and reversed in part.
Held: Patent owners do not need to prove their entire case at the pleading stage, but they cannot rely solely on conclusory statements of infringement.
Reasoning: The Federal Circuit affirmed (1) dismissal of the infringement allegations as to two patents for being conclusory; (2) denial of leave to file a second amended complaint as to four patents; and (3) summary judgment in favor of Sony on one patent in view of the claims being directed to patent ineligible subject matter. The Court reversed and remanded as to the remaining two patents because the infringement claims were found to plausibly state a claim at the early pleading stages.
The panel acknowledged the district court’s authority to request an amended complaint, but disagreed with its requirement that Bot M8 explain “every element of every claim” because a plaintiff “need not prove its case at the pleading stage.” The panel explained that any district court approach that employs a “blanket element-by-element” requirement for patent infringement cases exceeds the scope of the Supreme Court’s pleading standard set forth in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) and Bell v. Twombly, 550 U.S. 544, 570 (2007). Instead, plaintiffs must only articulate a “plausible claim for relief.”
However, the panel stated that merely reciting claim elements and concluding that an allegedly infringing product has each element will not be enough to meet this pleading standard, as there must be some factual allegations suggesting a plausible claim. Under this reasoning, allegations of infringement for two patents were deemed conclusory and lacking in factual allegations. Similarly, the panel found no error in the district court’s application of Alice, and affirmed summary judgment in favor of Sony. But the panel determined that the district court erred by dismissing the other two patents for failure to state a claim of infringement by demanding highly specific allegations too early in the proceedings. The panel found that Bot M8 alleged specific instances of infringement sufficient to meet the plausibility requirements for Bot M8’s claim.
The Federal Circuit also found no abuse of discretion in the district court’s denial of Bot M8’s request for leave to file a second amended complaint. While the court acknowledged that requiring reverse engineering of the accused device may not have been necessary, Bot M8 waived any objection to this requirement by volunteering to complete the task without suggesting that compliance would be difficult in terms of labor or obtaining legal permissions.
Yu v. Apple Inc., 1 F.4th 1040 (Fed. Cir. 2021)
Facts: This case concerns whether claims directed to a device that implements an abstract idea are patent ineligible under 35 U.S.C. § 101.
Yu owns U.S. Patent No. 6,611,289 (“the ‘289 patent”) titled “Digital Cameras Using Multiple Sensors with Multiple Lenses.” Yu sued Apple Inc. and Samsung Electronics Co., Ltd. (“Defendants”) for infringement of claims 1, 2, and 4. Claim 1 is representative and recites:
1. An improved digital camera comprising:
a first and a second image sensor closely positioned with respect to a common plane, said second image sensor sensitive to a full region of visible color spectrum;
two lenses, each being mounted in front of one of said two image sensors;
said first image sensor producing a first image and said second image sensor producing a second image;
an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;
an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital image and said second digital image; and
a digital image processor, coupled to said image memory and receiving said first digital image and said second digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.
Defendants filed a Rule 12(b)(6) motion to dismiss. The district court found that the asserted claims were directed to “the abstract idea of taking two pictures and using those pictures to enhance each other in some way,” decided that each asserted claim was patent ineligible under § 101, and granted the motion to dismiss. Yu appealed to the Federal Circuit.
Held: Affirmed. The claims are directed to an abstract idea and lack an inventive concept sufficient to transform the abstract idea into a patent-eligible invention.
Reasoning: The Court applied 9th Circuit law, which reviews a district court’s grant of a Rule 12(b)(6) motion de novo. It also applied its own law and reviewed the district court’s determination of patent ineligibility under § 101 de novo.
The Court used the Mayo/Alice two-step framework to analyze whether a patent claim is eligible under § 101. The first step analyzes whether “a patent claim is directed to an unpatentable law of nature, natural phenomenon, or abstract idea.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014). If it is, then the court determines “whether the claim nonetheless includes an ‘inventive concept’ sufficient to ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72 (2012)).
At step one, the Court found that “claim 1 is directed to the abstract idea of taking two pictures (which may be at different exposures) and using one picture to enhance the other in some way.” Reading the claim language in view of the specification, the Court noted that claim 1 results in “producing a resultant digital image from said first digital image enhanced with said second digital image,” and that “Yu does not dispute that . . . the idea and practice of using multiple pictures to enhance each other has been known by photographers for over a century.”
The Court further found that “[o]nly conventional camera components are recited to effectuate the resulting ‘enhanced’ image” and that “it is undisputed that these components were well-known and conventional.” It therefore concluded that “[w]hat is claimed is simply a generic environment in which to carry out the abstract idea.”
Yu asserted that claim 1 is “directed to a ‘patent-eligible improvement in digital camera functionality’ by ‘providing a specific solution’ to problems such as ‘low resolution caused by low pixel counts’ and ‘inability to show vivid colors caused by limited pixel depth.’” The Court, however, found that “claim 1’s solution to these problems is the abstract idea itself—to take one image and ‘enhance’ it with another.”
Yu also argued that parts of the specification provide support that the patentable advance in the claims is “the particular configuration of lenses and image sensors.” The Court, though, found that “[e]ven a specification full of technical details about a physical invention may nonetheless conclude with claims that claim nothing more than the broad law or abstract idea underlying the claims.” ChargePoint, Inc. v. Sema-Connect, Inc. 920 F.3d 759, 769 (Fed. Cir. 2019). For instance, the specification refers to a “four-lens, four-image-sensor configuration” as an advance over the prior art, where “three of the sensors are color-specific while the fourth is a black-and-white sensor.” Claim 1, however, is limited only to a “two-lens, two-image-sensor configuration in which none of the image sensors must be color.” The Court found “the mismatch between the specification . . . and the breadth of claim 1 underscores that the focus of the claimed advance is the abstract idea and not the particular configuration discussed in the specification that allegedly departs from the prior art.”
At step two, the Court found that there was no inventive concept sufficient to transform the claimed abstract idea into a patent-eligible invention. The Court reasoned that claim 1 failed under step two because it is “recited at a high level of generality and merely invokes well-understood, routine, conventional components to apply the abstract idea.” Yu asserted that the prosecution history shows that the claim was allowed over multiple prior art references. The Court, however, found that “even if claim 1 recites novel subject matter, that fact is insufficient by itself to confer [patent] eligibility” and went on to explain that “[t]he claimed [two-lens, two-image-sensor] configuration does not add sufficient substance to the underlying abstract idea of enhancement—the generic hardware limitations of claim 1 merely serve as ‘a conduit for the abstract idea.’” In re TLI Commc’ns LLC Pat. Litig., 823 F.3d 607, 612 (Fed. Cir. 2016).
Additionally, the Federal Circuit found that the district court’s recognition of a “century-old practice” at the pleadings stage was appropriate, that the 12(b)(6) motion could properly be determined without hearing expert testimony, and that it was not error for the district court to consider only the intrinsic record (the patent itself) to conclude that it was patent ineligible.
The Federal Circuit therefore affirmed the district court’s decision that the claims of Yu’s patent are ineligible under § 101 and affirmed the order granting the 12(b)(6) motion.
Judge Newman dissented and argued that the majority was “further enlarge[ing] . . . and further obfuscat[ing] the statute.” She argued that the claimed “camera is a mechanical and electronic device of defined structure and mechanism; it is not an ‘abstract idea.’ Observation of the claims makes clear that they are for a specific digital camera . . . . not for the general idea of enhancing camera images.” Such a device “easily fits the standard subject matter eligibility criteria.” While the patent specification describes the superior image definition capabilities of the claimed camera, “[a] statement of purpose or advantage does not convert a device into an abstract idea.”
Trimble Inc. v. PerDiemCo LLC, 997 F.3d 1147 (Fed. Cir. 2021)
Facts: This case concerns whether a patentee is subject to specific personal jurisdiction in the federal district where an alleged infringer is headquartered, when the alleged infringer files a declaratory judgment action in that district after the parties have engaged in licensing negotiations.
PerDiemCo LLC (“PerDiemCo”) is a Texas LLC. It owns eleven patents all related to electronic logging devices and/or geofencing designed to help employers track commercial vehicles and drivers. PerDiemCo’s sole owner, officer, and employee lives and works in Washington, D.C. PerDiemCo rents office space in Marshall, TX, but its sole owner, officer, and employee has never visited the space and it has no employees there.
Trimble Inc. (“Trimble”) and its wholly owned subsidiary Innovative Software Engineering, LLC (“ISE”) make and sell GPS navigation products and services, which include electronic logging and geofencing devices and services. Trimble is a Delaware Corporation with its headquarters in the Northern District of California. ISE is an Iowa LLC with its headquarters and principal place of business in Iowa.
PerDiemCo sent a letter to ISE in Iowa alleging that ISE was infringing PerDiemCo’s patents. This letter was forwarded to Trimble’s Chief IP Counsel in Colorado. Between October and December 2018, the parties engaged in licensing negotiations, and PerDiemCo threatened to sue Trimble and ISE for patent infringement in the Eastern District of Texas. During these negotiations, PerDiemCo communicated with Trimble at least twenty-two times via letter, email, or telephone.
In January 2019, Trimble and ISE filed a complaint in the Northern District of California, where Trimble is headquartered. They sought a declaratory judgement that they did not infringe any of the patents PerDiemCo asserted.
PerDiemCo moved to dismiss for lack of personal jurisdiction under Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998), which states that “[a] patentee should not subject itself to personal jurisdiction in a forum solely by informing a party who happens to be located there of suspected infringement” because “[g]rounding personal jurisdiction on such contacts alone would not comport with principles of fairness,” id. at 1361.
The district court found that while PerDiemCo had established sufficient minimum contacts with California through its negotiations with Trimble, it would be constitutionally unreasonable to exercise personal jurisdiction over PerDiemCo in view of Red Wing. It therefore dismissed Trimble and ISE’s complaint. Trimble and ISE appealed to the Federal Circuit.
Held: Reversed and remanded. The exercise of personal jurisdiction over PerDiemCo in the Northern District of California is not unreasonable and satisfies due process.
Reasoning: The Court applied Federal Circuit law “because the jurisdictional issue is intimately involved with the substance of the patent laws.” Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009). Therefore, because the parties did not dispute the jurisdictional facts, the Court reviewed the question of personal jurisdiction de novo.
The exercise of personal jurisdiction over an out-of-state defendant involves an evaluation as to whether the forum state’s long-arm statute permits service of process and whether the assertion of personal jurisdiction violates due process. California allows service of process to the limits of the Due Process Clauses, and therefore the “two inquiries fold into one”—whether personal jurisdiction over PerDiemCo was consistent with due process.
A Court may exercise personal jurisdiction over a defendant when the defendant has had sufficient minimum contacts with the forum state and when the exercise of personal jurisdiction “does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 310, 316-17 (1945).
Minimum contacts are typically established when the defendant intentionally reaches out to the forum state and purposefully avails itself of doing business there. The plaintiff’s claims must arise out of or relate to those contacts. To satisfy fair play and substantial justice, the Court considers the burden on the defendant, the forum state’s interest in adjudicating the dispute, the plaintiff’s interest in convenient and effective relief, the interstate judicial system’s interest in obtaining an efficient resolution, and the shared interest of the states in furthering fundamental substantive social policies.
The Court noted that Supreme Court cases following Red Wing make clear that special patent policies and considerations cannot impact the personal jurisdiction analysis.
The Supreme Court has held that communications sent into a state may give rise to specific personal jurisdiction and that a defendant that repeatedly communicates with the forum state “clearly has fair warning that [its] activity may subject [it] to the jurisdiction of a foreign sovereign.” Quill Corp. v. North Dakota, 504 U.S. 298, 308 (1992). The Federal Circuit has interpreted this to mean that “negotiation efforts, although accomplished through telephone and mail . . . can still be considered as activities purposefully directed at residents of [the forum].” Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1362 (Fed. Cir. 2001) (discussing Quill). The Court noted that it previously held that Red Wing did not create a rule that “patent enforcement letters can never provide the basis for jurisdiction in a declaratory judgement action.” Jack Henry & Associates, Inc. v. Plano Encryption Technologies LLC, 910 F.3d 1199, 1206 (Fed. Cir. 2018).
Other circuits have found that communications from outside a forum state can lead to specific personal jurisdiction in the forum. See, e.g., Yahoo! Inc. v. La Ligue Contre le Racisme et l’Antisemitisme, 433 F.3d 1199, 1208 (9th Cir. 2006) (en banc) (cease-and-desist letter can be basis for personal jurisdiction); Oriental Trading Co. v. Firetti, 236 F.3d 938, 943 (8th Cir. 2001) (directing communications into state gives rise to personal jurisdiction).
Other activities have also led to minimum contacts relevant to declaratory judgment patent cases, such as hiring an attorney or patent agent in the forum state, Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1351 (Fed. Cir. 2003); physically entering the state to demonstrate the technology, id., or to discuss infringement allegations with the plaintiff, Xilinx, Inc. v. Papst Licensing GmbH & Co. KG, 848 F.3d 1346, 1357 (Fed. Cir. 2017); the presence of an exclusive licensee in the state, Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1366-67 (Fed. Cir. 2006); and “extra-judicial patent enforcement” targeting businesses in the state, Campbell Pet Co. v. Miale, 542 F.3d 879, 886 (Fed. Cir. 2008).
Further, the Court evaluated the Supreme Court’s recent decision in Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., which found that the “link” or “connection” between the defendant’s contact with the state and the plaintiff’s suit requires only that the complaint “arise out of or relate to the defendant’s contacts with the forum.” 141 S.Ct. 1017, 1026 (2021). The Federal Circuit interpreted this to mean that nonexclusive patent licenses in a forum state can support personal jurisdiction over the licensor.
Here, the Court found that PerDiemCo’s contacts with California were extensive, including twenty-two communications with Trimble in California over three months. This is “far beyond solely informing a party who happens to be located in California of suspected infringement.” Therefore, PerDiemCo had sufficient minimum contacts to justify personal jurisdiction in California.
Further, the Court found that the factors of fair play and substantial justice each lean in favor of personal jurisdiction being reasonable. The Federal Circuit reversed the district court’s order finding a lack of personal jurisdiction and remanded for further proceedings.