Precedential and Key Federal Circuit Opinions
1. IOENGINE, LLC V. VIDAL (21-1227 Lourie, Chen, Stoll)
Chen, J. The Court reversed in part and affirmed in part the Final Written Decisions of the Patent Trial and Appeal Board (“Board”) finding unpatentable certain claims of the challenged patents. IOENGINE appealed, arguing that the Board incorrectly applied the printed matter doctrine, among other arguments.
Under the printed matter doctrine, claim limitations directed to printed matter are given no patentable weight because they are deemed to fall outside the scope of patentable subject matter. In re Distefano, 808 F.3d 845, 848 (Fed. Cir. 2015). The doctrine applies to any information claimed for its communicative content, regardless of medium, and involves a two-step test.
Under the first step—whether the limitation in question is directed toward printed matter—the Board determined that the claim term “encrypted communications” claims only communicative content, because it found nothing in the claim that requires anything beyond sending and receiving data, even if the data is in an encrypted format. Under the second step—whether the claimed informational content has a functional or structural relation to the substrate, in which case it should be given patentable weight—the Board found that there was no functional relationship of the encrypted data to the communication carrying it because nothing in the claims required the data to be used, manipulated, or otherwise processed beyond being transmitted. The Court disagreed, finding that the claimed “encrypted communications” does not constitute printed matter. Printed matter is claimed for its content specifically being communicated. The fact that there is a communication itself is not content; content is what the communication actually says. Nor is the form of a communication, such as whether it is encrypted, considered to be content. Printed matter encompasses what is communicated, not the act of a communication itself.
Likewise, the Court also disagreed with the Board’s finding that the claim term “program code” is printed matter because the “program code” is not claimed for its communicative content. The claims are silent as to the contents of the claimed “program code,” meaning the program code is not printed matter. To conclude otherwise would impermissibly expand the printed matter doctrine beyond its current scope.
2. PACKET INTELLIGENCE LLC V. NETSCOUT SYSTEMS, ET. AL (22-2064 Lourie, Hughes, Stark)
Stark, J. The Court vacated and remanded the judgment of the U.S. District Court for the Eastern District of Texas with instructions to dismiss the case as moot.
The Court had issued an earlier decision in 2020, affirming infringement and validity among other issues and reversing with respect to pre-suit damages. While on remand, the Patent Trial and Appeal Board (“Board”) issued final written decisions in inter partes reviews, finding all asserted claims unpatentable. Packet Intelligence appealed those decisions, and NetScout moved to dismiss the district court case or, in the alternative, to stay it until the conclusion of Packet’s appeal. The district court denied NetScout’s motion and entered an amended final judgment. In the appeal, Packet argued that the Court’s 2020 decision was sufficiently final to render the infringement judgment immune to the Board’s subsequent unpatentability determination.
Under Fresnius, a patent infringement judgment is immune to subsequent unpatentability findings only when the infringement judgment ends the litigation on the merits and leaves nothing for the court to do but execute the judgment. Fresnius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1341. Even though the Court’s 2020 decision had affirmed a judgment of infringement of valid patent claims, it also remanded for the district court to excise pre-suit damages, and thus did not leave anything for the district court to do but execute the judgment. Packet’s suit against NetScout was not final as it proceeded on remand in the district court.
In addition, Packet briefly asserted that even if its case was not final when it was proceeding on remand in the District Court, it is sufficiently final now. The Court rejected this argument because this case remains pending as a result of NetScout’s non-frivolous appeal of the district court’s amended judgment.
3. SNAPRAYS, DBA SNAPPOWER V. LIGHTING DEFENSE GROUP (23-1184 Moore, Lourie, Dyk)
Moore, C.J. The Court reversed and remanded the decision of the U.S. District Court for the District of Utah dismissing SnapPower’s complaint for a declaratory judgment of noninfringement against Lightning Defense Group (“LDG”) for lack of personal jurisdiction. The Court reversed and remanded after concluding that LDG purposefully directed extra-judicial patent enforcement activities at SnapPower in Utah.
SnapPower sold products on Amazon.com, and Amazon offers a low-cost procedure called the Amazon Patent Evaluation Express (APEX) to efficiently resolve claims that third-party product listings infringe utility patents. To initiate an evaluation under APEX, a patent owner submits an APEX agreement to Amazon, which identifies one claim of a patent and allegedly infringing listings, and is then sent to the identified sellers. In May 2022, LDG submitted an APEX Agreement alleging certain SnapPower products sold on Amazon.com infringed LDG’s patent. Amazon notified SnapPower of the Apex Agreement and available options. SnapPower and LDG exchanged emails and no agreement was reached, so SnapPower filed an action for declaratory judgment of noninfringement. LGD moved to dismiss for lack of personal jurisdiction and the District Court granted LDG’s motion, finding it lacked specific personal jurisdiction over LDG.
On appeal, the Court applied a three-factor test for whether specific personal jurisdiction comports with due process: (1) whether the defendant purposefully directed its activities at residents of the forum; (2) whether the claim arises out of or relates to the defendant’s activities with the forum; and (3) whether assertion of personal jurisdiction is reasonable and fair.
As to the first factor, LDG purposefully directed enforcement activities at Utah when it initiated the APEX program, thereby satisfying the first factor of the Court’s test. As to the second factor, SnapPower’s suit arose out of defendant’s activities with the forum because LDG’s actions of submitting the APEX Agreement was directed towards SnapPower in Utah. Finally, under the third factor, because the first two factors were satisfied, specific jurisdiction was ”presumptively reasonable.” LDG did not meet its burden to present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.
4. INTELLECTUAL TECH LLC V. ZEBRA TECH. CORP. (2022-2207 Prost, Taranto, Hughes)
Prost, J. The Court reversed and remanded the U.S. District Court for the Western District of Texas’s decision dismissing all Intellectual Tech LLC’s (“IT”) claims against Zebra for lack of constitutional standing. IT owned the asserted patent subject to a set of security agreements with Main Street Capital Corporation (“Main Street”). The agreements allowed Main Street to “sell, assign, transfer, pledge, encumber or otherwise dispose of” the ’247 patent through a loan agreement.
The District Court had denied Zebra’s motion to dismiss for lack of standing under F.R.C.P. 12(b)(1) and 12(c), explaining that IT is the rightful owner of the asserted patent, retains the right to enforce that patent, and thus has constitutional and statutory standing to bring a patent infringement suit against Zebra. Zebra then renewed its standing arguments in the form of a motion for summary judgment for lack of subject-matter jurisdiction. Zebra primarily asserted that the “initial default in 2013 triggered an immediate transfer of exclusionary rights to Main Street” leaving “no exclusionary rights to assign IT.” Although the District Court denied Zebra’s primary argument and found the default gave Main Street the right to enforce, sell, assign, transfer, pledge, encumber or otherwise dispose of’ the ’247 patent,” the default did not “automatically divest title to the ’247 patent.” Nevertheless, the District Court granted Zebra’s motion as to constitutional standing because Zebra could still obtain a license to the asserted patent from Main Street, thereby depriving IT of all its exclusionary rights.
On appeal, to show IT has constitutional standing, IT needed to show that it retained an exclusionary right—i.e., infringement would amount to an invasion of IT’s legally protected interest. The Court concluded that under the only reasonable reading of the security agreement, IT still retained at least one exclusionary right, namely the right to enforce, even in view of the rights Main Street gained upon default. As such, the Court found that Main Street and IT’s shared ability to license while a default existed did not divest IT, the patent owner, of all exclusionary rights.
