Federal Circuit Review | July 2012

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The July 2012 Federal Circuit Review is out!

"FRCP Sample Complaint Form is Sufficient to State a Claim for Direct Infringement"

"Objective Recklessness is a Question of Law"

"Long List of Possible Ingredients Can Anticipate Specific Combinations"

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Federal Circuit Review | July 2012

  1. 1. Federal Circuit Review VOLUME 2 | ISSUE 7 JULY 2012FRCP Sample Complaint Form Is Sufficient to State a Claim forDirect InfringementIn In Re Bill of Lading Transmission and Processing System Patent Litigation, (Appeal No. 2010-1493), the Federal Circuitaffirmed the district court’s holding that R+L Carriers, Inc. (R+L)’s amended complaints failed to state a claim of contributoryinfringement, but reversed its holding that those amended complaints failed to state a claim of induced infringement. The FederalCircuit therefore reversed the dismissal of the case and remanded for further proceedings.The district court concluded that R+L failed to adequately plead direct infringement by defendants’ customers because the inferencesin the complaints were not reasonable. The district court also concluded that the complaints failed to plausibly plead that thedefendants had specific intent to induce infringement or that the accused products lacked substantial noninfringing uses. R+Lappealed.The Federal Circuit found that R+L’s amended complaints adequately pled direct infringement by the defendants’ customers asmeasured by the sample complaint for direct infringement, Form 18 of the Appendix to Forms to the F.R.C.P. The court explainedthat Form 18 and the F.R.C.P. do not require a plaintiff to plead which claims it is asserting, how each element of an asserted claimis met, or who the specific direct infringer is.With respect to induced infringement, the Federal Circuit held that, to survive the defendants’ motion to dismiss, R+L’s amendedcomplaints must contain facts that, if true, would plausibly show that the defendants specifically intended their customers to infringethe ’078 patent and that they knew the customers’ acts constituted infringement. When the allegations in R+L’s lengthy amendedcomplaints were considered as a whole and in the context of the technology disclosed in the ’078 patent and the relevant industry, itwas clear that the inferences drawn by R+L were both reasonable and plausible. R&L was not required to plead that the defendanthad instructed a specific customer to perform all of the steps of the patented methods.Turning to contributory infringement, the Federal Circuit affirmed the dismissal of R+L’s claims because the documents accompanyingthe amended complaints, e.g., the defendants’ advertising, demonstrated that the defendants’ products had substantial non-infringinguses.Judge Newman dissented to the majority’s holding that, to the extent that Twombly and its progeny conflict with the requirementsof Form 18, the form controls. She argued that the plaintiff must at least “give the defendant fair notice of what the . . . claim is andthe grounds upon which it rests.” However, she concurred in the majority’s conclusion because she believed that the amendedcomplaints satisfied the standards of Twombly and Iqbal. In This Issue • FRCP Sample Complaint Form Is Sufficient • Long List of Possible Ingredients Can to State a Claim for Direct Infringement Anticipate Specific Combinations • Objective Recklessness Is a Question of Law
  2. 2. Objective Recklessness Is a Question of LawIn Bard Peripheral Vascular, Inc. v. W.L. Gore & Assoc., Inc., (Appeal No. 2010-1510), the Federal Circuit affirmed-in-part,reversed-in-part, and remanded to the Arizona district court for further analysis of willful infringement under Seagate.In a previous decision, the Federal Circuit had affirmed the judgment of the trial court regarding its denial of JMOL of no willfulinfringement. W.L. Gore filed a petition for rehearing and rehearing en banc, arguing that the trial court had improperly applied In reSeagate’s two-pronged willfulness analysis. On further review, the en banc court remanded the case back to the panel for furtherconsideration. The panel vacated the portions of its prior decision relating to willfulness and enhanced damages. The court clarifiedthat the objective prong under Seagate is a question of law based on underlying mixed questions of law and fact and is thereforesubject to de novo review.The court explained that, although willfulness had long been considered a question of fact, recent case law has shown that the issueis much more complex. Thus, while the ultimate question of willfulness based on an assessment of the second prong of Seagatemay be a question of fact, Seagate’s first prong requires the court to make a threshold determination of objective recklessness as amatter of law. In light of its clarification that the objective prong of the Seagate standard is a legal question for the court, the FederalCircuit remanded the case back to the district court to make the appropriate determinations in the first instance.Judge Newman concurred in the vacatur but dissented from the partial remand. In Judge Newman’s view, the facts of record weresufficient for the court to find, in the first instance, that W.L. Gore did not willfully infringe, thereby obviating the need to remand tothe trial court. Judge Newman suggested, however, that if willfulness were to be retried, the other appealed issues of validity andinventorship would become relevant and should also be reviewed by the trial court.Long List of Possible Ingredients Can Anticipate SpecificCombinationsIn WM. Wrigley Jr. Co. v. Cadbury Adams USA LLC., (Appeal No. 2011-1140), the Federal Circuit affirmed summary judgmentof non-infringement and invalidity.Wrigley and Cadbury manufacture chewing gums containing menthol and a “cooling sensation” compound. Wrigley’s ’233 patentcovers gum comprising menthol and the compound WS-23, while Cadbury’s ’893 patent covers menthol and the compound WS-3.Following the success of Wrigley’s product, Cadbury began using WS-23 and Wrigley sued for infringement. Cadbury countersued,alleging infringement of its own patent. The district court granted Wrigley’s motion for summary judgment of non-infringement of the’893 patent, and Cadbury’s motion for summary judgment of invalidity of the ’233 patent as anticipated and obvious. Both partiesappealed.Wrigley argued that the prior art did not anticipate the ’233 patent because the art did not disclose the combination of menthol andWS-23, but rather provided a long list of possible ingredients from which a person of skill in the art would need to pick. The FederalCircuit affirmed that the claim was anticipated because WS-23 was one of three “particularly preferred” cooling agents and becausementhol was among the “most suitable” flavoring ingredients. Regarding obviousness, Wrigley argued unexpected cooling effectsof the combination, commercial success and copying demonstrated non-obviousness. The court, however, affirmed the finding ofobviousness because the prior art taught a “synergistic cooling effect” between menthol and WS-3, and that WS-3 and WS-23 hadcommon characteristics relevant to their “cooling effects.” Thus, Wrigley needed to demonstrate that WS-23 and menthol had anunexpected “cooling effect” beyond that provided by WS-3 and menthol, which it did not do. The court discounted the evidence ofcommercial success and copying because there was no nexus to the novel aspects of the invention.With regard to Cadbury’s ’893 patent, the Federal Circuit affirmed the finding of non-infringement by Wrigley under the doctrine ofequivalents because the patent’s claims were directed to a narrow class of compounds which did not include WS-23, even thoughat the time of filing WS-23 was a known substitute for the claimed WS-3 compound.Judge Newman dissented regarding the validity of the ’233 patent, arguing that the patent was non-obvious in view of Wrigley’sevidence of unexpected results, commercial success and copying, and that it was not anticipated because it was undisputed that aperson of ordinary skill would not “at once envisage” the combination of menthol and WS-23 from the long list of ingredients in theprior art. 2 knobbe.com
  3. 3. Knobbe Martens Offices Orange County San Diego San Francisco Silicon Valley Los Angeles Riverside Seattle Washington DC© 2012 Knobbe Martens Olson & Bear LLP, a Limited Liability Partnership including Professional Corporations. All rights reserved. The information contained in thisnewsletter has been prepared by Knobbe, Martens, Olson & Bear, LLP and is for general informational purposes only. It does not constitute legal advice. While every efforthas been made to ensure the accuracy of the information contained in this newsletter, Knobbe Martens Olson & Bear LLP does not guarantee such accuracy and cannot beheld liable for any errors in or any reliance upon this information. Transmission of this newsletter is neither intended nor provided to create an attorney-client relationship,and receipt does not constitute an attorney-client relationship. You should seek professional counsel before acting upon any of the information contained in this newsletter. Who We Are Over 95% of our litigators hold technical degrees, including electrical engineering, computer science, mechanical engineering, chemistry, chemical engineering, biochemistry, biology, and physics. Many of our litigators are former Federal Circuit or district court clerks. With eight offices, Knobbe Martens represents clients in all areas of intellectual property law. • Exclusive practice in the area of intellectual property since 1962 • M ore than 250 lawyers, many of whom have advanced degrees in various technologies • I nternationally recognized leaders in IP across a vast spectrum of technology areas knobbe.com 3

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