Split CAFC Partially Reopens Door for Valve in Attempt to Overturn $4 Million Patent Infringement Ruling

Yesterday, the US Court of Appeals for the Federal Circuit (CAFC) upheld portions of a district court decision finding video game company Valve willfully infringed Ironburg’s US Patent No. 8,641,525. However, the CAFC judge ruled that he estopped Valve from raising several reasons not covered by the partially-instituted inter partes review (IPR) petition against Ironburg. ruled to be erroneous. Justice Clevenger disagreed.

A jury awarded Valve $4 million in damages. The district court denied increased damages, found that the two challenged claims were not indefinite, said the claims were willfully infringed, and Valve found that the IPR was sought but commenced. held and held barred from litigating grounds of prior art that were not filed. That his Valve was estopped from suing grounds of invalidity that were later discovered.

The CAFC affirmed all but the latter finding, saying that it is the patent owner’s responsibility to prove that prior art discovered after it was not part of the IPR petition is subject to the IPR. I explained that I had to follow the criteria of the “investigator”. Estoppel.

A CAFC judge wrote on Ironberg’s behalf that “the district court unduly imposed the burden of proof on Valve.” Therefore, the court vacated this aspect of the decision and remanded the subsequently discovered grounds for vacancy for further proceedings.

“We agree with Valve that the burden of proof rests on the patent owner to demonstrate by a preponderance of the evidence that a skilled researcher, using reasonable care, would have identified the grounds for invalidation. Affirmative Defense to IPR Estoppel,” the CAFC wrote.

Estoppel

Valve pursued invalidity grounds based on third-party IPR petitions filed after Valve’s own IPR petition.

Both Valve and Ironburg agreed that the court should apply the “skilled searcher” standard consistent with 35 US Code § 315 in this case. . . could reasonably have been raised inside. . . inter partes review. “

Although the district court did not expressly state which party had the burden of proving what a skilled searcher could find, the CAFC implyed that the district court’s inference that liability rests with Valve. claimed to be relevant.

In the district court proceedings, Valve attempted to show the court that it had failed to reveal the prior art at issue, even though its search was “reasonably diligent.” Valve also cited Collective Minds’ IPR proceedings, but did not comment on the accuracy of the investigation.

However, the district court held that this was not persuasive and that Valve had failed to provide sufficient evidence to prove that the investigation was vigorous.

The CAFC judge said, “The district court’s estoppel conclusion was not yet proven on record that the prior art search conducted by Collective Minds was merely ‘reasonably’ diligent and required no special measures.” It is based on assumptions that have not been made.”

Accordingly, the CAFC has agreed with Valve that the burden is on the patent owner to demonstrate that a skilled searcher would uncover this prior art.

Previously, Ironburg has attempted to argue that the burden of proof should not rest on the patent owner because patent opponents seek to conceal their search efforts through attorney-client privilege. However, the CAFC was unconvinced by this argument, saying how important skilled searchers are. right Find out with reasonable care, not what patent challengers do bottom seek.

Ambiguity and infringement analysis confirmed

Valve’s first argument on appeal was that the district court erred in its holding that two claim terms of the ‘525 patent were not invalid due to ambiguity. In a previous lawsuit, Valve argued that the “elongated member” and “substantially the entire distance between the top and bottom ends” were unclear and therefore invalid.

However, the CAFC concurred with the district court and determined that those of ordinary skill in the art could understand the meaning of these terms.

“Valve’s arguments do not persuade us to reach a different conclusion,” the CAFC judge wrote on the issue of claim construction.

Valve also filed multiple petitions with the CAFC to overturn the infringement verdict or initiate a new trial, but the judges were unsatisfied with these petitions.

The case effectively moved forward in 2021 due to the pandemic, with jurors each shipping two video game controllers related to the patent. The CAFC cited Valve’s enthusiasm for this method throughout the litigation as a rebuttal to the company’s appeal that the jury failed to understand certain characteristics of the controller.

Valve’s new attempt was also unsuccessful. The video game company alleged that the testimony of Ironburg inventor Duncan Ironmonger turned into testimony of expert opinion on infringement. However, the CAFC disagreed, writing, “Even though this strayed into the realm of undisclosed expert opinion, Valve failed to demonstrate the errors it admitted to be unfavorable.” increase.

Ultimately, the Federal Circuit found that the district court did not abuse its discretion by admitting Ironmonger’s testimony. Further, the judge wrote, “the jury had substantial evidence to support its verdict of infringement, even without considering this testimony.”

This, combined with the circuit court’s disagreements with Valve on other points, resulted in the CAFC upholding the district court’s denial of Valve’s motion for retrial.

harmless error

The CAFC found that the district court erred in connection with Valve’s motion to vacate its willful infringement judgment.

The district court ruled that the motion was invalid because the court did not plan to use its discretion to enhance infringement damages. Therefore, the district court found that it does not matter whether the willful determination was valid. However, the CAFC explained that willfulness and enhancement are separate matters and that Valve should have ruled on the merits of its allegations.

A circuit court judge said, “A finding of willful infringement also has collateral consequences for parties not ordered to pay enhanced damages, such as defamation and the possibility of default in bankruptcy.” It can bring about,” he wrote.

However, because Valve did not seek further reconsideration of the matter, but merely sought revocation, the CAFC concurred with the District Court’s earlier ruling that infringement was willful, and held that the error was harmless. .

opposite opinion

Judge Clevenger dissented from the majority decision that the ‘525 patent is not perpetual, arguing that: Nautilus, Inc. vs. Biosig Instruments, Inc.The patent claims that
specification and filing history, [must] Inform a person skilled in the art of the scope of the invention with reasonable certainty. In the case of the ‘525 patent, Mr. Clevenger said: But the craftsman needs to know where on the top edge to start the major measurements, and there is no such guidance in the spec. “

Further, Clevenger said, “Neither the claims nor the specification specifically indicate where the bottom edge of the claimed controller is.” Even if the drawing tells the craftsman how to find the bottom edge, “The craftsman faces the same basic dilemma: Where along the bottom edge does the critical measurement end?”

To illustrate his argument, Clevenger points to Figure 2 of the patent, in which a potential competitor could identify relevant measurement points on the top and bottom of the controller to see if it was infringed. I said I can’t know how. Clevenger added:

“The policy purpose of the clarity requirement is to give competitors at least a fair chance to avoid infringement. It reduces some slackness to the invention (e.g., the inherent limitations of language), but in this case Ironburg shouldn’t slack.For the English language or related art, the patentee has Nothing prevented me from stating clearly where along the “full distance” measurements should be made. “

Therefore, Clevenger would have held the patent to be indefinite.