“Between June 1 and December 1, 2024, the Federal Circuit denied all ten mandamus petitions relating to venue issues that it received.”
The last six months of 2024 saw numerous interesting, precedential decisions from the Federal Circuit on a range of patent issues. This article briefly summarizes six of those opinions as well as a perceived trend relating to mandamus petitions.
En Banc Rehearing of Damages Challenge
In June, the Federal Circuit issued a precedential opinion in EcoFactor v. Google LLC, 104 F.4th 243 (Fed. Cir. 2024), rejecting Google’s appeal that the district court abused its discretion in admitting the testimony and opinions of EcoFactor’s damages expert, Mr. Kennedy, specifically as it related to evidence surrounding EcoFactor’s portfolio licenses. Id. at 252.
The majority opinion expressed that Google’s argument to exclude the testimony would raise the standard for admissibility too high, such that “the trial judge no longer [would] act[] as a gatekeeper but assumes the role of the jury.” Id. at 257. In dissent, Judge Prost argued “the majority opinion here at best muddles our precedent and at worst contradicts it.” Id. at 257. The dissent agreed with Google and found the expert’s royalty rate to be a product of EcoFactor’s subjective beliefs, not reliable inputs and methodology tied to the facts of the case.
Three months later, the court granted en banc rehearing and requested the parties file new briefs on the “court’s adherence to Federal Rule of Evidence 702 and Daubert.” EcoFactor, Inc. v. Google LLC, 115 F.4th 1380 (Fed. Cir. 2024). Thus, in 2025 the en banc court will use this case as a vehicle to consider the standards imposed by Rule 702 (including 2023 Amendments thereto). After Google submitted its opening brief, the court published a precedential order directing EcoFactor to disregard Google’s argument that Mr. Kennedy’s proposed royalty rate should have been excluded for not being reliably apportioned. In other words, the court will only be addressing whether Kennedy properly applied a running royalty amount from the lump sum agreements, and not whether his running royalty for just the infringed patent is reliably apportioned. It seems the Court will not provide guidance or reconciliation of its case law regarding use of portfolio agreements as benchmarks in the reasonable royalty analysis.
Revival of False Patent Marking as a Trademark Claim
In Crocs, Inc. v. Effervescent, Inc., 119 F.4th 1 (Fed. Cir. 2024), Dawgs alleged Crocs violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), when it created false advertisements and commercial misrepresentations in promoting its “Croslite” footwear as “patented,” “proprietary,” and “exclusive.” The district court granted summary judgment in favor of Crocs saying Dawgs’ claims were not directed to the nature, characteristics, or qualities of Crocs’ products, reasoning that any claim that a product was patented was directed to inventorship, and thus was precluded by the Supreme Court’s Dastar Corp. v. Twentieth Century Fox Film Corp. and the Federal Circuit’s Baden Sports Inc. v. Molten USA Inc. decisions.
The Federal Circuit reversed, holding that there was a cause of action against Crocs for its product advertisements. The court found that Crocs’ promotional statements went further than merely a false claim of origin, which was prohibited under the Dastar and Baden precedents, instead differentiating the Crocs’ material from other molded footwear in a way that could “deceive consumers and potential consumers into believing that all other molded footwear is made of inferior material.” Crocs, Inc, 119 F.4th at 3 (omission and citation omitted).
This case is interesting because it may revive “false patent marking” as something that consumer goods and other companies need to consider when promoting their products. Prior to the America Invents Act (AIA) in the early 2010’s, a plaintiff could bring a qui tam claim for recovery of up to $500 per product that was falsely marked as practicing a patent, without needing to show injury. The AIA changed this by requiring that plaintiffs show that it suffered a competitive injury and by limiting recovery to “damages adequate to compensate for the infringement.” 35 U.S.C § 284. Obviously, the standing requirements of Lanham Act claims will not re-open the floodgates to the false marking claims that we saw in the 2010’s, but this development is meaningful because the current false patent marking statute requires intent (“for the purpose of deceiving the public”), while the Lanham Act does not. And this decision is all the more interesting given that the Federal Circuit does not have exclusive jurisdiction over false advertising claims, so other circuit courts could reach a different result.
Approval of District Court’s Inherent Powers
For the past two years, the U.S. District Court of Delaware has unveiled potential attorney and party misconduct in related patent cases as part of its policing of new disclosures of interested parties in the litigation. See Nimitz Techs. LLC v. CNET Media, Inc., No. 21-1247, 2022 WL 17338396, at * 10–12. In July, the Federal Circuit heard an appeal in one of the cases involving Backertop Licensing LLC, a plaintiff LLC created by IP Edge and Mavexar, after the Delaware District Court ordered the sole owner of Backertop, Ms. LaPray, to appear in person for testimony regarding potential fraud on the court. 107 F.4th 1335 (Fed. Cir. 2024).
Although Backertop argued that Federal Rule of Civil Procedure (FRCP) 45 “preclude[ed] the district court’s order requiring Ms. LaPray to appear in Delaware” because she does not fall within the 100-mile requirement, the district court denied her motion because the order to appear was rooted in its inherent powers, not FRCP 45. Id. at 1341. The district court held Ms. LaPray in civil contempt and imposed a fine of $200 each day until she appeared.
On appeal, the Federal Circuit held that the district court’s order requiring in-person appearance fell within its inherent powers. The Federal Circuit explained that FRCP 45 applies only to “a party or attorney’s efforts to subpoena a person to attend a trial, hearing, or deposition within a 100-mile radius,” not the District Court’s sua sponte order. Id. at 1342. The Federal Circuit concluded that the order to compel attendance was not an abuse of discretion because “it was reasonable for the district court here to require in-person testimony in furtherance of its authority to investigate attorney and party misconduct.” Id. at 1344. As more courts and districts are considering disclosure requirements for parties (and interested persons), this case is important to recognize the power that courts have to enforce those requirements.
In an even more recent case, the Federal Circuit affirmed another district court’s invocation of its inherent powers to sanction a plaintiff $25,000 for bad faith conduct, in addition to awarding attorney fees under Section 285. PS Products Inc. v. Panther Trading Co., 2024 WL 4996328 (Fed. Cir. 2024). The Court first generally affirmed district courts’ ability to impose monetary sanctions under their inherent powers in addition to awarding fees and costs under Section 285. The Court then found that this district court did not abuse its discretion in doing so, based on the lack of merit of the claim and the need for deterrence given the more than two dozen cases filed in the district, pursuant to the wrong venue statute. In referring to these cases as “meritless,” the Court noted that many of the cases were dismissed before, or soon after, a responsive pleading was filed. The Federal Circuit found that “the district court acted within its discretion by relying on its inherent power to sanction conduct that would typically fall under Rule 11.” Id. at *11.
A New Trend for Mandamus Petitions on Venue Issues
In recent years, patent litigants have utilized the mandamus procedure to challenge venue decisions with increasing frequency. For example, prior to 2008, we could not find any evidence that the Federal Circuit granted a mandamus petition to overturn a transfer decision. But from 2008 to 2021, the court at least partially granted approximately one-third (31%) of the nearly 200 mandamus petitions that it received regarding venue challenges. That uptick was not surprising given the changes in relevant venue transfer law from the Fifth Circuit in 2008 and the Supreme Court’s guidance on the proper interpretation of the venue patent statute in 2014.
It seems that 2024 is the year that this trend comes to an end. Between June 1 and December 1, 2024, the Federal Circuit denied all ten mandamus petitions relating to venue issues that it received. Given the brevity of these orders, it’s not entirely clear what is driving this new trend. The court’s Orders in this period often turn on the petitioner not showing that the high bar for “extraordinary relief” is needed. See e.g., In re Zepp Health Corp., No. 2025-11 (Fed. Cir. Nov. 15, 2024); In re Charter Communications, Inc., No. 2024-136 (Fed. Cir. Jul. 8, 2024). It is possible that the court feels like the venue case law is now substantially settled and more uniformly applied so that mandamus relief is not necessary, but it will be interesting to see if this trend continues in 2025.
Standards for Anti-Suit Injunction
Unable to reach an agreement on a global cross-license to standard-essential patents (“SEPs”) relevant to the 5G wireless-communication standards, Lenovo and Ericsson took domestic and foreign legal action to enforce their respective patent rights. Telefonaktiebolaget LM Ericsson v. Lenovo (United States), Inc., 2024 U.S. App. LEXIS 26863, 120 F.4th 846 (Fed. Cir. 2024). Among those actions, Ericsson initiated proceedings against Lenovo in Colombia and Brazil seeking (and ultimately obtaining) a preliminary injunction in both jurisdictions. In North Carolina, Lenovo moved the district court to enter an anti-suit injunction prohibiting Ericsson from enforcing its foreign injunctions. The district court rejected Lenovo’s motion under the three-part framework set out in Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th. Cir. 2012). The district court held the first threshold requirement, that “the domestic suit must be dispositive of the foreign action to be enjoined,” was not met because the court said that the particular foreign suits would not necessarily result in a global cross-license. Telefonaktiebolaget, 2024 U.S. App. LEXIS 26863 at *5.
On appeal, the Federal Circuit concluded that the “dispositive” requirement was met and therefore vacated the district court’s denial. The Federal Circuit explained that the “dispositive” requirement does not have to result in a global cross-license, rather, the “requirement can be met even though a foreign anti-suit injunction would resolve only a foreign injunction and even though the relevant resolution depends on the potential that one party’s view of the facts or law prevails in the domestic suit.” Id. at *21. As applied here, the Federal Circuit concluded the “dispositive” requirement was met because the FRAND commitment prevented Ericsson from obtaining injunctive relief without first complying with the commitment’s obligation to negotiate in good faith for a license on the SEPs. Whether Ericsson actually negotiated in good faith, and, if Ericsson did not, whether Ericsson demonstrated the other two requirements of the Microsoft Corp. anti-suit injunction framework, are determinations to be made on remand at the district court.
Additional Guidance on ODP and ‘Essential Element’ Jurisprudence
In Allergan USA Inc. v. MSN Laboratories Private Ltd., 111 F.4th 1358 (Fed. Cir. 2024), the Federal Circuit addressed two important issues when reviewing the final decision from the Delaware District Court decision which held claim 40 of the ’356 patent invalid for obviousness-type double patenting (“ODP”) and the ’179, ’291, ’792, and ’516 patents invalid for lack of written description. As background, the ’365 patent, which was the first to cover the eluxadoline compound, was filed in 2005. The ’365 patent received a significant patent term adjustment (“PTA”) extending the ’365 patent’s expiration until June 2026. Allergan filed continuation applications claiming priority to the 2005 filing date. The ’011 and ’709 continuation patents did not receive any PTA, and both will expire in March 2025. Accordingly, all three patents share a priority date and should expire on the same day but for the PTA awarded to the ’365 patent. The ’179, ’291, ’792, and ’516 patents are directed to formulations of eluxadoline and share a common specification and priority date.
On appeal, the Federal Circuit first reversed the ODP judgment, holding that “a first-filed, first-issued, later-expiring claim cannot be invalidated by a later-filed, later-issued, earlier-expiring reference claim having a common priority date.” Id. at 1369. The court explained that because the ’356 patent is the first patent to cover eluxadoline, it would be “antithetical to the principles of ODP” to conclude that the ’356 patent extends Allergan’s period of exclusivity to the disclosures of the reference patents just because it expires earlier. Id.
Next, the Federal Circuit reversed the district court’s conclusion that the asserted ’179, ’291, ’792, and ’516 patent claims are invalid under 35 U.S.C. § 112 for lack of written description by failing to include an “essential element,” namely, glidant. The court explained that the starting presumption is that no element is “essential,” but that courts should look for indications in the patent that a particular element is “critical,” “essential,” etc. Although expert testimony to “essentiality” may be relevant, it needs to be sufficiently tied to the intrinsic record. In this case, the Federal Circuit found that glidant was not an essential element, based on the specification referring to this as “optional” and the fact that the original patent claims were broadly written without this element.
For a summary of key Federal Circuit decisions from the first half of the year, read here.
Image Source: Deposit Photos
Author: tumsasedgars
Image ID: 770851238
