Latest Federal Court Cases – January 2024 #4 | Schwabe, Williamson & Wyatt PC
Roku, Inc. v. International Trade Commission, Appeal No. 2022-1386 (Fed. Cir. Jan. 19, 2024)
In an appeal from the International Trade Commission (the “Commission”), the Federal Circuit addressed a number of findings underlying the Commission’s order banning Roku, Inc. (“Roku”) from importing certain devices that infringe U.S. Patent No. 10,593,196, owned by intervener Universal Electronics, Inc. (“Universal”). The Federal Circuit found that the Commission did not err in making any of the findings at issue and affirmed the order.
The ’196 patent covers a universal controller for communicating with multiple electronic devices (such as smart TVs and DVD players) that are otherwise incompatible with each other. The universal control receives wireless signals from either a remote control or an app, then issues commands to the various electronic devices a user is attempting to operate. The patent’s teachings are incorporated into a technology called “QuickSet,” which Universal incorporated into multiple smart TVs. Roku creates various streaming TV technologies, including the Roku streaming channel and the Roku stick. Universal filed a complaint with the Commission against Roku for importing certain TV products that Universal claimed infringed the ’196 patent. An administrative law judge found that Roku was importing infringing articles and the Commission affirmed and found in relevant part that: (1) Universal had ownership rights to assert the ’196 patent; (2) Universal satisfied the economic prong of the domestic industry requirement under subparagraph (a)(3)(C) of 19 U.S.C. § 1337 (“Section 337”); and (3) the asserted claims were not invalid as obvious. Roku’s appeal centered on these three aspects of the Commission’s final determination.
First, the Federal Circuit quickly dealt with Roku’s argument that Universal did not have ownership rights to assert the ’196 patent. Relying on contract principles, the Federal Circuit found that one of the original inventors (an employee of Universal) had assigned his entire rights to the invention through an agreement in 2012.
Second, the Federal Circuit addressed Roku’s argument that the Commission erred in determining that Universal had satisfied the economic prong of the domestic industry requirement under Section 337 because it did not require Universal to allocate its domestic industry expenses to a specific domestic industry product. The administrative judge found, and the Commission affirmed, that because QuickSet involves software and software updates that result in practice of the asserted claims when implemented on Samsung TVs, Universal’s asserted expenditures were attributable to its domestic investments in R&D and engineering. The administrative judge also found, and the Commission affirmed, that Universal’s investments went directly to the functionality necessary to practice many claimed elements of the ’196 patent. The Federal Circuit found both findings to be supported by substantial evidence and that Roku missed the mark when it focused its argument on Universal’s investments in certain smart TVs rather than the QuickSet technology that is installed on those TVs. The Court emphasized that its precedent does not require expenditures on whole products themselves, but rather, sufficiently substantial investment in the exploitation of the intellectual property.
Finally, the Federal Circuit addressed Roku’s argument that the ’196 patent was invalid as obvious, and found that Roku failed to directly address or dispute any of the Commission’s findings on obviousness.
The opinion can be found here.
By Mario E. Delegato
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CyWee Group Ltd. v. ZTE (USA), Inc. and LG Electronics Inc., Appeal No. 2021-1855 (Fed. Cir. Jan. 18, 2024)
In this case, the Federal Circuit addressed limitations on the role of an otherwise time-barred petitioner joined to an existing inter partes review, specifically within the context of opposing a patentee’s motion to amend its claims. On the facts presented, the Court found the Board had not erred in permitting such a secondary petitioner to oppose the patentee’s motion to amend.
Appellee ZTE initially challenged CyWee’s U.S. Patent No. 8,441,438 directed to a 3D pointer tool that could register its position in a virtual space. Appellee LG Electronics was time-barred from filing its own IPR petition against the ’438 patent, but was permitted to join ZTE’s IPR “as a passive ‘understudy,’” on the condition that it would “not assume an active role unless [ZTE] ceases to participate in the instated IPR.”
CyWee filed a motion to amend certain challenged claims to limit the 3D pointer device to a cell phone. ZTE had no objection to the subject claims as amended, but LG sought and obtained leave to oppose. In permitting LG to oppose, the Board reasoned that ZTE had ceased to participate and the proceedings had become non-adversarial as to CyWee’s motion.
The challenged claims were ultimately found unpatentable, and CyWee’s motion to amend was denied over LG’s opposition. On appeal, CyWee argued, inter alia, that the Board had erred in permitting LG to oppose its revised motion, and also in permitting LG to base its opposition on new prior art. The Federal Circuit rejected those arguments, finding that while an otherwise time-barred party was not permitted to introduce new issues into the main inter partes review as governed by the petition, “[a] motion to amend is different” and not subject to the same limitations; for example, as shown by published Board guidance that expressly permits a party to raise new evidence in response to a revised motion. The Court also agreed that because of ZTE’s non-opposition, permitting LG to oppose CyWee’s motion did not violate the terms of its joinder.
The Court also affirmed the Board’s denial of CyWee’s motion to amend on substantive grounds; rejected CyWee’s argument that it was denied Director review because its petition was heard by the Commissioner for Patents at a time when there was no Director of the USPTO; and otherwise affirmed.
The decision can be found here.
By Jason A. Wrubleski
