Federal Circuit Review | July 2023 | Knobbe Martens
Can’t Stop a Bull: Limits of Claim Preclusion
In Inguran, LLC Dba Stgenetics v. Abs Global, Inc., Genus Plc, Appeal No. 22-1385, the Federal Circuit held that claim preclusion does not bar an induced infringement claim that did not exist at the time of the earlier action.
In a first lawsuit (ABS I), STGenetics (“ST”) brought claims for patent infringement against ABS Global, Inc. (“ABS”). ABS stipulated that its GSS System directly infringed ST’s patent on a method for sorting bull sperm cells. The district court granted ST an ongoing royalty. ST also filed a second patent infringement suit (ABS II) against ABS. During discovery in ABS II, ST learned that ABS had begun selling and licensing the GSS System to third parties and teaching them how to use the system. In a third suit (ABS III), ST alleged induced infringement based on ABS’s selling and licensing of the GSS System to third parties. ABS moved to dismiss this induced infringement claim on the ground that the claim was precluded by the judgement in ABS I. The district court granted the motion to dismiss. ST appealed.
On appeal, ABS and ST disputed only the second element of the three elements of claim preclusion, namely whether ABS I and ABS III involved the same cause of action. The Federal Circuit first found that, in ABS I, ST did not assert induced infringement involving third parties. Second, the Federal Circuit found that ST could not have tried its third-party induced-infringement claim in ABS I because that claim would have been based on speculation, as the facts supporting the claim came to light only during discovery in ABS II. The Federal Circuit therefore held that ABS I and ABS III did not involve the same cause of action. Thus, the district court erred in applying claim preclusion and the Federal Circuit reversed.
AIA Patents May Not be Challenged in Interference Proceedings
In Snipr Technologies Ltd. v. Rockefeller University, Appeal No. 22-1260, the Federal Circuit held that patents whose priority is governed exclusively by the AIA are not subject to interference proceedings.
The Patent Trial and Appeal Board declared an interference between five patents owned by SNIPR, all of which were governed by the AIA, and one pre-AIA patent owned by Rockefeller. The Board cancelled all of the claims of the SNIPR patents in the interference. SNIPR appealed, arguing that its patents should not have been subject to interference proceedings because they are governed by the first-inventor-to-file provisions of the AIA, rather than the pre-AIA first-to-invent system.
The Federal Circuit agreed with SNIPR and reversed, holding that “the text, purpose, and history of the AIA make clear that first-inventor-to-file patents exclusively governed by the AIA cannot be subject to an interference.” Relying on the plain language of AIA § 3(n), the Federal Circuit held that the statute allowed only pre-AIA patents and mixed patents (i.e., patents with pre- and post-AIA claims) to be part of an interference. The statute’s language states that the AIA amendments “shall” apply to any AIA patent, which “imposes a nondiscretionary duty” that the AIA applies and is “both mandatory and comprehensive.” As further support, the Federal Circuit explained that Congress carved out one exception, allowing interferences for “mixed patents,” which further supports that AIA patents are not subject to interferences. Thus, the Federal Circuit held that interferences do not exist for AIA patents.
The Federal Circuit rejected the argument by Rockefeller and the USPTO Director, as intervenor, that the language “any unexpired patent” in pre-AIA § 135(a) allowed for interference proceedings challenging AIA patents. Because courts construe “statutes, not isolated provisions,” the Federal Circuit interpreted “pre-AIA § 135 in light of the AIA and its effective date provisions in AIA § 3(n).” Because interference proceedings were entirely replaced by derivation proceedings and all other references to interferences were removed from the statute, the Federal Circuit held that it was clear that the language “any unexpired patent” in pre-AIA § 135 could not refer to pure AIA patents.
Performing Claimed Features Faster than Humans by Using Generic Computers Is Not Sufficient as an Improvement to Computer Technology
In Trinity Info Media, LLC v. Covalent Inc., Appeal No. 22-1308, the Federal Circuit held that patents directed to connecting users based on their polling answers were abstract because the patents simply used generic computer components without adding more to the abstract idea.
Trinity Info Media filed a patent infringement lawsuit against Covalent, alleging that Covalent infringed patents directed to methods and systems for connecting users based on their polling questions and answers. Covalent moved to dismiss, arguing the patent claims were ineligible under 35 U.S.C. §101. The district court granted the motion to dismiss, finding that the asserted claims were directed to the abstract idea of matching users who gave corresponding answers and, thus, the claims were ineligible under §101. Trinity Info Media appealed.
The Federal Circuit affirmed the district court, holding that the asserted patents did not claim patentable subject matter under §101. On appeal, Trinity Info Media argued that the claimed process was not an abstract idea because humans cannot perform the claimed features in nanoseconds or aggregate the high volume of polling results. The Federal Circuit rejected Trinity Info Media’s argument. The Federal Circuit noted that the claims at issue did not require processing in “nanoseconds.” Moreover, claims can still be directed to an abstract idea even if the claims require operations that a human cannot perform as quickly as a computer. Trinity Info Media further argued that the claims were directed to improvements in the functionality of a computer. The Federal Circuit noted that the asserted claims were directed to “how to improve existing polling systems… not how to improve computer technology.” The Federal Circuit further explained that simply using generic computers to perform processes faster than a human is not sufficient for patent eligibility.
