Federal Circuit

Federal Circuit - The FindLaw Federal Circuit Court of Appeals Opinion Summaries Blog


Following Alice v. CLS Bank last term, all those "on a computer" business method patents were seriously called into question. We've seen new lawsuits spring up over invalidating old patents, and Alice get invoked in current litigation over "on a computer" patents.

One of the highest-profile cases was Ultramercial v. Hulu, also known as the WildTangent case for one of its other defendants. The short, short version is that Ultramercial owns a patent that purports to cover viewing free streaming videos online in exchange for watching a little advertising throughout -- basically, exactly what Hulu and YouTube do.

Last week, an en banc panel of the Federal Circuit bench-slapped the other party in the e-mail scandal that led to Chief Judge Randall Rader's retirement. This week, the same court is preparing for a possible new colleague, as there is a nominee to fill Rader's now-vacant seat.

Enter Kara Farnandez Stoll, a partner in the largest firm that practices intellectual property exclusively: Finnegan, Henderson, Farabow, Garrett & Dunner LLP (or Finnegan for short). President Barack Obama announced Stoll's nomination Wednesday, and she'll face a post-midterm Republican-controlled Senate during her confirmation process now that the elections are over.

Everyone remembers the scandal that led to Chief Judge Randall R. Rader's resignation earlier this year, right? The Chief sent an email to his buddy, Edward Reines, a patent attorney at Weil Gotshal's Silicon Valley office. The email related a third-party judge's comments that Reines was "IMPRESSIVE in every way," and Rader added: "I was really proud to be your friend," before encouraging Reines to let others see the message.

Chief Rader stepped aside, but the scandal apparently wasn't over. On Wednesday, the Federal Circuit issued a rare en banc bench-slapping of Reines over his use of the laudatory email -- and forwarded a second friendly gesture between the two pals to the California State Bar for further proceedings.

Did Reines cross the line by taking Rader up on his suggestion to share the email? Or is this much ado about two buddies sharing compliments and concert tickets?

Halo Electronics makes electronic packages for use on printed circuit boards. It has three patents on this technology, filed in 1995. Pulse Electronics also makes electronic packages for use on printed circuit boards. Uh oh. Thankfully, though, Pulse only sells its products in Asia.

Or does it? After Pulse incorporated some of its electronics into equipment sold by Cisco in the United States, Halo sent Pulse a polite letter asking if Pulse would like to enter into a license agreement. A Pulse engineer determined that Halo's patents were not invalid. Pulse never consulted a lawyer and kept selling its products anyway.

Patents are supposed to be issued for new and novel things, not things that anybody could have come up with. A patent can be invalidated for "obviousness" if the thing that is to be patented is based on prior art and that thing would have been obvious to a person of ordinary skill in that field.

In the field of pharmaceuticals, a drug can be considered obvious if it's the made by adding something to an extant chemical -- something that anyone could have done and the result of which anyone would have expected. But what about after it's patented? That doesn't work, affirmed the Federal Circuit, in a divided opinion over a rehearing en banc in Bristol-Myers Squibb v. Teva Pharmaceuticals.

The Harmonized Tariff Schedule of the United States is a 3,000-page book that classifies every single thing that enters the country, all for the purpose of determining how to tax it when it gets here. For example, black tea is free, but flavored green tea will cost the importer 6.4 percent. A T-shirt made of man-made fibers has a whopping 32 percent tariff, but if it's cotton, then it's only 16.5 percent.

The point is that how you classify something makes a big difference when it comes to paying taxes. Victoria's Secret, like most clothing companies, manufactures clothes overseas and then imports them. They make something called a Bra Top and another thing called a Bodyshaper. The Court of International Trade said these were "other garments, knitted or crocheted," which requires a 10.8 percent tariff. Victoria's Secret, on the other hand, says they should be considered "brassieres, girdles, corsets [...] and other similar articles and parts thereof." That's only 6.6 percent.

Ah, the Federal Circuit. It's like the spooky basement of the federal judiciary, that place where even seasoned appellate attorneys are afraid to go. "There might be ... patent litigation down there!" they exclaim.

And, in truth, since the last time we covered the Federal Circuit, there has been a bit of patent litigation. So here's a roundup of what's been going on in the Spooky Basement Circuit Court of Appeals.

The Federal Circuit is weird. It hears patent cases, of course, but it also hears a whole lot of other random federal appeals: Court of Federal Claims appeals, veterans' appeals, trademark appeals, Merit Systems Protection Board appeals, and of course, Little Tucker Act appeals. (Bonus points if you already knew that that was.)

So far this Term, two cases have been granted certiorari by the Supreme Court out of the Federal Circuit, one involving the termination of a Transportation and Safety Administration whistleblower and a second which involves patents -- two very different, yet very interesting cases.

The Court of Federal Claims normally only gets mentioned when its cases are appealed to the Federal Circuit Court. But last week, the Court of Federal Claims was in the news thanks to the largest settlement ever obtained by a single Indian tribe against the U.S. government -- $554 million, according to the Los Angeles Times.

SCA Hygiene Products (SCA) holds a patent on "adult incontinence products" -- that is, adult diapers. The company sued First Quality Baby Products for infringing on its patent for a disposable diaper that can be taken on and off like underwear -- think Pull-Ups, but for adults.

A Long Waiting Period

Back in 2003, SCA sent a letter to First Quality saying something along the lines of, "Hey, we think one of your products infringes on our patent." First Quality responded by saying, "Hey, actually, it looks like your diaper has the same construction as our diaper, which was patented before yours was. Looks like our patent invalidates yours. Go figure."