Federal Circuit

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


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."

It's been a while since we covered the Federal Circuit, and they have busy little bees indeed, publishing 13 precedential opinions since September 9. Today, we bring you a patent infringement case involving Apple's FaceTime technology.

The U.S. District Court for the Eastern District of Texas -- every patent litigant's favorite venue -- determined that FaceTime infringed on several valid patents held by VirnetX, awarding it a total of $368 million. (VirnetX is considered a patent troll, reported Ars Technica back in June.)

VirnetX purchased patents that allow secure communication links between a computer and a target network address. Apple was alleged to have infringed on this patent through its FaceTime technology, which allows video calls over a secure connection. Part of the technology involves creating a secure VPN tunnel "on demand," something that the plaintiffs had already patented.

Those of us deeply nerded into patent litigation -- and let's face it, if you're reading this now, that's you -- were pleased and surprised when the U.S. Supreme Court decided Alice Corp v. CLS Bank International last term. With Alice, the Court said that taking an obvious, otherwise non-patentable idea and adding "on a computer" to the end of it doesn't suddenly make it patentable. In Alice, that was a calculation of risk in a financial transaction, something Justice Thomas said has been around forever.

Post-Alice, the nerds (you know, you and me) hoped and prayed that the decision signaled the end of "patent trolls" that claimed a right to inventions only because the person filing the patent did little more than take a universal concept and make software out of it. From the Federal Circuit, here comes the first post-Alice appeal to invoke Alice.

From 1977 to 1996, Commander Judith Cronin was an active-duty Navy officer. Throughout her service, she had several ailments, ranging from heel spurs to PTSD. In 1996, she was placed on a Temporary Disability Retired List (TRDL), and by 2000, she was permanently retired due to her physical condition. Cronin filed suit to challenge this determination.

Over the course of several appeals, the case went back and forth. The question before the Federal Circuit this time was whether Cronin's non-PTSD claims were time-barred. The Federal Circuit, reversing the Court of Federal Claims' decision, said they were.

Does a data connection have to be completely established before it can transmit data? You'd think so, and if you didn't, you'd have lost a $147 million jury award and be out about $200,000 in court costs.

A company called mFormation Software Technologies (MST) claimed that BlackBerry infringed its patent to "the wireless activation and management of an electronic device without the need to have physical access to the device" -- in this case, basically remotely deleting the contents of the phone.

Following the Federal Circuit's 2011 opinion in Therasense Inc. v, Becton, Dickinson & Co., the "inequitable conduct" defense -- described by one Quinn Emanuel article on the subject as "the 'atomic bomb' of patent law" -- became much harder to invoke.

Last week, the Federal Circuit proved that news of its death had been greatly exaggerated, as it used inequitable conduct to invalidate a plaintiff's patent.