Federal Circuit: June 2010 Archives
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June 2010 Archives

Shaw v. Sec'y of Human & Health Serv., No. 09-5117, concerned a challenge to the Court of Federal Claims' dismissal for lack of jurisdiction in an appeal of Special Master's decision to award plaintiff's undisputed portion of his request for interim attorneys' fees and costs and deferring consideration of the remaining amount until submission of a final petition for fees and costs in a case under the Vaccine Act.

As stated in the decision: "The Special Master's grant or denial of interim attorneys' fees is a decision on compensation and as such it is reviewable by the Court of Federal Claims under section 12(e).  Moreover, the Special Master's decision on interim attorneys' fees is a final decision on the issue of "interim fees."  And if the interim fee denial cannot be reviewed until after a decision on the merits, it is no longer an interim fee.  Foreclosing review of a denial of interim fees is tantamount to a denial of such fees."

Thus, in reversing, the court held that 42 U.S.C. section 12(e) confers jurisdiction on the Court of Federal Claims to review interim attorney fee decisions as an interim attorney fee decision is a separate decision on compensation, and as such, is reviewable even when that decision issues prior to a decision on the merits. 

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In Lincoln Nat'l Life Ins., Co. v. Transamerica Life Ins., Co., No. 09-1403, the Federal Circuit faced a challenge to the district court's denial of defendants' motion for summary judgment as a matter of law that it does not infringe the claims at issue of the '201 patent in a suit for patent infringement, related to computerized methods for administering variable annuity plans.

As stated in the decision: "[S]tep (e) recites making guaranteed payment regardless of the account value.  Under the court's interpretation, Lincoln was required to prove that Transamerica's computerized systemt is configured to make payments regardless of account value, even if the account value is exhausted before all payments have been made...Because Transamerica's computerized system does not make a payment if an account is exhausted, the systemt does not make a guaranteed payment regardless of the account value.  Therefore, Lincoln failed to prove that Transamerica performs step (e)."

Thus, in reversing the judgment, the court held that the district court erred in denying defendants' motion for JMOL of noninfringement as the evidence on the record does not support jury's verdict of infringement.  Furthermore, because defendant does not infringe, its argument that the district court abused its discretion by refusing to grant it leave to amend its complaint to assert a claim for invalidity under 35 U.S.C. section 101 need not be addressed.   

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In Target Corp. v. US, No. 09-1518, the Federal Circuit faced a challenge to the Court of International Trade's affirmance of the U.S. Department of  Commerce's final affirmative circumvention determination that petroleum wax candles with 50% or more vegetable wax are later-developed merchandise covered by the anti-dumping duty order on petroleum wax candles from China.  In affirming, the court held that the Commerce's reasonable interpretation of the relevant Congressional statute is entitled to Chevron deference and it's determination rested on substantial evidence.  

As stated in the decision: "First, the commercial availability test was consistent with the definition of "developed" provided in the dictionary.  Second, the commercial availability of the product at issue is relevant because a 'product's actual presence in the market at the time of the [antidumping] investigation is a necessary predicate of its inclusion or exclusion from the scope of an antidumping order.  Third, the later-developed merchandise provision is designed to prevent circumvention of an antidumping order by a comparable product to the subject merchandise.  Commerce's interpretation accomplishes this objective since it reaches comparable products that emerge in the market after implementation of the antidumping order."

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Encyclopedia Britannica, Inc. v. Alpine Elec. of Am., Inc., No. 09-1544, concerned a patent infringement suit by Encyclopedia Britannica against various defendants, involving patents relating to a multimedia database search system for retrieving textual and graphical information.  In affirming the district court's grant of summary judgment in favor of defendants in declaring the patents invalid as anticipated by foreign patent application, the court held that section 120 requires each application in the chain of priority to refer to the prior applications, and here, the patents in suit cannot claim priority as the '955 application failed to specifically reference the earlier filed '917 application and did not claim priority to the '917 application.     

Michael Simon Design, Inc. v. US, No. 09-1571, concerned an appeal brought by three importers of foreign made goods from the Court of International Trade's denial of their request for judicial review of certain modifications to the U.S. Tariff schedule made by Presidential proclamation.  In affirming the decision, the court held that the Commission's recommendations under section 3005 are not "final" and consequently are not subject to judicial review under the APA.  Further, the trial court correctly held that the Presidential proclamation at issue was not reviewable based on the claim that the Commission's recommendation was legally flawed.     

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Dismissal of Breach of Contract Suit Against the Government Upheld

M. Maropakis Carpentry, Inc. v. US, No. 09-5024, concerned a challenge to the decision of the United States Court of Federal Claims dismissing plaintiff's breach of contract suit against the government under the Contract Disputes Act (CDA) and granting the government's counterclaim for liquidated damages, arising from a contract awarded by the Navy to replace windows and a roof at a Naval warehouse building.

In affirming the judgment, the court held that the Court of Federal Claims correctly dismissed plaintiff's claim for lack of jurisdiction as plaintiff did not meet the jurisdictional prerequisites of a claim against the government for contract modification under the CDA.  The court also affirmed the grant of summary judgment to the government on its counterclaim for liquidated damages as the court correctly held that it lacked jurisdiction over plaintiff's claim for time extensions and because plaintiff's extension claim was the only defense asserted against the government's counterclaim for liquidated damages.     

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Wordtech Sys., Inc. v. Integrated Networks Solutions, Inc., No.09-1454concerned a patent infringement suit against defendant and its two employees, related to patents involving technology for automated duplication of compact discs, the court reversed the judgment of the district court for the most part, except the district court's denial of defendants' motion for leave to amend.      . 

First, the court held that the district court's denial of defendants' Rule 59(a) motion was improper as the jury's verdict of the two employees' individual liability of direct infringement, despite the lack of instructions on defendant's existence or piercing its corporate veil, was plain error that requires a new trial.  Next, the court also reversed the jury verdict of individual liability for inducement as it involved a mistake of law.  Further, the court held that the district court's legal error in presenting the contributory infringement issue with respect to individual liability of the two employees to the jury requires a new trial. 

And lastly, because the verdict was clearly not supported by the evidence and was based on only speculation or guesswork, district court's denial of defendants' Rule 59(a) motion is reversed and remanded for a new trial on damages. 

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Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., No. 09-1102, concerned a patent infringement suit, related to patents for disclosing a magnetic snap fastener commonly used in women's handbags.  In affirming in part, the court held that the district court was correct in holding the '773 patent unenforceable as the plaintiff and its president attempted to defraud the PTO.  The court also held that the district court did not err in finding that this case was an exceptional case under 35 U.S.C. section 285 justifying an award of attorney's fees.  However, the court reversed in part in holding that the district court abused its discretion by sanctioning plaintiff's attorney under 28 U.S.C. section 1927 as the court failed to find that the attorney acted in bad faith.   

Stobie Creek Inv. LLC. v. US, No. 08-5190, concerned a challenge to the Court of Federal Claims' decision upholding the Notices of Final Partnership Administrative Adjustment determinations and associated penalties in a tax refund suit involving the "Son of BOSS" tax shelter.  In affirming the judgment, the court held that the district court properly disregarded a series of transactions under the economic substance doctrine, that the plaintiff was properly subject to accuracy-related penalties under 26 U.S.C. section 6662, and that the reasonable-cause defense in 26 U.S.C. section 6664(c)(1) does not apply because it was not reasonable for plaintiff to rely on the advice of professionals in promoting and implementing the tax shelter.  Furthermore, the court held that the testimony of plaintiff's expert was properly excluded under Federal Rule of Evidence 702.     

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Jurisdictional Issue In Government Employee's Suit and IP Matter

Morris v. Office of Compliance, No. 09-6001, concerned an appeal by an officer of the United States Capitol Police under the Congressional Accountability Act arising from his termination, challenging the Board of Directors of the Office of Compliance's decision denying exceptions to an arbitrator's decision rejecting the officer's request for arbitration.  In dismissing the appeal for lack of jurisdiction, the court held that the statutes defining the right to judicial review of Board decisions make clear that only the Board's General Counsel and the respondent to an unfair labor practice complaint are authorized to obtain review in federal courts of an adverse Board decision.    

Pequignot v. Solo Cup Co., No. 09-1547, concerned a licensed patent attorney's qui tam action under 35 U.S.C. section 292 alleging that defendant had falsely marked its products with expired patent numbers for the purpose of deceiving the public.  

In affirming in part, the court held that the grant of summary judgment of no liability in favor of defendant was proper as false marking, combined with knowledge of the falsity, merely creates a rebuttable presumption of intent to deceive the public, and here, defendant provided credible evidence that its purpose was not to deceive the public with either the expired patent markings or the "may be covered" language, and plaintiff raised no genuine issue of material fact showing otherwise.  However, the court vacated in part district court's determination on the meaning of the word "offense," in holding that defendant could have committed at most three offenses was in error as Forest Group, 590 F.3d 1295 holds that every false marked product constitutes an "offense" under section 292.  

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Summary Judgment In an IP Matter Reversed, Reassignment Advised

In TriMed, Inc. v. Stryker Corp., 09-1423, the Federal Circuit faced a challenge to the district court's grant of summary judgment in favor of defendant of invalidity of the asserted claims of a patent relating to an implantable device used to set bone fractures in plaintiff's patent infringement suit.

As the court wrote: "Both the record in this case and the order granting Stryker's motion for summary judgment are devoid of such reasoning," and "The record also fails to explain why the district court summarily dismissed the evidence of secondary considerations of nonobviousness submitted by TriMed.  We have repeatedly held that evidence of secondary considerations must be considered if present."

Thus, in reversing the judgment, the court held that the district court improperly resolved genuine issues of material fact in favor of defendant as the record fails to provide a reasoned basis to support the district court's grant of summary judgment.  Furthermore, the court concluded that reassignment is advisable to preserve the appearance of justice as the district court has now been reversed twice after entering summary judgment against plaintiff, in both instances simply signing defendant's proposed statement of law and facts relevant to the decided issues, a disfavored practice in the Ninth Circuit.     

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In Strategic Hous. Fin. Corp. of Travis County v. US, No. 09-5078, the Federal Circuit faced a challenge to the order of the U.S. Court of Federal Claims (CFC) dismissing plaintiff's suit against the U.S. to recover its arbitrage rebate for lack of jurisdiction under I.R.C. section 7422(a).

In affirming the dismissal, the court held that section 7422(a) prohibits a court from asserting jurisdiction to hear a bond issuer's claim to recover an arbitrage rebate when the issuer failed to first seek an administrative refund from the IRS.  However, the portion of the CFC's judgment regarding whether I.R.C. section 148(f)(3) grants the Secretary of the Treasury unfettered discretion to accelerate an arbitrage rebate is vacated as the court should not have conducted an APA analysis after recognizing that it lacked jurisdiction. 

Nielson v. Shinseki, No. 09-7129, concerned a challenge to the final judgment of the U.S. Court of Appeals for Veterans Claims denying petitioner entitlement to Department of Veterans Affairs outpatient dental treatment and related dental appliances.  In affirming the judgment, the court held that a "service trauma" under the statute is an injury or wound produced by an external physical force during the performance of military duties, and does not include the intended result of proper medical treatment, such as extraction of teeth due to periodontal infection. 

Roberson v. Shinseki, No. 09-7093, concerned a challenge to the Court of Appeals for Veterans Claims' affirmance of the Board of Veterans' Appeals' decision denying petitioner's claim for death and indemnity compensation for her husband's death from non-service connected cancer.  In affirming the denial, the court held that the Veterans Court correctly interpreted the elements required for a claimant's recovery under the previous version of 38 U.S.C. section 1151. 

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Decision in an IP Matter Involving Computer Graphics System

Silicon Graphics, Inc. v. ATI Techs., Inc., No. 08-1334, concerned a challenge to the district court's grant of summary judgment of non-infringement in an infringement action concerning a patent related to a graphics system and process that mainly operates on a floating point format.

In vacating part of the district court's judgment, the court held that, because the district court erroneously construed two of the three contested limitations, summary judgment on claims with those terms is vacated.  Also, the court held that the district court erred with respect to the effect of the Microsoft license on direct infringement.  With respect to remaining issues, the court affirmed the district court's judgment in all other respects. 

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In Honda of Am. Mfg., Inc. v. US, No. 09-1493, the Federal Circuit faced a challenge to the decision of the Court of International Trade (CIT) affirming a Customs and Border Protection classification of Honda's oil bolts under the Harmonized Tariff Schedule of the United States (HTSUS).  In  affirming the decision, the court held that the CIT properly interpreted and applied the Schedule in concluding that articles that are "parts of general use" under Chapter 73 cannot be classified as "parts and accessories" under Chapter 87.    

Haemonetics Corp. v. Baxter Healthcare Corp., No. 09-1557, concerned a challenge to the district court's judgment in favor of the plaintiff in plaintiff's suit for infringement of a patent, which claims a compact blood centrifuge device for separating and collecting components in a liquid such as blood. 

Frist, the court held that, because "centrifugal unit" in claim 16 consistently means a vessel and a plurality of tubes, irrespective of its meaning in claim 1, district court erred in its claim construction, and is thus reversed. Next, the court held that the district court's holding that claim 16 is not indefinite as a matter of law and the jury's finding that the patent was not invalid due to anticipation or obviousness is vacated because the district court erred in its construction of "centrifugal unit" and because the jury's verdict relied on the district court's incorrect claim construction.     

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In Colantonio v. Shinseki, No. 09-7067, the Federal Circuit faced a challenge to the decision of the United States Court of Appeals for Veterans Claims finding that petitioner was not entitled to a free medical examination in connection with his claim for compensation for a service-connected disability.

In reiterating the interpretation of subparagraph B adopted in Waters v. Shinseki, the court wrote: "[M]edically competent evidence is not required in every case to "indicate" that the claimant's disability "may be associated" with the claimant's service.  Of course, that is not to say that it will always be possible to establish a nexus through lay evidence, as there may be instances, such as Waters case itself, in which the lay evidence falls short of satisfying the statutory standard."

 Thus, in concluding that the Veterans Court may have applied an erroneous interpretation of 38 U.S.C. section 5103A(d)(2), the court vacated and remanded the judgment to permit the Veterans Court to reconsider its harmless error analysis in light of the proper interpretation of 38 U.S.C. section 5103A(d)(2). 

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