Shearman & Sterling LLP | IP Blog | Federal Circuit Upholds Texas Trial Court On Section 101 And On Claim-Construction Burden-Of-Proof Issues, And Again Takes Appellate Jurisdiction While Damages Issues Remain Pending In The Trial Court<br >  
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  • Federal Circuit Upholds Texas Trial Court On Section 101 And On Claim-Construction Burden-Of-Proof Issues, And Again Takes Appellate Jurisdiction While Damages Issues Remain Pending In The Trial Court

    On January 25, 2018, the United States Court of Appeals for the Federal Circuit issued an opinion affirming the trial court’s decisions that a user-interface patent claims patentable subject matter and that unrebutted expert testimony did not require a jury to find anticipation, as well as its claim-construction decisions, all while damages issues remained unresolved in the trial court.  Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., appeals nos. 2016-2684 and 2017-1922.

    Patentable Subject Matter
    The patents that Core Wireless Licensing S.A.R.L. (Core Wireless) accused LG Electronics, Inc., (LG) of infringing “disclose improved display interfaces, particularly for electronic devices with small screens like mobile telephones.”  The claims recite, e.g., a computing device “configured to display on the screen a menu listing one or more applications, and additionally being configured to display on the screen an application summary that can be reached directly from the menu.”  The summary in turn displays data or functions available within the summarized application. 
    LG argued that the claims are directed to the abstract idea of indexing.  However, both the trial court and the Federal Circuit disagreed.  The Federal Circuit opinion recites a litany of cases finding technological improvements to computer-related technology to be patentable, and explains that the claimed user interface is described in the patents’ specification as solving problems associated with the use of electronic devices, “particularly those with small screens.” Citing the specifications, the Federal Circuit noted that the claimed interface “improves the efficiency of using the electronic device [and] allows the user to see the most relevant data or functions ‘without actually opening the application up’.”  Thus, “the speed of a user’s navigation through various views and windows can be improved . . . .”  Apparently relying entirely on the specifications, the Federal Circuit affirmed the trial court’s patentability determination, holding that “[t]his language clearly indicates that the claims are directed to an improvement in the functioning of computers,” rather than to an abstract idea as LG had argued.
    Unrebutted, but Unavailing, Anticipation Testimony
    LG had presented an anticipation defense at trial, arguing that a prior-art patent document (the Blanchard reference) teaches every element of the asserted claims.  LG supported this defense not only with the apparently undisputed evidence of the Blanchard reference itself, but also with expert testimony explaining the application of the reference to the asserted claims.  Core Wireless cross-examined LG’s expert, but did not present any expert testimony of its own on the anticipation issue.  The jury found against LG, and on appeal LG argued that the trial court was required to enter judgment of anticipation because its expert testimony was unrebutted.
    The Federal Circuit disagreed.  Even though the Blanchard reference was, apparently, a document proven to be prior art by clear and convincing evidence, and even though claim construction is a matter for the judge, not the jury, to decide, the Federal Circuit ruled that the jury was within its province to compare and contrast the Blanchard reference to the asserted claims as a matter of disputed fact, and to find the claims not anticipated.  The Federal Circuit pointed to Core Wireless’s successful cross-examination of LG’s expert on one point concerning the disclosure in the Blanchard reference, and held, “A reasonable jury could have heard the cross-examination of Dr. Rhyne and concluded Blanchard did not disclose the ‘limited list’ limitation in the claims . . . .”  The Federal Circuit did not appear to apply any independent reasoning to the question of whether, on the undisputed facts of what the Blanchard reference says, the Blanchard reference does or does not disclose the limitation in question.  Instead, the Federal Circuit upheld the apparently almost uncircumscribed right of the jury “to evaluate Dr. Rhyne’s testimony and determine whether LG clearly and convincingly established that Blanchard anticipated the claims,” possibly regardless of how well the undisputed Blanchard reference and the court-construed claims actually compare. 
    The decision illustrates how careful advocates must be in presenting expert testimony, because cross-examination of an expert, even on possibly peripheral points and even when the testimony as a whole is uncontested, can undermine a case in a way impossible to correct on appeal.
    Claim Construction and a Jury Verdict of Infringement, Without Fact Issues
    LG also challenged some of the trial court’s claim constructions, and the resulting finding of infringement.  Neither LG nor Core Wireless submitted extrinsic evidence (e.g., expert testimony) on the claim-construction issues.  Thus, the claim construction was based on the intrinsic evidence of the plain English meaning of the claims and the contents of the patents’ specifications and prosecution histories.
    The Federal Circuit majority opinion admitted that, “this is a close case for which the intrinsic evidence could plausibly be read to support either party,” but affirmed the claim construction, holding that “we see no error in the district court’s construction.”  The majority applied the de novo standard of appellate review to the claim constructions.  The dissent applied the same standard but came to the opposite conclusion; it would have construed the claim language differently, and would have remanded the infringement (and validity) issues to the trial court for further findings.
    Interestingly, the Federal Circuit majority noted specifically, “[t]here is no dispute on appeal how the accused devices work,” but nonetheless ruled that the infringement dispute “is a fact question that we presume the jury resolved in favor of Core Wireless.”  The holding that the court should defer to the jury even when there is no disputed issue of fact about how the accused products function is consistent with the holding that the court should defer to the jury finding of no anticipation, despite the absence of any dispute over what was described in the Blanchard reference.
    The majority and dissenting opinions together suggest the question of how the case would have been decided if either party had decided to present expert testimony on the claim-construction questions.  Would the Federal Circuit still have applied the de novo standard?  The deference the Federal Circuit gave to the jury’s other decisions suggests not, and that such testimony could have changed the outcome, especially in a case where, apparently, the intrinsic evidence was not entirely consistent—even if the testimony was only presented by one party, and even if the jury disagreed with his or her opinions.
    Appellate Jurisdiction, Without a Damages Determination
    In a footnote, the majority opinion written by Judge Kimberly Moore observed that the court of appeals took jurisdiction even though “[c]oncern remains regarding whether we have jurisdiction to review the appeal of validity and infringement while damages remain unresolved and will be the subject of a future jury trial.”  Judge Moore was referring to the Federal Circuit’s en banc determination in Robert Bosch, LLC v. Pylon Mfg. Corp., 719 F.3d 1305 (2013), that the court could properly take appellate jurisdiction even when the trial court’s infringement and validity determinations are not part of a final judgment.  Given the existence of the undisputedly controlling en banc decision, Judge Moore’s comments suggest a continued divide among the Federal Circuit judges, and, perhaps, an opportunity for a Supreme Court challenge to the Pylon holding.