For our weekly SoCal IP Institute meeting on Monday, December 19, 2016, we will discuss the following:
Medgraph, Inc. v. Medtronic, Inc., Case No. 2015-2019 (Fed Cir. December 13, 2016) (available here). Medgraph asserted two patents against Medtronic related to an improved method for diagnosis and treatment of patients that generally relates to symptoms or medical issues that require ongoing monitoring over a long period of time. The district court dismissed Medgraph’s claims with prejudice on Medtronic’s motion for summary judgment, in part because of a lack of a direct infringer because the patent claims require actions by the patient and/or doctor. In the background, the Akamai series of cases regarding the scope of direct infringement and divided infringement was working its way through the courts. Just after the district court’s decision, the final, en banc Akamai decision broadened the available scope of direct infringement available to Medgraph. Specifically, the Fed. Cir. held that “when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” Medgraph appealed.
Medgraph argued that remand was necessary to correct the direct infringement decision in view of the Akamai change in law. Medtronic argued that Medgraph had failed to provide any evidence of doctors or patients performing the claimed steps, so even on remand, the direct infringement result would remain the same because Medgraph did not and cannot point to evidence that would demonstrate direct infringement. Absent a direct infringer, indirect infringement is impossible.
Medgraph also unsuccessfully argued that terms in the system claims were incorrectly construed, leading to a finding of noninfringement. The verdict was affirmed.
Power Integrations, Inv. v. Fairchild Semiconductor Int’l, Inc. et al., Case Nos. 2015-1329, -1388 (Fed. Cir. December 12, 2016 ) (available here). For this case, there are numerous potential issues. We will focus on the discussion of induced infringement primarily appearing on pages 19-31 of the linked opinion.
Power Integrations sued Fairchild who counter-claimed under various patents related to power supplies for electronic devices. These two companies are competitors in a tight market for such supplies as the number and diversity of electronic devices used in everyday life increases. The patents, generally, relate to power supplies that are safer and better for use with sensitive electronics.
The jury found that Fairchild induced others to infringe one of the patents by selling them to their customers for inclusion in electronics products shipped to and sold within the U.S. Fairchild raised three issues with respect to the jury’s induced infringement verdict. Fairchild first argued that the verdict should be reversed because its foreign sales of and sales activities related to the infringing products cannot constitute specific intent to bring about infringement in the United States. Alternatively, Fairchild argued that the verdict should be vacated because the jury was improperly instructed that Fairchild need not successfully induce a third party to infringe to be liable for induced infringement. Finally, Fairchild argued that the district court’s failure to include interrogatories on the verdict form requiring identification of direct infringers is a separate ground to vacate the jury verdict.
Regarding the second argument, the Federal Circuit agreed, finding that the jury instruction used appears to suggest that Fairchild need not actually be successful in communicating with a third-party direct infringer (e.g. regarding the infringing acts). The Federal Circuit confirmed that inducement requires “successful communication between the alleged inducer and the third-party direct infringer.” Further, “[t]o prevail under a theory of indirect infringement, [plaintiff] must prove that the defendants’ actions led to direct infringement of the [patent-in-suit].” Here, the jury instruction incorrectly stated that liability exists even where no inducement actually occurred. The court found that this is contrary to the law. Accordingly, on this particular issue, the Federal Circuit vacated the jury’s verdict on induced infringement.
Fairchild unsuccessfully asked the court to enter JMOL in its favor on inducement of this patent. The court declined, finding that there was more than sufficient evidence for a jury to conclude as it did, so the issue must be re-tried, not decided in Fairchild’s favor as a result of the vacation of the jury’s verdict on induced infringement.
All are invited to join us on Monday, December 19, 2016, at noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.