IP News

On appeal, SimpleAir argued that claim preclusion only triggers to later cases which involve the same cause of action, and that each patent raises an independent and distinct cause of action. SimpleAir also argued that claim preclusion could not apply to the patents asserted in its fourth suit against Google because those patents issued after its complaints were filed in earlier cases. Google argued that claim preclusion was correctly applied by the district court, because the fourth lawsuit brought by SimpleAir involved the same accused GCM services, and because the asserted patents were materially similar continuation patents to the common parent patent involved in SimpleAir's earlier suits against Google (sharing a common specification with, and terminal disclaimers to the common parent patent.)

Reviewing the district court's dismissal de novo, The Federal Circuit vacated and remanded the claim preclusion order. The district court erred by presuming that claim preclusion applied solely because the asserted patents were terminally disclaimed continuations of a previously adjudicated parent patent. The Federal Circuit explained that a terminal disclaimer can be relevant to the inquiry of whether a child patent involves the same cause of action as its parent. Claim preclusion, however, can only be applied where the claims of subsequent asserted patents are found to be patentably indistinct from the claims of earlier adjudicated patents. The Federal Circuit indicated that it did not see how the asserted claim language was different from the claims in the previously adjudicated patents; however, it remanded this analysis to the district court.

Additionally, The Federal Circuit rejected SimpleAir's argument that claim preclusion cannot apply to patents that issue after complaints are filed in earlier cases. The Federal Circuit explained that under its precedent, whether “continuation patents present the same cause of action as previously litigated” patents “depends on the scope of their claims, not on their dates of issuance.” The Federal Circuit also disagreed with Google's assertion that the Kessler doctrine, named after Kessler v. Eldred, 206 U.S. 285 (1907), precluded assertion of the patents in SimpleAir's fourth suit against activity predating the judgments in earlier cases. The Federal Circuit explained that the Kessler doctrine serves as a trade right which precludes assertions of a patent against post-judgment activity that is “essentially the same” as previously accused activity found not to infringe. It noted, however, that the Kessler doctrine was based on timing, and had never been applied to activity predating an earlier judgment, as Google had advocated for.

Claim Elements Taught by Prior Art for Purposes of Novelty and Obviousness are not Necessarily 'Well-Understood, Routine, and Conventional' Under §101

On March 8, 2018, a Federal Circuit panel of Judges Moore, Bryson, and Hughes issued a split decision, with the majority opinion authored by Judge Moore, and the dissent authored by Judge Hughes, in Exergen Corp. v. Kaz USA, Inc., Case Nos. 2016-2315, 2016-2341. This case was on appeal from the United States District Court for the District of Massachusetts in No. 1:13-cv-10628-RGS. The majority opinion affirmed the district court's denial of judgment as a matter of law that the claims were ineligible under 35 U.S.C. §101. Additionally, the majority affirmed the district court's denial of enhanced damages, reversed its verdict of infringement with respect to certain claims, and vacated and remanded the damage award to account for the claims that were no longer infringed.

Exergen Corp. (Exergen) owns U.S. Patent Nos. 6,292,685 and 7,787,938, which “disclose a body temperature detector that calculates a person's core temperature by detecting the temperature of the forehead directly above the superficial temporal artery.” The district court denied Kaz USA, Inc.'s (Kaz) motion for judgment of invalidity under §101. It found that under step one of the Alice inquiry, the asserted claims employed a natural law and were directed to a patent-ineligible concept. Under step two, however, the court found no evidence in the record that the methods for measuring temperature taught by the patents “were well-understood, routine, and conventional prior to the introduction of Exergen's invention.” At the district court and on appeal, Kaz argued that the methods for measuring temperature taught by the patents were known in the prior art. The district court explained that although the claim elements existed in the prior art, they were not “well-understood, routine, and conventional,” because they were not used to solve the specific problem of detecting arterial temperature beneath the skin.

Reviewing patent eligibility under §101 de novo, and the underlying determination of whether claim elements were “well-understood, routine, and conventional” for clear error, the majority opinion agreed. It noted that while references may broadly qualify as prior art for purposes of novelty and obviousness, this does not guarantee that the disclosures in the references are “well-understood, routine, and conventional” for purposes of §101. The majority found no clear error in the district court's conclusion because Exergen provided evidence that due to the prior art's design, it was not capable of measuring core body temperature by scanning across the forehead. Furthermore, Exergen presented evidence of years and millions of dollars spent on testing and development to discover the coefficient representing the relationship between temporal-arterial temperature and core body temperature. The Federal Circuit likened the method in Exergen's patents to the method of curing rubber held eligible in Diamond v. Diehr, 450 U.S. 175 (1981).

Judge Hughes's dissent argued that the district court's finding that the patents embody an inventive concept was clearly erroneous, because the invention's calculations of core body temperature from forehead temperature merely reflect the natural relationship between the two.

He argued that the invention in Diehr was patent-eligible because the rubber curing process used the Arrhenius equation as an intermediate step. He argued that unlike the process in Diehr which involved an intermediate step, Exergen's claimed invention begins by detecting a heat balance equations inputs, and ends by displaying the output. He also argued that the district court's differentiation of the claimed invention from the prior art solely on the basis that it did not solve the same problem, was in contravention with the Federal Circuit's decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015), where the court rejected the argument that an “inventive concept” could be established merely by solving a novel problem.

The majority found no abuse of discretion in the district court's denial of enhanced damages. It explained that the objective prong of Seagate was not the district court's only rationale in awarding summary judgment of no willfulness, as the court considered additional briefing as well as the Read factors following the Supreme Court's grant of certiorari in Halo Elecs., Inc. v. Pulse Elecs. Inc., 136 S. Ct. 1923 (2016). The majority vacated the district court's damages award, to account for its reversal of the district court's denial of Kaz's motion for judgment of noninfringement as a matter of law, with respect to claims 7, 14, and 17 of the '685 patent. These claims required calculating the temperature of the body beneath the forehead; however, the accused devices instead calculated an oral-equivalent temperature. The majority noted that although the difference between these two temperatures may be insubstantial, the claim limitation was nonetheless not literally met, and infringement under the doctrine of equivalents was not at issue in this case.
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Howard J. Shire is Editor-in-Chief of this newsletter and a Partner in the New York office of Andrews Kurth Kenyon. He can be reached at [email protected]. Michael Block is an associate with the firm. He can be reached at [email protected].