Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. The Federal Circuit reversed two final written decisions of the Patent Trial and Appeal Board (PTAB) based on errors in the PTAB’s obviousness analysis. The PTAB invalidated claims in two patents directed to an extrusion process for coating and insulating communication cables with a unique polymer. The PTAB relied on a single prior art reference, and found that there was a motivation to modify the reference to teach the challenged claims. The Federal Circuit disagreed noting that the primary reference had a narrow, preferred range related to a melt flow rate, and taught away from the range in the challenged patent claims. The PTAB used other references that were less, if at all, relevant to the problem being addressed by the challenged patent claims, to ostensibly overcome the teaching away issue in terms of the melt flow rate range, and said there was a motivation to modify the primary reference. The Federal Circuit rejected this approach. The Federal Circuit also reversed the PTAB on its analysis of secondary indicia of non-obviousness, namely commercial success. First, the Federal Circuit said that simply because a claim element was in the prior art, that did not negate the required “nexus” between the commercial success and the challenged claim. Second, the PTAB required evidence of market share, not just sales data, which the Federal Circuit said was improper. The takeaway here is that the Federal Circuit, at least in this opinion, seems to have done something helpful to patentees in connection with secondary indicia of non-obviousness, which may be helpful to overcoming obviousness challenges in the Patent Office as well as district courts.
2. In the ongoing and sometimes amusing back and forth between the Federal Circuit Court of Appeals and Judge Alan Albright of the Western District of Texas in connection with motions to transfer venue, a recent salvo from the Federal Circuit granted a writ of mandamus to transfer a case to the Central District of California, defendant Hulu’s home district. In essence, the Federal Circuit looked at the transfer factors under Fifth Circuit law, considered how Judge Albright weighed them to deny transfer, and then said Judge Albright erred and the case should be transferred. Here, the errors in weighing related to availability of compulsory process, willingness of witnesses to testify, and court congestion. Notably, regarding court congestion and speed to trial, the Federal Circuit noted that the Western District of Texas and the Central District of California were similar. The takeaway here for plaintiffs looking to sue in West Texas is that you need to carefully consider the venue analysis before filing because the Federal Circuit will grant writs of mandamus if a transfer is warranted.
3. To be fair to Judge Albright, he did grant a motion to transfer a first-filed patent case (SmileDirectClub v. Candid Care Co.) in connection with a continuation application where the second-filed declaratory judgment action was pending in the District of Delaware, but where the Court in Delaware was already familiar with the parent application and had denied a motion to transfer the second-filed case to Judge Albright in Texas. The plaintiff originally filed a case based on a parent application in Delaware. The Court in Delaware invalidated the parent patent based on Section 101/Alice. Thereafter, a continuation application issued as a patent, and in order to avoid the Court that had issued the unfavorable ruling, the plaintiff filed the case in the Western District of Texas with Judge Albright. Shortly thereafter, the defendant filed a declaratory relief action in Delaware. The Court in Delaware denied a motion to transfer the declaratory relief action to Texas. Judge Albright then transferred the case in his court to Delaware, stating that, “this Court does not and will not encourage such blatant forum shopping.” This latter quote is amusing coming from Judge Albright, but he did the right thing here. The takeaway here is to properly and realistically evaluate venue options in patent cases because poor venue analysis wastes time and increases costs.
