Weekly IP Takeaways

Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.

1. In a recent opinion from the Federal Circuit, the Court ordered Judge Rodney Gilstrap of the Eastern District of Texas to transfer a patent case against Netflix to the Northern District of California. Judge Gilstrap adopted the recommendation of the Magistrate Judge to deny Nexflix’s motion to dismiss or transfer. The Federal Circuit pointed, the fact that the bulk of the evidence and witnesses were in California, the district court’s improper analysis of compulsory process by requiring witnesses who could not be compelled to testify in East Texas to have important testimony, as well as an incorrect weighing by the district court of willing witnesses in a way that favored a denial of transfer. The takeaway here is that the Federal Circuit has cracked down quite firmly in the past several years on what it seems to believe are skewed transfer analyses to hold cases in East and West Texas. Venue in patent cases is not as loose as it used to be, and a solid connection to a venue is needed to avoid a transfer, assuming such a motion is made.

2. In a recent decision on a Daubert motion from the Western District of Texas, the Court granted Amazon’s motion challenging the plaintiff’s damages expert’s reasonable royalty analysis and calculations. The patent-in-suit was directed to a data access and management system that Amazon was allegedly infringing. Amazon moved to exclude the expert for violating the entire market value rule and not limiting the royalty base to the smallest patent-practicing unit of the allegedly infringing system. Judge Hightower agreed that the plaintiff’s expert improperly used the entire revenue stream from the allegedly infringing system and granted Amazon’s motion. The takeaway here is that in reasonable royalty cases, determination of the proper, supportable royalty base is very important lest an expert be excluded for violating the entire market value rule.

3. In a recent opinion from the Federal Circuit Court of Appeals, the Court reversed a construction by Judge Staton of the Central District of California of the phrase “magazine catch bar” in a patent directed to a device for converting a firearm with a detachable magazine to a firearm with a fixed magazine. Judge Staton’s construction excluded a factory-installed magazine catch bar, which precluded literal infringement. The Federal Circuit disagreed and opined that a factory-installed catch bar was within the scope of the claims, thus reversing the construction and the summary judgment of non-infringement. The Federal Circuit noted that the claim language did not limit the invention to a catch bar other than factory-installed, and that reliance on an unasserted claim did not change its conclusion because it would require reading material into the unasserted claim, which was improper in this case. The takeaway here is that the Federal Circuit (at least this panel) focuses on the plain and ordinary meaning of claim terms, as guided by the specification, and that importing limitations into claim language from the specification or making claim differentiation-like arguments do not often change the plain meaning of claim terms.