ALJ Shaw Finds No Violation In 921 Investigation – On July 2, 2015, Administrative Law Judge David Shaw issued a 320-page Final Initial Determination On Violation And Recommended Determination On Remedy in Certain Marine Sonar Imaging Devices (Inv. No. 337-TA-921) determining that a violation of Section 337 had not occurred with respect to the asserted patents. The investigation had been instituted in July 2014 based on a Complaint by Navico Holdings AS and Navico, Inc. (“Navico”) accusing marine imaging devices, namely, underwater scanning devices using “DownScan” sonar technology, imported by Garmin International, Inc., Garmin USA, Inc., and Garmin (Asia) Corp. (“Garmin”) of infringing Navico’s patents. Navico had alleged that Garmin hired former Navico engineers, including the three named inventors of the asserted patents, to develop the infringing products. After the hearing, ALJ Shaw ordered the parties to submit supplemental briefing on the effects of the Federal Circuit’s precedential opinion concerning the economic prong of the domestic industry requirement in Lelo Inc. v. Int’l Trade Comm’n, No. 13-1582 (Fed. Cir. May 11, 2015). The determination of no violation was announced by Notice stating that the public version of the Initial Determination will be available within 30 days. This publication will report on ALJ Shaw’s findings and conclusions of law, including those concerning contributory and induced infringement, in the next Update.

Barnes & Noble Requests De Novo Review Of Magistrate Decision Not To Apply Res Judicata To ITC Determination – On June 15, 2015, Barnes & Noble filed a Motion For De Novo Determination by U.S. Judge Vince Chhabria of Magistrate Judge Grewal’s recommendation that claim and issue preclusion not be applied to an ITC determination of non-infringement in Technology Properties v. Barnes & Noble, Case No. 3:12-cv-03863-VC in the Northern District of California (see prior coverage). Barnes & Noble requested a July 23, 2015 date for a hearing on the matter. In the interim, another U.S. District Judge Claudia Wilkin denied a request by defendants Hewlett-Packard, Canon, Seiko Epson, Rosewell and Newegg to bar plaintiff TPL from bringing infringement claims in Technology Properties Ltd v. Canon, Case No. 14-cv-03640 in the Northern District of California, because the ITC found in 2012 their products did not infringe the asserted patents – the parties stipulated that these products were “essentially the same” as the newly accused products in the district court case. In an Order Denying Motion for Judgment on the Pleadings, Judge Wilkin rejected defendants’ request that res judicata should apply under the Kessler doctrine holding that the relevant inquiry is whether Congress granted the ITC “authority to provide binding decisions” and that “Congress has expressly indicated that ITC decisions are not entitled to have preclusive effect”, quoting Senate Report No. 1298, 93d Cong., 2d Sess. 196 (1974). For this reason, Judge Wilkin also distinguished defendants’ citation to a recent Supreme Court decision in B&B Hardware v. Hargis Indus.,135 S.Ct. 1293, 1299 (2015), which Judge Wilkin found “emphasized that courts must defer to Congress’s view that an agency’s action should not be preclusive.”

Federal Circuit Invalidates Two Intellectual Ventures Patents Directed To Abstract Ideas – On July 6, 2015, the Federal Circuit issued a unanimous panel Opinion that two Intellectual Ventures patents are patent-ineligible under 35 U.S.C. §101 in Intellectual Ventures v. Capital One Bank (USA),Appeal No. 2014-1506. The Court followed the two step test set forth in Mayo v. Prometheus,132 S.Ct. 1289, 1297:  (1) “First, we determine whether the claims at issue are directed to a patent-ineligible concept”; and (2) “We next consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether additional elements ‘transform the nature of the claim’ into a patent-eligible application.” The Court found that an “abstract idea does not become nonabstract by limiting the invention to a particular field of use or technological environment, such as the internet.” Specifically, the Court held that “the patent claims are directed to an abstract idea:  tracking financial transactions to determine whether they exceed a pre-set spending limit (i.e., budgeting)” and “while the claims recite budgeting using a ‘communication medium’ (broadly including the Internet and telephone networks), that limitation does not render the claims any less abstract.” Patent ineligibility under Section 101 may become the subject of a future request for a 100-Day early disposition in an ITC Section 337 investigation. In OIP v. Amazon.com, Appeal No. 2012-1696 (Fed. Cir. June 11, 2015), the Court affirmed a district court’s judgment on the pleadings of patent-ineligibility. Circuit Judge Mayer noted that “[f]ailure to recite statutory subject matter is the sort of ‘basic deficiency,’ that can, and should, ‘be exposed at the point of minimum expenditure of time and money by the parties and the court’….”