Bearbox LLC v. Lancium LLC, Appeal No. 2023-1922 (Fed. Cir. Jan. 13, 2025)
In this week’s Case of the Week, the Federal Circuit affirmed a district court’s determination that appellants Bearbox and Austin Storms—Bearbox’s founder and sole employee—had not shown that Mr. Storms should be added as an inventor to Lancium’s U.S. Patent No. 10,608,433. The ’433 patent is directed to the operation of cryptocurrency mining centers which are situated adjacent to a power supply like a wind farm, and which utilize an agreement with the power provider to selectively operate “miner” computers on behind-the-meter energy based on the price of electricity, relevant cryptocurrency exchange rates, and other inputs. In addition to the district court’s ultimate denial of Mr. Storms’ inventorship claim, the Court also affirmed its finding that appellants’ Louisiana state law conversion claim was pre-empted by federal patent law.
Appellants contended that the invention of the ’433 patent was premised on information and materials that Mr. Storms had shared with one of Lancium’s founders, Michael McNamara, during a cryptocurrency industry summit in May 2019. Mr. Storms had shared dinner and conversation with Mr. McNamara, and sent him an email afterwards with several attachments concerning Bearbox’s similar crypto mining concept. However, the district court found that Lancium had independently conceived of the subject matter of the relevant claims by the time it filed the ’433 patent’s application in February 2018; that Lancium had actually reduced its invention to practice months before anyone at Lancium met Mr. Storms; and that Mr. McNamara credibly testified that he had looked at Mr. Storms’ email and attachments for no more than three minutes and did nothing with the information. It was undisputed that Mr. Storms and Mr. McNamara had had no contact before or after this exchange, and the Court had little trouble affirming the district court’s substantive determination that appellants had failed to prove their co-inventorship claim.
The Court also affirmed the district court’s conclusion that appellants’ parallel claim for “conversion” of Louisiana state law was pre-empted by federal patent law. The Court analyzed the question as one of conflict preemption, as opposed to express or field preemption. In reaching its conclusion, the Court deferred to substantial precedent that state law may not offer “patent-like” protection to concepts or ideas that are otherwise unprotected under federal law, because restricting the dissemination and exploitation of unpatented innovations would conflict with the patent system’s central objectives of fostering public disclosure and use. In this case, appellants’ conversion claim was pled similarly to a patent claim, for example seeking damages based on Lancium’s use, sale, and monetization of intellectual property that Bearbox considered to be its own. Because “federal patent law generally precludes” such damages awards premised on the exploitation of unpatented technology that is otherwise freely shared with others, the Court found appellants’ conversion claim to be “clearly preempted” in this case.
The Court also affirmed the district court on several procedural challenges, including the exclusion of appellants’ untimely-disclosed supplemental expert report in the weeks leading to trial, and of certain of Mr. Storms’ testimony as hearsay. On the “hearsay” point, the Federal Circuit particularly faulted appellants’ failure to preserve the issue by making a proffer of the excluded testimony at the district court level, as the absence of this material from the record prevented the Court from considering how the testimony may have altered the district court’s determination.
The full opinion can be found here.
By Jason A. Wrubleski
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Lynk Labs, Inc. v. Samsung Electronics Co., Ltd, Appeal No. 2023-2346 (Fed. Cir. Jan. 14, 2025)
The Federal Circuit addressed an issue of first impression concerning prior art that can be used in an inter partes review proceeding. Specifically, Section 311(b), adopted as part of the APA, states that an IPR may be brought “only on the basis of prior art consisting of patents or printed publications.” In this case, a patent application had been asserted as prior art that was not published until after the critical date. Lynk Labs asserted the patent application, although undisputedly prior art under 102(e), did not qualify as a “prior art . . . printed publication” for purposes of Section 311 until after it was published. The Board disagreed and, accepting the patent application as prior art, found the patent in question invalid as obvious. On appeal, the Federal Circuit affirmed, holding that a patent application is a “prior art . . . printed publication” for purposes of Section 311(b) as of the date it is filed, not the date it is published. The Federal Circuit performed an extensive statutory analysis including the legislative history behind post-grant review procedures, and analyzed case law dating back to the 1800s. After resolving that issue, the Court addressed claim construction and the Board’s obviousness analysis, ultimately affirming the Board’s finding that the patent was obvious.
The full opinion can be found here.
By Nika Aldrich
