CAFC: No Sua Sponte Summary Judgment; No Baseless Suit Without Claim Construction

EON-Net v. Flagstar Bancorp (Fed. Cir. 07-1132) (non-precedential)

In 2006, the Washington State district court granted summary judgment of non-infringement in Flagstar’s favor. The court also applied sanctions against the patentee’s attorneys – a NYC class action boutique — for filing the “baseless” litigation. [link]

Sua Sponte Summary Judgment: A summary judgment motion for non-infringement must at least point to “specific ways in which the accused system [does] not meet the claim limitations.” (Exigent Technology). Without at least that threshold level of information, the court must reject such a motion. 

Here, the court issued its summary judgment decision on sua sponte grounds (i.e., using grounds that had not been particularly raised in the SJ motion). Because EON did not have an opportunity to respond, the CAFC vacated and remanded.

“The district court should have given Eon-Net an opportunity to fully present its arguments on these issues, even if the district court ultimately would have reached the same conclusion. We have previously held that where a district court construes a patent without following the necessary steps, we should remand the matter for further proceedings so that the district court can follow the appropriate steps.”

Sanctions: Normally, an attorney is required to perform a “reasonable pre-filing inquiry” that includes an infringement analysis prior to filing a patent infringement complaint. Here, the district court sanctioned Eon’s counsel for not performing such an inquiry.

In a major exception to the inquiry requirement, however, “an attorney may not be sanctioned solely for failing to conduct a reasonable inquiry as long as the complaint is well-founded.” Of course, in patent cases, a patent claim can rarely be deemed unfounded prior to claim construction.

“[W]ithout a full claim construction analysis it is impossible to assess whether Eon-Net’s claim construction was unrealistic.”

Furthermore, the “mere fact” that EON sent identical complaints to dozens of other companies is insufficient to establish that the complaint was filed for a sanctionable “improper purpose.”

Summary Judgment of Non-Infringement: Downward Force <> Upward Force

SafeTCare v. Tele-Made (Fed. Cir. 2007).

SafeTCare’s patent covers a bariatric hospital bed designed for obese patients. On summary judgment, the district court found that the Tele-Made beds do not infringe. Other defendants and counterclaims are still pending.

Jurisdiction: On appeal, the CAFC sua sponte questioned jurisdiction. Because the judgment was not complete as to all parties and the judge had not issued a Rule 54(b) order of appealability (See Bashman), the CAFC did not have jurisdiction at the time of oral arguments. However, the CAFC allowed the parties time to ask for such an order from the district court before dismissing the appeal. (This pragmatism is perhaps due to Judge Robinson’s place on the panel).

Upward Force: SafeTCare’s patent requires a plurality of motors exerting a pushing or upward force on the bed.  Tele-Made’s motors are essentially attached to one end of a lever, and by pulling down, cause an upward force on the other end of the lever. However, because SafeTCare’s specification implied a direct link between the motor and the bed, the levered approach was non-infringing. Prosecution history estoppel blocks DOE coverage.

Non-infringement affirmed.

Procedure: Expert Testimony Deserves Weight on Summary Judgment

Omegaflex v. Parker-Hannifin Corp (Fed. Cir. 2007) (nonprecedential)

On summary judgment, the Massachusetts District Court found the Omegaflex pipe-fitting patents novel, nonobvious and infringed. Parker appealed.

Respect the Expert: On several points of contention, the district court gave no probative weight to Parker’s expert’s testimony.  On summary judgment, the evidence should be weighed in the “light most favorable” to the non-movant (Parker). Because the expert testimony creates issues of material fact, the CAFC reversed and remanded.

In dicta, the three-member panel (Judges Michel, Dyk, and Garbis) probed the Supreme Court’s recent KSR decision — noting that it will continue to look for some reason to combine prior art references in an obviousness rejection.

Quoting KSR: “a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art.”

Reversed and remanded.