Federal Circuit Mixed Opinion In HP Patent Infringement Suit

The Federal Circuit issued an opinion on Thursday regarding an appealed suit from the Eastern District of Texas involving plaintiff-appellant Network-1 Technologies, Inc., and defendants-cross-appellants Hewlett-Packard Company and Hewlett Packard Enterprise Company (collectively referred to as HP). The suit went before Chief Judge Prost and Circuit Judges Newman and Bryson. In an opinion issued by Chief Judge Prost, the Federal Circuit affirmed-in-part, reversed-in-part, and remanded proceedings.

Network-1 Technologies appealed the Eastern District of Texas’s judgment regarding the company’s patent infringement suit against HP regarding U.S. Patent No. 6,218,930 (the ’930 patent). HP argued that the patent-in-suit was invalid and HP did not infringe. The jury found that HP did not infringe the patent and that the patent was invalid. Afterward, the district court denied Network-1’s request for a new trial but granted its motion for judgment as a matter of law on validity. However, Network-1 appealed the court’s decision that HP did not infringe the patent-in-suit claiming that the court “erred in its claim construction.” Additionally, HP “cross-appeal(ed) the district court’s determination that HP was estopped from raising certain validity challenges under 35 U.S.C. § 315(e)(2) based on HP’s joinder to an inter partes review.” Furthermore, HP asserted that Network-1 “improperly broadened claim 6 of the ’930 patent during reexamination.”

The Federal Circuit stated that it affirms-in-part and reverses-in-part the district court’s claim construction in regards to Network-1’s, thus it remands to the district court. In relation to HP’s cross-appeal, the Federal Circuit noted that it vacates the district court’s judgment as a matter of law on validity and remand. Additionally, the Federal Circuit affirms the district court’s decision in regards to improper claim broadening.

Network -1 alleged that the district court erred in its claim construction for the terms “low level current” and “main power source,” which it said entitled it to a new trial. Network-1 had to “establish that the challenged jury instructions were legally erroneous, and that the errors had prejudicial effect.” However, the court found that the district court correctly construed “low level current,” but erred constructing “main power source,” because it only included “‘a DC power source,’ and thereby excluded AC power sources from its construction” when it should have included both power sources; so, Network-1 is entitled to a new infringement trial. Additionally, according to the Federal Circuit, the district court also “erred by adding a limitation to the claims to carve out certain inoperable embodiments.” Moreover, Network-1 established that the erroneous construction of the term led to a prejudicial error, so it is entitled to a new trial. As a result, the Federal Circuit vacated the Eastern District of Texas’s non-infringement judgment and remanded for a new trial to determine if HP infringed the asserted claims using the correct construction for “main power source.”  

The court also considered HP’s cross-appeal. HP averred that the district court erred when it granted the judgment as a matter of law in relation to the validity of the ’930 patent by stating that HP was estopped because of its joinder to an IPR from raising obviousness challenges. The Federal Circuit agreed with HP, noting that it is not estopped. The Federal Circuit stated that the district court “misapplied the estoppel provision under 35 U.S.C. §315(e)(2)…HP’s joinder to the Avaya IPR and the estoppel consequences of that joinder are governed by the America Invents Act (‘AIA’), which established IPR proceedings.” According to the court, HP could join the IPR as a party, even though HP was time-barred from bringing its own IPR petition.

The Federal Circuit vacated the district court’s judgment and remands to the court for proceedings “consistent with this opinion.” Additionally, the Federal Circuit disagreed with HP and affirmed the district court’s decision that the asserted patent claims were not broadened improperly by adding dependent claims 15 and 16 to claim 6 during reexamination. Thus, the precedent is that “dependent claims cannot broaden an independent claim from which they depend.” As a result, the Federal Circuit affirmed that claim 6 and the other asserted claims are not invalid because of improper broadening.

Network-1 Technologies is represented by Dovel & Luner, LLP and MoloLamken LLP. HP is represented by Gibson, Dunn & Crutcher LLP; Morgan and Lewis Bockius LLP.