ResQNet.com, Inc. v. Lansa, Inc. , 594 F.3d 860 (Fed. Cir. 2010) (PER CURIAM; Lourie & Rader; NEWMAN, concurring-in-part & dissenting in part)
MAJOR ISSUES: Product manual not a “printed publication”; absence of evidence of public accessibility ; submission to PTO: not an admission; on sale and public use without inventor’s authorization; pre-critical date advertisement of accused infringer’s product; damages: reasonable royalty, expert’s error in relying on a patent owner’s prior license agreements with high rates, agreements including software and not linked to infringed patent claim
1. MANUALS; NOT PRINTED PUBLICATIONS; NO ADMISSION BY SUBMISSION TO PTO IN REEXAMINATION OF ANOTHER PATENT. Two manuals for a software product did not constitute “printed publications” under Section 102(b) for purposes of anticipation or obviousness because there was no evidence that the manuals were publicly accessible. The patent owner had submitted the manuals to the PTO during a prior reexamination of another patent, but this did not constitute any admission that the manuals were prior art.
CROSS REFERENCES. On what constitutes a “printed publication,” see Chisum on Patents 3.04; Chisum Patent Law Digest 1321.
2. PRE-CRITICAL DATE ADVERTISEMENT FOR EARLY VERSION OF ACCUSED INFRINGER’S PRODUCT; ESSENTIAL ELEMENT OF PATENT’S CLAIMS MISSING FROM ADVERTISED VERSION; OFFER FOR SALE NOT PRIOR ART. A patent concerned screen recognition and terminal emulation in which a personal computer processes into a graphical user interface (GUI) information sent by a mainframe computer. The patent owner charged that an accused infringer’s terminal emulation product, “New Look,” infringed the patent. The accused infringer responded that the patent was invalid because it had advertised an earlier version (1.0) of “New Look” as early as March 1996, more than a year before the application for the patent was filed. A district court found that an essential limitation of the patent’s claim, to wit, a built-in terminal emulator, was missing from the advertised early version. The Federal Circuit held that the district court did not clearly err in “finding that the offer for sale of this earlier version did not constitute prior art.”
CROSS-REFERENCES. On what constitutes a barring “public use” or “offer to sell”, see Chisum on Patents 6.02, Chisum Patent Law Digest 1313, 1316.
3. DAMAGES OF INFRINGEMENT; REASONABLE ROYALTY; RELIANCE ON UNRELATED “RE-BUNDLING” LICENSES TO ADJUST UPWARD RATES FROM “STRAIGHT” LICENSES THAT WERE IN LITIGATION SETTLEMENTS FOR THE PATENT IN SUIT A district court, in adopting a 12.5% royalty, erred by, inter alia, relying on unrelated, high-royalty licenses, which included software that a licensee could “re-bundle,” to adjust upward the more modest royalty rates derived from “straight” licenses under the patent in suit.
a. The “re-bundling” licenses were not shown to be related to the patent in suit. Contrariwise, the “straight” licenses were in settlement of litigation involving the patent in suit. Therefore, only the latter should be considered. The district court’s award, based on the patent owner’s expert testimony, which, in turn, relied on the “rebundling” licenses, was tainted by “speculative and unreliable evidence divorced from proof of economic harm linked to the claimed invention ….”
b. The majority on the Federal Circuit panel held that the award was “inconsistent with sound damages jurisprudence.”
c. SAME LEGAL ERROR AS LUCENT (2009). The majority found that, in relying on the expert’s testimony, which failed to link the re-bundling licenses to the infringed patent, the district court had “made the same legal error that this court corrected in” Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009).
d. NEWMAN, DISSENTING. Judge Newman dissented, arguing that the majority departed from precedent, including i4i Limited Partnership v. Microsoft Corp., 589 F.3d 1246 (Fed. Cir. 2009).
CROSS-REFERENCES. On reasonable royalty damage awards based on prior licenses, see Chisum on Patents 20.03[b][i], Chisum Patent Law Digest 6213.