SiRF Technology, Inc. v. U.S. Int’l Trade Comm’n, 601 F.3d 1319, 2010 U.S. App. LEXIS 7423 (Fed. Cir. 2010) (DYK, Michel & Clevenger)SiRFTechnology04122010
MAJOR ISSUES: patent eligible processes under Section 101; Bilski; standing to sue; inventor’s prior assignment; invention assignment agreements as automatic transfer of future inventions; recording assignment with PTO; burden of proof; joint infringement; control and direction requirements; method claims requiring action only by a single party
COMMENT. This case addresses three issues, the first two of which relate to issues in other cases that came before the Supreme Court in 2010 and 2011.
The first issue was whether claims to certain calculation methods constituted patent eligible processes under Section 101. Applying the Federal Circuit’s purportedly exclusive machine-or-transformation (MORT) test articulated in the en banc decision, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), this case held that the claims met the “M” part of the test (“tied to a particular machine or apparatus”). Subsequently, the Supreme Court held that MORT was an important “clue” to “process” patentability but not the exclusive test. Bilski v. Kappos, 130 S. Ct. 3218, CPLRG 0015 (2010).
The second issue was whether the plaintiff, as apparant owner of the patent at issue, had standing to assert the patent, given that one of the named inventors may have previously assigned his rights pursuant to an invention assignment. In another case, Board of Trustees of Stanford University v. Roche Molecular Systems, Inc., 583 F.3d 832, CPLRG 0003 (Fed. Cir. 2009), cert. granted, 131 S. Ct. 502 (2010), the Supreme Court granted certiorai to review a specific issue regarding employee assignments of patents. The issue: “Whether a federal contractor university’s statutory right under the Bayh-Dole Act in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor’s rights to a third party.”
The third issue was whether method claims required, for infringement, action only by a single party so as to avoid the need for the patent owner to meet the requirements of control and direction applicable to “joint infringement” situations. A “joint infringement” situation arises when a method claim requires several steps and different parties perform the steps. For such situations, the Federal Circuit has decreed a “control and direction” test. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2008); BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378 (Fed. Cir. 2007). This case illustrates how patent owners can avoid joint infringement situations: draft claims that focus on the acts of a single party. The court offered an interesting analogy: “By analogy, if a claim for a method of making a telephone call included the limitation: `placing a telephone call to a telephone at a second location,’ the fact that the call must first be routed through a switched telephone network, and then eventually to the eventual recipient, would not prevent this claim limitation from being satisfied.”
1. GLOBAL POSITIONING SYSTEM (GPS). Six patents concerned “six patents are in the field of GPS,” that is, “Global Positioning System.” U.S. Pat. No. 6,417,801 USPatNo6417801; U.S. Pat. 6,606,346 USPatNo6606346; U.S. Pat. No. 6,651,000 USPatNo6651000; U.S. Pat. 6,704,651 USPatNo6704651; U.S. Pat. No. 6,937,187 USPatNo6937187; U.S. Pat. No. 7,158,080 USPatNo7158080.
2. SECTION 101 PATENTABLE ELIGIBLE SUBJECT MATTER. Apply the MORT test of the 2008 en banc Bilski decision, the Federal Circuit held that claimed methods to calculating position from satellite signals were for patent-eligible subject matter. First, the methods required use of a specific machine, to a GPS (Global Positioning System) receiver. Second, as Bilski required, the linkage to a machine imposed “meaningful limits on the claim’s scope” because (1) “there is no evidence … that the calculations … can be performed entirely in the human mind,” and (2) “the use of a GPS receiver is essential to the operation of the claimed methods.”
3. STANDING; EMPLOYMENT ASSIGNMENT. The Federal Circuit held that the International Trade Commission did not err in finding that a patent owner, Global Locate, had standing to assert infringement of one of the patents. The patent concerned an improvement in “signal correlation” for global positioning system (GPS) receivers.
a. Substantial evidence supported the Commission’s finding that a named co-inventor Abraham, a Global Locate employee who had assigned his patent rights to Global Locate, did not previously assign rights to the invention to Abraham’s previous employer, Megallan. Therefore, Megallan was not a co-owner of the patent and need not have been joined in an ITC proceeding asserting infringement of the patent. See Isr. Bio-Eng’g Project v. Amgen, Inc., 475 F.3d 1256, 1264-65 (Fed. Cir. 2007).
b. In his agreement with his prior employer Megallan, employee Abraham assigned rights to all inventions that where conceived during the period of employment and were “related to or useful in the business of the employer” Megallan.
c. If a contract expressly assigns future inventions, no further act is required when the invention subsequently comes into being. FilmTec Corp. v. Allied-Signal Inc., 939 F.2d 1568 (Fed. Cir. 1991).
i. The interpretation and effect of the Abraham-Magellan employee invention assignment agreement was governed by California state contract law and by California Labor Code Section 2870.
ii. For purposes of determining standing to assert infringement, Federal law governs whether an agreement “provides for automatic assignment.” DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008).
iii. Here, the agreement between the inventor Abraham and his former employer Megallan provided that the employee “assigns” any invention. The present tense phrasing (“assigns”) meant that agreement was an automatic assignment. “See DDB Techs., 517 F.3d at 1290 & n.3 (finding automatic assignment where the agreement used `the present, automatic’ language `agrees to and does hereby grant and assign’).”
d. The employee Abraham did conceive the invention subsequently claimed in the patent at issue during his previous employment with Magellan. On whether the automatic transfer agreement applied, the question remained: was the invention “related to or useful in” the employer’s business?
e. The burden of establishing standing rests on a party asserting a patent, here Global Locate. However, when, as here, an inventor (Abraham), who is the presumptive owner of an invention, assigns his rights to a party (Global Locate) and the PTO issues the patent to the assignee (Global Locate), as authorized by 35 U.S.C. § 152, the burden of showing that the invention has been previously assigned to another (Magellan) rests on an accused infringer who challenges the assignee’s standing to assert the patent.
i. Recording an assignment with the PTO under 35 U.S.C. § 261 is not a determination of the assignment’s validity, but the recording does create a presumption of validity. See § 9500.
ii. The accused infringer argued the California Labor Code provision governing employee invention assignment agreements required that the burden of showing that an invention is not covered by an agreement rest on the employee. The argument lacked merit. The Labor Code provides that the burden of proof is on an employee in a suit challenging an agreement’s enforceability. An ITC proceeding based on the patent is not such a suit.
f. Given that the accused infringer’s bore the burden of proof, substantial evidence supported the Commission’s determination that the accused infringers provided no evidence that the invention was related to (or useful in) the former employer Magellan’s business within the meaning of the employee invention assignment agreement.
i. Under California contract law, when contract language is ambiguous, extrinsic evidence on how the parties’ interpreted the agreement is admissible.
ii. Here, there was extrinsic evidence that the former employer Magellan did not interpret the employee invention assignment agreement as applying to the invention in question. Magellan had brought a trade secret misappropriation suit against the patent owner Global Locate and the inventor Abraham. The suit was settled. In the suit, Magellan had received documents showing that the inventor had conceived the invention during his employment with Magellan. Yet, the settlement agreement recognized that Global Locate could continue to use the technology that included the invention.
4. JOINT INFRINGEMENT. Two of the patents concerned improvements over conventional A-GPS technology.
a. GPS comprises 32 satellites, at least four of which are in direct line-of-sight at any point on Earth. An A-GPS system receives GPS signals and uses a server to forward them via the internet or a wireless telephone network to GPS-enabled receivers, which use the information to compute the receiver’s location.
i. The ‘651 patent disclosed sending satellite “ephemeris” data, that is, data regarding the location and trajectory of the satellite, to GPS receivers through a GPS network and using the data to more precisely locate satellites.
ii. The ‘000 patent disclosed compacting ephemeris data so that GPS receivers may receive it more quickly.
b. An accused infringer, SiRF, developed and sold chips containing software for installation on its customers’ GPS receivers.
i. The customers import and sell receivers containing SiRF chips and software to end users in the United States.
ii. The accused infringer SiRF maintained a “InstantFix” A-GPS system, which provided extended-ephemeris (EE) files to end-user devices.
iii. The end user’s GPS receives use the EE files to computer position.
c. IMPORTATION EXCLUSION PROCEEDING. The patent owner initiated a Section 337 importation proceeding before the International Trade Commission.
i. The accused infringer SiRF argued that accused infringement was one of “joint invention” because the method steps in the two patents’ claims were required to be performed by, and were in fact undertaken by, third parties, to wit, the accused infringer’s customers that forwarded EE files via their servers and end users, who enabled their GPS receivers to receive and process the EE files. It argued that the patent owner failed to meet the requirements for joint infringement, to wit, that the accused infringer SiRF controlled or directed the customers and end users.
ii. The Commission found that the requirements for joint infringement were met.
d. HELD: joint infringement need not be addressed because, under a proper construction of the claims, SiRF performed each of the method steps.
e. COMMUNICATING AND TRANSMITTING DATA TO RECEIVERS. The claims required the communicating or transmitting of ephermeris or formatted data to a mobile (remote) GPS receiver.
i. The accused infringer argued that these communicating steps necessarily involved action by third parties, to wit, (1) by the accused infringer’s customers in receiving data from the accused infringer’s server and forwarding it to mobile receivers, and (2) by the end users in downloading the data.
ii. Properly construed in light of the patents’ specifications, the claims encompassed both direct and indirect communication or transmission.
iii. The accused infringer directly infringed the claims because it initiated the transmission and communication of EE files and the files were actually transmitted to end users.
iv. The accused infringer marketed its chips, software, and system as “end-to-end service.”
v. It was irrelevant to the determination of direct infringement that other parties performed the actions of forwarding and downloading because the claims did not require those actions. They only required indirect communication or transmission.
f. PROCESSING RECEIVED SIGNALS AND REPRESENTING DATA. The claims also required processing received signals and representing data.
i. The processing and data representation occurred at the end user’s GPS receivers.
ii. The accused infringer argued that the claimed processing and representing steps required action by the end user.
iii. The argument lacked merit because it required an improper reading of enabling or activating steps into the claims.
iv. Properly construed, the claims’ processing and representing steps are ones that “take place in a GPS receiver that is enabled and ready to process data.”
v. The accused infringer directly infringes because its chips and software on the receiver automatically perform the processing and representing steps on receiving data initiated by the accused infringer’s system.
1. On patent eligible processes, see Chisum Patent Law Digest 1110; Chisum on Patents 1.03[m].
2. For discussion of standing and employment assignment agreements, see Chisum Patent Law Digest 9300, 9400.
3. For a discussion of “joint infringement” and divided infringement of method claims, see Chisum Patent Law 5113.30; Chisum on Patents 16.02[a].