United States: Federal Circuit Patent Watch: Nearly $2.2 Billion Damages Award Vacated

Precedential and Key Federal Circuit Opinions

1. VLSI TECHNOLOGY LLC, v. INTEL CORPORATION [OPINION] (2022-1906, 12/04/2023) (Lourie, Dyk, Taranto)

Taranto, J. The Court overturned a $2.2 billion infringement judgment. The Court affirmed-in-part and reversed-in-part on infringement, vacated the remaining damages award and remanded for a new trial on damages, and reversed the denial of the defendant's motion to add a license defense.

For one patent, the Court reversed the infringement judgment because the patentee's expert testimony was insufficient to prove infringement under the doctrine of equivalents. The Court held that the plaintiff failed to prove, with particularized testimony and linking argument, that the elements of the arrangement in the accused products were substantially the same as the elements of the claimed arrangement.

For the other patent, the Court affirmed the infringement judgment because it found that expert testimony and internal documents supported the jury's verdict. However, the Court set aside the $1.5 billion award for that patent because the plaintiff's damages expert relied on a regression analysis that used technical inputs chosen by trying to match data that was not from use of the infringing functionality. The Court remanded for a new trial on damages with respect to this patent.

The Court also held that the district court abused its discretion in denying the defendant's motion to amend its answer to add a license defense. The Court found there was no undue delay by the defendant in seeking to add the defense, that there was no basis on which prejudice alone could support denial of the motion, and that the defense was not futile.

WilmerHale represented Appellant Intel Corporation.

2. H. LUNDBECK A/S v. LUPIN LTD. [OPINION] (2022-1194, 12/07/2023) (Dyk, Prost, Hughes)

Dyk, J. The Court affirmed the district court's decisions on non-infringement and infringement. As an initial matter, the Court affirmed its prior cases establishing that “the use ... claimed in a patent” under section 271(e)(2)(A) must be the use for which an applicant is seeking marketing approval. Thus, actions for infringement of method of use patents under section 271(e)(2)(A) are limited to patents that claim an indication of the drug for which indication the applicant is seeking approval. Because defendants were not seeking approval for an indication claimed by the patents, plaintiffs failed to establish that section 271(e)(2)(A) provides an independent basis of infringement.

The Court also affirmed the district court's finding of no induced infringement, where plaintiffs' inducement case relied solely on defendants' proposed ANDA labels as the inducing conduct. The Court explained that a patentee cannot bar the sale of a drug for a use covered only by patents that will have expired simply by securing a new patent for an additional, narrower use. A label required to market the drug for a use covered by expired patents would not demonstrate the required specific intent to encourage infringement of new patents covering different uses. 

The Court also affirmed the district court's finding of no contributory infringement, where there were substantial noninfringing uses of the drug. The Court explained that substantial noninfringing use in section 271(c) refers to uses that do not infringe the patent in question, not other patents. To consider patents other than those asserted against a defendant would impermissibly expand the exclusive grant Congress provided. And while section 271(c) does not use the word “intent,” the statute still imposes a scienter requirement—that the accused infringer sells articles knowing the same to be especially made or especially adapted for use in an infringement of such patent.

The Court also affirmed the district court's construction, finding that the district court did not discount evidence from the prosecution history, and the dependent claims were not inconsistent with the claim construction.

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