Jeffri A. Kaminski is a Partner with Venable LLP in its Washington, DC office and is the WLF Legal Pulse’s Featured Expert Contributor, Intellectual Property—Patents.
In a split decision in Ericsson Inc. v. TCL Communications, the U.S. Court of Appeals for the Federal Circuit has provided accused infringers another avenue to challenge patent eligibility under 35 U.S.C. § 101 via appeal. Under the majority opinion, accused infringers can appeal a district court’s denial of summary judgement that is based on 35 U.S.C. § 101 even if the defendant did not raise the patent eligibility issue at trial. Judge Newman authored a pointed dissent.
In February 2015, Ericsson sued TCL for infringement of U.S. Patent No. 7,149,510. TCL moved for summary judgment, arguing that the asserted claims of the ’510 patent are ineligible under 35 U.S.C. § 101. The district court denied the motion in November 2017, and the case proceeded to trial one month later.
At trial, the jury found TCL willfully infringed the patent and awarded Ericsson damages. TCL then moved for renewed judgment as a matter of law and a new trial on the damages and willfulness issues. The district court reinstated the jury verdict and denied TCL’s motion for a new trial. The district court also denied TCL’s motion for judgment as a matter of law on willfulness, finding the jury’s verdict supported by substantial evidence. Notably, TCL did not file a judgment as a matter of law motion or any other post-trial motion on eligibility.
TCL appealed. Because TCL made no post-trial motions questioning eligibility, it could only appeal the summary judgment denial on eligibility. The failure to file any post-trial motions on eligibility is typically fatal to an appeal on the issue.
Accordingly, Ericsson argued that TCL had waived its right to appeal the issue of ineligibility by failing to raise it in a post-trial motion for judgment as a matter of law. The appeals court disagreed. The court explained that in denying TCL’s pretrial motion, the district court made a conclusion that ’510 patent was not directed to an abstract idea. And when the district court denied TCL’s summary judgment motion on eligibility, there was nothing left for the jury to decide. Thus, the majority held that when the district court denied TCL’s summary judgment motion on patent eligibility, it effectively granted a motion for summary judgement of eligibility. Critical to this determination is the Federal Circuit’s conclusion that “no party has raised a genuine fact issue that requires resolution.”
It further explained that by making such a conclusion, the district court “effectively entered judgment of validity to [Ericsson], and that grant of judgment was appealable.” The majority also addressed the merits of patent eligibility, concluding that the claimed invention is ineligible under 35 U.S.C. § 101.
Judge Newman begins a strong dissent by stating “[t]he court today sets aside the Federal Rules and sound practice for civil trials and appeals, and holds that the district court’s pre-trial denial of a motion for summary judgment based on 35 U.S.C. § 101 is the same as a final decision in favor of the non-movant.” Judge Newman explains that the Fifth Circuit, whose procedural law controls in this case, stresses that appellate review is available only for issues preserved in a Rule 50 motion. None of those requirements were met in this case:
TCL did not pursue any Section 101 aspect at the trial or in any post-trial proceeding. . . . TCL took no action to preserve the Section 101 issue, and Section 101 was not raised for decision and not mentioned in the district court’s final judgment.
There is no trial record and no evidence on the question of whether the claimed invention is an abstract idea and devoid of inventive content.
Patent litigants clearly disagree on whether findings of fact and conclusions of law from the district court are beneficial, or even necessary, for the Federal Circuit. In any event, Ericsson Inc. v. TCL Communications poses a hurdle for patent owners in the ever-changing 35 U.S.C. § 101 eligibility case law.