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Claim Validity Stands if Noninfringer Does Not Appeal

Wednesday, March 13, 2013

An inter partes reexamination ruling that certain patent claims were invalid must be vacated because parallel court proceedings ended without a successful validity challenge to the end of the appeals process, according to a March 7 nonprecedential opinion by the U.S. Court of Appeals for the Federal Circuit (Function Media L.L.C. v. Kappos, Fed. Cir., No. 12-1380, nonprecedential 3/7/13).

The hitch in the case was that the reason Google Inc. did not appeal the validity ruling of the lower court was because it won on noninfringement grounds.

Function Media L.L.C. holds patents (U.S. Patent Nos. 6,446,045; 7,240,025; and 7,249,059) directed to facilitating advertising on multiple websites. The company sued Google and its rival search firm Yahoo! Inc. for patent infringement in the U.S. District Court for the Eastern District of Texas. Yahoo settled.

On Feb. 13, the Federal Circuit affirmed the lower court's judgment that Google's AdWords and AdSense products did not infringe the patents. 105 U.S.P.Q.2d 1754 (Fed. Cir. Feb. 13, 2013) (33 PTD, 2/19/13). However, the district court had found that Google had failed to prove the invalidity of claims 52, 63, 90, and 231 of the '025 patent, and Google did not appeal that part of the ruling.

During litigation, Google had also initiated inter partes reexamination of the '025 and '059 patents at the Patent and Trademark Office. The Board of Patent Appeals and Interferences affirmed an examiner's judgment that all the claims of both patents were invalid for anticipation or obviousness. The board also refused Function Media's petition to dismiss in light of the results of its court litigation.

Function Media appealed both decisions.

Judge Kimberly A. Moore wrote the appeals court's opinion, which was joined by Judges Haldane Robert Mayer and Evan J. Wallach. The court agreed with the board on the merits as to all the claims other than the four '025 patent claims. The court determined it would be improper to address the merits of those claims

Pursuant to 35 U.S.C. §371(b), the court said, “the PTO is barred from maintaining an inter partes reexamination of a patent claim once a 'final decision has been entered' in a civil action holding that the third-party requester failed to 'sustain[] its burden of proving the invalidity' of that patent claim.”

In the sequence of events here, the court said, Google had brought an invalidity challenge and was unsuccessful.

“Google's failure to appeal the determined validity of those claims removed them from any subsequent actions,” the court said.

The court thus vacated the board's judgment as to the four claims only and remanded with instructions to rule on Function Media's petition to dismiss.

Justin A. Nelson of Susman Godfrey, Seattle, Wash., represented Function Media. John A. Dragseth of Fish & Richardson, Minneapolis, represented Google. Lore A. Unt, PTO associate solicitor, Alexandria, Va., represented the PTO.


Text is available at http://www.bloomberglaw.com/public/document/Function_Media_LLC_v_Kappos_Docket_No_1201380_Fed_Cir_May_11_2012.

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