Translogic Requests Rehearing En Banc in its Appeal against Hitachi

Translogic, a Northwest innovator of logic circuits known as multiplexers, saw its $85M jury verdict for infringement of U.S. Patent No. 5,162,666 against Hitachi evaporate into thin air when the Federal Circuit affirmed a decision by the Board of Patent Appeals and Interferences (BPAI) upholding an Examiner's final rejection in a Reexam. The reexam and litigation (D. of Oregon) proceeded simultaneously along parallel tracks. After winning a jury verdict that certain claims of the '666 patent were not invalid, the Examiner issued a rejection in the reexam, finding those same claims invalid for obviousness. Translogic was unsuccessful in its appeal of the Examiner's rejection before the BPAI, and subsequently appealed to the CAFC. Meanwhile, Translogic had won a jury verdict of willful infringement and judgment of $85M which was appealed by Hitachi. Both cases reached the CAFC at about the same time and the CAFC issued two independent rulings. First, the Court affirmed the BPAI's decision in an opinion dripping with comparisons to the U.S. Supreme Court's decision in KSR v. Teleflex [PDF] and reasoning that the BPAI correctly determined that the claims of the '666 patent were invalid. [PDF] Second, the Court vacated the jury's verdict [PDF] based on its decision affirming the decision by the BPAI.

Today, Translogic requested rehearing by the CAFC en banc in a brief that raises some interesting arguments. Translogic challenges the Constitutional character and make up of the BPAI, with its lack of Article III judges. There is support for this argument in a recent article in the Patently O Law Journal.

Second, Translogic asserts a US Supreme Court case from 1861 arguing that the CAFC's decision violates the "antiretroactivity doctrine." Essentially, this doctrine does not permit the CAFC to eliminate a judgment based solely on a decision of the BPAI, where that decision came later in time than the jury's verdict. (i.e., "What the jury giveth, the BPAI cannot take away.") Of course, this argument would still require the CAFC to go back and evaluate the other issues on Hitachi's appeal of the underlying judgment.

I think both of these arguments have some legs. Rehearings en banc are always a long shot, but I hope the CAFC takes another look at this decision. If judgment on the Jury's verdict is flawed for some reason (like lack of sufficient evidence) that would be one thing, but if the verdict is supported by the evidence, it "beat" the Examiner's rejection, and it should be upheld no matter what the result of the reexamination was. I think this is important to preserve the sanctity of our judicial system which is based on the institution of the jury. When a jury sits to decide a case and renders a verdict, that verdict should be respected and upheld unless it is flawed for some reason under the Federal Rules. Jury Verdicts should not be open to collateral attack by independent agency decisions, applying different rules. What is to stop any party who loses in district court and is hit with damages for patent infringement from simply trying the case over again before the BPAI, in an attempt to invalidate claims that have already been held not invalid by a jury? This promotes duplicate proceedings and could lead to inconsistent results.

Company Loses $85M Because of Patent ReExam

On Friday, the US Court of Appeals for the Federal Circuit vacated an award of $85M in damages which followed a jury verdict of infringement of US Patent No. 5,162,666. The '666 patent covers certain multiplexers, a type of logic circuit with multiple inputs, one or more control lines, and one output. Claims16, 17, 39-45, 47&48 of the '666 patent were found obvious under 35 U.S.C. 103(a) in a decision from the same panel of the court, Judges Mayer, Rader, and Prost. The Court's obviousness decision affirmed a prior ruling of invalidity made by the U.S. Patent and Trademark Offices Board of Appeals and Interferences, which had affirmed an examiner's rejection made in a reexamination proceeding. The Reexam was filed June 4, 1999, following an infringement case brought by the owner of the '666 patent, Beaverton Oregon Company, Translogic Technology, Inc. on March 24, 1999 in the District of Oregon (No. 99-407-PA) against Hitachi. Instead of staying the district court case in view of the Reexam, Translogic pushed ahead, winning a jury verdict that the claims of the '666 patent were not invalid in October 2003 and a subsequent verdict of infringement by Hitachi in May 2005 and an award of $85M in damages. The District court also entered a permanent injunction which was stayed by the Federal Circuit pending appeal. Only claims 16 and 17 of the '666 patent were litigated by Translogic to verdict.