May 2011

Spotlight Info

In TiVo Inc. v. EchoStar Corp., No. 09-1374 (Fed. Cir. Apr. 20, 2011) (en banc), the Federal Circuit, sitting en banc, overruled the two-step analysis from KSM Fastening Systems, Inc. v. H.A. Jones Co., 776 F.2d 1522 (Fed. Cir. 1985), governing the standards for contempt proceedings in patent infringement cases.  Instead, the en banc Court “telescope[d] the current two-fold KSM inquiry into one, eliminating the separate determination whether contempt proceedings were properly initiated. . . . What is required for a district court to hold a contempt proceeding is a detailed accusation from the injured party setting forth the alleged facts constituting the contempt.”  Slip op. at 17-18.  Further, “[t]he analysis must focus not on differences between randomly chosen features of the product found to infringe in the earlier infringement trial and the newly accused product, but on those aspects of the accused product that were previously alleged to be, and were a basis for, the prior finding of infringement, and the modified features of the newly accused product.  Specifically, one should focus on those elements of the adjudged infringing products that the patentee previously contended, and proved, satisfy specific limitations of the asserted claims.  Where one or more of those elements previously found to infringe has been modified, or removed, the court must make an inquiry into whether that modification is significant.  If those differences between the old and new elements are significant, the newly accused product as a whole shall be deemed more than colorably different from the adjudged infringing one, and the inquiry into whether the newly accused product actually infringes is irrelevant.  Contempt is then inappropriate.”  Id. at 19-20 (citation omitted).

Applying the new standard, the Federal Circuit considered the district court’s findings of contempt of two separate provisions of that court’s permanent injunction order.  The Court vacated the district court’s finding of contempt of the infringement provision of the permanent injunction and remanded to the district court to make a factual determination of colorable differences under the new standard laid out by the en banc Court.  Accordingly, the Federal Circuit vacated-in-part the damages awarded to TiVo Inc. for EchoStar Corporation’s (“EchoStar”) continued infringement.  Additionally, the Federal Court affirmed the district court’s finding of contempt of the disablement provision of the permanent injunction.  Thus, the Court affirmed the sanctions award in its entirety because EchoStar waived arguments of overbreadth and vagueness with regard to that provision.  See the full summary in this issue.

Further, subsequent to the Federal Circuit’s decision, but before the Court’s issuance of the mandate, the parties jointly moved to dismiss the appeal due to settlement.  The Court noted that if it were to grant the motion, which was neither required nor a proper use of the judicial system, it would result in a modification or vacatur of the Court’s en banc judgment.  Thus, the Court denied the parties’ motion and indicated that the district court could consider their request on remand.  See TiVo Inc. v. EchoStar Corp., No. 09-1374 (Fed. Cir. May 10, 2011) (en banc) (Order).