A Cautionary Tale: When Patentee’s Voluntary Election to Try Subset of Patents Justifies Noninfringement Judgment for All Asserted Patents

In Nuance Communications v. ABBYY USA Software House, No. 2014-1629 (Fed. Cir. Feb. 22, 2016), the Federal Circuit affirmed a noninfringement judgment against the patentee, Nuance, for all patents in Nuance’s complaint, even those not tried before the jury.

Nuance sued ABBYY and others for infringement, asserting eight patents in its complaint. As the case progressed, Nuance repeatedly agreed to reduce the number of asserted patents and claims, but only after it got full discovery and claim construction rulings on all of its patents. The goal, Nuance told the district court, was to identify its “best” patents during discovery and then assert only a manageable subset of its “strongest” patents in a single trial. On the recommendation of a special master, the district court adopted Nuance’s proposal to reduce the number of patents to four, but Nuance ultimately chose to assert only three patents at trial. After a jury found that ABBYY did not infringe the three patents at trial, the district court entered final judgment for ABBYY. Later, in ruling on ABBYY’s motion for payment of costs, the district court clarified that the judgment applied to all of Nuance’s patents, including those that were not tried.

The Federal Circuit affirmed the judgment, noting that Nuance repeatedly elected to move forward on fewer patents and fewer claims. Nuance argued that it expressly reserved its right to try the unselected patents at a later time, but the Federal Circuit found Nuance’s “boilerplate reservation of rights” insufficient to overcome the special master’s recommendation and Nuance’s intention to have one trial on a subset of its “best” patents. The Court also rejected Nuance’s argument under In re Katz, 639 F.3d 1303 (Fed. Cir. 2011), that the excluded claims presented unique legal issues and their exclusion violated due process. The Court held that Nuance failed to show that it attempted to protect its due-process rights, because it made no objection or assertion that excluding the claims could deprive it of due process.