Federal Circuit SanDisk Decision Addresses Appellate Jurisdiction and Disclosure-dedication Rule

Practical Law Legal Update 3-521-8224 (Approx. 6 pages)

Federal Circuit SanDisk Decision Addresses Appellate Jurisdiction and Disclosure-dedication Rule

by PLC Intellectual Property & Technology

Key Litigated Issues

The issue on appeal in SanDisk Corp. v. Kingston Technology Co., Inc. was whether the district court erred in its construction of certain patent claims asserted by SanDisk and its non-infringement summary judgment ruling in favor of Kingston on other claims.

Of particular note is SanDisk's argument that the district court erred in applying the disclosure-dedication rule to find that Kingston did not infringe two claims in the asserted patents under the doctrine of equivalents.

Background

SanDisk sued Kingston in the US District Court for the Western District of Wisconsin for infringement of five US patents relating to various methods and systems for managing data in flash memory systems:

After the district court issued its claim construction opinion, SanDisk withdrew its infringement claims against Kingston concerning the '808 and '893 patents and certain claims of the '424 patent. Both parties moved for summary judgment. The district court granted SanDisk's motion on SanDisk's claim that Kingston contributorily infringed certain claims of the '424 patent. The district court granted Kingston's motion for summary judgment of non-infringement for all remaining asserted claims and entered judgment in favor of Kingston on those claims. After the district court's summary judgment order, the parties entered into a Stipulation and Order Dismissing Remaining Claims for Relief. In the stipulation, SanDisk dismissed without prejudice its remaining infringement claims involving the '424 patent and Kingston dismissed without prejudice its related invalidity and enforceability counterclaims.

SanDisk then appealed the district court's decision to the US Court of Appeals for the Federal Circuit. SanDisk argued that the district court erred in:

Its construction of various claim limitations in the five patents asserted against Kingston, including those SanDisk voluntarily withdrew after the district court's claim construction order.
Granting summary judgment that Kingston did not infringe claim 20 of the '424 patent and claim '79 of the '316 patent.

Outcome

In an October 9, 2012 opinion, the Federal Circuit reversed some of the district court's '424 patent claim construction rulings. The court also vacated the district court's summary judgment ruling that Kingston did not infringe claim 20 of the '424 patent and claim 79 of the '316 patent under the doctrine of equivalents but affirmed the district court's finding of no literal infringement of claim 79 of the '316 patent.

Of particular note were the Federal Circuit's:

Ruling that it lacked jurisdiction to address SanDisk's claim construction arguments for the claims SanDisk voluntarily withdrew after the claim construction ruling.
Discussion of the disclosure-dedication rule where the disclosure of unclaimed subject matter in a document incorporated by reference amounts to a dedication of that subject matter under its Johnson v. Johnston decision.

No Appellate Jurisdiction for Withdrawn Claims

The Federal Circuit held that it lacked jurisdiction to review the district court's claim constructions for claims SanDisk voluntarily withdrew from the litigation because there was no final judgment on these claims. The court treated the withdrawal of these claims as being similar to either a FRCP 15 amendment to the complaint or a FRCP 41(a) voluntary dismissal of claims without prejudice. It then noted that in patent infringement cases, the existence of a case or controversy under Article III of the Constitution must be determined on a claim by claim basis (Streck, Inc. v. Research Diagnostics Sys., Inc.).

The court rejected SanDisk's argument that the district court's ultimate entry of a final judgment and the parties' stipulation of non-infringement on the other asserted claims provided appellate jurisdiction over the withdrawn claims.

Disclosure-dedication Rule

On appeal, SanDisk argued that the district court erred in granting summary judgment that Kingston did not infringe claim 20 of the '424 patent and claim 79 of the '316 patent under the doctrine of equivalents. The district court determined in each case that the equivalent asserted by SanDisk was disclaimed under the disclosure-dedication rule set out by the Federal Circuit in Johnson & Johnston Associates, Inc. v. R.E. Service Co.

Under the disclosure-dedication rule, a patentee dedicates subject matter, including equivalents, to the public if it is disclosed in the specification but not claimed. However, a generic reference in the patent specification does not necessarily dedicate all members of that particular genus to the public. Instead, the disclosure must be specific enough so that one of ordinary skill in the art could identify the subject matter that had been disclosed and not claimed (PSC Computer Products v. Foxconn International, Inc.). In addition, the unclaimed subject matter must have been identified by the patentee as an alternative to a claim limitation before that subject matter is deemed to have been dedicated to the public.

The Federal Circuit agreed with SanDisk, finding in each case that the asserted equivalent had not been dedicated to the public because the specifications did not disclose to one of ordinary skill that the equivalents are an alternative to the claim limitation.

Application of Disclosure-dedication Rule to Documents Incorporated by Reference

The decision is notable because the disclosed but unclaimed subject matter relating to claim 79 of the '316 patent was incorporated by reference into the specification of '316 patent from another document. In the decision, the Federal Circuit noted that:

It had yet to address the circumstances in which the disclosure of subject matter incorporated by reference amounts to a dedication of that subject matter to the public.
Because a document incorporated by reference becomes effectively part of the host document, the disclosure of the incorporated document's subject matter can dedicate that subject matter to the public for purposes of the host patent.

The Federal Circuit, citing its decision in Modine Manufacturing Co. v. International Trade Commission, clarified that incorporation by reference does not convert the invention of the incorporated patent into the invention of the host patent. To determine whether incorporated matter satisfies the disclosure-dedication rule standards, the Federal Circuit stated that one must first look to the teachings of the host patent, which must sufficiently inform one of ordinary skill that the incorporated document contains subject matter that is an alternative to a claim limitation. If it does, the inquiry then shifts to the incorporated document to assess whether the disclosure of that subject matter is specific enough so that one of ordinary skill in the art could identify the subject matter that was disclosed and not claimed.

Here, the Federal Circuit found that the '316 patent's discussion of the incorporated '338 patent did not sufficiently identify to one of ordinary skill that the incorporated patent contains subject matter that is an alternative to the claimed controller. Instead, the '316 patent only included a cursory discussion of the incorporated patent.

Practical Implications

Procedurally, the case serves as a good reminder to patent holders and their counsel that the Federal Circuit's Article III jurisdiction in patent infringement cases is determined on a claim by claim basis. SanDisk lost the ability to appeal the district court's claim constructions on the claims it voluntarily withdrew before the court's entry of summary judgment and the parties' stipulation of non-infringement on the other claims.

Substantively, the court's decision clarifies that the subject matter of a document incorporated by reference in a host patent may be dedicated to the public for purposes of the host patent but only where:

The host patent sufficiently informs one of ordinary skill in the art that the incorporated document contains subject matter that is an alternative to a claim limitation in the host patent.
The incorporated document's disclosure of that subject matter is specific enough so that one of ordinary skill in the art could identify the subject matter that was disclosed and not claimed.

Federal Circuit SanDisk Decision Addresses Appellate Jurisdiction and Disclosure-dedication Rule | Practical Law