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Adaptation of prior art bidding system to the web obvious under KSR and Leapfrog

By McKee, Voorhees & Sease, P.L.C.

In a decision Monday, the Federal Circuit reversed a district court's permanent injunction and denial of judgment as a matter of law in a patent infringement case.  A jury determined the asserted claims of the patent were not obvious and that the defendant willfully infringed, and awarded $38.5 million in damages, which the district court enhanced to nearly $77 million based on the willful infringement finding.  

After the jury reached its verdict, but before the district court ruled on the defendant's motion for judgment as a matter of law, the Supreme Court decided KSR.  The district court considered KSR, but held substantial evidence supported the jury's conclusion of nonobviousness in part based on secondary indicia.

On appeal, the Federal Circuit held some of the asserted claims were obvious as a matter of law under KSR and Leapfrog.  The plaintiff's expert testified that the prior art contained all the elements of several asserted claims with the exception of perform the method using a web browser.  The Federal Circuit noted the facts showed web browser technology was well-known at the time the patent was filed.  Under KSR, "when a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one," and in this case, additional prior art noted the desirability of the combination.  As a result, the defendant had shown a prima facie case of obviousness.  While the plaintiff asserted secondary indicia of nonobviousness rebutted this showing, the court held much of the evidence lacked a nexus with the claims, and the remainder was not sufficiently persuasive to overcome the strong prima facie case of obviousness.

The court then addressed whether the defendant infringed the remaining claims.  The infringement claim was based on a theory of joint infringement, and while the appeal was pending, the Federal Circuit decided BMC Resources, clarifying the standard for joint infringement.  Under BMC Resources, one party must control or direct all steps of the claimed method in order for joint infringement to be found.  Here, there was no such "mastermind," so the Federal Circuit held the remaining claims were not infringed.

More detail of Muniauction, Inc. v. Thomson Corp. after the jump.

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Full post as published by FileWrapper on July 17, 2008 (boomark / email).