Centocor v. Abbott (E.D.Tex.)

Centocor v. Abbott (E.D.Tex.)

Abbott has two chances to block the $1.67 billion jury verdict while the case is still in the hands of E.D. Texas Judge Ward.

Inequitable Conduct: Because inequitable conduct is an equitable doctrine, it is determined by a judge. In this case, Judge Ward bifurcated the trial and will hold a one-day bench trial on inequitable conduct on August 4, 2009. On the 4th, parties will each have three hours of witness time and 25 minutes for argument.

Judgment Notwithstanding the Verdict (JNOV): This is unlikely in Judge Ward’s courtroom – especially here since the Judge has already denied Abbott’s motions for summary judgment.

On appeal at the Federal Circuit look for a number of different disputes, including:

  • Priority dates and anticipation: Centocor’s patents claim priority to 1991 via a series of continuations-in-part, but the claims at issue were probably not enabled until a 1994 filing. In 1993, a foreign counterpart of the original application published – becoming prior art against the 1994 CIP filing. The appeal may focus on the symmetry (or lack therof) between enablement and anticipation.
  • Damages: The damage calculation here is somewhat complex and could lead to important Federal Circuit precedent on lost profits

34 thoughts on “Centocor v. Abbott (E.D.Tex.)

  1. 34

    Ken Brooks: “Bobby, the courts are finding inequitable conduct in situations far more innocuos than that of deceit. It appears that simple negligence is tantamount to inequitable conduct in the eyes of the court.”

    Not really.

  2. 33

    Whoa Mr. Matthews:
    I just read that Supreme Court decision. It readily appears that several points raised by that case are being necessary to render a patent invalid are omitted from Federal Circuit case law. I am beginning to believe that the Federal Circuit has been acting in contravention to history, precedent and the will of the people when using inequitable conduct to keep a patentee from enjoying the monopoly granted by the people.

    Firstly, there was actual fraud found in this case . . . not equitable fraud. Secondly, there is nothing in the case that allows a private party to attack the patent. In fact the case strongly implies that it is only the grantor of the patent who would have standing to sue for the fraud, i.e., only the Federal Government or its agent can bring an action to preclude a patentee from enjoying the monopoly rights premised upon fraud.

  3. 32

    Ken: Over the last several years, some egregious cases could make it appear that conduct amounting to mere negligence is passing muster under the inferences permited from circumstantial evidence even though CAFC law clearly holds that even gross neglience is not sufficient. Kingsdown (en banc), see generally, Robert A, Matthews Jr., Annotated Patent Digest, § 27:70 Gross Negligence (collecting cases on the issue).

    Star Scientific, 537 F.3d 1357, and Rader’s dissent in Aventis, 525 F.3d 1334, 1349-51, try to pull back the reins on IE and reemphasize the requirement of there being an adequate finding of an intent to decieve. Interestingly, in the two published CAFC opinions issued in 2009 addressing inequitable conduct (Ariad, 560 F.3d 1366 (two theories) and Rothman, 556 F.3d 1310) the CAFC found no inequitable conduct for lack of intent to decieve. In a third case, Larson, 559 F.3d 1317, while the court found the withheld information was material, it vacated the IC finding and remanded for the court to redo the intent analysis.

    If you need a summary of current CAFC cases on the IC issues, I have collected all the IC cases I could find from the CAFC and cases from the district courts over the last 3 to 4 years in the Annotated Patent Digests in sections 27:86 thru 27:89.

  4. 31

    Bob Matthews:
    Thank you for the analysis. Bobby, the courts are finding inequitable conduct in situations far more innocuos than that of deceit. It appears that simple negligence is tantamount to inequitable conduct in the eyes of the court. You should examine Judge Nies dissents in several of the recent inequitable conduct cases. This is why I am analyzing the courts equity power.

  5. 30

    In response to Ken Brooks’ question about authority of a court to declare a patent unenforceable for inequitable conduct in view of the 1789 Act, the S.Ct. in United States v. Am. Bell Tel. Co., 128 U.S. 315, 364-68 (1888), discussed the jurisdictional issue of why a federal court has the power to set asside a patent for being procurred by alleged fraud. It discussed the genesis of a court’s power to decide inequitable conduct in the patent context by comparison to equity jurisprudence in real property law. After citing to several earlier cases that bore upon the issue, the court stated:
    “The essence of the right of the United States to interfere in the present case is its obligation to protect the public from the monopoly of the patent which was procured by fraud, and it would be difficult to find language more aptly used to include this in the class of cases which are not excluded from the jurisdiction of the court by want of interest in the government of the United States.” Id. at 367-68.

    At that time in the history, it appeared that the right to strike down a patent for fraud rested in the gov’t. So there has been an extension of the right now that private parties can assert inequitable conduct (as opposed to fraud). Arguably, 35 U.S.C. 282(1) provides the statutory basis for a private party to now assert inequitable conduct since it broadly states that “unenforceability” may be asserted as a defense to a charge of infringement. Further section 288 seems to hint at inequitable conduct with its caveat that a patentee can maintain an infringement suit on valid claims even if the patent has invalid claims provided the invalid claim was invalid “without deceptive intention.”

    While the Am. Bell case does not directly answer’s Ken’s question, hopefully it provides some further insight.

  6. 29

    “a chain consisting of a CIP of a CIP of a CIP of a CIP of a CON of a CIP of a CON.”

    but the last-filed application has a patent term of 20 years from the filing date of the first-filed application.

  7. 28

    Brooks,

    The quid pro quo between the patent applicant and the government is worth nothing if the applicant obtained that right through deceit.

    This has nothing to do with 35 USC 102. The deceitful patent applicant still is the possessor of a valid patent. He is just equitably estopped from recovering money damages or obtaining an injunction.

  8. 27

    Jeff L: “So, what good are CIPs?”

    From the standpoint of a potential infringer, it is more difficult to determine the priority date of a particular claim, relative to a new stand-alone application, e.g., consider a chain consisting of a CIP of a CIP of a CIP of a CIP of a CON of a CIP of a CON. Not fun. Of course, text-comparison software makes some aspects of this task “more efficient” …

  9. 26

    “Well 6 is you are obtaining your authority from wikipedia, res ipsa loquitor.”

    I’m not obtaining any authority from there. I pointed you to a reference point for you to begin an inquiry into the matter yourself. If you’re not convinced that the court has the authority to choose to impose the penalties which it does in IC cases, upon the basis which they claim to use as their basis for making such judgments and taking subsequent punitive actions, then by all means, tell the court so when it finds you or your client guilty of IC. All you have to do is make the argument and convince them.

    All will hail you as their hero for getting IC reform accomplished all by yourself.

    It’s your chance to be famoose, like me.

  10. 25

    “The punishment does not fit the ‘crime’ of ‘failure to pay 60$’ (note that this could have been .01$ and the same thing happens). And if I fin knew how to file a lawsuit (which I’m looking into) against the state/judiciary then I’d dmn well do it. Just for the lolz of seeing the mockery of ‘law’ being enforced in this country today if nothing else.”

    Dude, it’s $60, not 60$. I think you were supposed to learn that in second grade. I’m looking forward to hearing about your lawsuit. Especially the lolz associated with being found in contempt of court. To get off to a good start, you should write your complaint in leet.

  11. 24

    Regarding comment #1 … you say if the support for any added matter is not present in the parent case, then the effective filing date is the CIP filing date. With this I agree. I ask, then, why not file a stand alone case – no priority claimed? Further, if the support is in the parent case, then aren’t you filing a CON rather than a CIP? So, what good are CIPs?

    Regarding some of the bottom-shelf comments I am reading above. Is there anyway we can block some of these posters or their comments at least? I’d like for this to remain a professional site.

  12. 22

    link to en.wikipedia.org

    link to en.wikipedia.org

    Read those n get back to us Ken. Jaoi might be interested in reading it as well, particularly the part about injunctions.

    “Why is it, such as was the case in MacKesson, that the applicant paid a search fee and the court exonerated the examiner from requiring a search of his own docket?”

    We’ll never know if that examiner searched his docket and considered that document. The point is, he never made it of record and neither did applicant.

    ” That is completely inequitable. ”

    Perhaps MacKesson should have sued the PTO then. I don’t see that they did tho.

    “It would seem completely equitable that an applicant not have to provide information to the examiner that could be garnered by reasonable efforts, e.g., a search of the Internet. ”

    Imma disagree. And the courts are gonna too.

    ” Otherwise, it would seem to me that the search fee charged by the USPTO would constitute an unconstitutional taking:”

    Be honest, are you even a lawyer? The stuff that’s coming out of your mouth suggests either you aren’t, or you’re temporarily out of your mind.

    ” If not, well then perhaps our constitutional republic has already devolved into something less desirable.”

    Welcome to the year 2009. Glad you could join us down here in reality. Where courts suspend your license to drive for failure to pay a mere 60 dollar fine in 15 days. Where, on top of that, a “license” to drive is even required to traverse the public highways. It started out innocently enough. “Just prove to us that you can drive safely and we’ll give you a license.” said the people in France, and the people in the US said, “well look at them over in France, they make sure that people know how to drive before letting them drive on the public highways and they have less people getting run over”. Now, everything in your (avg) day to day life depends on your ability to traverse long distances of public highway.

    Let’s talk about this in the context of the 8th amendment. If you want to talk about some cruel and unusual punishment, taking someone’s license with naught but a notice in the mail, is it. The punishment does not fit the “crime” of “failure to pay 60$” (note that this could have been .01$ and the same thing happens). And if I fin knew how to file a lawsuit (which I’m looking into) against the state/judiciary then I’d dmn well do it. Just for the lolz of seeing the mockery of “law” being enforced in this country today if nothing else.

    As an aside I note that I have little problem with them requiring 60$ of me (well I did based on the particular “infraction”) but I do have a problem with them not simply having an “government fees account” where I can simply give them my credit card number and have that sht deducted if they really absolutely must have payment within 15 days.

    Bottom line for you: The “law” in this country has devolved from a fairly simple set of fairly well founded rules that were in place around the turn of the year 1900 into a hopelessly HUGE jumble of meaningless not well founded dribble. This is apparent from the law as it stands today on its very face.

    I blame you lawyers for not having done your jobs for the last 100 years making sure justice was done rather than carrying out unjust laws.

    Oh, btw, the “paperwork reduction act” should be applied to the laws themselves.

  13. 21

    The problem I see with inequitable conduct is that the 1952 patent act grants an affirmative right to a patent. Specifically, the very language of 35 USC section 102 states that an applicant is entitled to a patent application unless certain situations exist. The list of situations that preclude patent protection of an idea is exhaustive. As a result, we have the Federal Courts invoking an additional criteria that precludes an applicant from enjoying the affirmative right mandated by Congress.

    Although there are Supreme Court cases recognizing inequitable conduct as a defense to patent infringement . . . those cases pre-date the 1952 Act. Moreover, the patent acts, prior to 1952, granted the courts discretion to determine defense to patent infringement. I do not find that the 1952 Act grants the same discretion. Please advise me if I am wrong.

    In fact, the history of the 1952 Act is interesting. The Act was passed to reverse counter-productive Supreme Court case law, such as the flash of genius test and the like. I would suggest reading Mr. Federico’s commentary on the 1952 Patent Act. It will quickly become apparent that the 1952 Act specifically adopted Supreme Court precedent Congress considered useful for advancing the useful arts and rejected Supreme Court precedent it did not consider useful. As a result, any Supreme Court decision rendered before the 1952 Patent Act and not finding support in the language of the 1952 Patent Act should be considered nullified by the Act.

    However, the speciousness of inequitable conduct defense does not end here. What we have is an affirmative right granted by the people to be awarded a monopoly for teaching. This is the quid pro quo of the contract between a patentee and the government. The courts have assumed a power to completely ignore the will of the people as exercised through their representatives: Congress, by including additional criteiria by which to nullify the affirmative right of a patent granted by Congress above and beyond what Congress requires. This does violence to the Separation of Powers doctrine.

    There has been some language about the finding of inequitable conduct merely resulting in a patent being unenforceable. Unenforceability of the patent is tantamount to a rescission of the contract that an applicant entered into with the government, i.e., the contract is no longer binding . . . it is invalid.

    However, what I find completely unreasonable in the inequitable condcut defense is the absence of an analysis of equity that the government has toward the applicant/patentee. Why is it, such as was the case in MacKesson, that the applicant paid a search fee and the court exonerated the examiner from requiring a search of his own docket? That is completely inequitable. The examiners have a duty to use reasonable care when searching an invention. It would seem completely equitable that an applicant not have to provide information to the examiner that could be garnered by reasonable efforts, e.g., a search of the Internet. Otherwise, it would seem to me that the search fee charged by the USPTO would constitute an unconstitutional taking: a search fee is paid, but a reasonable search is not being done. In short, the government owes the same amount of care to an applicant/patentee that the applicant owes to the government. If not, well then perhaps our constitutional republic has already devolved into something less desirable.

    However, I leave with this one question . . . an applicant has provided teachings to the world of a clearly beneficial invention. How can it be considered equitable for a court to deny the enforceability of the patent when the applicant has already fully performed?

  14. 20

    Sara Silverman’s outrageous Jewish jokes from CBS Sunday Morning today:

    If there were Blacks in Germany in the 30’s,
    I doubt there would have been a Holocaust.
    At least not to the Jews.

    Bears like honey
    like
    Jews like money.

    A Jewish girl was raped by a doctor — sort of a bittersweet experience.

    You may ask, what does this have to do with inventing? , patentability?, patent prosecution?, or patent litigation?

    Well, writing jokes and IP work all require creativity.
    I wonder if this is why so many patent attorneys try to be funny?

  15. 18

    Motions for judgment as a matter of law have been successful in Judge Ward’s court frequently recently on discrete issues, i.e. whether there was evidence as to certain products with respect to infringement or damages, so it’s common for verdicts to be trimmed along these lines. For example one of the BSC verdicts was trimmed several times, eventually down to $19 million from $250 million.
    I don’t know the issues here and there aren’t separate products, but if the damage calculations are complex it’s possible that the Court may grant a JMOL in part on those issues and ended up with a recalculated damages part of the verdict. This case doesn’t seem to be similar to the multiproduct, multipatent cases where these are often granted, but again – I don’t know the issues. The Court is highly unlikely to set aside a verdict as against the great weight of the evidence, but there may be some no evidence points or legal problems with the damage calculations.
    In any event, it’ll be interesting to see. But I’d still rather buy tickets for the inequitable conduct hearing, not the JMOL one.

  16. 17

    Re “do Federal Courts with sufficient equity power to invalidate patents based upon inequitable conduct?”
    They don’t invalidate them, they render them inequitably unenforceable, and yes the Supreme Court supported that a long time ago.
    If a defense against a patent obtained by inequitable conduct could be eliminated simply by selling the patent to another assignee there would be mass sales of almost all patents to separate enforcement corporations before they are enforced.
    {That is, in fact, done fairly often these days, but for tax and/or counter-claim avoidance reasons and/or asset disposals for cash or buying off troll suits by assigning them some patents.}

  17. 16

    “I would love to debate Judge Rader on this.”

    You would get demolished in less than a paragraph’s worth of him talking.

  18. 15

    Very insightful analysis Mr. Mooney. Perhaps this is a case where the Federal Circuit can demonstrate the temporal distinction between enablement and anticipation. For example, when considering enablement the timing for determining equivalents is at the time of filing of the patent application. In addition, the equivalents that should be allowed to be considered covered by the claims should be those that would be obvious in view of the applicant’s teachings in the specification and at the time of filing of the application in view thereof. This even if the equivalents are not directly recited in the application. Afterall this would advance the quid pro quo for the application not maintaining the invention a trade secret. Anticipation/obviousness, on the other hand, must be determined by information that antedates the filing of the application. Moreover, one must never use applicant’ own teachings against them for purposes of hindsight reconstruction of the invention to find anticiption/obviousness.

  19. 14

    DC “The appeal may focus on the symmetry (or lack therof) between enablement and anticipation.”

    Made all the more interesting by the fact that the claims at issue are composition claims which describe the claimed antibody in terms of its function/properties rather than structurally.

    link to scribd.com

    “1. An isolated recombinant anti-TNF-antibody or antigen binding fragment thereof, said antibody comprising a human constant region, wherein said antibody or antigen binding fragment (i) competitively inhibits binding of A2 (ATCC Accession No. PTA-7045) to human TNF and (ii) binds to a neutralizing epitope of human TNF in vivo with an affinity of at least 1 x 10 liter/mole, measured as an association constant (Ka), as determined by Scatchard analysis.”

    A few instances of waffling by the Federal Circuit notwithstanding, I believe it is still the case that the bar for finding a prior art reference sufficiently “enabling” for anticipation purposes is lower than that for supporting claim validity under 112. A prior art reference suggesting the preparation of an antibody that blocks binding of A2 to human TNF may do the job…

  20. 13

    The first sentence of 35 U.S.C. section 120 specifically excludes getting the priority benefit of prior applications for inventions that are not fully 112 supported therein. [Which excludes, not authorizes, CIP claims requiring any CIP added new matter]
    ————-
    See also, e.g., PowerOasis v. T-Mobile (Fed. Cir. 2008) for more free and recent CIP case law.
    Also there was a whole AIPLA annual meeting presentation a few years ago on CIP usage that you can dig up [mostly critical of it].

  21. 12

    Hey Boss — what about Carroeat emptor?
    Is that what — food for thought — means?

  22. 11

    Brooks,

    Inequitable conduct does not render a patent “invalid.” Rather, it prevents the patent holder from asserting a right because he (or his predecessor-in-interest) obtained that right by fraud (or by other fraud-like conduct).

    It is unavailing that the patentee might still have obtained the right without the fraudulent conduct. The point is: The patentee got his patent through deceit. The Judiciary Act clearly authorizes courts to prevent rights-holders from exercising rights that they obtained through deceitful conduct.

    Besides, if patent applicants don’t like the inequitable conduct doctrine, there is a simply solution: Stop lying to the PTO and stop withholding material references during prosecution.

  23. 9

    “The question is quite simple.”

    Why did you ask if you already knew the answer? JAOI, I think I’ve found a lawyer for you.

  24. 8

    In fact I will go one further. The expressed language of 35 U.S.C. 102 states an affirmative right by Congress to grant anyone a patent unless certain situations exist. A clear interpretation of that statute seems to me Congress has spoken in exhaustive terms of the situations in which an applicant can be denied a patent. It seems to me that the Courts have operated counter to the expressed and unequivocal mandate of Congress by generating new criteria by which to deny an applicant a patent. I do not believe that the 1789 Judiciary Act ever conceived of a providing a court the power to invalidate an affirmative right granted by Congress. See Marbury v. Madison. Just food for thought. I would love to debate Judge Rader on this.

  25. 7

    This has nothing to do with traditional legal concepts. The question is quite simple. Does the 1789 Judiciary acts provide Federal Courts with sufficient equity power to invalidate patents based upon inequitable conduct? I know that in the bankruptcy proceedings the metes and bounds of the Federal Courts’ equity powers is being hotly contested. It is readily aparrent that the Fedearl Courts’ equitable powers are no where near as strong as the Exchequer of old England and probably narrower than courts of general jursidication, i.e., state courts.

  26. 6

    Ken Brooks, property rights can be devalued as a result of misconduct by the prior owner. If you innocently purchase a car that turns out to be stolen or a house that happens to have a defective chain of title, you will still suffer the consequences and your recourse is generally against the person who sold it to you. Innocent purchasers protect themselves through due diligence, title insurance, and contingency clauses in the purchase agreements.

    If you’re an innocent purchaser of a patent that gets invalidated, you can sue the person who sold it to you, or you can put something in the purchase agreement that provides for that situation.

    It may be that there’s a better remedy out there than invalidating the entire patent, but I don’t think it’s out of line with traditional legal concepts.

    I haven’t recently looked up the statutes creating the A-III courts.

  27. 5

    I have a question about inequitable conduct. Has anyone done the research to determine whether the 1789 Judiciary act actually provides Article III tribunals with equity powers sufficient to sanction a party for conduct that said party may not have had anything to do with, such as a purchased patent? I mean it does not seem equitable to penalize an innnocent purchaser of a patent by invlidating the same based upon conduct that the party had nothing to do with nor no knowledge of.

  28. 4

    Preview of memo:

    TO: JUDGE
    FROM: PLANTIFF

    RE: Priority in CIP’s

    New matter may be added to a CIP.

    500$ please.

  29. 3

    “I will be happy to assist for a fee. I have a memorandum on the subject.”

    You hear that guys? He has a MEMO!

  30. 2

    There is statutory basis for CIPs. It is 35 U.S.C. section 120. By the way, new matter may be added to the CIP and included in a claim and the priority date be that of the parent application, in certain circumstances. I have already done the research and have the analysis and case law supporting the same. I will be happy to assist for a fee. I have a memorandum on the subject. I can sell that as well. Just look me up on the USPTO website.
    Cheers!:)

  31. 1

    If any part of a CIP claim requires any specification support from any of the new material added in the CIP, then the effective filing date for that claim is only the filing date of that CIP. Thus, any and all art having dates between the original filing date and the CIP filing date becomes presumptive prior art against that claim. That can include the publication date of the parent application. [Unfortunately this is too often missunderstand, especially by some examiners, unless they are just ignoring the existence or significance of the “new matter” added in the CIP.] E.g., Tronzo v. Biomet, Inc., 47 USPQ2d 1829 (Fed. Cir. 1998), on the effective filing dates of continuation-in-part application (CIP) claims and published foreign equivalents of the parent application as consequent prior art, In re Ruescetta and Jenny, 255 F2d 687, 118 USPQ 101 (CCPA 1958), and other decisions since. Plus various other decisions requiring any claim to have full 112 support in its alleged parent specification for the entire claim [not just a part of the claim] to obtain a valid parent filing date benefit. In re Wertheim, etc.
    BTW there is no specific statutory basis for U.S. CIP practice, but that has never bothered anyone. It’s a long, if too often misused or missunderstood, tradition.

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