In my patent class, I just had my students act like patent-examiners and write rejections for pending patent claims. These are all real-cases that recently published and have not yet been examined. My question what should I do with their results:
Have the students submit their prior art to the PTO under 37 CFR § 1.290 and 35 U.S.C. § 122(e)?
Have the students send their prior art to the patent attorney who filed the cases? or
Just sit on it and see whether the Examiner finds the same or better prior art?
Third party 122(e) Submissions:
My patent law students just did a patent-examination exercise (searching for prior art + writing rejections). These are real cases that have not yet been examined.
My question for the group — What should I do with their results.
I haven’t yet had the chance to read this, but officials at the USPTO and EPO, as well as working groups at AIPLA, WIPO, and others, have been struggling with AI as inventors, including who to name as an inventor (not AI, says the USPTO, UKIPO, and EPO), as well as what does 103/inventiveness mean when AI is involved. The report is here.
The ABA issues formal ethics opinions that often influence how state and federal judges decide motions to disqualify, as well, of course, as matters of discipline. Thus, ABA Formal Opinion 494 (July 2020) (here) should be of interest. A comment to the Model Rules had explained that a “lawyer related to another lawyer, e.g., as parent, child, sibling or spouse, ordinarily may not represent a client in a matter where that lawyer is representing another party, unless each client gives informed consent.”(For patent practitioners, the USPTO has adopted the 2003 version of the ABA Model Rules, but not its comments, but has stated that the commentary and opinions construing the ABA Model Rules are informative.)
The opinion examined that principle in a broader array of personal relationships. The summary of the opinion states:
Model Rule 1.7(a)(2) prohibits a lawyer from representing a client without informed consent if there is a significant risk that the representation of the client will be materially limited by a personal interest of the lawyer. A personal interest conflict may arise out of a lawyer’s relationship with opposing counsel. Lawyers must examine the nature of the relationship to determine if it creates a Rule 1.7(a)(2) conflict and, if so, whether the lawyer reasonably believes the lawyer will be able to provide competent and diligent representation to each affected client who must then give informed consent, confirmed in writing.
To assist lawyers in applying Rule 1.7(a)(2), this opinion identifies three categories of personal relationships that might affect a lawyer’s representation of a client: (i) intimate relationships, (ii) friendships, and (iii) acquaintances. Intimate relationships with opposing counsel involve, e.g. cohabiting, engagement to, or an exclusive intimate relationship. These relationships must be disclosed to clients, and the lawyers ordinarily may not represent opposing clients in the matter, unless each client gives informed consent confirmed in writing. Because friendships exist in a wide variety of contexts, friendships need to be examined carefully. Close friendships with opposing counsel should be disclosed to clients, and, where required as described in this opinion, their informed consent obtained. By contrast, some friendships and most relationships that fall into the category of acquaintances need not be disclosed, nor must clients’ informed consent be obtained. Regardless of whether disclosure is required, however, the lawyer may choose to disclose the relationship to maintain good client relations.
Given the close-knit nature of the patent bar in some places, the opinion may spur the need for disclosure and in some instances consent.
This 30 second clip comes from a recent Federal Circuit oral arguments in a case captioned In Re Google Technology Holdings LLC (2019-1828). The voices you hear are Judge Chen asking a question and Kathryn Kayali representing Google.
Until recently, patent applicants have always been the human inventors. Now the law allows the patent owner to serve as the applicant. Thus, rather than identifying Bogdan Carbunar as the inventor, the caption as well as the briefing identify Google as the innovative entity. The following quote is just one from Google’s briefing:
Google explains here that it (not the inventor) recognized the networking congestion problem and that it was the company (rather than the inventor) who developed a solution.
Centripetal Networks, Inc. v. Cisco Systems, Inc. (E.D. Va. 2020)
Here is the punchline of this recent decision:
The Court FINDS the actual damages suffered by Centripetal as a result of infringement total $755,808,545; that the infringement was willful and egregious and shall be enhanced by a factor of 2.5x to equal $1,889,521,362.50. … The Court, additionally, imposes a running royalty of 10% on the apportioned sales of the accused products and their successors for a period of three years followed by a second three year term with a running royalty of 5% on said sales upon the terms described supra. It DENIES any further relief to Centripetal at the termination of the second three year term.
Apart from the $1.8 billion judgment, the case is interesting because it involved a 22 day bench trial (no jury) via video. Ironically, Cisco had objected to video conferencing — especially because the court was not using Cisco tech. The patents here relate to secure network communications.
GlaxoSmithKline LLC v. Teva Pharmaceuticals (Fed. Cir. 2020)
GSK’s patent at issue here covers a method of treating congestive heart failure with the drug carvedilol (Coreg) along with an ACE inhibitor, a diuretic and digoxin. RE40,000. Claim 1 below is representative and shows the limitation added during the reissue process:
1. A method of decreasing mortality caused by congestive heart failure in a patient in need thereof which comprises administering a therapeutically acceptable amount of carvedilol in conjunction with one or more other therapeutic agents, said agents being selected from the group consisting of an angiotensin converting enzyme inhibitor (ACE), a diuretic, and digoxin,
wherein the administering comprises administering to said patient daily maintenance dosages for a maintenance period to decrease a risk of mortality caused by congestive heart failure, and said maintenance period is greater than six months.
RE40,000 (original US Pat 5,760,069). Each of these drugs were already known for treating heart disease, and the narrowing reissue was filed after Teva first challenged the patent.
Teva did a couple of things to avoid infringement. First, Teva waited until 2007 to launch its product — that was when the underlying patent on the drug carvedilol expired. Second, Teva attempted to avoid directly market its drug for the purposes of treating congestive heart failure. In particular, its product labelling focused instead on hypertension and Ventricular Dysfunction following MI (two non-patented approved uses of the drug). However, in 2011 the FDA required Teva to alter its labelling to be identical-in-content to the approved GSK product. Thus, in 2011 Teva added treatment for heart failure as an indication for treatment.
Once the labeling was changed, GSK then sued for inducing doctors to infringe.
271(b) Whoever actively induces infringement of a patent shall be liable as an infringer.
At trial the jury sided with the patentee — finding the patent valid and willfully infringed and then awarding $234 million in lost profit damages.
Post-trial, the district court flipped the award — finding insufficient evidence that Teva “actually caused” any particular physician to infringe. “Without proof of causation, which is an essential element of GSK’s action, a finding of inducement cannot stand.” District Ct. Awarding JMOL. The district court noted lots of publications and promotions informing physicians about how to use the product to treat heart failure — none of which came from Teva. Practicing doctors don’t read the fine-print on the side of the bottle. In fact, GSK’s MD expert admitted that he did not read the Teva label before prescribing.
On appeal here, the Federal Circuit has reversed — holding that the circumstantial evidence of inducement was sufficient. In particular, in this situation Doctors relied upon Teva’s statements that its drug was interchangeable with GSK’s — a “complete replacement.” My Mizzou colleague, Professor Erika Lietzan testified as a FDA-expert for GSK at trial. Her testimony includes the conclusion that (1) the “AB-rating” of the generic indicates that the products are interchangeable; and (2) comparing GSK’s product by-name creates an implication of interchangeability.
The majority opinion here was written by Judge Newman and joined by Judge Moore. Chief Judge Prost wrote in dissent — arguing that the decision here undermines the balance between innovator incentives and the introduction of lower-cost generics.
Teva waited until GSK’s patent covering the carvedilol compound expired to launch its product covering two unpatented indications hypertension and post-MI LVD. So, when GSK’s ’000 reissue patent later issued—reciting a narrow method of treating a third indication, CHF—Teva’s skinny label did not even suggest using its product according to the patented method.
At the FDA’s direction, Teva amended its label years later to include the patented method, but there was still no inducement via the full label. Nothing changed in the market, and doctors’ prescribing decisions were not affected. By that time, GSK could not rely on Teva’s ANDA as an artificial act of infringement. Thus, to prove induced infringement, GSK had to show that Teva actually caused doctors to directly infringe the ’000 patent. It failed to do so.
Dissent. With regard to Prof. Lietzan’s testimony, the dissent quoted to her same statement regarding AB-rating — noting that “AB rating reports therapeutic equivalence only ‘if the generic drug is used in accordance with the label.'” The AB-rating does not apply to “off-label uses.”
= = = =
The majority also sustained the jury’s damages verdict. Teva argued that the lost-profit award was improper because there were other generic versions on the market. If Teva hadn’t been on the market then the sales would have gone to the other generic producer — not back to the higher-priced GSK. In its decision, the district court identified the other generic versions as “infringing alternatives” (GSK is in a separate lawsuit against them) and thus should not count in the economic picture of lost profits. On appeal, the Federal Circuit affirmed — holding that “The district court correctly instructed the jury that the availability of carvedilol from other generic producers is not a ‘noninfringing substitute.'”
Thus, in the end, the jury verdict is reinstated and Teva will have to pay the money. Note — the ‘000 patent is also expired and so generics continue to be available.
= = = =
Presumably, Teva could have avoided infringement by sending notices to pharmacies and doctors to avoid proscribing its product for congestive heart failure.
Oral Argument set for October 7, 2020 in Google v. Oracle.
(1) Whether copyright protection extends to software code and the organizational structure of a programming language; and
(2) Whether, as the jury found, the petitioner’s use of a software interface in the context of creating a new computer program constitutes fair use.
What is the role of the Jury in deciding fair use? (Raised by the Court)
What is the role of patents in the protection of a software code? (Raised by Crouch)
Certiorari Denied:
Following its first conference, the Supreme Court has denied certiorari in a number of patent cases. In particular, the court has denied certiorari in all the patent cases ready-for-conference with the notable exception of the Arthrex cases focusing on appointments clause issues are still pending.
Still Pending:
Constitutional challenge to Admin Patent Judges: United States v. Arthrex, Inc., No. 19-1434; Smith & Nephew, Inc. v. Arthrex, Inc., No. 19-1452; Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1458; Polaris Innovations Limited v. Kingston Technology Company, Inc., No. 19-1459. These cases remain the most likely for certiorari.
Denied:
Retroactive application of IPR to already applied-for patents: Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1204.
AIA Challenge: Sanofi-Aventis Deutschland GmbH v. Mylan Pharmaceuticals Inc., No. 19-1451;
Divided Infringement and 271(g): Willowood, LLC v. Syngenta Crop Protection, LLC, No. 19-1147.
Federal vs State Law for Patent Licensing: Cheetah Omni LLC v. AT&T Services, Inc., No. 20-68.
Right to a Jury Trial on Specific Performance of FRAND license: TCL Communication Technology Holdings Limited v. Telefonaktiebolaget LM Ericsson, No. 19-1269.
Patent Eligibility: The Chamberlain Group, Inc. v. Techtronic Industries Co., No. 19-1299.; Thomas v. Iancu, No. 19-1435; Primbas v. Iancu, No. 19-1464; Morsa v. Iancu, No. 20-32.
Due Process Issues Regarding Sua Sponte Judicial Order: Ameranth, Inc., Petitioner v. Domino’s Pizza, LLC, No. 19-1351.
Appealing IPR Termination:BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc., fka MonoSol RX, LLC, No. 19-1381.
Power of PTO To Exclude Patent Attorney: Polidi v. Lee, No. 19-1430; Piccone v. United States Patent and Trademark Office, No. 19-8844.
Obviousness – Nexus for Secondary Indicia: SRAM, LLC v. FOX Factory, Inc., No. 20-158.
This Week’s Conference:
Voiding a patent after a damage award: Phazzer Electronics, Inc. v. Taser International, Inc., No. 19-1378
Arthrex Appointments Issue: Essity Hygiene and Health AB v. Cascades Canada ULC, et al., No. 20-131; ESIP Series 2, LLC v. Puzhen Life USA, LLC, No. 20-228; Customedia Technologies, LLC v. Dish Network Corporation, et al., No. 20-135 (also eligibility question)
The “Respondent” has a right to file a response to a petition for writ of certiorari. However, as a strategy (and money saving device), many repondents waive their right. In cases of interest, the Supreme Court will often request a response. However, the request for response need only be requested by a single Justice. And, some of the justices have reportedly given authority to their law clerks to file the request.
Recent CFR’s
Are the Fed. Reserve Banks “People” or “the Government”: Bozeman Financial LLC v. Federal Reserve Bank of Atlanta, et al., No. 20-333
Reasonable Royalty and Apportionment: Cochlear Corporation, et al. v. Alfred E. Mann Foundation for Scientific Research, et al., No. 20-362
Notice and Damages: Arctic Cat Inc. v. Bombardier Recreational Products Inc., et al., No. 20-355
Sowinski v. California Air Resources Board (CARB), Docket No. 19-01558 (Fed. Cir. 2020) (en banc petition)
When I first wrote about this case, I explained my view that the Federal Circuit issued “a really poor decision” in the way that it recklessly expanded-out the scope of claim preclusion without consideration of the impact. The case was decided just after Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., 140 S. Ct. 1589 (2020). In that case, the court clamped-down on expansion of issue or claim preclusion beyond their traditional bounds.
The setup is explained in Sowinski’s petition for en banc rehearing:
Petitioner brought an earlier infringement action against the defendant that was dismissed [with prejudice] under the district court’s local rules for failure to prosecute [without addressing] the underlying merits of the infringement allegations.
After that earlier litigation was final, petitioner brought a second suit against the same defendant, asserting the same patent against the same infringing activity—but limited to “damages only for infringement after the decision in Sowinski I.”
In this setup, there is no issue preclusion because no issues were actually decided in the first lawsuit — rather the case was dismissed for procedural grounds. Claim preclusion does apply, but is limited to claims that were brought (or should have been been brought under the same-transaction test) in the first action.
This is where we get into some patent law doctrine regarding post-judgment acts of infringement:
[T]raditional notions of claim preclusion do not apply when a patentee accuses new acts of infringement, i.e., post-final judgment, in a second suit—even where the products are the same in both suits.
This is where the Kessler doctrine comes into play (although not actually cited or addressed in the opinion).
Under the panel’s disposition, petitioner’s infringement suit is barred despite presenting new issues and new claims that no court has ever resolved. In past cases, this Court readily acknowledged that this result is squarely at odds with ordinary principles of issue and claim preclusion. But this Court has nevertheless barred such actions entirely, applying its own unique understanding of the so-called Kessler doctrine: under this Court’s decisions, once a defendant obtains any prior judgment of non-infringement, all future litigation over the same product is forever barred, even if it involves issues unadjudicated by any court and claims arising after the initial judgment (i.e., post-judgment acts of infringement)—a fact-pattern that would permit litigation to proceed in every other circuit in all non-patent cases.
Petition. Note here that the Federal Circuit decision does not cite to the Kessler Decision, but instead appears to shift its approach to capturing the post-judgment actions as captured by claim preclusion. That shift makes sense when considering the Lucky Brand warning against non-uniform preclusion principles.
As the Supreme Court just reiterated, the world of preclusion “comprises two distinct doctrines”—issue preclusion and claim preclusion. There is no third doctrine “unmoored from th[ose] two guideposts.” Lucky Brand(“our case law indicates that any such preclusion of defenses must, at a minimum, satisfy the strictures of issue preclusion or claim preclusion”).
The following question is one I taught in Civil Procedure earlier this semester:
May a motion for Rule 11 sanctions be granted when the moving party fails to serve the motion on the nonmoving party prior to filing?
In my class, I taught that R.11(c)(2) prohibits a party from filing a R.11 motion for sanctions without first serving “the motion” on the non-moving party (and waiting 21 days).
My students: What if we the moving party provides notice by sending an email to say that they are planning to file a motion and explaining the reasons?
Crouch: No, the rule says that you have to serve “the motion;” not just provide notice of your concern.
In Khan v. Hemosphere, Inc., the Federal Circuit disagreed with my analysis of the rule. In particular, the court held that the Khans were sufficiently “on notice of [defendants’] intent to seek sanctions” based upon a series of letters sent to the Khans indicating that a sanctions-motion was coming. Thus, although the Khans were not served with “the motion” they were sufficiently on notice.
Khan Petition for Rehearing: In their petition, the Khans argue that the Federal Circuit’s “conclusion that warning letters of the type at issue here can take the place of the ‘motion’ required by Rule 11(c)(2) breaks sharply with the text of the Rule, and with every other Court of Appeals to consider the issue—including the Seventh Circuit.” Here, the 7th Circuit is important because this case arose in Illinois and the regional circuit’s law should apply to this non-patent related issue. The 7th Circuit is also important because it is an outliner in allowing “substantial compliance” with the R. 11 rather than sticking to “the motion” rule. The 7th Circuit’s approach appears to have begin with a flippant ruling by Judge Easterbrook in Nisenbaum v. Milwaukee County, 333 F.3d 804, 808 (7th Cir. 2003). In that case the court decided without any analysis that “substantial compliance” with the notice requirement is sufficient.
In its decision, the Federal Circuit cited to Matrix IV, Inc. v. Am. Nat’l Bank & Tr. Co., 649 F.3d 539, 552–53 (7th Cir. 2011), which stated that “a letter informing the opposing party of the intent to seek sanctions and the basis for the imposition of sanctions” was sufficient. In its petition for rehearing, Khan explains that the Matrix IV statement was dicta and insufficient to overcome other 7th Circuit decisions which require the to-be-sanctioned-party an “opportunity to withdraw or correct the challenged pleading within 21 days without imposition of sanctions.” Khan argues that the 21-day opportunity was not given here.
Wright & Miller suggest that informal notice as provided here is insufficient:
Note that informal notice—rather than formal service—of a potential violation is insufficient to trigger the beginning of the twenty-one day safe harbor period. The Advisory Committee Note explains that although informal notice does not trigger the safe harbor period, it usually is expected that informal notice will be given before a party prepares and serves a formal motion under Rule 11 for sanctions.
§ 1337.2Procedural Aspects of Rule 11 Motions—The Safe Harbor Provision, 5A Fed. Prac. & Proc. Civ. § 1337.2 (4th ed.).
I hope the Khans win here, otherwise I’ll be forced to change my syllabus.
In In the Matter of Gitler (Proc. No. D2019-48), a patent lawyer was suspended for 90 days by Virginia on May 8, 2019. The District of Columbia and New York also suspended the practitioner. The practitioner notified the OED of his Virginia suspension on May 29, 2019, and, while agreeing reciprocal suspension by the USPTO was proper, requested it be ordered nunc pro tunc — so it would have run with the Virginia suspension. The OED declined that request.
Significantly, the OED took a very technical and literal reading of the provisions governing nunc pro tunc orders.
First, the rule requires practitioners to withdraw from pending cases. He had told his clients he was not representing them but his name was still associated with a customer number and so they were handling the matters. The OED stated this did not excuse his failure to withdraw.
Second, the rule requires the practitioner to notify other states where the practitioner is licensed of suspension: while he had notified D.C., of the Virginia suspension, he had not notified New York: it had received notice. Thus, the Office seemed to require the practitioner to give notice to a jurisdiction already aware of the facts!
Finally, third, the rule requires practitioners who want nunc pro tunc suspension to take “necessary and appropriate steps” to remove attorney advertising, but he mistakenly had left his bio on the firm’s web page, and it stated that he was registered before the Office. The court stated that leaving this up indicated an unreasonable failure.
