by Dennis Crouch

In re Aspen Aerogels, Inc. (Fed. Cir. 2020) (non-precedential)

The basic question in this ex parte appeal is whether the asserted references teach the layering of aerogels as required by the insulation materials claim pending before the USPTO.  The pending APN 14/446,663 was filed in 2014, but claims a chain of priority stretching back to a 2005 provisional patent application. The basic idea here is that aerogel is a great insulator, but is fragile, so the claim requires fiber-reinforcement.  The claim particularly requires two plys of fiber-reinforced aerogel — and that the fibers in the plys are interlaced with one-another.

Claim 1: A composite comprising

[a] at least one first ply of fiber-reinforced aerogel material adjacent to [b] at least one second ply of fiber-containing material,

wherein fibers from the at least one first ply of fiber-reinforced aerogel material are interlaced with fibers from the at least one second ply of fiber-containing material.

The examiner rejected the claim as obvious and that was affirmed by the PTAB. The Federal Circuit has now affirmed.

• U.S. Patent App. No. 2002/0094426 (Stepanian) taught having the two layers of fiver-reinforced aerogel, but did not teach the interlacing of fibers.
• Japanese Patent No. 2000-080549 (Sano) teaches interlacing of fibers of layers using needle-felting.

Aspen’s argument on appeal is that Stepanian does not actually teach plys as claimed but rather two masses of undifferentiated aerogel.  On appeal here, Aerogel presented this as a question of law involving the definition of the term claim term “ply.”  The Federal Circuit here rejected that approach — holding instead that the real question is whether the prior art discloses the plys.  The difference between these two approaches is very important on appeal: Claim construction is reviewed de novo on appeal without deference to the PTO determination; Content of the prior art is reviewed for substantial evidence with major deference going to the PTO.

[W]e determine the issue to be a factual question of whether the prior art teaches an undifferentiated mass of aerogel or teaches layers of fiber-reinforced aerogel as the Board determined. We review this issue for substantial evidence.

Slip Op.  Stepanian (which I have previously discussed in PatentlyO) clearly shows layers, and particularly defines Fig 3 (below) as disclosing “a 3-layer laminate.”  But, the issue is that Stepanian stacks the fibers and then pours in the areogel over the layers of fibers.  The PTAB made the factual conclusion that Stepanian disclosed “plys” of fiber-aerogel, even with the pour-over approach, and the appellate panel found substantial evidence for that conclusion.

Whether layers of fibrous material are filled with aerogel and then stacked or stacked and then filled with aerogel makes no difference if the result is the same as the claimed composite here.

Slip Op.

Note here, that Aerogel is also the owner of the Stepanian patent application (and issued patent). The problem though is that the Stepanian application was published back in 2002, more than 1-year before the priority date of the application at issue here.

Rejection affirmed.

If there really is a claim-construction issue here, on remand the patentee may want to amend its claims to make the proper construction exceedingly clear and then rejoin the rodeo.

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If we go back to the heart of this matter: Aergoel appealed on claim construction, the Federal Circuit says “the real issue is not claim construction but rather the content of the prior art” (paraphrase).  The court then goes on to refuse to decide the claim construction issue and instead decide the case on the alternative grounds.

Truthfully, this seems wrong. The appellate court should have decided the issue raised by the appellant (claim construction) and ended the case there.  I read appellant’s brief who particularly stated that no factual question is being appealed: “There is no dispute here about any relevant fact.”

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Poongs Muthukumaran, chief counsel for Aspen argued for his employer; Kakoli Caprihan argued for the PTO.

As we reflect on family, consider the following cases:

Inspiration for Inventing on Thanksgiving Day: 

Shafer claims that he invented the subject matter of his patent and reduced it to practice November 24, 1921 (Thanksgiving Day). . . . [This was] the first time that his brother, who was a mechanic, and he, had the day off together, they devoted that morning to reducing to practice his discovery.

Brown Instrument Co v. Gen. Electric Co, 35 F. Supp. 29, 30 (E.D.N.Y. 1940), rev’d sub nom. Gen. Elec Co v. Minneapolis-Honeywell Regulator Co, 118 F.2d 278 (2d Cir. 1941) (thermostat patent).

= = =

Protecting Children from Forced Adoption: 

He was a research man prepared to devote his life to discoveries of value to industry. Under [his employment] contract he was, however, if he worked in another laboratory or for another manufacturer, required to assign his discoveries to appellee. This would effectively close the doors of employment to him. Until the end of the [contract term of three years] he was compelled either to work for appellee or turn over the children of his inventive genius to it. Such a contract conflicts with the public policy of the land, which is one that encourages inventions and discourages the exclusion of an employee from engaging in the gainful occupation for which he is particularly fitted for all time, anywhere in the United States.

Guth v. Minnesota Min. & Mfg. Co., 72 F.2d 385, 388–89 (7th Cir. 1934).

= = =

It just sounds bad to terminally disclaim a child: 

Although a terminal disclaimer does not conclusively show that a child patent involves the same cause of action as its parent, the terminal disclaimer is still very relevant to that inquiry.

SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1168 (Fed. Cir. 2018).

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As a Family, we are In it Together: 

[T]he FRAND commitment applies to all members of that patent family, unless a specific exclusion has been made.

TCL Commun. Tech. Holdings, Ltd. v. Telefonaktiebolaget LM Ericsson, CV 15-2370 JVS(DFMX), 2017 WL 6611635, at *15 (C.D. Cal. Dec. 21, 2017).

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I’ll buy some consonance for $250:

[T]he sibling patent did not maintain consonance [under Section 121], and therefore the safe harbor provision cannot apply, we hold [the claims] invalid.

St. Jude Med., Inc. v. Access Closure, Inc., 729 F.3d 1369, 1380 (Fed. Cir. 2013).

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Sleeping in your Corset?: 

They were presented to her for use. He imposed no obligation of secrecy, nor any condition or restriction whatever. . . . The donee of the steels used them for years for the purpose and in the manner designed by the inventor. . . . According to the testimony of the complainant, the invention was completed and put into use in 1855. The inventor slept on his rights for eleven years.

Egbert v. Lippmann, 104 U.S. 333, 337 (1881).

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Patents & Divorce: 

In a dissolution action, patents are subject to equitable distribution.

Teller v. Teller, 53 P.3d 240, 249 (Haw. 2002).

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L·U·B·R·I·C·I·O·U·S

[T]he patent fails to teach how the invention actually achieves lubriciousness.

Ritchie v. Phallix, Inc., 8:06-CV-2128-T-26TGW, 2007 WL 9723903, at *2 (M.D. Fla. Oct. 26, 2007).

Whitewater West Indus. v. Richard Alleshouse and Yong Yeh (Fed. Cir. 2020)

This is an important case invalidating provisions of an employment agreement based upon California Law. Alleshouse left his former employer Wave Loch (predecessor to Whitewater) and started working on inventions for his new venture the very next day. Within two months he (along with his partner Yeh) had filed a set of provisional patent applications at issue in this case.  Whitewater then sued, arguing that the employment contract included rights over post-employment inventions.

The agreement:

a. Assignment: Employee agrees that all right, title and interest in all inventions … that Employee conceives or hereafter may make or conceive …

(a) with the use of Company’s time, materials, or facilities; or (b) resulting from or suggested by Employee’s work for Company; or (c) in any way connected to any subject matter within the existing or contemplated business of Company

shall automatically be deemed to become the property of Company as soon as made or conceived, and Employee agrees to assign to Company, its successors, assigns, or nominees, all of Employee’s rights and interests in said inventions, improvements, and developments in all countries worldwide. Employee’s obligation to assign the rights to such inventions shall survive the discontinuance or termination of this Agreement for any reason.

Prong (c) from the contract is at issue that requires Alleshouse to assign any invention connected with the business of Wave-Loch — apparently reaching indefinitely into the future.  It just so happens that Wave-Loch makes wave-riding attractions, and that is also the subject of Alleshouse inventions here. So the patents fall squarely within the express and literal terms of the contract.

On appeal, the court looked to § 16600 of the California Business and Professions Code.

Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.

The provision voids any contract that restrains anyone from engaging in a lawful profession or trade. Here, the Federal Circuit found that the assignment provision reaching indefinitely into the future would have “a broad restraining effect” because it would prevent Alleshouse from working effectively in the field for any other company.

The Federal Circuit cited to a number of prior district court decisions confirming “that invention-assignment provisions that go beyond protection of proprietary information and ensnare post-employment inventions are to be judged under the strict § 16600 standards that protect former employees.”  The court also cited older cases that discuss these same issues. See, e.g., Standard Plunger Elevator Co. v. Stokes, 212 F. 893, 896 (2d Cir. 1914); and Guth v. Minnesota Min. & Mfg. Co., 72 F.2d 385 (7th Cir. 1934) (improper to force someone to “turn over the children of his inventive genius” conceived after employment).

The weak point: The baseline here is that the court found that this assignment agreement to be void. The weak point of the Federal Circuit’s decision is that it is seemingly contrary to its own prior express statement that “section 16600 [applies] to employment restrictions on departing employees, not to patent assignments.” Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., 583 F.3d 832, 837 (Fed. Cir. 2009), aff’d on other grounds, 563 U.S. 776 (2011).  On appeal here, the court attempted to skirt that statement by interpret interpret as only applying to assignment agreements that were not themselves driven by employment agreements, even though that caveat is not found in the decision.

= = =

U.S. Patent Nos. 9,044,685; 9,302,189; and 9,592,433.

= = =

Alleshouse was Represented by Manuel de la Cerra with Rick Taché on the other side.

Tracy Nixon v. General Motors (Fed. Cir. 2020).

Nixon sued GM in E.D. Texas, acting pro-se.  The complaint makes the following allegation:

The defendant infringed on the Plaintiffs Design for the Chevrolet Corvette that consisted of the rear trunk LTD Wing, Aerodynamic Full Body Combo Kit, and Hood DAM sold on the 2014-2019 Corvette C7 and Z06 Corvette before the Plaintiff could patent the invention for sale to the public.

Pro Se Complaint.

GM did not make an entry of appearance into the lawsuit and Nixon asked for default judgment. However, Judge Gilstrap refused to enter default judgment — holding that GM had not been properly served with the summons and complaint as required by FRCP 4.

The rule includes several mechanisms for service process, including  “following state law for serving a summons …”   Nixon thought service was proper — Nixon sent the Summons & Complaint to the Texas Secretary of State who forwarded the Summons and Complaint to General Motors HQ via Certified Mail. (See image below). Texas law allows for service-via-SOS in special circumstances, such as where a company is supposed to have a registered agent, but does not have one (or that one isn’t accepting service). See Texas Business Organizations Code § 5.251. (Failure to Designate Registered Agent). A non-Texas company only needs a registered agent in Texas if it “Transact Business” within the state. .

Texas does not make its list of registered agents freely available online, but I just paid for a search and found that General Motors does have a a registered agent in Texas, and that is who should have received service of process.

The District Court denied default judgment, and Nixon immediately appealed to the 5th Circuit who denied appellate jurisdiction for lack of final judgment:

Nixon also appealed directly to the Federal Circuit in parallel who has issued a notice-to-show-cause on whether this is a patent case.  If you remember, Nixon does not have a patent but has sued for theft of the idea.  The court writes:

It appears that this case is not within this court’s limited subject matter jurisdiction. Although this court does have jurisdiction “of an appeal from a final decision . . . in any civil action arising under . . . any Act of Congress related to patents,” it does not appear that Mr. Nixon’s complaint raises a non-frivolous claim arising under the patent laws. See Gayler v. Wilder, 51 U.S. 477, 493 (1850) (explaining that “no suit can be maintained by the inventor against any one for using it before the patent is issued”).

Nor does it appear that transfer to the appropriate federal court of appeals, in this case, the United States Court of Appeals for the Fifth Circuit, would be in the interest of justice. It appears that Mr. Nixon’s request for permission to appeal was initially filed at that court, which issued an order on November 4, 2020 denying his request because “[t]he district court’s order denying the motion for default judgment is not a final order . . . [and] the order has not been certified for immediate appeal under 28 U.S.C. § 1292(b) by the district court.” Nixon v. Gen. Motors Corp., No. 20-90032 (5th Cir. Nov. 4, 2020).

NixonGMOrder.

In the end, Nixon may be left with properly serving GM to get his case moving forward.

by Dennis Crouch

C R Bard Inc. v. AngioDynamics, Inc., No. 19-1756 (Fed. Cir. 2020) (Opinion by Judge Reyna, joined by Judges Schall and Stoll).

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Important: The court in this case particularly holds that “a claim may be found patent ineligible under § 101 on the grounds that it is directed solely to non-functional printed matter and the claim contains no additional inventive concept.”

= = = =

Question: How does the printed-matter-doctrine apply to letters that can only be read using an X-ray?

Answer: It is still printed matter; the limitations are given no patentable weight; and might render the whole claim ineligible.

= = = =

The invention in this case was prompted by a 2005 FDA labelling requirement for IV ports capable of handling fluids “power injected” directly into a patient’s veins.  (Most IV ports are designed for low-pressure gravity flow).  Bard’s IV ports were apparently already designed for use in power-injection, but not fully labelled.

More than Skin Deep: The problem with labelling is that the ports are under the skin, and so are not susceptible to a written label.  Bard’s solution: “a radiographic marker in the form of the letters ‘CT’ etched in titanium foil on the device.”   The radiomarker would then be seen on a pre-treatment “scout scan.”  The products also include shapes palpable through the skin, although that feature is not required in the claims:

providing an access port including … a radiographic feature indicating that the access port is suitable for flowing fluid at a rate of at least 1 milliliter per second through the access port …

identifying the access port as being suitable for flowing fluid at a rate of at least 1 milliliter per second through the access port via the image of the radiographic feature of the access port …

Claim 8 of US8805478.  In essence, Bard wants to be the only company that sells ports with the CT radiographic marker.

In 2015, Bard sued AngioDynamics for infringement and the case went to trial before a jury. But, the jury never got to deliberate.  After Bard presented its case-in-chief the court terminated the trial and granted JMOL (directed verdict) for the defendant — finding particularly: no infringement, no willful infringement, and that the claims are invalid as directed ineligible subject matter (printed matter) and also not inventive. The district court explained:

Fundamentally, after listening to the evidence presented to the jury and considering the evidence for the previous motions for summary judgment, the Court finds this patent is about labeling, not invention and not technology.

C R Bard Inc. v. AngioDynamics Inc., 382 F. Supp. 3d 332 (D. Del. 2019).

Printed Matter Doctrine: Under Praxair and other cases, the Federal Circuit has expanded the printed matter doctrine to “encompass[] any information claimed for its communicative content.” Printed matter can be patent eligible it is functional rather than merely communicating about the invention.

Here, the court found that the marker is on the port as a label precisely for the purpose of informing others about the functionality of the product.

Indeed, as early as the 1930s, our predecessor court recognized that the mere marking of products, such as meat and wooden boards, with information concerning the product, does not create a functional relationship between the printed information and the substrate. See In re McKee, 75 F.2d 991 (CCPA 1935); In re Johns, 70 F.2d 913 (CCPA 1934); In re Bruce, 56 F.2d 673 (CCPA 1932).

Slip Op.

Printed Matter and Eligibility: So we have claimed printed matter what next?:  One answer is that portion of the claim is “not entitled to patentable weight.”  The second question though is weather the entire claim fails under Alice?

Although the underlying rationale of the printed matter doctrine lies in the requirements of subject matter eligibility under § 101, our case law has typically applied the doctrine to hold that specific limitations of a claim are not entitled to patentable weight for purposes of novelty under § 102 and non-obviousness under § 103.

Slip Op.

Although the court has traditionally not applied eligibility-doctrine to printed-matter, the court here notes that prior precedent “did we foreclose the possibility that an entire claim could be found patent ineligible when the claim as a whole is directed to printed matter.” Slip Op.

We therefore hold that a claim may be found patent ineligible under § 101 on the grounds that it is directed solely to non-functional printed matter and the claim contains no additional inventive concept.

Id. On the merits of this case, the court found that Step-Two of Alice (lack of “something more”) was not clear enough for a directed verdict summary judgment:

AngioDynamics’s evidence is not sufficient to establish as a matter of law, at Alice step two, that the use of a radiographic marker, in the “ordered combination” of elements claimed, was not an inventive concept.  Even if the prior art asserted by AngioDynamics demonstrated that it would have been obvious to combine radiographic marking with the other claim elements, that evidence does not establish that radiographic marking was routine and conventional under Alice step two.

Id.  A confusing aspect of the decision is that it identified its judgment on Section 101 as a “reversal”, but really looks more like a vacatur.

= = = =

What is the impact of a claim term being “not entitled to patentable weight.”  Here, the court narrowly defined the printed matter as “the information that the claimed access ports are suitable for [power] injection.”  The court still gave weight to the requirement of a “radiographic marker.” Thus, if you scroll up to the two claim-terms that I copied, it appears that the first term (“providing … a radiographic feature”) is given patentable weight while the second term (acting on information provided by the feature) is not.  The district court gave neither patentable weight. On appeal the court also vacated on anticipation.

On remand there will be a new trial on infringement and validity, apparently including aspects of Alice Step 2.

Donner Technology, LLC v. Pro Stage Gear, LLC, App. No. 20-1104 (Fed. Cir. 2020)

The PTAB sided with the IPR patentee — finding the cited prior art had not been proven “analogous” On appeal, the Federal Circuit has vacated and remanded for lack of substantial evidence to support that conclusion.

The Analogous Art Test: Federal Circuit obviousness doctrine begins with prior art as defined by 35 U.S.C. 102, but then limits the scope of potential references with the “analogous art” test.  The test appears to have its origin in Judge Giles Sutherland Rich’s 1966 decision of In re Winslow, 365 F.2d 1017, 1020 (Cust. & Pat. App. 1966) (“Section 103 requires us to presume full knowledge by the inventor of the prior art in the field of his endeavor.”).  There are two potential ways of showing that a reference is analogous. The first option follows directly from Winslow, asking “whether the art is from the same field of endeavor, regardless of the problem addressed.”  In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004).  The alternative asks “whether the reference … is reasonably pertinent to the particular problem with which the inventor is involved.” Id.  If either prong is met (a factual question), then the reference is deemed analogous and available for use in an obviousness argument.  I believe a fair reading of KSR further expands the doctrine, but the courts have not gone there.

In the same way that a pretextual police stop opens the door to more invasive searches, the analogous arts test also opens the door to more extensive obviousness analysis. In particular, once the reference is admitted as analogous art, any aspect of the reference (including non-analogous aspects) can be used.

Here, Pro Stage Gear’s US 6,459,023 is directed to a guitar effects pedalboard with space for mounting guitar pedals and running cables.  The image above comes from the patent and shows the patented mounting-board with various controls attached.

Donner petitioned for IPR citing US 3,504,311 (along with several other references).  The ‘311 patent has nothing to do with guitars or guitar pedals.  Rather, that patent is directed to electrical relays, including a support structure for holding a relay and wiring-channel space.

The PTAB found the ‘311 patent non-analogous.  On appeal, that judgment was vacated.  Although everyone recognized the patent came from a different field of endeavor, the fight was on the second-prong — whether it addressed the same-problem as the ‘023 inventors faced.

On appeal, the court first addresses the PTAB’s apparent failure to read the briefs:

The Board erroneously stated that Donner did ‘not put forth any argument’ [that the ‘311 patent addressed questions considered by] a pedalboard inventor. . . . “To the contrary, Donner submitted detailed expert testimony relevant to the inquiry. . . . Given the Board’s mistaken assertion to the contrary, it is unclear whether the Board meaningfully considered all of Donner’s arguments and evidence.”

On a more substantive push, the court found that the Board had improperly tied the patentee’s problem-to-be-solved to the field-of-endeavor without actually focusing on the true nature of the problem:

For instance, the Board at one point stated that the “purpose of the ’023 patent” is “to mount guitar effects on a pedal board.” But substantial evidence does not support that statement. As the
’023 patent readily discloses, guitar effects had already been mounted on a pedalboard. Thus, that could not possibly be a relevant purpose of the invention. Indeed, with respect to the analogous art inquiry, the relevant purposes of an invention are those relating to solving a problem.

Slip Op. In the end, the court remanded for reconsideration rather than offering a complete reversal:

Although we conclude that the Board applied the wrong standard and might have failed to analyze certain arguments and evidence, we do not further hold that “no reasonable fact finder could conclude, under the proper standard,” that Mullen is not analogous art. Accordingly, we leave this factual issue for the Board to resolve on remand.

Id.   This outcome appears correct since the question of analogous art is a question of fact.  What the court is really holding here is that substantial evidence did not support the PTAB’s factual conclusion.

The jury awarded less than $1 per device, but it still adds up.  This $500 million verdict is stacked atop a $400 million judgment from earlier this year.

by Dennis Crouch

Valeant Pharmaceuticals v. Mylan Pharmaceuticals (Fed. Cir. 2020)

Prior to TC Heartland, Federal Circuit precedent equated proper venue with personal jurisdiction — finding venue proper in any court that had personal jurisdiction over the defendant. See 28 U.S.C. § 1391.  In 2017, however, the Supreme Court gave renewed force to the text of 28 U.S.C. § 1400(b).

Any civil action for patent infringement may be brought [1] in the judicial district where the defendant resides, or [2] where the defendant has committed acts of infringement and has a regular and established place of business.

28 U.S.C. § 1400(b). You’ll see that I underlined “where the defendant has committed acts of infringement” in the quote above because Valeant focuses on the location-of-infringement.

Valeant is an innovator-generic ANDA case.  ANDA lawsuits are peculiar because the statutory act-of-infringement is submitting an Abbreviated New Drug Application (ANDA) to the FDA for a patented drug/use (along with a paragraph IV certification).  35 U.S.C. § 271(e)(2)(A) (“submit an application”). Here, the court held that that the location-of-infringement for venue purposes is “where actions related to the submission … occur.”  The court further clarified that Section 271(e) infringement (for venue purposes) does not consider “locations where future distribution of the generic products specified in the ANDA is contemplated.”

On the facts here:

• Mylan Pharmaceuticals Inc. (“MPI”) is a West Virginia corporation and a subsidiary of the UK/Dutch company Mylan N.V.  Mylan is set to merge with Pfizer later this calendar year.
• MPI submitted the ANDA documents from its Morgantown office to the FDA, which is located in Maryland just north of DC.
• Valeant then sued for infringement in New Jersey — noting that MPI plans to market the generic drugs within the state.

We do not have information about the course taken by the ANDA filing, but the most efficient route from WV to MD does not pass through NJ. (Note assumption regarding mail efficiency.) In any event, the district court concluded: “defendant MPI submitted its ANDA application in West Virginia, to the FDA in Maryland. None of these actions occurred in New Jersey.”  On appeal, the Federal Circuit affirmed:

A plain language reading of this provision directs us to the conclusion that it is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this context. Valeant makes several arguments as to why we should understand § 271(e)(2) as encompassing more. None persuade us to reach a different conclusion.

Slip Op.

There has been some debate about the how to think about § 271(e).  It seems odd that “to petition the Government” constitutes an act of infringement. (Quoting the First Amendment, U.S. Const.).  Some courts have seen the provision as creating an “artificial act of infringement” to trigger resolution before the real-infringement occurs.  You might see this as nunc-pro-tunc constructive infringement “by virtue of submitting an ANDA for the purpose of engaging in that future infringing conduct.” (quoting appellant’s brief); See also Eli Lilly and Co. v. Medtronic, Inc., 496 U.S. 661 (1990) (§ 271(e)(2) creates a “highly artificial act of infringement”).

On appeal, the Federal Circuit rejected the future-infringement theory and instead walked through a straight statutory read —

The Hatch-Waxman Act … speaks in real terms—submission of the ANDA is the infringing act. . . an ANDA submission is a real, albeit statutorily created, act of infringement.

Slip Op.

Although I have not developed this argument, the court’s straight-read of the statute here places the provision on rocky First Amendment grounds regarding both speech and gov’t petitions.  The court considered some of these issues in the personal-jurisdiction context in Zeneca Ltd. v. Mylan Pharm., Inc., 173 F.3d 829 (Fed. Cir. 1999)

In any event, MPI wins this round — with a holding that venue is improper against MPI in New Jersey.

= = = =

Foreign Defendant: Mylan Laboratories Ltd. (“MLL”) is also a defendant in the lawsuit, MLL is an “Indian corporation with a principal place of business in Hyderabad, India.”  If you remember, TC Heartland applied directly only to domestic corporations, and the district court held here that 28 U.S.C. § 1391(c)(3) allows the lawsuit in N.J. against the foreign corporation:

(3) a defendant not resident in the United States may be sued in any judicial district.

Id. However, the court went-ahead and dismissed the case against MLL on venue grounds. On appeal, the Federal Circuit reversed this holding.  MLL also argued that its case should be dismissed on R. 12(b)(6) for failure-to-state-a-claim. In particular, the complaint alleges that it was MPI who submitted the ANDA, not MLL.  On appeal, the Federal Circuit punted on that issue and remanded to the district court to determine the issue.

Although venue is “proper” for MLL it probably isn’t the most-convenient forum if the rest of the case is heading to W.V.  In addition, MPI might be considered a necessary party who cannot be joined under FRCP R. 19 (Required Joinder of Parties).  As such, I expect that the NJ case against MLL will be dismissed.

by Dennis Crouch

Bio-Rad Laboratories, Inc. v. 10X Genomics Inc., 19-2255 (Fed. Cir. 2020).

Without opinion, the Federal Circuit has denied defendant-appellant 10X Genomics’ en banc rehearing petition on the following three questions:

1. Whether a patentee can overcome prosecution history estoppel under the tangentiality exception merely because the inventors ceded more claim scope than necessary;
2. Whether a claim term written in binary form is vitiated by an equivalent that is the opposite of that term; and
3. Whether the requirement to apportion reasonable royalty damages in every case applies in comparable license cases.

EnBancPetition.  The petition filed by Joshua Rosenkranz sets-up a push for writ of certiorari with the Supreme Court.

The $100 million case involves technology for growing and analyzing eukaryotic cells using microchip technology. Effectively cyborg technology albeit at a 1-cell-at-a-time level rather than whole organism.

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Bio-Rad’s U.S. Patent No. 8,889,083 is particularly directed to a microfluidic system.  The claims require “a non-fluorinated microchannel.”  But, it turns out that 10X’s product uses a fluorinated microchannel.  This automatically raises the issue of vitiation and thus 10X’s question “Whether a claim term written in binary form is vitiated by an equivalent that is the opposite of that term.”

BioRadJuryVerdict. The jury was particularly asked about whether the element was satisfied under the doctrine of equivalents, and said yes, it was DOE infringement. On appeal, the Federal Circuit affirmed — rejecting “10X’s attempt to limit the inquiry to a binary choice between ‘fluorinated’ and ‘nonfluorinated’ microchannels.”

The appropriate inquiry is whether a reasonable juror could have found that a negligibly-fluorinated microchannel performs the same function, in the same way, and achieves the same result, as a non-fluorinated microchannel. Here, based on the evidence presented at trial … the district court concluded that a reasonable juror could find that a 0.02% Kynar-containing microchannel is insubstantially different from a non fluorinated microchannel.

Slip Op.

Damages 1 vs 3: The jury found infringement of three separate patents. However, on appeal the Federal Circuit reversed claim-construction for two of the patents and thus vacated the infringement judgment. Although the damages verdict was based upon three patents, the appellate panel affirmed “the entirety of the jury’s damages award” even after finding no infringement for two of the patents.  The court explained: “The jury verdict and jury instructions show that the damages award is not predicated on infringement of any one patent.”

by Dennis Crouch

The court issued an important short-opinion, In re Ivantis, Inc. (Fed. Cir. 2020), that should be read and considered as a case-study by in-house counsel. The case involves pre-lawsuit destruction of evidence.

The basic setup is that Ivantis has a corporate email-destruction-policy* of deleting emails that are 12-months old.  Glaukos sued Ivantis for infringement in April 2018 and served the defendant with the Summons and Complaint on April 16, 2018. On April 19, 2018 the company instituted an internal “litigation hold” that suspended the deletion-policy for emails potentially related to the lawsuit.  It turns out that Ivantis has been preparing for this litigation and considering work-arounds for Glaukos patents since at least 2013, and all those emails were deleted.

The district court found that Ivantis actually anticipated the litigation and that the email deletion constituted improper spoliation under FRCP 37(e) . As a penalty, the court found that the jury should be given an adverse inference instruction, focusing on willfulness:

Ivantis intentionally deleted and failed to preserve relevant evidence for this litigation. Ivantis anticipated patent infringement litigation from Glaukos, but nonetheless adopted and maintained a policy that deleted all company email after 12 months, resulting in the destruction of virtually all emails at Ivantis that pre-date April 2017, including emails specifically relating to the Glaukos Asserted Patents. You may presume from that destruction that the destroyed evidence was favorable to Glaukos and unfavorable to Ivantis, including on the issue of whether Ivantis willfully infringed the Asserted Patents.

Glaukos adverse inference order.  The district court also awarded “a sanction prohibiting Ivantis from referring to any pre-suit investigation of the Asserted Patents as a basis for believing that it did not infringe or that the patents were invalid.”

On mandamus, the Federal Circuit has refused to take the case – finding that the decision was not “so patently unreasonable as to warrant mandamus.” Ivantis argued that immediate appeal was important because “a massive damages judgment and an injunction against sales of Ivantis’s only product will cast a dark shadow over the company, threatening its ability to grow at this critical juncture in its development—even if Ivantis were to obtain a stay and ultimately prevails on appeal.”  The Federal Circuit noted that argument, but found it unconvincing: “we are not prepared to depart from the usual practice of waiting until after final judgment to review such orders based on such speculation.”

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I should note here that this case has more red-flags than the typical email-retention issue.

• Both companies are competing in the narrow field of FDA-approved stent-treatments for glaucoma.
• As early as 2009, Ivantis was told that it infringed Glaukos patents.
• In 2013, Ivantis hired “patent litigation counsel” to conduct diligence
  related to Glaukos’s patents.  Shortly thereafter, Ivantis instituted its email-deletion policy that resulted in deleting all the emails relating to the patents at issue here. The same attorneys represent Ivantis in this litigation.
• In 2017, Ivantis CEO distributed a report from an industry analyst wo indicated Glaukos would sue Ivantis for infringement in 2018.
• In 2018 (about a month before the lawsuit), Ivantis began preparing a petition for IPR.

In its decision, the appellate panel found these events sufficient to sustain the lower court’s determination that Ivantis “acted with the intent to deprive another party of the information’s use in the litigation.”

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* Ivantis uses the politically correct ‘retention policy’ rather than ‘destruction policy.’

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FRCP R. 37(e) Failure to Preserve Electronically Stored Information. 

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

by Dennis Crouch

For most of the history of the US patent system, the Commissioner of Patents was the head of the Patent Office and was seen as an Officer of the United States appointed by the President.  The 1952 Patent Act was written as follows:

A Commissioner of Patents, one first assistant commissioner, two assistant commissioners, and nine examiners-in-chief, shall be appointed by the President, by and with the advice and consent of the Senate.

35 U.S.C. 3 (1952).  In 1881 Congress created a national trademark law with registration via the Patent Office. This setup meant that the Commissioner of Patents was also in charge of trademarks.  This also created the oddity that registered trademarks were marked with the patent office name.

In 1975, the job title was changed to “Commissioner of Patents and Trademarks” and the office name was changed to the “Patent and Trademark Office.”  In 1999, Congress officially changed the office name to the “United States Patent and Trademark Office” and the position of “Director” (Deputy Undersecretary of Commerce) was created. At that time, the roles of Commissioner for Patents and Commissioner for Trademarks were pushed down as appointments by the Secretary of Commerce (with 5-year terms).

Question of the day:  Assuming that Arthrex wins and PTAB judges must be appointed by the President, does this also mean that the Commissioner of Patents must be appointed by the President?  Of note here, the Commissioner of Patents is also a member of the PTAB and comes with a 5-year term.*  However, unlike regular PTAB Judges, the Commissioner can be removed from office by the Secretary of Commerce for “misconduct or non-satisfactory performance … without regard to the provisions of title 5.”

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* In what may be simply a longstanding error from the 1999 amendments, the Commissioner for Trademarks is also a member of the PTAB.

Cochlear Corp. v. Alfred E. Mann Foundation (Supreme Court 2020)

It is always tricky for a defendant to appeal solely on damages.  Here, Mann filed this patent case back in 2007 and finally got to trial in 2014.  The jury answered as follows:

• Infringement: Yes
• Willfulness: Yes
• Invalid: No

The jury form on damages focused on notice-of-infringement; reasonable royalty rates; and also a grand total for damages — $131 million.

Following the verdict, the district court held a bench-trial on indefiniteness and found some of the claims indefinite.  Since some of the infringed-claims were now invalid, the court awarded a new trial on damages issues. In addition, the court granted JMOL of no-willful-infringement. On appeal, the Federal Circuit reversed the willfulness judgment since Halo‘s more flexible test had replaced Seagate by that time.  The new damages trial was also appealed, but the Federal Circuit refused to consider the issue since a new trial order is not a final judgment.

On remand, the district court reconsidered its new trial order — and instead reinstated the verdict.  The court decided that the verdict questions structured to allow damages on “either” of the patents. Since claims in one of the patents were still valid and infringed, the court found the verdict sufficient.  This was supported by the evidence since the damages expert had apparently treated the patents together as a group.  The court also reinstated the jury’s willfulness decision and then doubled the verdict — up to $268 million.  Now the money is getting serious.

Cochlear appealed again and the Federal Circuit affirmed and then denied rehearing.  Now the case is pending before the Supreme Court on petition for writ of certiorari and with three very specific damages questions:

1. Whether the Federal Circuit has misapplied the “book of wisdom” set forth in Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689 (1933), by allowing a reasonable royalty for patent infringement under the Patent Act, 35 U.S.C. § 284, to be determined by evidence arising long after the hypothetical negotiation on which that royalty is based?
2. Whether Maryland v. Baldwin, 112 U.S. 490 (1884), forecloses an award of damages under a general damages verdict where some claims underlying that award are overturned after trial, and if so, whether a party may challenge such a result notwithstanding agreement to a general damages verdict?
3. Whether Garretson v. Clark, 111 U.S. 120 (1884), requires apportionment of patent damages to the inventive contribution of the claimed technology?

[Cochlear Petition].  A group of law professors have filed an amicus brief supporting certiorari of question 2: “to resolve the circuit split on how to treat general jury damages verdicts when the underlying verdict is overturned in part.” [Professor Petition].

The first question focuses on what information should be available during hindsight-focused hypothetical negotiation used to calculate damages.  In Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689 (1933), the Supreme Court indicated that post-infringement evidence offers a “book of wisdom that courts may not neglect.”  Still, the infringer argues that the book should not include evidence arising “long after the hypothetical negotiations” theoretically occurred.

The second question highlights the 1884 Supreme Court decision of Maryland v. Baldwin. Baldwin is an odd case to cite — it is an estates case involving inheritance and common-law marriage.   But, the key of the case is its holding that a general verdict becomes faulty when one of several possible claims is found in error.

The third question asks about apportionment under Garretson v. Clark, 111 U.S. 120 (1884). In that case, the lower court found infringement, but awarded no damages. The Supreme Court affirmed with the following guidance:

Id. The Federal Circuit has recognized that apportionment is important, but is considered as part of the traditional reasonable royalty analysis.