All posts by Jordan Duenckel

Playing From The Rough: Kirkland Signature™ Irons and The Doctrine of Equivalents

Guest Post by Jordan Duenckel.  Jordan is a third-year law student at the University of Missouri and a registered patent agent.  He has an extensive background in chemistry and food science. Before law school, he was a greenskeeper at a local golf course. 

TaylorMade Golf Company teed off a dispute over golf club design and filed a patent infringement lawsuit on January 31st, 2024, in the Southern District of California against Costco and Southern California Design Company alleging infringement and false advertising relating to five of TaylorMade’s patents related to golf irons. The two defendants have not responded to the complaint but users of X, formerly Twitter, are abuzz with speculation and comments about the implications for golf at an affordable price.  

TaylorMade is one of golf’s true bluebloods and releases new clubs regularly. Played by PGA Tour professionals, these clubs are not cheap with a full set of TaylorMade irons, the P790 series at issue here, running about $1400 new. Costco is more famous for membership-based bulk grocery distribution than luxury sports goods. Costco has a variety of goods that they sell in their stores as “house brand” Kirkland Signatureproducts, with the 7-piece player’s irons set designed by Southern California Design Company selling for $499.99.  

TaylorMade P790 Iron (Exploded)

Kirkland SignatureIrons (Exploded)

For patent infringement, TaylorMade alleges infringement of five patents that contain “revolutionizing” technologies that TaylorMade asserts their patent covers.  Facially, it seems the clubs look similar and may contain similar elements. Proving infringement will likely be more difficult. TaylorMade will likely attempt to find the fairway with the doctrine of equivalents. The doctrine of equivalents states that someone can infringe on a patent even if they do not literally meet all of the elements of a patent claim, as long as their product or process is equivalent to the claimed invention. 

The policy rationale behind the doctrine is that patentees should be able to have appropriate coverage for their inventions even if competitors make insubstantial changes that allow them to evade the literal scope of the patent claims. If competitors could easily make small, trivial changes and avoid infringing, then patent protection would not be very meaningful. 

There are three primary tests courts use to determine equivalency under this doctrine: 

  1. The function-way-result test – The alleged equivalent product or process must perform substantially the same function, in substantially the same way, to achieve substantially the same overall result as the claimed invention. This is an objective assessment focused on comparing the major operational aspects.
  2. The insubstantial differences test – Courts look at whether the differences between the patented invention and the alleged equivalent are insubstantial compared to the invention as a whole. Typically only minor, trivial differences that contribute little will allow a finding of equivalence. 
  3. The known interchangeability test – If persons reasonably skilled in the technology know that the substitute element and claimed element are interchangeable, this helps support a conclusion of equivalence. 

However, there are limitations to the doctrine of equivalents. It cannot be used to effectively erase a substantive claim limitation in its entirety or vitiate a limitation. Additionally, amendments made during patent prosecution to narrow claims can estop or preclude arguments for equivalence. Finally, the prior art restricts the scope of equivalence that can be found – the alleged equivalent cannot encompass subject matter that would not have been patentable over the prior art during prosecution. 

Some may question how different the clubs can be or how many ways to possibly design a golf club so the ultimate question of infringement will depend on how close Costco’s clubs come to the patent claims. Equally interesting is the false marketing claim that asserts that Costco and SCDC made false statements in advertising the Costco clubs, specifically concerning the “injected urethane insert” that is shown as the red insert on the above right photo. TaylorMade believes that both the infringement and false advertising are willful and designed to take customers from TaylorMade.  

 “The statement by Defendants that the accused products contain an ‘injected urethane insert’ is literally false, or in the alternative, is misleading and … has actually deceived or has a tendency to deceive consumers in a way that influences purchasing decisions. … Defendants’ false advertising has misled golf journalists and customers to believe the accused products are similar to or equivalent to the TaylorMade P790 irons.”  

Redditors have been cited as an example of folks who would love to buy functionally premium clubs at a third of the price. Beyond Reddit and golf influencers, the broader public seems to be interested in the irons as Costco sold out of the irons in mere hours. Adding to the drama is the allegations that a former TaylorMade engineer helped to design the Kirkland Signatureirons.  

The irons are visually very similar, and the claim charts affixed to the complaint as Exhibits 6-10 make a compelling case for infringement by equivalent. If I were to make a prediction, I would guess that the parties settle as TaylorMade did with PXG in 2019 in a similar iron design action but only time (and maybe claim construction) will tell.  

Coffee and Claim Construction: The Plain and Ordinary Meaning of “Barcode”

Guest Post by Jordan Duenckel. Jordan is a third-year law student at the University of Missouri and a registered patent agent. He has an extensive background in chemistry and food science.  

A recent Federal Circuit opinion, K-Fee v. Nespresso, 2022-2042, — F.4th — (Fed. Cir. Dec. 26, 2023), arises from an infringement suit filed by K-fee System GmbH against Nespresso USA, Inc. in the Central District of California and revives a coffee controversy. K-fee owns three related patents (the ‘176, ‘177, and ‘531 patents) concerning coffee capsules that display information via a “barcode” which is read by the coffee machine to control the beverage production process. The key dispute is over the meaning of “barcode” and whether there was any prosecution disclaimer.

The technology underlying the dispute is individual coffee pods that have a barcode located on the outer rim of the pod that the coffee machine can read to self-adjust temperature, water amount, and other characteristics to brew different types of coffee all without user input creating a “one touch” gourmet coffee maker. Depending on the pod, our Nespresso machine can make expresso, a double expresso for the wife, or just a cup of black coffee for me. 

K-fee owns U.S. Patent No. 10,858,176 and claim one reads in part:  

1. A method of making a coffee beverage comprising: 

providing an apparatus including a barcode reader; 

inserting a first portion capsule into the apparatus, the first portion capsule including . . . an opposing bottom side with a first barcode located on the bottom side, . . . ; 

reading the first barcode with the barcode reader; 

controlling a production process of a first coffee beverage based upon the reading of the first barcode; 

The initial issue is the plain and ordinary definition of a barcode as both parties agree that the plain and ordinary definition is appropriate but disagree about what that meaning is. The district court issued a claim construction order construing “barcode,” relying on statements K-fee made distinguishing certain prior art (Jarisch) during prosecution of a related European patent before the European Patent Office (EPO). Based on K-fee’s statements that Jarisch discloses a “bit code” rather than a barcode, the district court construed barcode to exclude the type of bit codes in Jarisch. The district court granted summary judgment of non-infringement to Nespresso, finding that its accused coffee capsules use a code identical to Jarisch’s bit codes.  

The Federal Circuit reviewed appeal of the claim construction de novo because the claim construction relied only on intrinsic evidence. The claims and specification did not define “barcode,” so the court looked to the prosecution history, specifically K-fee’s statements distinguishing the Jarisch reference before the European Patent Office. Specifically examined were what the statements would indicate to a person having ordinary skill in the art about the meaning of “barcode.” K-fee presented evidence consisting of quotes from technical publications describing “barcode” as a code with bars of varying widths. K-fee also explicitly stated “the [skilled artisan] at all times defines the term ‘barcode’ as a line code constructed of bars having variable widths.” Additional confirmation is in K-fee’s statement that standard UPC retail barcodes fall within the scope of its claims. Since K-fee did not describe anything about how retail barcodes encode data, this further indicates K-fee was focused only on the visual appearance of varying width bars when referring to “barcodes.” 

Judge Taranto concludes a skilled artisan would not understand K-fee’s statements as excluding all bit codes from the scope of “barcode.” He specifically points to K-fee explicitly stating that retail barcodes like UPC codes are barcodes, even though they contain binary code elements. Citing Phillips v. AWH Corp.,415 F.3d 1303, 1312-17 (Fed. Cir. 2005), Judge Taranto found that the ordinary meaning of “barcode” to a relevant artisan focuses on visual appearance – i.e. a linear sequence of visually non-uniform width bars and concluded that the district court erred in narrowing the ordinary meaning of “barcode” based on K-fee’s statements to the EPO.  

I am sympathetic to Nespresso’s concern that the focus on visual appearance as to ordinary meaning misses some of the nuance about what the barcodes actually represent and that a relevant artisan would consider their functional purpose. As construed by Judge Taranto, “varying-width visual appearance of the bars” is an extraordinarily broad claim construction that seems to expand the claim scope significantly compared to the more narrow district court construction.    

The corollary issue is whether K-fee’s statements to the EPO are disclaimer of claim scope. Nespresso alleges that K-fee’s statements to the EPO constitute surrender of claim scope that would include their Vertuo coffee pod product. The court notes disclaimer requires “clear and unmistakable” statements, unequivocally disavowing claim scope. Looking at K-fee’s EPO submissions, statements about bit codes being excluded from barcodes were ambiguous rather than clear. For example, K-fee said a barcode “can be, but is not necessarily, a bit code.” This directly contradicts disclaimer of all bit codes. 

Judge Taranto concludes that the prosecution history as a whole does not show K-fee clearly disclaimed any portion of the ordinary meaning of “barcode.” The only thing K-fee clearly distinguished was the Jarisch reference itself, which does not expressly disclose varying width bars. Multiple instances indicate some possible indicia that K-fee disclaimed some scope however, it was not “clear and unmistakeable” as required to find disclaimer.  Therefore, reversing the district court’s construction of “barcode” also necessitated reversing the summary judgment of non-infringement that was based entirely on the erroneous claim construction.

More Than Just “Inventory”: Some Professional Responsibility Implications of Third Party Patent Assertion Entity Funding

Guest Post by Jordan Duenckel. Jordan is a third-year law student at the University of Missouri and a registered patent agent. He has an extensive background in chemistry, food science, and economics. 

Law is a noble profession destined to be marred by the activities of attorneys behaving badly. On November 27th, Chief Judge Colm Connolly of Delaware released a blistering opinion reprimanding counsel for inexcusable and willful lapses in professional responsibility, misrepresentations to the USPTO, and potential unauthorized practice of law all associated with the patent assertion entity IP Edge LLC (IP Edge) and its affiliate Mavexar LLC (Mavexar). Disciplinary, administrative, and potential criminal referrals result for the counsels of record for plaintiffs for this conduct. For other practitioners, this is a cautionary tale about third-party litigation and candor to the Court.  

Even when clients are viewed as mere “inventory”, they are still owed the renowned “punctilio of an honor the most sensitive.” Huber v. Taylor, 469 F.3d 67, 81 (3d Cir. 2006) (quoting Meinhard v. Salmon, 249 N.Y. 458, 464 (N.Y. 1928) (Cardozo, J.))

Judge Connolly’s 102-page opinion is thorough and supplies extensive examples of attorney (and non-attorney) coercive misbehavior through a pattern of activity spanning three plaintiffs that display shocking disregard for professional responsibility stemming from third party litigation funding. An in-depth look at Mellaconic IP is representative of Nimitz and Lamplight’s comparable situation. Mellaconic IP is a sole member LLC organized under the laws of Texas. That sole member is Hau Bui, a food truck and restaurant operator by day. At the hearing, Mr. Bui told how Linh Deitz, the office manager for Mavexar, formed Mellaconic in August 2020 with the limited assets of seven patents. Mr. Bui’s testimony about his ownership of the patents begins to supply insight:

Q: Okay. How much did you pay for the patents?                                                                 A: I didn’t pay for the patents.                                                                                                   Q: So how do you come to own patents if you don’t pay for them?                                   A: I was- came up–someone pushed me with the opportunity, selling the patents.     Q: Who was that? Mellaconic?                                                                             A:Mellaconic-no, Mavexar. Sorry.

When asked about the actual business of Mellaconic, Bui stated:

Q: Did you have to take on any responsibilities to assume ownership of the patents? A: As far as, just like, viewing the litigations and everything that come through.         Q: Oh, so you do review the litigations?                                                                                 A: Yeah.                                                                                                                                           Q: Tell me about what you do in that regard?                                                                       A: So Mavexar will send me the litigations of what’s going on or the, you know, attorney engagements. And then I, essentially, if l sign-I approve of them or disapprove of them.                                                                                                                     Q: How do you know whether to approve or disapprove of an attorney?                       A: I mean, I chose Mavexar and they’re-they’re-what is it? -they’re good. Like, you know, they haven’t done me wrong.                                                                                       Q: Well, so do you get a share, then, of lawsuits or settlements that are brought using these six patents? Is that how you make money, passive income, as you call it?  A: Yeah.

Mellaconic “acquired” the patent via a patent assignment from another company, Empire, and subsequently filed an assignment at the PTO and entered a “Consulting Services” agreement with Mavexar on August 11, 2020. At the time Mellaconic filed with the PTO an assignment that stated that Mellaconic’s “right, title, and interest” in the seven assets listed in the assignment “includ[ed] all income, royalties, damages and payments now or hereafter due or payable with respect thereto,”* Mavexar was contractually entitled to 95% of the profits generated from licensing or litigating those assets. Mellaconic subsequently filed 44 different patent infringement cases nationwide asserting a single patent, 9,986,435 (the #435 patent).  Maxevar located and contacted attorney Jimmy Chong to be counsel for Mellaconic in these lawsuits and filed the suits as well as voluntary dismissals with cocounsel’s firm Sand and Sebolt.  

A slight issue arose when it became clear that Bui was unaware that Chong’s firm was Mellaconic’s counsel, even failing to identify Mr. Chong in person from 20 feet away, with the first direct contact via email on November 30th, weeks after the hearing. Bui replied, “Yes, you can continue to communicate to Mavexar team directly.” At the hearing, it became clear that Mr. Bui did not review any complaints before being filed or even that he was apprised of settlement offers in the litigation. Up to thirteen complaints had been filed and voluntarily dismissed before Mr. Bui even communicated with his counsel of record. Chong and Sebolt’s attorneys would often communicate with Maxevar to confirm settlement offers without asking for Bui’s consent.

Rules of Professional Conduct for Lawyers | Clio

Omnipresent in any attorney-client representation are the requirements of the rules of professional responsibility that are codified by the Model Rules. Rule 1.2 (allocation of authority), Rule 1.4 (Communications), Rule 1.7(Loyalty), and Rule 1.8f (Third Party Funding) were all implicated in Connolly’s opinion. Rules 1.2 and 1.4 are important but self-evident in this context. The more pernicious, and less visible, problem is the implications of third-party funding creating a conflict of interests that results in a de facto denial of independent representation. The potential for a conflict of interest is clear when profits (or a substantial portion of them) are assigned to one party and the risk is assigned to another. Third-party litigation in general carries increased risks of conflicts of interest and non-practicing patent assertion entities (PAEs) enhance the risks even more. 

The structure that Mavexar created assures that the only risk Mavexar assumes when an attorney files at Mavexar’s direction an infringement case in Mellaconic’s name is the potential that Mellaconic will not follow its contractual obligation to reimburse Mavexar for the fees and costs Mavexar advances to that attorney that exceed any gross recovery. In other words, Mavexar has virtually nothing to lose and everything to gain (i.e., 95% of everything) from asserting the patent in infringement suits. Mellaconic, by contrast, receives a tiny fraction of the litigation gains but it, and potentially Mr. Bui, personally have lots to lose if the litigation results in an adverse decision, sanctions, or fees and costs that exceed the gross recovery. PAEs, like Mavexar, represent rent-seeking behavior (extraction of wealth without any reciprocal contribution of productivity), and the related Tullock Paradox, at work: increased marginal utility at a fraction of the marginal cost.  

Considering these vastly different profit and risk profiles, Mavexar’s and Mellaconic’s interests were significantly different when it came to deciding to file or to settle the lawsuits Mr. Chong and co-counsel brought in Mellaconic’s name. Repeatedly, Chong and others insisted that they do not represent Mavexar as counsel but rather that Mavexar acts as a consultant to Mellaconic. However, Mavexar is the guiding force behind the entirety of the assertion of patent infringement claims despite explicitly requesting to keep their name out of any of the litigation that was filed despite being the real party in interest. Mavexar was actively involved in the creation of shell companies, finding “targets” to assert patents against, hiring attorneys to represent Mellaconic, and actively managing settlement discussions.** 

Much ink can and has been spilled discussing the economic and societal merits of third-party litigation funding. Regardless of the future direction, a bedrock legal principle must remain: truly independent representation of all parties is core to informed decisions and fair dealing. Mr. Bui, and many others like him nationwide, are deprived of that fundamental principle when conflicts of interest are disguised and perpetrated by PAEs at the expense of clients. This is beyond an academic review of best practices: real clients suffered real economic and emotional distress as a result of these attorney’s disregard. The de facto client was Mavexar and the actual client, Mellaconic, was simply “inventory,” left without some of the most basic tenants of legal representation. 


*This assignment either does not disclose or actively hides the real party in interest because it falsely states who is entitled to the income from the patents. This false statement forms the basis for the criminal referral under 18 U.S.C. 1001. There is also some uncertainty around whether federal law was broken concerning failing to disclose a French sovereign investment fund that was the original assignor of at least one of the patents.

**While Mavexar vigorously denies being a law firm, the work they were doing in the litigation is legal in nature and forms the basis of the unauthorized practice of law referral. 


Seeing Clearly: Article III Standing of IPR Judicial Review

Guest Post by Jordan Duenckel. Jordan is a third-year law student at the University of Missouri and a registered patent agent. He has an extensive background in chemistry, food science, and viticulture. 

Article III standing remains a hot topic at all levels of federal litigation and across many different areas of law. Inter partes review is not unique. In Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC, Case No. 22-1706 (Fed. Cir. Nov. 7, 2023), the Federal Circuit dismissed, in a unanimous opinion by Chief Judge Moore, an appeal of a PTAB final IPR decision before reaching the merits by finding that the IPR challenger did not allege sufficient “injury in fact” to confer standing necessary for Article III judicial review.  

Pterygium is the result of cellular expression of kinase in the cornea that expands beyond control and creates tumors. With surgery as the only viable course of treatment, Cloudbreak Therapeutics created a topical application of multikinase inhibitors to provide a non-surgical treatment to prevent recurring tumors, which is recognized in U.S. Patent No. 10,149,820 (the ‘820 patent). Specifically, nintedanib is one of the most powerful multikinase inhibitors for reducing corneal neovascularization, a principal cause of pterygium.

Pterygium - Eye Doctors

Allgenesis petitioned for IPR of all eleven claims of the ’820 patent.  After the Board instituted, Cloudbreak disclaimed the genus claims, i.e., claims 1–3 and 6–11, leaving only claims 4 and 5, which more narrowly claim the use of nintedanib.  The Patent Trial & Appeal Board issued a final written decision finding that Allgenesis failed to show that the remaining two claims were unpatentable overcoming prior art and motivation to combine asserts. As part of its decision, the Board made a priority decision that a Patent Cooperation Treaty (PCT) application belonging to Allgenesis was not prior art to Cloudbreak’s patent.  While standing was not necessary to file an IPR because of the administrative nature of the PTAB, standing is a constitutional requirement for appeal to the federal courts. 

The Federal Circuit dismissed Allgenesis’s appeal because Allgenesis failed to establish Article III standing to appeal. Article III standing stems from the Constitutional requirement that federal courts only decide actual “cases” and “controversies” and avoid speculative advice administration. Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992) is the seminal Supreme Court case that set forth the requirements for establishing Article III standing – namely that a party must show: 

  1. An “injury in fact” that is concrete, particularized, and actual or imminent (not hypothetical) 
  1. Causation between the injury and the challenged conduct 
  1. Redressability (a favorable court decision would likely redress the injury) 

In Lujan, the Court found the plaintiffs failed to show an imminent, concrete injury since their professed intentions to return to project sites at some indefinite time were insufficient. The Court also held that plaintiffs could not establish standing based solely on a “procedural injury” from violation of the consultation procedure, absent showing impairment of a separate concrete interest. Compare to Allgenesis. Specifically, Allgenesis did not show: 

  • An injury-in-fact based on potential infringement liability from its plans to develop a nintedanib product, because its plans were not sufficiently concrete. 
  • An injury-in-fact from the PTAB’s priority date determination, because any preclusive effect was speculative and Allgenesis did not sufficiently articulate how it impaired its own patent rights. 

Allgenesis argued it had standing based on potential infringement liability from developing nintedanib treatments for pterygium. The court found Allgenesis failed to show concrete plans creating a substantial risk of future infringement as Allgenesis’ VP of Finance declaration did not identify specific plans beyond a Phase II trial years ago, nor any current plans for Phase III trials or any efforts to seek FDA approval for their own nintedanib product. Likewise, settlement talks related to the IPR petition were insufficient to show its activities would likely cause Cloudbreak to assert infringement. 

Allgenesis also argued injury because the Board found the ‘820 patent claims were entitled to a June 2015 priority date, making Allgenesis’ PCT with a June 2015 filing date not prior art. Allgenesis asserted this would have a preclusive effect on its pending application claiming priority to its PCT. However, the court found Allgenesis did not establish any preclusive effect. Importantly, collateral estoppel will not attach to a non-appealable determination like the Board’s determination of priority. Therefore, if an examiner would find that Cloudbreak’s application served as prior art to Allgenesis’ pending application, Allgenesis would be able to challenge that on a separate appeal. For standing, any potential injury that may result from a future examiner’s action is too speculative.  

The precise line for what consists of “concrete plans” seems to be especially uncertain in a highly uncertain business like the life sciences and pharmaceutical business here. Prospectively applying the Court’s position, to even reach the merits, drug development companies that act as challengers in IPR proceedings will need to develop more factual support for standing, including clinical trials, timelines for future events, pending information regarding company target dates with regulatory agencies, economic data, or even sensitive company business data. These disclosure requirements may face resistance for business, competitive advantage, or any number of reasons but should be a relevant factor in determining whether to proceed with IPR petitions. 

= = =

Note from Crouch: One key importance here is that the Federal Circuit demanded evidence of concrete injury.  At oral arguments, Allgenesis attorney Don Mizerk stated plainly that its client was practicing the invention, but that attorney statement was insufficient.

  • Court: I was curious as to what do you think is your best argument for why you have Article III standing?
  • Mizerk: Well, Your Honor, I think it’s a pretty clear case that we have standing. We are practicing the method that is claimed.
  • Court: Where is the evidence? … [W]here’s the proof that you’re doing that?

Although the court did not get into this issue, the Phase II trials conducted by Allgenesis would not likely create infringement liability because of the 271(e) safe harbor.

Building a Better BOTOX®? PGR and Enablement

Guest Post by Jordan Duenckel.  Jordan is a third-year law student at the University of Missouri, head of our IP student association, and a registered patent agent.  He has an extensive background in chemistry and food science.

Medytox, Inc. has appealed a decision made by the Patent Trial and Appeal Board regarding a post-grant review proceeding under the new Pilot Program. Medytox’s motion to amend the claim language, which aimed to substitute claims 19–27 of U.S. Patent No. 10,143,728 (‘728 patent), was denied by the Board for lack of enablement. Additionally, Medytox questions the Board’s Pilot Program regarding motion to amend practice and procedures under the Administrative Procedure Act. In Medytox v. Galderma, 2022-1165, — F.4th — (Fed. Cir. Jun. 27, 2023), Judge Reyna (joined by Judges Dyk and Stark) affirmed the Board’s determinations involving claim construction, enablement, arbitrary and capricious behavior under the Administrative Procedure Act (APA).

The ’728 patent is directed to the use of an animal-protein-free botulinum toxin composition that exhibits a longer-lasting effect in the patient compared to an animal protein-containing botulinum toxin composition. ’728 Patent, col. 2 ll. 57–62. Used to treat glabellar wrinkle lines and possibly chronic migraines, this botulinum toxin is claimed to have a greater length of efficacy than BOTOX®. While a deadly foodborne pathogen that can be present in canned food, modified botulinum toxin can be used as a cosmetic treatment in reducing wrinkling as well as other aesthetic applications.

Galderma S.A. submitted a petition for post-grant review of claims 1–10 of the ‘728 patent. Following the PTAB granting review, Medytox filed a motion to amend that sought to cancel claims 1–10 and introduce claims 11–18 instead. Medytox also requested the Board to provide Preliminary Guidance based on the Pilot Program, which relates to the practice and procedures for motions to amend. The Pilot Program allows a patent owner to receive Preliminary Guidance from the Board regarding its motion or to file a revised motion to amend. The Preliminary Guidance is an initial nonbinding discussion about whether there is a reasonable likelihood that the motion to amend meets the statutory and regulatory requirements. Read more about the Pilot Program here, 84 Fed. Reg. 9,497.

Galderma S.A. objects to the new claims claiming that they introduce new matter that is not disclosed in the specification. The new claim language claims that the responder rate at sixteen weeks is a range between 50% and 100%. The responder rate, in the context of the ’728 patent, is the proportion of patients who responded favorably to the animal protein-free botulinum composition expressed as a percentage. Galderma asserts that the original specification only discloses a responder rate up to 62% so anything above that is a range that is not fully enabled. The preliminary guidance was issued by the Board and stated that Medytox did not show a reasonable likelihood that the requirements of 35 U.S.C. § 326(d) and 37 C.F.R. § 42.221(a) were met to file a motion to amend. Significantly, the Board also gave its “preliminary view” that Medytox’s proposed responder-rate limitation did not add new matter. In order to comply with statutory and regulatory requirements, Medytox filed a revised motion to amend which was denied due to the introduction of new matter.

The responder rate substitute claim language was determined to have a scope of 50% to 100% based on the claim construction. Medytox relies on multiple clinical trials in their specification to show the actual responder rate that they attained. However, the highest rate achieved was 62% leaving a significant portion of the range unenabled with no clear direction on how to enable the rest of the claims. Relying on the Wands factors to conclude that the full scope of the claim was not enabled without undue experimentation.

Judge Reyna also references the recent Amgen v. Sanofi to require that the full scope of the claims must be enabled. Not enabling such a large range of the scope of the claims makes the lack of enablement seem more clear-cut in light of Amgen. While a different factual background from Amgen, not providing clear instructions to enable 76% of the claimed range is a more clear example of not enabling the full scope than the monoclonal antibodies of Amgen.

Medytox also challenges that the Board’s revision of its claim construction of the responder rate limitation made between its Preliminary Guidance and final written decision violated the Administrative Procedure Act (“APA”) because it was arbitrary and capricious and deprived it of a full and fair opportunity to litigate. Citing 5 U.S.C. § 706(2)(A), Medytox specifically asserts that the Board reversed its decision based on a nearly identical record rending the reversal arbitrary and capricious. The USPTO Director intervened to explain that the Board’s Preliminary Guidance was “initial, preliminary, and nonbinding.”

Likewise, the significant extrinsic evidence that warranted the reversal of the determination was developed after the Preliminary Guidance was issued. The claim construction regarding the responder rate limitation, expert testimony, briefing regarding written description, and subsequent oral argument on the limitation were all developed after the Preliminary Guidance. Based on the totality of the record, the reversal of the claim construction was not arbitrary and capricious. The guidance program is meant to be an effort to provide some direction to the patent owner and not be a binding decision. At oral arguments, the Board expressed multiple concerns about the responder rate limitation and Medytox did not adequately remedy the issue. As such, the Board had plenty of evidence to base their reversal.

Bringing Home the Bacon with Joint Inventorship

Guest Post by Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri, head of our IP student association, and a registered patent agent.  He has an extensive background in chemistry and food science.

HIP, Inc., v. Hormel Foods Corp., 2022-1696, — F.4th — (Fed. Cir. May 2, 2023)

Joint inventorship requires a substantial contribution to the invention. In the decision HIP, Inc. vs. Hormel, Judge Lourie writes for a unanimous panel to reverse a district court’s determination of joint inventorship involving a new process for precooking bacon. US Patent 9,980,498 has four inventors that are employees of and assigned their interest to Hormel.  HIP sued Hormel, alleging that David Howard was either the sole inventor or a joint inventor of the ’498 patent. The district court determined that Howard was a joint inventor based solely on his alleged contribution to the infrared preheating concept in independent claim 5.  

Bacon is an interesting food with unique preservation and cooking properties. Being a cured product, for food safety reasons, no additional cooking of the bacon is needed when bought off the shelf in a refrigerated section. Of course, most people are not consuming the bacon without additional cooking and some companies will precook the product for consumer convenience. When precooking, Hormel is trying to avoid the loss of salt, and therefore flavor, through condensation and prevent the creation charred off flavors (as opposed to the desirable char on a steak).  

 In the process of viability testing the new method, prior to filing the application, the inventors consulted with David Howard of Unitherm, HIP’s predecessor, to discuss methods related to Unitherm’s cooking equipment to create a two-step process of preheating then a higher temperature step. After some difficulties, Hormel leased the equipment and returned to their own R&D lab. The method created, the subject matter of the ‘498 patent, involves a first step that allows the fat of the bacon to seal the surface of the bacon and prevent condensation. The charring was remedied by adjusting the heating method of the oven in the second step of high-temperature cooking. In Hormel’s product development, Hormel tried an infrared oven and a conventional spiral oven.

HIP argued that Howard contributed to the ‘498 patent in the preheating by hot air in claim 5 and/or preheating with an infrared oven in claim 5.  Claim Five reads in the relevant part:  

  1. A method of making precooked meat pieces using a hybrid cooking system, comprising: preheating meat pieces in a first cooking compartment using a preheating method selected from the group consisting of a microwave oven, an infrared oven, and hot air to a temperature of at least 140º F. to create preheated meat pieces…

On appeal, Hormel argues that Howard’s contribution is well-known in the art and insignificant when measured against the full invention. With inventorship being a question of law, and the issuance of a patent creating a presumption of inventorship, an alleged joint inventor must provide clear and convincing evidence to substantiate their claim. In evaluating whether a significant contribution was made by Howards, the parties apply the test from Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed. Cir. 1998). The test requires that the alleged joint inventor: 

(1) contributed in some significant manner to the conception of the invention; (2) made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention; and (3) did more than merely explain to the real inventors well-known concepts and/or the current state of the art. 

Analyzing the second Pannu factor, the Court found that the alleged contribution of preheating meat pieces using an infrared oven to be insignificant in quality because it was mentioned only once in the patent specification as an alternative heating method to a microwave oven and was recited only once in one Markush grouping in a single claim. In contrast, preheating with microwave ovens and microwave ovens themselves were prominently featured throughout the specification, claims, and figures. The examples and corresponding figures also employed procedures using preheating with a microwave oven, but not preheating with an infrared oven.  

Infrared heating seems to have been an afterthought in the creation of the two-step precooking method. Whatever discussions Howard might have had about the importance of the infrared, Hormel seems to have focused on microwave heating to solve the condensation problem. From one step further back, it seems absurd to permit joint ownership by a cooking equipment manufacturer when the significant discoveries and refinements of the methods were made in Hormel’s R&D facility without Howard present. The prevention of condensation and avoiding the char flavor were both made independent of Howard’s contributions. Considering the second Pannu factor, the reversal of inventorship seems appropriate.  

Obviousness and Stereochemistry

Amgen Inc., v. Sandoz Inc. 22-1147, — F.4th — (Fed. Cir. Apr. 19, 2023)

Jordan is a second-year law student at the University of Missouri and a registered patent agent.  He has an extensive background in chemistry and food science.

Amgen markets apremilast, a phosphodiesterase-4 (“PDE4”) inhibitor, which is used for treating psoriasis and related conditions, under the brand name Otezla® which is covered by three patents, U.S. Patents 7,427,638, 7,893,101, and 10,092,541. Sandoz submitted an Abbreviated New Drug Application (“ANDA”) seeking approval market a generic version of apremilast. Celgene, the original plaintiff, brought this Hatch-Waxman suit, asserting that Sandoz’s generic product would infringe the ’638 and ’101 patents. The Federal Circuit affirms the district court’s findings on all issues raised.

Sandoz asserts that U.S. Patent 6,020,358 renders the Amgen patents obvious. The ’358 patent is the first U.S. patent describing a racemic mixture containing apremilast. Enantiomers detail the orientation of the molecule around a chiral center and can have vastly different therapeutic outcomes and clinical results between the (+) and (-) enantiomers, particularly thalidomide analogues. The critical difference between the ‘358 and ‘638 patents is the composition of the mixture:

The ’358 patent is a racemic mixture comprised of 50% of the (+) enantiomer of 2-[1-(3-ethoxy-4-methoxyphenyl)-2-methylsulfonylethyl]-4acetylaminoisoindoline-1,3-dione and 50% of the (-) enantiomer.

Compare to an excerpt of Amgen’s language in claim three of ‘638:

A pharmaceutical composition comprising stereomerically pure (+)2-[1-(3- ethoxy-4-methoxyphenyl)-2- methylsulfonylethyl]-4- acetylaminoisoindoline-1,3-dione, or a pharmaceutically acceptable salt, …

The ’638 Patent: Sandoz failed to provide clear and convincing evidence at the district court to show that a skilled artisan would have reasonably expected a benefit from separating the enantiomers or that the (+) enantiomer was the cause of the desirable properties of the ‘358 formulation. Sandoz’s appeal asserts that the district court erred in its findings.

At the Federal Circuit, Judge Lourie, writing for a unanimous panel of Judges Cunningham and Stark, focuses on the unexpected potency of apremilast discovered relative to the apremilast-containing racemic mixture during testing and experimentation. At the district court, the named inventor, Dr. Schafer, testified that the stereomerically pure apremilast reduces the production of tumor necrosis factor alpha (“TNFα”), the factor that is linked to psoriasis, 20 times more effectively than the previous patent.

Dr. Schafer also says that a skilled artisan would expect a twofold improvement in efficiency. The district court finds that the 20-fold difference, when an otherwise two-fold difference would have been expected by the skilled artisan was sufficient to support a finding of an unexpected result and subsequent nonobviousness. A 20-fold difference from the steromerically isolated formulation goes well beyond a difference in degree into a difference in kind.

It strikes me as interesting that the characteristics of apremilast were largely left undiscussed. Apremilast is a thalidomide analogue and safety concerns about the infamously teratogenic effects related to thalidomide were sufficient skepticism for a skilled artisan and the industry at large regarding stereomerically pure formulations. However, it would seem that this teratogenicity could cut both ways as a skilled artisan would have ample incentives to investigate the enantiomers separately for safety concerns in light of the thalidomide paradox.

The thalidomide paradox provides that racemic mixtures and pure enantiomers have different characteristics, despite in vivo racemization. If the molecule is sufficiently analogous to thalidomide, it seems that a skilled artisan would be inclined to be taught towards separating the enantiomers. Regardless, the unexpected result was found to be dispositive on appeal and the objective indicia weren’t necessary but the other findings of the objective indicia of long-felt need, others had tried and failed, industry skepticism, and commercial success were also affirmed.

           The ’101 Patent: Sandoz also alleges that the ’101 patent should have been found to be obvious. Sandoz says the ‘101 patent should not be entitled to the priority date of March 2002 because the  ’515 provisional application did not inherently disclose crystalline Form B of apremilast and therefore did not satisfy the written description requirements of 35 U.S.C. § 112. The district court relies on a finding that ‘515 application did inherently disclose the crystalline form.

The Federal Circuit did not find it necessary to delve into inherent disclosure because a review of the trial record shows Amgen provided multiple experiments, and expert testimony, showing that there was actual disclosure of the crystalline Form B. Absent any contrary evidence by Sandoz, the priority date and subsequent finding of nonobviousness were affirmed. Another win chalked up to Amgen’s excellent expert testimony.

            The ’541 Patent: On cross-appeal, Amgen asserts that the district court finding that the patent is obvious in light of prior art is erroneous. The district court found that the ’541 patent would have been obvious over the prior art or in crediting expert testimony stating that dose-titration modification would have been routine to a skilled artisan. Specifically, dose titration would be something that is regularly done in the treatment of psoriasis.

IPRs and the APA: Review of Director’s Discretion to Initiate IPRs

By Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri School of Law and a registered patent agent. 

Apple brought an action against the USPTO Director Vidal in district court under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701– 706, challenging the Director’s instructions to the Board regarding exercise of discretion in IPR institution decisions. In Apple v. Vidal, 2022-1249, — F.4th — (Fed. Cir. Mar. 13, 2023), Judge Taranto (joined by Judges Lourie and Stoll) largely affirmed the district court’s dismissal, confirming that the Director’s instructions are unreviewable.  The court did separately reverse a tertiary challenge to allow Apple to proceed on a claim related to the note-and-comments procedure of the APA. 

Apple and other repeat players in patent infringement litigation often use the inter partes review process under 35 U.S.C. §§ 311–319 to challenge the validity of asserted patents. The statute provides a two-step IPR process: Step 1 is the institution decision by the Director under § 314(b); Step 2 is the trial and final written decision by the PTAB.   

At least two prerequisites assist the Director in deciding to grant review: [1] a reasonable likelihood that the petitioner would prevail in 35 U.S.C. § 314(a) and [2] a petition must be filed within one year after service of the infringement complaint. § 315(b). Even if these conditions are met, the Director has unreviewable discretion over whether to initiate an IPR. The statutory text is seemingly as clear as a statute can be: “The determination by the Director whether to institute an inter partes review under [§ 314] shall be final and non-appealable.” 35 U.S.C. § 314(d); see also United States v. Arthrex, Inc., 141 S. Ct. 1970, 1977 (2021).   

From the outset of the IPR program, the Director delegated institution authority to the Board. 37 C.F.R. § 42.4(a). Practically, without this delegation, Director Vidal would spend a disproportional amount of time reviewing IPR petitions at the expense of other duties of the office, although she could have delegated responsibility to other agency departments such as the petitions division.  The right of delegation of the institution is settled law. See Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1031–32 (Fed. Cir. 2016).  

At issue in Apple v. Vidal are the so-called Fintiv instructions issued by the Director based on Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (P.T.A.B. Mar. 20, 2020) which provides six factors for analysis of whether to institute an IPR parallel to pending litigation.   

Proposing an analysis under the arbitrary and capricious standard, Apple and the other petitioners are directly focused now not on the denial of a specific petition for IPR review but as a general challenge to the Director’s instructions to the PTAB about how to exercise the delegated discretion.   

Slip Op. The district court ruled that 35 U.S.C. § 314(d) “precludes judicial review” of the challenged agency actions, bringing the case within the APA exclusion stated in 5 U.S.C. § 701(a)(1). According to this court, the IPR statute’s preclusion was settled by the Supreme Court in Arthrex and encompasses review of content-focused challenges to the Fintiv instructions. § 314(d) provides the clearest congressional delegation of nonreviewable discretion possible and the panel rightfully relied on plain-meaning and clear Supreme Court precedent.    

While affirming the dismissal of the content-based claims, the court separates the procedural requirements set forth in the APA. Reversing the district court in part, Judge Taranto’s panel opinion reopened Apple’s claim that the Director was required, by 35 U.S.C. § 116 together with 5 U.S.C. § 553, to promulgate institution instructions through notice-and-comment rulemaking procedures.  Slicing the procedure from the underlying substance of the rule, Taranto relies on Lincoln v. Vigil, 508 U.S. 182, 195 (1993) to clarify that the 5 U.S.C. § 553 provides the basis for rulemaking through the notice-and-comment procedure for the Director’s instructions and is a separate analysis of reviewability from the substance of the instructions. 

Standing was also preemptively addressed for the remand proceedings. Lujan provides the three-step test: injury-in-fact, causation, and redressability. In search of a particularized, concrete injury, the court takes notice that Apple is a repeat player with a history of IPR claims being denied. This past injury was used to show the eminency of future injury resulting from the denial of the benefits of IPRs linked to the concrete interest possessed by an infringement defendant. Redressability and causation were met because there is a genuine possibility that the instructions would be changed in a way favorable to Apple in notice-and-comment rulemaking.  

The Federal Circuit may have reached a bit to find standing in an effort to effectively resolve concerns about a heavily used procedure: the IPR process. On remand, the district court might rightly decide that a traditional notice-comment rulemaking procedure is required to redress harms or prophylactically provide clarifications for the patent system that can accomplish the goals of using agency resources effectively. Allowing the frequent fliers of the IPR system to at least have an appearance of input in the procedure would create a process with more certainty and produce more long-term economic efficiency.