Director Review: Petitioner must Prove its Case

Patent

by Dennis Crouch

Apple Inc. v. Zipit Wireless, Inc., 2022 WL 18108215 (PTO Dir., Dec. 21, 2022)

Back in December, Director Vidal issued an important director review decision holding an IPR challenger must prove that the challenged claims are invalid, even if the patentee raises no defense.  The PTAB appears to have incorrectly treated the situation as more of a default judgment even though the patentee had not expressly abandoned.

Apple filed three IPR petitions against each of two Zipit patents.  The PTAB instituted IPR proceedings in all six.  At that point, Zipit filed patent owner responses in two of the cases, but not in the other four cases.  In its final written decision, the PTAB did not consider the merits of the case, but simply concluded that the patent owner had “abandoned the contest” and treated their lack of opposition as a “request for adverse judgment under 37 C.F.R. § 42.73(b).”

In a sua sponte review of the record, Dir. Vidal noted that Counsel had not expressly abandoned the case, and during the hearing stated that judgment for Apple is appropriate “if the Board determines that they have met their burden of proof with respect to those claims.”  Vidal concluded that “Patent Owner’s non-opposition was contingent on the Board determining that Petitioner met its burden of proving by a preponderance of the evidence that the challenged claims are unpatentable.” As such, the Board must consider the evidence presented by Apple and determine whether it meets the statutory burden of providing “unpatentability by a preponderance of the evidence.” 35 U.S.C. 316(e).

Read it here: https://www.uspto.gov/sites/default/files/documents/IPR2021-01124_20221221_p14_20230104_.pdf

 

Supreme Court asked to Review Federal Circuit’s Judicial Shell Game

Patent

by Dennis Crouch

Novartis Pharms v. HEC Pharm (Supreme Court 2023)

Some drug treatments perform better if the patient starts with a loading dosage before shifting to the regular daily amount. But, loading dosages can be risky because of the high dosage and because of the greater likelihood of mistakes.  Novartis was able to configure a multiple sclerosis treatment plan without the loading dosage.  Its claims require the administration of fingolimod “at a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.” US Patent No. 9,187,405. The problem for Novartis is that its original priority application filings did not say anything positive or negative about a loading dosage, and the court eventually rejected the priority claims and thus invalidated the patent claims.

Novartis almost walked away a winner.  In the ANDA litigation, Judge Jordan (D.Del.) found the claims valid and infringed by HEC. On appeal Federal Circuit Judge O’Malley penned the majority opinion affirming the Novartis win. Judge Linn sided with O’Malley, with Chief Judge Moore in dissent.

But then an odd sequence of events occurred: (1) in February 2022, HEC filed a petition for panel rehearing; (2) but before the panel could rule on the motion, Judge O’Malley retired.  (3) At that point, Judge Hughes was added to the panel; and (4) Judge Hughes sided with Chief Judge Moore’s position.  The modified panel then issued a new opinion with Judge Moore’s prior dissent effectively becoming the majority, and Judge Linn now writing in dissent.  What made this more surprising was that the Federal Circuit had not provided any indication of Judge Hughes’ substitution.

Novartis petition for certiorari addresses both the procedural judicial shell game and the substantive written description question. Questions presented:

1. Whether 28 U.S.C. § 46 and principles of sound judicial administration preclude a court of appeals from adding a new judge to form a new panel and redecide a case after an original three-judge panel has already decided the case and entered its judgment.

2. Whether 35 U.S.C. § 112 should be interpreted consistent with its plain text as requiring that a patent specification contain a “written description of the invention” in a form that need only be understandable to “any person skilled in the art,” or whether the court of appeals properly read in a heightened requirement that allows it to deem the specification inadequate on de novo review and displaces the perspective of a person skilled in the art.

Novartis Petition for Cert 2023.   The Supreme Court will decide the Amgen enablement case later this term, but recently denied certiorari in the written description case of Juno v. Kite.

My thoughts: I think that Chief Judge Moore probably has the best argument on the merits of the written description question.  If you are going to claim some particular element of the invention (and use it to overcome the prior art), that element should be introduced at some level in the original specification.  But, written description is a question-of-fact, what that means is that the appellate court cannot simply substitute its decision in place of that of the district court. Rather, the district court’s finding of facts should be affirmed barring some clear error or abuse of discretion. The case is close enough here that I would not find a clear error by the district court judge.  The panel switch also smells very bad to me.

Pundits will tell you that the use  of top Supreme Court counsel helps get the court’s attention. That bonus is probably mostly because of their skill at framing the case, but their reputation within the Court probably also plays a role.  In this case though Novartis appears to go overboard and included a host of top Supreme Court counsel, including Deanne Maynard (MoFo), Willy Jay (Goodwin Procter), and Thomas Hungar (Gibsun Dunn), all of whom have successfully argued numerous cases before the Court.

Supreme Court Taking Additional Look at Apple’s Estoppel Petition

Patent

by Dennis Crouch

The Supreme Court has added a fourth case to its list of potentials for 2023: Apple Inc., v. California Institute of Technology, Docket No. 22-203.  The case is extremely important for our patent system because it could define key aspects of the interplay between inter partes review (IPR) proceedings and parallel district court litigation.

IPR Estoppel Provision: In traditional patent infringement litigation, accused infringers almost always raise invalidity defenses — arguing that the patent fails to satisfy the conditions of patentability set forth in the Patent Act.  For the past decade, IPRs have offered an additional powerful tool to challenge validity.  As the IPR system was being developed, patent holders were concerned about repeat harassment and argued that patent challengers should be required to choose their battleground: either the PTAB or Court, not both.   Aspects of the eventual compromise are codified in the estoppel provision of 35 U.S.C. 315(e)(2).  The statute becomes effective once an IPR reaches a final written decision as to some claim in the challenged patent. At that point, the IPR petitioner is prohibited from asserting in court that any challenged claim is “invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  Id.  The question in the case is statutory interpretation – what did Congress mean by “could have raised during that inter partes review”?

Apple lost its IPR against CalTech’s patent and subsequently attempted to maintain further obviousness arguments in the parallel infringement litigation. The district and appellate courts applied 315(e)(2) estoppel to prohibit those additional obviousness arguments — concluding that Apple reasonably could have raised them in its initial IPR petition.  Apple’s appeal to the Supreme Court argues that the Federal Circuit misconstrued the statute. Apple’s argument hinges on three key points:

  1. The statutory estoppel applies only to grounds that could have been raised “during” the IPR;
  2. The IPR begins only at the point where the PTAB grants the petition to institute an IPR; and
  3. Once the IPR is instituted, the petitioner is barred from raising new grounds (except for rebuttal-type issues).

The Federal Circuit’s error (according to Apple) is that the court found that estoppel applies to any ground that could have been raised in the petition. But, the petition is pre-IPR and thus not “during” the IPR as the statute requires.  The petition for writ of certiorari asks the following question:

Whether the Federal Circuit erroneously extended IPR estoppel under 35 U.S.C. § 315(e)(2) to all grounds that reasonably could have been raised in the petition filed before an inter partes review is instituted, even though the text of the statute applies estoppel only to grounds that “reasonably could have [been] raised during that inter partes review.”

Petition.

What’s the news: The Supreme Court has issued a CVSG – Call for the Views of the Solicitor General – in the case.  What this means is that at least four justices think that case has potential but that they would like to hear the Biden Administration’s views on whether this is an appropriate vehicle. The SG’s office is already working on three other briefs. Two focus on eligibility (Interactive Wearables & Tropp), and the other addresses the PTO-FDA interaction involving skinny-label infringement (Teva v. GSK).

My view on the estoppel issue:

  1. Point for CalTech: The Federal Circuit’s solution here is the better policy.  Parties should not be given repeated affirmative opportunities to attempt invalidation of the same patent claims. Rather, the process should follow the general use-it-or-lose-it rule of litigation that forces parties to bring their best arguments to the table and see if they are good enough.  Here, Apple made a strategic decision to bring certain arguments to the PTAB — most likely because they were the best arguments.  It doesn’t help anyone to now let them bring on the third-string as a measure of patent invalidity.
  2. Point for Apple: A pure textual reading of the statute favors Apple. If the IPR does not start until initiated, “during” the IPR would not include any petition-stage actions.
  3. Match for CalTech: Apple’s reading removes essentially all meaning from the “reasonably could have raised” provision since petitioners basically cannot add any new grounds once the petition is granted. The statute’s purpose though was to prevent abusive and serial patent challenges.

I always hope that the Supreme Court takes patent cases because of both the drama and potential for meaningful and positive reform.  Likewise, I hope that the court takes this case, but then affirms.

Push-Down on Drug Patents and Drug Pricing

Patent

by Dennis Crouch

Over the past several months, the USPTO and FDA have been collaborating with the purpose of promoting competition and lower drug prices in the US.   This week (Jan 19), the USPTO is holding a 7-hour joint listening session hosted by USPTO Director Kathy Vidal and FDA Commissioner Robert Califf.  [Register and see the Agenda here]

The session has three key substantive areas:

  1. The extent and impact of pharmaceutical and biotech companies acting in a two-faced manner: Arguing to the USPTO that their treatments represent major changes from what was previously done (and thus patentable); while simultaneously arguing to the FDA that then later arguing that these same treatments are quite similar to what is already on the market (and thus safe for use).
  2. The extent that pharmaceutical and biotech companies are improperly gaming the patent system and then using those games to justify strong protections under Hatch-Waxman and the BPCIA.
  3. How can the Orange Book process be improved to protect innovation while simultaneously improving competition?  Prof. Jay Thomas’s remarks here are on point: “Despite their [extraordinary] impact, Orange Book patent listings receive no FDA oversight.”  PTO-P-2022-0037-0010.

The thrust of this entire gambit from the administration level is to reduce drug prices.  But, once we drop down to the PTO/FDA level, the close industry relationship suggests to me that agency officials will be keenly aware of the potential negative impacts of any action on pharma innovation.

The key leadoff speaker is Hastings Law Professor Robin Feldman whose work argues that the system is broken in myriad ways.  George Mason Prof. Adam Mossoff will provide a high-level counterargument, and several others will talk through complications. In particular, I always learn a lot hearing from Corey Salsberg (Novartis), Sean Tu (WVU), and Jay Thomas (G-Town)

While this is a joint event, both agencies (along with several other federal agencies) are also operating unilaterally to address the high cost of healthcare in America.  In particular, the FTC/DOJ are using antitrust tools to push against monopoly-level pricing even for drug products whose use is protected by patents.

Although no direct action items are expected to come out of this event,  I see all of this as quite a big deal as the various players work to establish their narrative.

 

 

Trade Secrecy Rising

Patent

by Dennis Crouch

A continuing trend in American law is the rise of Trade Secrecy as a powerful form of intellectual property.

The FTC and Biden Administration have called for eliminating employee non-compete agreements, which will strengthen the hard push for trade secrecy.  Most trade secret claims involve former employees moving to competitors.  If contracts limiting those transitions are unenforceable, more weight will almost certainly fall on trade secrecy rights.

Recently, President Biden also signed into law the Protecting American Intellectual Property Act of 2022.  Despite its broad name, the new law focuses entirely on international trade secrecy issues.  In particular, the law authorizes the US President to place sanctions on foreign entities that engage or benefit from “significant theft of trade secrets of United States persons.”   The law has a two-step approach: (1) the President must provide Congress with a report of violators; and (2) the President must then put sanctions on the violators (with the exception that sanctions can be waived if in the national interest).  Potential sanctions include blocking and prohibiting “all transactions in all property and interests in property of the entity.”

The new law is set to Sunset in 7 years and so will not be codified within the United States Code (USC).  However, the law does rely upon the DTSA definition of trade secret found in 18 U.S.C. 1839:

[T]he term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if— (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.

Under Federal Law, the theft of trade secrets held by US persons for the purpose of taking information out of the US is also a felony. See, Economic Espionage Act.

But, for the most part the practice of trade secrecy law is radically different than that of patent law.  I’m wondering the extent that patent attorneys are engaging in the transition.

Guest Post by Prof. Burstein: Design patents: Line drawing & Locarno

Patent

By Sarah Burstein, Professor of Law at Suffolk University Law School.

Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc., 21-2299 (submitted but not decided) (oral argument recording available here)

The Federal Circuit heard oral arguments yesterday in the second round of Columbia v. Seirus. (Prior Patently-O coverage of this appeal is available here.) My 2015 article, The Patented Design, was mentioned several times during the argument.

In that article, I argued that a design patent’s scope should be limited to the design as applied to a specific type of product. In making that argument, I acknowledged that this approach could create some line-drawing problems, including the type that have arisen in Columbia v. Seirus. I suggested that, with respect to infringement:

[O]ne solution would be to put the burden of proof on the patent owner to show that the accused device should be considered the same type of product. Courts have been tasked with determining which products are and are not the same “type” of product in the trademark context; there is no obvious reason why they should not be able to do the same in the design patent context.

If, however, the line-drawing problem proves to be intractable, an alternative would be to determine product “types” according to the Locarno Agreement Establishing an International Classification for Industrial Designs. Specifically, “type of product” could be defined to map onto Locarno sub-classes. For example, Locarno Class 10 includes subclasses for “Clocks and Alarm Clocks,” “Watches and Wrist Watches,” and “Other Time-Measuring Instruments.” The Locarno classification system is not perfect for this use but it may provide a second-best solution if judicial common law development proves unworkable.

Sarah Burstein, The Patented Design, 83 Tenn. L. Rev. 161, 219–20 (2015) (footnotes omitted). So my argument was not that design patent scope (and in this case, the scope of comparison prior art) must be limited to the exact, specific type of article named expressly in the verbal portion of the design patent claim.

Instead, I argued that courts should look to whether the accused product (or reference) is the same general type of article.

I also suggested that the product type could be determined with reference to Locarno sub-classes. How might that work in practice?

Looking at the dispute in Columbia v. Seirus, the most relevant class would seem to be Class 5, “Textile piece goods, artificial and natural sheet material.” Here are the relevant class subheadings:

So which subclass(es) would apply here? This case is an example of how the “substantial latitude” that design patent applicants are given in describing the relevant article in their claim language, see MPEP § § 1503.01(I), might sometimes complicate later attempts at classification.

The asserted design patent, U.S. Patent No. D657,093, claims “the ornamental design of a heat reflective material.” The only Class 5 subclass heading that uses the word “material” is 05-06, “Artificial or Natural Sheet Material.” But the patented design seems to be directed more to something like the examples mentioned in subclass 05-05, “Textile Fabric.” (Indeed, if you look closer at the full Locarno Classification, subclass 05-05 specifically includes ID No. 100480, “Insulating fabrics.”)

So which bucket would the D’093 fit in best? Where classification is disputed, the burden of persuasion should be on whichever party wants to prove something is the same type of product.

For infringement, then, the patent owner should have to prove the accused product is the same type as what is claimed. For comparison prior art, the accused infringer should have to prove the reference is the proper type. (This is because the use of the prior art in evaluating infringement is a one-way ratchet; it can only be used to narrow the presumptive scope of a claim, not to enlarge it. See Sarah Burstein, Is Design Patent Examination Too Lax?, 33 Berkeley Tech. L.J. 607, 612 (2018).)

Evidence relevant to this inquiry could include information about any commercial embodiments, including information the patent owner has provided to regulators about their product or market. And if a patent owner has registered their design internationally, the design may already have a Locarno sub-class.

Who should decide? Judges would be well-suited to make these types of determinations. Indeed, these issues are likely to arise at the Markman stage or, as in Columbia v. Seirus, in motions in limine. This is not the kind of credibility or historical-facts determination that we normally leave to juries. Indeed, it’s difficult to imagine a way to effectively instruct juries on this issue without injecting undue confusion into the infringement analysis.

Guest Post by Prof. Contreras: How the ‘Patent Eligibility Restoration Act’ Would Harm American Businesses and Endanger Global Health by Reintroducing ‘Pathogen Patents’

Patent

Guest Post by Professor Jorge L. Contreras

The Patent Eligibility Restoration Act should be modified to prevent the reintroduction of patents on naturally-occurring genomic sequences that are isolated and purified in the lab, a change that will enable international pathogen research to continue while interfering little with private incentives to develop new biomedical technologies.

The Patent Eligibility Restoration Act of 2022 (PERA), introduced by Senator Thom Tillis (R-NC) in August 2022, is designed, among other things, to abrogate the Supreme Court’s patent eligibility decisions in Bilski, Mayo, Myriad and Alice. While Congressional action may be useful to clarify the confusing landscape of patent eligibility that has followed from these decisions, particularly in areas such as medical diagnostics, software and business methods, one piece of the eligibility puzzle that the Supreme Court got right, and which should not be changed, is Myriad’s holding that naturally occurring genomic sequences are ineligible for patent protection, even when “isolated and purified.”

In my book, The Genome Defense: Inside the Epic Legal Battle Over Who Owns Your DNA (New York: Algonquin, 2021), I discuss the Myriad case at length, focusing on its implications for human health and access to care.  Like many others, I am concerned that PERA would make newly identified human genetic variants with significant health implications (e.g., this and this) patentable again, potentially removing them from the broad competitive market and placing them in the hands of the first research team that chances to identify them (a task that is, today, largely serendipitous and requires little innovative skill). I have previously discussed these concerns here. In this post, however, I focus on a different and less-discussed issue: the risk that non-human pathogenic genomic sequences (i.e., from viruses and bacteria) will be patented by non-U.S. institutions and used to delay the development of lifesaving diagnostics, vaccines and therapeutics.

When Patents Held Up Pathogen Research

Prior to the Myriad decision, research groups around the world were able to obtain patents on newly identified pathogen genomic sequences, including those of the H5N1 influenza strain and the SARS and MERS coronaviruses. As I discuss in this new article, these patents led to disputes and delays in research on the diseases and effective countermeasures. After Myriad, however, research groups appear to have stopped seeking patents on new pathogenic agents, as shown by the global experience with the Ebola and Zika outbreaks, leading to greater global cooperation and rapid responses by public health agencies and private developers of diagnostics, vaccines and therapeutics.

SARS-CoV-2:  the Benefits of Patent-Free Pathogens

The genomic sequence of SARS-CoV-2 (the virus responsible for COVID-19) was first identified in early January 2020 by a team of researchers in China. On January 5, they uploaded the sequence to the publicly accessible GenBank database. Within days, diagnostic tests for the virus had been developed and a few months later, new vaccines against COVID-19 were being tested. As I have written previously, the unavailability of patents on genomic sequences, and the rapid uploading of the SARS-CoV-2 sequence to public databases, enabled researchers around the world to study the viral genome without fear of patent infringement and without the need to negotiate complex patent licensing agreements and pay royalties to the first researchers to determine its sequence. This open and unencumbered global research environment enabled scientists to identify and trace the spread of multiple pathogenic variants around the world, to understand the biological mechanisms of the virus, and to develop vaccines, diagnostics and therapeutics, all in record time.

PERA and U.S. Competitiveness

Senator Tillis, when introducing PERA, explained that a major goal of the bill is to enhance “the economic and global competitiveness of the United States”. He faults judicial decisions like that in Myriad for “undermining American innovation and allowing foreign adversaries like China to overtake us in key technology innovations.” Likewise, supporters of the draft legislation have enthusiastically proclaimed that it will “rev the US innovation engine once again”, warning that “[e]conomic growth, job creation, global competitiveness, public health and national security are all at risk until Congress repairs the law of patent eligibility that the Supreme Court has distorted.”

Yet, ironically, at least in the case of pathogenic sequences, PERA would work largely to benefit institutions in China and elsewhere, and could have adverse consequences for U.S. businesses and global public health.

Pathogens Usually Emerge, and are Sequenced, Outside the United States

Most serious pathogenic outbreaks result from the transmission of disease agents from animals to humans. These outbreaks originate in regions characterized by extensive animal husbandry, live animal markets, hunting or habitat loss. Within these parameters, the particular locale of a future outbreak is unpredictable. Recent infectious disease outbreaks have been traced, respectively, to China (SARS and H5N1), Saudi Arabia (MERS), Zaire and Congo (Ebola), Uganda and Brazil (Zika).

Likewise, once a pathogenic outbreak has entered human populations, the locations where its variants will emerge is also unpredictable. For example, the major variants of SARS-CoV-2  were first documented in China (original strain), the United Kingdom (alpha), South Africa (beta, omicron), Brazil (gamma), India (delta), Peru (lambda) and Botswana (omicron).

Today, genomic sequencing equipment is widely available at a modest cost. Researchers in 2021 estimated that the cost of sequencing a SARS-CoV-2 genome (only 1/100,000 the size of the human genome) is approximately $120, bringing it well within the reach of researchers in countries such as Gambia, which had, by mid-2021, sequenced more SARS-CoV-2 genomes than Germany.

It is also worth noting that countries, including the United States, that are parties to the World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property (TRIPS) must give “national treatment” to applicants from all other member states. Thus, researchers from any TRIPS member country may apply for a U.S. patent and will be afforded the same rights as applicants from the United States. Indeed, for the past several years, most U.S. patents have been issued to non-U.S. applicants. In 2021, for example, of approximately 374,000 issued U.S. patents, nearly 200,000 (roughly 53%) were issued to foreign entities. This situation is not unique to the United States and is simply indicative of today’s global technology markets.

The combination of unpredictable sites of pathogenic emergence, inexpensive genome sequencing and national treatment under TRIPS suggests that if U.S. patents become available for pathogenic sequences, the parties most likely to obtain these patents will originate outside of the United States in countries that are likely sites of disease emergence. It is doubtful that allowing pathogen patenting would result in more patents being issued to U.S. applicants. Rather, U.S. and other companies that wished to develop diagnostics, vaccines and other technologies dependent on those sequences would either be excluded from the market or required to pay unpredictable prices for a license to operate under those patents.

Countries That Are Willing to Hold-Up Research

In recent years, certain foreign governments have shown themselves willing to hold-up international disease research and response efforts in order to gain concessions and advantages for themselves under the banner of “access and benefit sharing” (ABS). The most prominent example of this tactic occurred in 2006-07, when the government of Indonesia refused to share samples of the H5N1 influenza virus strain with the World Health Organization until it obtained commitments regarding access to any resulting biomedical products. Similar tactics were adopted by other countries during the MERS, Ebola and Zika outbreaks, as documented here.

If countries are willing to hold-up international research and disease response in order to secure ABS benefits for themselves, then they are also likely to use patents to extract further concessions from the international community. Demands for ABS concessions are not necessarily unjustified in view of past exploitation of local resources by foreign firms in developing countries. Yet even if justified, these barriers to the international response to emergent disease outbreaks can negatively impact global health. Reintroducing pathogen patenting will give countries where diseases emerge yet another tool to hold-up critical international research and development to the detriment of all.

Patents are not Necessary to Incentivize Pathogen Sequencing

One of the principal functions of the patent system is to provide financial incentives for innovators to develop new technologies. Yet, this rationale does not support the issuance of patents claiming pathogen sequences. The identification of new pathogens during emergent disease outbreaks is rarely undertaken by private industry. Rather, this function is usually carried out by public health agencies and academic laboratories, typically in the locale of the outbreak, and which are supported by public funds. Thus, unlike the development of vaccines and therapeutics, the financial incentives offered by patent exclusivity are not necessary to incentivize these early stage research efforts.

There Are Ample Patentable Innovations Relating to Disease Response and Containment Beyond Pathogen Sequences

It is also unnecessary to patent underlying pathogenic sequences in order to protect novel and innovative technologies such as diagnostics, vaccines and therapeutics. A 2012 WIPO study identified more than 50,000 patents and published patent applications across 57 countries that claimed the active ingredients of pneumonia, typhoid and influenza vaccines, most without claiming the underlying pathogen. Even more opportunities for innovation exist with respect to therapeutics, which can adopt a broad range of approaches to combating infection. For example, Regeneron filed more than 100 patent applications around the world on its Ebola drug Inmazeb, though the viral sequence was freely available on GenBank.

The broad availability of patents for innovation around pathogenic disease outbreaks is amply demonstrated by the COVID-19 pandemic. Despite the absence of patents claiming the SARS-CoV-2 sequence or its many variants, the research institutions and private firms that developed COVID-19 diagnostics and vaccines obtained numerous patents on the innovative aspects of their products. For example, one 2020 study found that, with respect to mRNA vaccine technology alone, 56 different entities ranging from large pharmaceutical companies to small and medium-sized entities held a total of 119 different patent families. Perhaps the most convincing evidence that sizeable numbers of patents have issued in this space is the expanding universe of patent litigation among mRNA vaccine manufacturers, now dubbed the “COVID-19 Patent Wars”. All of these examples demonstrate that COVID-19 technology innovations, vaccines in particular, have been amply protected without the need for patents on naturally occurring pathogenic sequences.

But is this Threat Real?

An argument that may be made against the need to limit further pathogen patents is that the ability of patent holders to enforce their patents, especially during global health crises, is limited by law.  For example, in the United States, a patent holder cannot obtain a permanent injunction preventing an infringer from practicing a patented invention unless it demonstrates that the public interest would not be disserved by the entry of the injunction.  Likewise, the International Trade Commission, when assessing the appropriateness of an exclusion order barring the importation of infringing goods into the United States, must take into account “the effect of such exclusion upon the public health and welfare.”  These limitations have greatly reduced (but not entirely eliminated) the number of injunctions and exclusion orders issued with respect to medical and health-related technologies.

These limitations suggest that, at least in the United States, the existence of patents claiming pathogenic sequences might not represent a significant threat to pathogen research or biomedical product development. However, the existence of patents on these basic research tools, no matter what the likelihood of eventual litigation outcomes, can chill research, impose delays and prompt the payment of unwarranted fees. Moreover, even meritless claims are costly to fend off in court and impose some level of risk on defendants, particularly in the U.S. where fee shifting is rare.  Thus, while various litigation doctrines may tend to lessen the threat of pathogen patents in the U.S., that threat is not eliminated entirely and may still represent a significant cost and deterrent to firms engaged in research and development of pathogen-based biomedical products.

Don’t Let PERA Potentially Hold Up Research Efforts

For the reasons outlined above, PERA should be modified to ensure that naturally occurring genomic sequences – even once isolated – remain ineligible subject matter for patent protection. Preventing the reintroduction of pathogen patents will enable international pathogen research to advance rapidly while interfering little with private incentives to develop innovative new biomedical technologies. In contrast, opening the door to pathogen patents arguably will provide opportunities for individual countries where outbreaks emerge to hold up international research efforts for their own benefit, causing delays and barriers to the development of lifesaving diagnostics, vaccines and drugs.

New PatentlyO L.J. Article: What Every Patent and Trademark lawyer Should Understand About the MPEP, TMEP, and Other Guidance

Journal, Patent, Rantanen

By Jason Rantanen

New Patently-O Law Journal article by  David Boundy, a partner at Potomac Law Group, PLLC. Mr. Boundy practices at the intersection of patent and administrative law, and consults with other firms on court and administrative agency proceedings, including PTAB trials and appeals. He may be reached at DBoundy@PotomacLaw.com.

What Every Patent and Trademark Lawyer Should Understand About the MPEP, TMEP, and Other Guidance: How to Use (and Defend Against) the MPEP to be a Better Advocate, by David Boundy – Boundy.2021.HowToUseGuidance.pdf

Every four years, the PTO issues new guidance documents.  Some of them are legal and either help applicants or give nonbinding advice.  Other guidance documents are beyond the PTO’s authority and create burdens that ought not be shifted onto the public.  Several recent notices from the Patent Office note that several batches are coming.

The administrative law lays out limits on the ways that federal agencies may use guidance documents vis-à-vis rights of the public.  Every patent practitioner should understand those limits—when does the MPEP state binding law, when is it mere aspiration for what an agency would like the law to be or would like you to do, when is it asymmetric (binding against the agency, but not against any member of the public), when is it an offer of a quid pro quo (the agency promises “if you do this, we’ll do that”), and when is it invalid and entirely unenforceable?  When has the PTO broken the law, and what rights does that give you?  Knowing the difference, and following the practical advice outlined below, can prevent you from unintentionally compromising your client’s rights.

Read: David Boundy, What Every Patent and Trademark Lawyer Should Understand About the MPEP, TMEP, and Other Guidance: How to Use (and Defend Against) the MPEP to be a Better Advocate, 2023 Patently-O Patent Law Journal 1 (2023) (Boundy.2021.HowToUseGuidance).

Prior Patently-O Patent L.J. Articles:

  • Colleen Chien, Janelle Barbier, and Obie Reynolds, The AIA at Ten – How Much Does the Pre-AIA Prior Art Regime Still Matter?, 2021 Patently-O Patent Law Journal 34. (Chien.2021.Pre-AIAPatents)
  • Nicholas Shine, Covid-19 Pandemic’s Impact on the U.S. Patent System Through November 2020, 2021 PatentlyO Law Journal 27 (2021) (Shine.2021.COVID-19Impact)
  • Thomas F. Cotter, Is Global FRAND Litigation Spinning Out of Control, 2021 PatentlyO Law Journal 1 (2021) (Cotter.2021.GlobalFRANDLitigation)
  • Colleen V. Chien, Nicholas Halkowski, Maria He, and Rodney Swartz, Parsing the Impact of Alice and the PEG, 2020 Patently-O Law Journal 20 (2020) (Chien.2020.ImpactOfAlice)
  • Paul R. Michel and John T. Battaglia, eBay, the Right to Exclude, and the Two Classes of Patent Owners, 2020 Patently-O Law Journal 11 (2020) (Michel.2020.RightToExclude)
  • Thomas F. Cotter, Two Errors in the Ninth Circuit’s Qualcomm Opinion, 2020 Patently-O Patent Law Journal 1 (2020). (Cotter.2020.TwoErrors.pdf)
  • Jasper L. Tran & J. Sean Benevento, Alice at Five, 2019 PatentlyO L.J. 25 (2019) (Tran.2019.AliceatFive.pdf)
  • Bernard Chao, Implementing Apportionment, 2019 PatentlyO L.J. 20 (Chao.2019.ImplementingApportionment)
  • Jeremy C. Doerre, Is There Any Need to Resort to a § 101 Exception for Prior Art Ideas?, 2019 PatentlyO L.J. 10. (2019.Doerre.AnyNeed)
  • Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
  • David A. Boundy, Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem, 2018 Patently-O Patent Law Journal 20. (Boundy.2018.BadGuidance)
  • Colleen Chien and Jiun-Ying Wu, Decoding Patentable Subject Matter, 2018 PatentlyO Patent Law Journal 1.
  • Paul M. Janicke, Patent Venue: Half Christmas Pie, And Half Crow, 2017 Patently-O Patent Law Journal 13. (Janicke.2017.ChristmasPie.pdf)
  • Paul M. Janicke, The Imminent Outpouring from the Eastern District of Texas, 2017 Patently-O Patent Law Journal 1 (2017) (Janicke.2017.Venue)
  • Mark A. Lemley, Erik Oliver, Kent Richardson, James Yoon, & Michael Costa, Patent Purchases and Litigation Outcomes, 2016 Patently-O Patent Law Journal 15 (Lemley.2016.PatentMarket)
  • Bernard Chao and Amy Mapes, An Early Look at Mayo’s Impact on Personalized Medicine, 2016 Patently-O Patent Law Journal 10 (Chao.2016.PersonalizedMedicine)
  • James E. Daily, An Empirical Analysis of Some Proponents and Opponents of Patent Reform, 2016 Patently-O Patent Law Journal 1. (Daily.2016.Professors)
  • Tristan Gray–Le Coz and Charles Duan, Apply It to the USPTO: Review of the Implementation of Alice v. CLS Bank in Patent Examination, 2014 Patently-O Patent Law Journal 1. (GrayLeCozDuan)
  • Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law Journal 1 (Stoll.2012.estoppel.pdf)
  • Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29.  (Morgan.2011.AIAAmbiguities)
  • Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12 (sarnoff.2011.derivation.pdf)
  • Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent Patent Law Journal 6 (chao.sealedrecords.pdf)
  • Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC):  Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent Law Journal 1 (levi.ftcunsound.pdf)
  • Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent Law Journal 111 (Collins.KingPharma.pdf)
  • Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent Law Journal 95 (matthews.falsemarking.pdf)
  • Kristen Osenga, The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89 (Osenga.pdf)
  • Peter S. Menell,  The International Trade Commission’s Section 337 Authority, 2010 Patently-O Patent L.J. 79
  • Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently‐O Patent L.J. 72
  • Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24
  • Etan Chatlynne, Investigating Patent Law’s Presumption of Validity—An Empirical Analysis, 2010 Patently-O Patent L.J. 37
  • Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24 (Kasdan.Casino.Damages)
  • Dennis Crouch, Broadening Federal Circuit Jurisprudence: Moving Beyond Federal Circuit Patent Cases, 2010 Patently-O Patent L.J. 19 (2010)
  • Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently‐O Patent L.J. 7  (2010) (Reines.2010)
  • Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) (Nominee Diversity)
  • Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1. (Cole.pdf)
  • John F. Duffy, The Death of Google’s Patents, 2008 Patently O-Pat. L.J. ___ (googlepatents101.pdf)
  • Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
  • Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O Patent L.J. 36
  • Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30 (Download Sarnoff.BIO.pdf)
  • John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. (Duffy.BPAI.pdf)
  • Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1 (Casino-Seagate)

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Patent Law Year in Review

Patent

by Dennis Crouch

I just gave a short (45 min) talk about the past year in patent law. See the slides here: Patent Year in Review.  Key points:

  1. Director Review and Ex Parte Lobbying: Exercising the constitutional right to petition the government via shadow request for director review.
  2. Full Scope Enablement and Written Description: Increased focus by both the USPTO and the Federal Circuit.  Pending SCOTUS cases of Amgen v. Sanofi and Juno v. Kite.
  3. Patents as Commodity: Many folks are treating it as such.
  4. Broad IPR Estoppel: CalTech v. Broadcom/Apple.  Pending before the Supreme Court.
  5. Who is the Inventor: AI and Corporation as the inventor.  Thaler v. Vidal cert petition likely in January 2023.
  6. Eligibility: Tropp and Interactive Wearables are not great vehicles for Supreme Court review.  Hopefully IBM petitions its case from IBM v. Zillow.
  7. Patent Venue: Lots still happening in W.D.Tex.  IMO, parties arguing inconvenient venue don’t really care about convenience. Their basic concern is that they want to escape from Judge Albright’s courtroom and raise costs on the patentee.

A Mathematical Model of a Rake

Patent

Janke v. Vidal (Supreme Court 2023)

Some of you may know Oregon patent attorney Garth Janke.  Janke’s new petition for certiorari offers a philosophical inquiry into the scope of patent eligibility.  It all started with Janke’s invention of an improved leaf rake, which the USPTO found patentable. But, Janke also invented a method of manufacture and hit an eligibility roadblock in his attempt to patent aspects of that process.  The following three claims are representative:

  • 1. A leafrake head product, as described above.
  • 21. Installing a mathematical model of the same leaf rake head product defined in Claim 1 on a computer.
  • 26. Applying the mathematical model of Claim 21 on a conventional 3D printer to result in making the same leaf rake head product defined in Claim 1.

The USPTO found claims 21 and 26 directed to abstract ideas and that judgment was affirmed on appeal. Now, Janke has petitioned the US Supreme Court for certiorari with the following two questions:

  • Can a known patentable product become ineligible for patenting when it is claimed to be made by applying a mathematical model of the product on a 3D
    printer?
  • Can it be too much patent “monopoly” to preempt (in practical effect) a mathematical model of a product, as no one is disputing follows from Gottschalk v. Benson, when it is known that it is not too much patent monopoly to pre-empt the real product itself?

Petition.

Protective Orders and Appellate Jurisdiction

Patent

by Dennis Crouch

In the USA, civil litigation typically involves substantial discovery — with each party demanding to see the other side’s secrets.  In patent law, these secrets are often at the core of the business process: product development and manufacturing processes, key product details, detailed market and sales data, etc.  That information may be needed to resolve the infringement litigation, but you could imagine a competitor also using the information for a competitive advantage in the marketplace.

Protective Order: The common solution is a protective order with varying levels of confidentiality.  A number of districts have adopted an automatic protective order that basically fits this scheme.  As one example, the District of Utah Federal Courts automaticaly apply a Standard Protective Order in every case that allows parties to designate materials as CONFIDENTIAL INFORMATION – ATTORNEYS’ EYES ONLY.  The result of that designation is that the information can only be reviewed by attorneys (and perhaps their staff), and cannot be provided to any “competitive decisionmaker.”   In addition to avoiding improper competitive use of litigation, limiting the scope of access also reduces the likelihood that trade secret information will be inadvertently disclosed.

In this situation, parties regularly argue about whether certain in-house counsel can review the material. The recent interlocutory appeal in Modern Font Applications LLC v. Alaska Airlines, Inc., — F.4th — (Fed. Cir. 2022), highlights some of these issues; although the appellate court ultimately determined that it lacked jurisdiction to hear the appeal.

Unlike the competitor-litigation situation I highlighted above, Modern Font and Alaska are not competitors.  Rather, Modern Font is a patent assertion entity that makes its money through licensing IP rights.  Still, Alaksa balked at allowing Modern Font’s in-house counsel to review the source code it disclosed in discovery.  The Utah magistrate judge and district court agreed with Alaska that the Modern Font in-house counsel was a competitive decisionmaker and refused to modify the standard protective order to allow access.  On this point, the court concluded that Modern Font’s key business activity is IP licensing, and the in-house counsel is intimately involved with that activity.  In my view, the court’s interpretation of “competitive decisionmaker” does not seem to fit the limitation’s purpose because there was no sense that the in-house counsel would have any use for Alaska’s source code beyond the context of the litigation at hand.  Certainly, Modern Font is not about to begin competing with Alaska Airlines in any marketplace.  It looks to me that the Utah court used the “competitive decisionmaker” designation as a hook to limit code distribution to outside counsel in order to avoid inadvertent disclosure.  “The risk of inadvertent disclosure outweighs the risk of prejudice to Plaintiff.”

This is a pretty big deal in this case since the content of the code is going to determine whether or not Alaska infringes.  And now in-house counsel will be unable to inspect the accused specimin.  In this case, in house counsel is an experienced and skilled patent attorney who (1) was doing lots of the work in order to reduce litigation costs; (2) is intementely involved with parallel litigation and so has a very good understanding of whether a particular process is infringing; (3) is a key settlement negotiator; and (4) is the key monitor of outside counsel and their handling of the lawsuit.  Those activties will all be significantly hobbled by the protective order, especially considering that Modern Font’s outside counsel trial & appellate team consists of one person – Perry Clegg.

Modern Font appealed the order, but had a major procedural problem: the Final Judgement Rule generally bars appeals of interlocutory orders, such as a discovery order.  There are a number of important exceptions to the Final Judgment Rule:

  1. Partial Final Judgment: This comes up most often when a court issues a partial summary judgment, and the losing party is able to peal-off that portion for immediate appeal.
  2. Rulings on Injunctions: Under 28 U.S.C. 1292(a), a district court’s ruling regarding injunctive relief can be automatically appealed, even if the case is not yet final as a whole. In patent cases, these appeals typically involve preliminary injunctions.
  3. Appeal of Certified Question: Under 28 U.S.C. 1292(b), a district court can certify a question of law for immediate appeal. The appellate then has the discretion to decide whether or not to hear the appeal.
  4. Mandamus: The appellate court can issue an interlocutory writ of mandamus in situations where a district court has clearly abused its discretion causing a major injustice.  For historical reasons, this is not called an appeal but today is effectively treated as an appeal.
  5. Appeal under the Collateral Order Doctrine: This doctrine permits immediate appeal in a small subset of cases where the district court (1) conclusively decides an issue that (2) “resolve[s] important questions separate from the merits” and (3) the decision would be “effectively unreviewable on appeal from the final judgment in the underlying action.” Quoting Swint v. Chambers Cnty. Comm’n, 514 U.S. 35 (1995).

The collateral order doctrine is the only one of these five that fit the situation, and Modern Font appealed under the doctrine.

The Federal Circuit never reached the merits. In a split decision, the appellate court held that it lacked appellate jurisdiction.  In particular, the court concluded that the case failed to meet prong #3 of the Collateral Order Doctrine. I.e., the court concluded that the question (of whether in-house counsel should have access to the code) can wait until after final judgment.  On this point, the appellate decision is extremely weak since an abuse of discretion at the discovery stage will likely be seen as a non-appealable harmless error by the time of final judgment because it does not rise to a due process violation.  Still, the decision fits within the typical approach that appellate courts almost always refuse to hear collateral order appeals of discovery issues.

The majority opinion here was penned by Judge Cunningham and joined by Judge Reyna. Judge Newman wrote in dissent.  Her particular argument focused on the issue of appellate jurisdiction.

Judge Cunningham had concluded that the court lacked jurisdiction since Modern Font’s issue could wait until final judgment.  Judge Newman argued that the court generally has discretionary jurisdiction in situations like this, and the proper question is whether the court should exercise its discretion. “[O]ur authority to review this ruling is not a matter of appellate jurisdiction, but of appellate discretion. . . . [T]he question concerning this particular protective order is within our jurisdiction and subject to our discretion to review and resolve.” Newman in Dissent.

 

Influencing PTAB Judges

Patent

The US GAO (Gov’t Accountability Office) has released its report on the Patent Trial & Appeal Board — providing evidence to support the open secret that (1) political appointees have power to influence PTAB judicial decisions; and (2) most PTAB Judges feel their independence has been impacted by oversight practices. The report calls for increased transparency in PTAB Judicial oversight.

Read the report here:

The next report may need to move one level up and focus on outside lobbying of political appointees and its impact on USPTO decisionmaking.

Chair of the Intellectual Property Subcommittee

Patent

Most of the action in the House of Representatives begins in committees and subcommittees.  Over the past several terms, patent law legislation and USPTO oversight have primarily been handled by the Judiciary Committee, and particularly the Subcommittee on Courts, Intellectual Property, and the Internet, with the subcommittee chair often driving the discussion and proposals.

As Republicans take charge in the House, the new Speaker (along with the Judiciary Chair) will need to also name an IP Subcommittee chair.  There are two leading candidates:

  • Rep. Darrell Issa, a Republican from San Diego, California; and
  • Rep. Thomas Massie, a Republican from Northern Kentucky.

Both Issa and Massie are non-traditional judiciary committee members as neither are attorneys.  However, each has lots of experience in electronics and creating products, and with patents.  Issa asks great questions and is a powerful agency watchdog.  But, Massie is the one that truly believes in patents as an element of a strong libertarian property rights system.  In recent days, USInventor has been lobbying against Rep. Issa and has indicated to me that it would strongly support Rep. Massie.

I remember first hearing Rep. Issa’s voice on vehicle alarm systems back in the early 1990s saying: “protected by Viper, stand back.”  But, it is Massie’s patents that are particularly cool, most of which focus on haptic feedback mechanisms.

 

Are you Smarter than a Law Student? (Civil Procedure Edition)

Patent

The following comes from my 2022 Civil Procedure I Exam. – Dennis

Introduction: Dryson makes a “hair wand” that styles as it dries.  The company also owns a design patent covering the product. In 2021, three different competitors started selling similar products. Dryson is considering suing them all together in a single lawsuit to be filed W.D. Tex. Federal Court. The action would allege both (1) Federal Patent Infringement; and (2) Unfair Competition (based upon Texas state law).  One note, Dryson’s attorneys believes that it has a good claim of Patent Infringement against all three parties, but the Unfair Competition claim would only be filed against two of the defendants.

1. Do the rules permit Dryson to file a single lawsuit that includes all these parties/claims? (Is Dryson required to bring them all together in one action?)

More facts for next question: Dryson filed the action as noted above. One of the defendants (Amaxon) sells the accused product, but does not actually manufacture the product.  Rather, Amaxon sells a product manufactured by Revloon. As part of their deal, Revloon agreed to indemnify Amaxon for any losses if the product turns out to be infringing on intellectual property owned by a third party.

2. The rules of Civil Procedure provide different ways that Revloon could become part of the lawsuit. Identify them and explain how it would work.

More facts for next couple of questions: When Amaxon first started selling the Revloon product, the company conducted a “freedom-to-operate” search.  To this end, Amaxon hired an attorney (Crunch) to opine on whether the knock-off version infringed anyone’s intellectual property rights. Crunch hired a technical expert to search through patent office records. The technical expert created a Technical Report showing several patents and trademarks that were implicated. Crunch then used that Technical Report to draft an Opinion Letter stating that: “Amaxon is infringing Dryson’s IP rights.” Despite the opinion letter, Amaxon decided that the profits were too lucrative and decided to keep selling the product. All of this occurred before Dyson sued or threatened to sue.

Later, during litigation, Dryson submitted a request to Amaxon seeking discovery of documents held by Amaxon that relate to Dryson’s intellectual property.  Amaxon identified  the Technical Report and Opinion Letter as responsive, and added them to its Privilege Log. But, Amaxon indicated that it would not disclose their contents to Dryson.  Dryson is interested in the documents because proof of willful infringement can lead to treble damages.

3. After attempting to negotiate to resolve the discovery dispute, Dryson filed a motion to compel – seeking an order requiring Amaxon to turn-over the two documents. How should the Judge rule?  

4. Assume that the court granted the motion to compel and ordered Amaxon to provide the requested documents. Can Amaxon appeal that order?

5. The case is headed to trial. What information would help you know whether the court will hold a bench trial or a jury trial (explain)?

More facts for next question: Dryson’s product has a problem.  It burns hair. Russell Brand is one of the people injured. Brand is a famous and wealthy comedian.  Although he is English, the incident happened on a trip to Missouri and so he filed suit in St. Louis Federal Court.  Rather than suing just for himself, Brand filed a class-action on behalf of all people whose hair had been burned within the State of Missouri (but excluding anyone whose skin was burned).  The case seeks both an injunction (stop selling harmful products) and monetary damages for hair loss.  Brand’s attorney is a leading class-action litigator and Brand has promised to pay all legal fees from his considerable wealth in pursuit of justice.

6. Should the court certify the class?

USPTO Grants 2022

Patent

The US Patent and Trademark Office (USPTO) issued a total of 359,000 patents in 2022, including 323,000 utility patents. This marks the third consecutive year of decline in the number of issued patents. The 2022 figures show a 1% decrease from the previous year and a 9% decrease from the record-high numbers seen in 2019, as depicted in the chart below.

 

Genentech v. Sandoz: Patents claiming methods of managing side effects found invalid or not infringed

Patent

by Chris Holman

A branded drug manufacturer can sometimes extend its exclusive right to market a drug by patenting a method of using the drug and successfully suing a potential generic competitor for infringement based on the premise that an instruction or warning appearing on the generic product’s label will induce doctors and/or patients to infringe the patent. In some cases, a generic company can skirt infringement by means of a “skinny label” that carves out the patented method, a practice that is the subject of a pending petition for certiorari in Teva v. GSK, as discussed by Dennis in a recent post (see an earlier post for a more detailed discussion of Teva and skinny labels).

In Teva, the drug is approved for the treatment of multiple indications, two of which are unpatented, and the generic company attempted to avoid infringement by carving out (unsuccessfully, absent Supreme Court intervention) an indication covered by the patent.  In a case in which a patent covers a method of using the drug safely, as opposed to a new indication, the skinny label option is generally not available, and the generic product label will be required to closely track the label of the branded product. A remaining option for a generic company facing such a patent is to challenge it in a Hatch-Waxman proceeding and successfully argue that the patent claims are invalid and/or not infringed. An example of this appears in the Federal Circuit’s recent decision in Genentech v. Sandoz.

The active ingredient at issue in Genentech is pirfenidone, marketed by Genentech under the tradename ESBRIET.  Pirfenidone was first studied as an investigational new drug in 1973.   In 2004, the United States Food and Drug Administration (“FDA”) granted pirfenidone orphan drug status for treatment of patients with idiopathic pulmonary fibrosis (“IPF”), a chronic, irreversible lung disease.  In 2008 it was approved for the treatment of IPF in Japan under the trade name of PIRESPA.  Approvals in the European Union and Canada followed in 2011 and 2012, respectively.

When Genentech obtained approval to market pirfenidone (ESBRIET) in the U.S. in 2014, it was granted seven years of orphan drug exclusivity, which expired in 2021.  However, Genentech still holds 19 Orange Book-listed patents purportedly covering ESBRIET. The patents were issued between 2009 and 2014, and expire between 2026 and 2033.

Sandoz submitted Abbreviated New Drug Applications (“ANDAs”) seeking approval from the FDA to market a generic version of pirfenidone, to which Genentech responded by bringing a Hatch-Waxman suit, asserting that Sandoz’s generic product would induce the infringement of five of the Orange Book-listed patents.  The asserted patents do not claim pirfenidone itself, or the use of pirfenidone to treat IPF. Instead, the patents claim methods for managing certain side effects that can occur when using pirfenidone to treat IPF. The patents fall into two categories: the Liver Function Test (“LFT”) patents and the Drug-Drug Interaction (“DDI”) patents.

The LFT patents are directed to methods for administering pirfenidone to a patient who has exhibited abnormal biomarkers of liver function in response to pirfenidone administration. The asserted claims in these patents recite various options, including: (1) temporarily reducing the dose of pirfenidone and then returning to the full dose, (2) maintaining the full dose of pirfenidone, (3) reducing the dose of pirfenidone, (4) discontinuing pirfenidone for a week and then returning to the full dose, and (5) discontinuing pirfenidone for a week and then returning to a reduced dose.

The DDI patents are directed to methods for avoiding adverse interactions between pirfenidone and fluvoxamine, a drug that can interfere with drug metabolism. The three asserted DDI claims involve methods for administering pirfenidone to a patient taking fluvoxamine by either discontinuing fluvoxamine or modifying the dose of pirfenidone and continuing fluvoxamine.

The district court found the LFT patents invalid for obviousness over a 2005 publication reporting the results of clinicals trials involving the use of pirfenidone in patients with IPF (the “Azuma” reference), combined with the PIRESPA label and “known, standard medical practices.”  Prior to reviewing the district court’s analysis, the Federal Circuit noted its:

initial perception that, as the district court noted, varying doses in response to the occurrence of side effects would seem to be a well-established, hence obvious, practice. Thus, claiming it as an invention would appear to be at best a long shot. The district court gave it careful scrutiny, however, as do we.

The Federal Circuit then proceeded to affirm the district court’s obviousness determination, stating that:

The asserted claims in the LFT patents do not represent the invention of a new drug, nor do they recite a novel application of an existing drug. Instead, these claims recite adjusting doses in the presence of side effects, which clinicians routinely do, and which would have been obvious in view of the prior art.

As to the DDI patents, the district court found that although warnings appearing on Sandoz’s proposed label appeared to encourage, recommend, and/or promotes infringement of the patents, there was insufficient evidence of direct infringement. The district court stated that:

Genentech had not shown that any patient would be prescribed both pirfenidone and fluvoxamine such that the methods of the DDI patents would even be relevant. [E]ven if an IPF patient were prescribed fluvoxamine, a physician would likely choose a non-infringing treatment adjustment over any of the claimed methods.

The Federal Circuit affirmed, noting that the evidence of record included testimony from physicians that, in their decades of treating IPF patients, they had never prescribed pirfenidone to an IPF patient taking fluvoxamine; and were they to find themselves in that position, they would choose a noninfringing response—i.e., prescribing nintedanib instead (nintedanib is another drug approved by FDA for the treatment of IPF).

Genentech argued that if an IPF patient needed fluvoxamine, instead of a doctor prescribing nintedanib to treat their IPF, the doctor could prescribe pirfenidone and an alternative to fluvoxamine. However, the court credited Sandoz’s expert testimony to the effect that:

a pulmonologist prescribing pirfenidone would not be able to alter another physician’s prescription of fluvoxamine or take over that aspect of the patient’s treatment. Therefore, the pulmonologist would prescribe nintedanib to be taken in conjunction with the patient’s preexisting prescription of fluvoxamine.

This was a split decision, with Judge Newman dissenting without offering an opinion.

Supreme Court Patent Law 2023

Patent

by Dennis Crouch

Although somewhat slow thus far, there is some potential that 2023 will turn out to be a major year for Supreme Court patent law jurisprudence.

Full Scope Enabling Written Description: The court has granted only one petition, Amgen Inc., v. Sanofi, No. 21-757, with merits briefs due beginning December 27, 2022. Although Amgen presented two questions in its petition, the Supreme Court indicated its interest only in hearing the second:

Whether enablement is governed by the statutory requirement that the specification teach those skilled in the art to “make and use” the claimed invention, 35 U.S.C. § 112, or whether it must instead enable those skilled in the art “to reach the full scope of claimed  embodiments” without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments of the invention without substantial “ ‘time and effort,’ ”

Amgen Petition.  Enablement rejections continue to primarily be found in chem and biotech areas.  This case, for instance, focuses on a functionally claimed monoclonal antibody.  Still, the Federal Circuit has been clear in recent years that the “full scope” requirement applies to all tech areas and both to enablement and written description requirements.   The parallel full-scope written description issue is raised in the parallel case of Juno Therapeutics, Inc., v. Kite Pharma, Inc., No. 21-1566.  Juno’s petition argues that the Federal Circuit’s test goes too far by requiring the original patent filing “demonstrate the inventor’s possession of ‘the full scope of the claimed invention,’ including all ‘known and unknown.'”  Juno Petition.  The Court is holding conference on January 6, 2023 to consider the fate of Juno.  Although petition-stage briefing is complete in Juno, questions raised by Amgen and its amici will hopefully influence the court to simultaneously pick-up this Juno case.  USPTO written description rejections most often occur based upon late-stage claim amendments, and those can happen in any area of technology.  (Note here that often the result is refusal to permit a priority claim resulting in intervening prior art rather than a straight written description rejection.)

Six additional petitions remain pending. Of these, the Court has indicated at least some interest in five (three CVSGs and two additional requests for responsive briefing).  The sixth petition was only recently filed and so the court has not had the opportunity to indicate interest.

Eligibility: Similar to the enablement/WD cases, the eligibility petitions all come from patent holders who argue that their claims were wrongly invalidated.

  • Interactive Wearables, LLC v. Polar Electro Oy, No. 21-1281 (System for displaying media information while simultaneously experiencing the media content).
  • Tropp v. Travel Sentry, Inc., No. 22-22 (method of using a luggage lock with a master key held by TSA for airport security).

Both of these cases argue that the Federal Circuit has taken Alice Corp., too literally and in a way that is limiting the patentability of traditionally eligible subject matter.  Also in both, the Supreme Court has asked for views of the Solicitor General (CVSG) and will very likely await that filing before deciding whether to grant or deny certiorari. In my view, the Interactive Wearables claims are much stronger because they recite an arguably novel device. See, US9668016.  It will be interesting to see whether the SG splits hairs or simply refiles a version of its American Axle brief supporting certiorari.

Skinny Label: Although it involves a fairly narrow issue, the pending case of Teva Pharms. v. GlaxoSmithKline LLC, No. 22-37, has a good chance of being heard by the Court, although it may be better for Congress to work to resolve the pending questions.  The basic issue here involves a generic drug with several medical treatments.  Some of the treatments are covered by method-of-use-patents while other treatments are no longer patented.  Teva has been selling the drug for the non-patented uses, and the question is whether the FDA-approved drug label that purported to carve-out the patented actually encourages infringement.  Question presented:

If a generic drug’s FDA-approved label carves out all of the language that the brand manufacturer has identified as covering its patented uses, can the generic manufacturer be held liable on a theory that its label still intentionally encourages infringement of those carved-out uses?

Teva petition.  The Federal Circuit held that the drug label could induce infringement, even though FDA approved it.  In my view, the generic manufacturer here has a very strong estoppel defense because the patentee itself proposed the language used on the generic label.  That defense has not yet been considered at the district court.  As with the eligibility cases, the Supreme Court has asked for the views of the Biden Administration in this case as well.  Although the SG’s views have often been important in guiding certiorari grant/denial, it is unclear to me what influence Solicitor General Prelogar’s statements will have on the strongly conservative court.

Estoppel and Procedure: The remaining three pending petitions all relate to some form of estoppel or procedure.

  • Apple Inc., et al. v. California Institute of Technology, No. 22-203.  Following  an inter partes review, the petitioner is estopped from re-raising validity arguments that “reasonably could have been raised during that inter partes review.”  Apple lost the IPR against CalTech’s patent and wants to raise additional defenses in the district court litigation.  Apple has argued for a very narrow interpretation of the 315(e) estoppel while the Federal Circuit broadly interpreted the statute.
  • Jump Rope Systems, LLC v. Coulter Ventures, LLC, dba Rogue Fitness, No. 22-298. This case focuses on the doctrine of collateral estoppel and asks whether the Federal Circuit is correct that “a determination of unpatentability by the Patent Trial and Appeal Board in an inter partes review proceeding, affirmed by the Federal Circuit, has a collateral estoppel effect on patent validity in a patent infringement lawsuit in federal district court.”  In other parallel scenarios, there would be no collateral estoppel because the first decision (invalidity at PTAB) is judged with a lower preponderance-of-the-evidence standard as compared with the later district court case that requires clear-and-convincing-evidence.
  • Innovation Sciences, LLC v. Amazon.com, Inc., No. 22-554.  This final asks the Supreme Court to reinvigorate its old precedent requiring contemporary corroboratory evidence in order to invalidate a patent based upon prior art.

These final three cases are all in the petition briefing stage.  They could still be heard and decided by June if the Court quickly grants certiorari.  However, it is increasingly more likely that the briefing would extend over the summer.

Three more petitions likely coming soon:

  • Thaler v. Vidal (patentability of AI-created inventions)
  • Novartis v. HEC. (Written description and changed panel composition)
  • Wakefield v. Blackboard (pro se; indefiniteness of means-plus-function claim for failure to disclose corresponding algorithm in the specification)

Reasonable Stories of Inventorship

Patent

by Dennis Crouch

Patents filed before March 2013 are examined using the pre-AIA rules of patentability, including 35 U.S.C. 102(f):

A person shall be entitled to a patent unless — (f) he did not himself invent the subject matter sought to be patented.

35 U.S.C. § 102(f).  Under this old law, an accused infringer was able to assert a defense of invalidity if the issued patent fails to name the correct inventors.

In 2020 Plastipak sued its competitor Premium Waters for infringing a collection of twelve related patents covering the “neck finish” of a plastic bottle. The neck-portion is more costly and the inventions here generally allow for a reduced neck size while still including tamper-evident formations. Plastipak Packaging, Inc. v. Premium Waters, Inc. (W.D. Wis. Aug. 19, 2021) reversed on appeal in Plastipak Packaging, Inc. v. Premium Waters, Inc., — F.4th — (Fed. Cir. Dec. 19, 2022).

The patents list two inventors, Richard Darr and Edward Morgan.  But, on summary judgment the district court concluded they should have listed a third inventor, Alessandro Falzoni.  Usually it is no problem for a company to add additional inventors – even after the fact.  Here, though Falzoni was not a Platipak employee or subject to any agreement to assign rights, and so shared inventorship would mean shared ownership with an industry competitor.

What happened: Falzoni designed an improved neck while working for his Italian packaging company SACMI.  SACMI then proposed the design to various US parties, including Plastipak.  As part of that process, Falzoni emailed a 3D model of the design to Darr.  Darr responded with a finished drawing using the Falzoni model; and Falzoni found those drawings acceptable.  Darr asked for SACMI exclusive rights to the design, but, the parties could not agree on a deal. Eventually, Plastipak ended up filing for its own patent rights and manufacturing using alternate sources.

Taking all this in, the district court concluded that Falzoni had contributed significantly to the claimed invention and therefore should have been listed as an inventor. Since he was not listed, the claims were all invalid. Plastipak Packaging, Inc. v. Premium Waters, Inc. (W.D. Wis. Aug. 19, 2021).

The figure above compares the Falzoni design with that found in Plastipak invention (Fig 2).  The prior art being overcome is found in the middle (Fig 1).

In making its ruling, the district court focused on three primary factors: the “striking similarities” between Plastipak’s engineering drawings and the Falzoni design; the collaboration between Falzoni and Darr at arriving at the invention; and the  financial motivation to exclude Falzoni that made an “honest mistake” unlikely.

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On appeal, the Federal Circuit has vacated, holding that the case was not quite as open-and-shut as the district court claimed.  Although the evidence seems to suggest Falzoni is an inventor, the patentee has a right to a jury trial on this issue because there remain disputed issues of material fact.  In particular, the size of the neck appears to be the critical improvement here, but the patentee raised disputes about the size of Falzoni’s proposed neck.

Ultimately, we agree with Premium Waters that it presented sufficient evidence from which a reasonable factfinder may find clear and convincing evidence that Falzoni was a joint inventor of the X Dimension Patents. Such a finding could be grounded in Falzoni’s testimony, as corroborated by the 3D model and the testimony of another SACMI employee, as well as the arguably suspicious timeline, in which the collapse of Plastipak’s efforts to license SACMI’s ML27 design was quickly followed by Darr and Morgan filing their patent application. Such a finding could lead to the conclusion that the X Dimension Patents are invalid for failure to name Falzoni as an inventor. Crucially, however, nothing in the record requires a reasonable factfinder – particularly one who is resolving all fact disputes, and drawing all reasonable inferences, in Plastipak’s favor – to make these necessary findings. Accordingly, summary judgment of invalidity is not warranted.

Slip Op.

The court goes on to hold that “overwhelming evidence” of joint inventorship is not necessarily enough for summary judgment.  The question instead is whether a reasonable juror could find independent inventorship.  The appellate court also noted that the district court erred in failing to believe the Plastipak testimony.  While the appellate court appeared to agree that a Plastipak’s story of independent invention appeared concocted, the issue of credibility is for the jury to decide.

On remand, the case might still not get to a trial — the district court had not decided all of the summary judgment motions because it found this one dispositive.

Question for you: How do you think a court should handle a similar inventorship issue post-AIA?

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Christopher Dillon (Fish & Richardson) argued for the patentee Plastipak.  Jeffrey Costakos (Foley & Lardner) represented Premium Waters. Both lawyers led their respective trial and appellate teams.

Smart Wallets and Measuring Credibility of the Prior Art

Patent

by Dennis Crouch

“Smart wallets” are growing in popularity.  I have one branded FIDELO with a  carbon-fiber case that claims to block scammers trying to read the chip on my credit card.  I think of these generally as “smart wallets” but I learned today that the company Storus has a registered trademark for that term. What should I call them now?

Mosaic Brands, Inc. v. Ridge Wallet LLC, — F.4th — (Fed. Cir. 2022).

In 2020, Storus (AKA “Mosaic Brands”) sued Ridge Wallet for both patent infringement (US7334616) and product-design trade dress misappropriation.  Ridge counterclaimed with its own patent infringement contentions (US10791808, Fig 11 shown above).  The district court denied all the claims pre-trial.

  • Summary Judgment: Mosaic ‘616 patent was not infringed based upon a somewhat narrow claim construction.
  • Summary Judgment: Mosaic lacked product design trade dress rights.
  • Summary Judgment: Ridge ‘808 patent was invalid as anticipated.

On appeal, the Federal Circuit has sided with Ridge: Affirming that Mosaic has no case and vacating the anticipation summary judgment in Ridge’s favor.  On remand, the case should proceed to trial on the infringement counterclaims Ridge brought against Mosaic.

Is it Prior Art?: From a patent law standpoint, the most interesting part of the appellate decision focuses on anticipation and the basic patent-law game show question “Is it Prior Art?”

The purported prior art to the Ridge patent is a product manufactured and sold by Mosaic at a trade show.  The district court compared the asserted claims of Ridge’s US10791808 against the Smart Money Clip II (SMCII) and found each and every limitation embodied by the product. Mosaic presented testimony of its founder (Kaminski) that the SMCII product was on-sale more than 1-year before Ridge’s application filing date.  Mosaic also corroborated that testimony with invoices showing the SMCII was sold at a trade show in 2011.

On appeal, the Federal Circuit concluded that the evidence presented was sufficient for a jury to find anticipation.  But, the procedural problem here is that the district court superseded the jury and instead decided the case on summary judgment. In particular, the jury must decide whether the admittedly biased testimony is credible and whether the documents are authentic, taking into account the high standard of clear and convincing evidence.

While the District Court correctly concluded that the evidence was sufficient to satisfy the corroboration requirement, the District Court erred by proceeding to grant summary judgment of anticipation. Finding that Mosaic presented legally sufficient evidence to corroborate the inventor’s testimony does not necessarily mean that Mosaic’s evidence would also lead every reasonable factfinder – taking the evidence in the light most favorable to Ridge, as the non-moving party – to find by clear and convincing evidence that the SMCII does, in fact, predate the ’808 patent’s critical date. . . . Before the anticipation issue presented in this case can be resolved, a factfinder will have to evaluate the credibility and persuasiveness of the evidence of corroboration and make its own judgment as to whether Mosaic has proven, clearly and convincingly, that the SMCII is prior art to Ridge’s ’818 patent.

Slip Op.  To be clear, this opinion does not shut the door on anticipation summary judgment. But, for over 150 years the courts have hotly questioned and challenged  the credibility of self-serving prior art that first comes to light during the litigation.  The gold standard is always published documents (including patents and patent applications).

A patentee wanting to avoid summary judgment on witness credibility or document authenticity issues will need to provide some showing of a material dispute that creates reasonable doubt. But, because the patent challenger has such a strong burden of proof, the patentee’s showing does not require the presentation of contradictory evidence. Rather, it can be sufficient to simply present logical holes sufficient to create some reasonable doubt.

The District Court appears to have based its summary judgment decision, at least in part, on its belief that Ridge produced no affirmative evidence challenging Kaminski’s testimony. This was not consistent with our precedent, which holds that affirmative evidence is not always necessary in order to create a genuine dispute.

Slip Op.  Here, the patentee argued (1) the documents could have easily been backdated; (2) a lack of images of the SMCII from 2011; (3) a lack of any further documented sales; (4) a lack of meta-data associated with the provided documents showing their provenance; (5) Kaminski’s financial motive to misrepresent the information; and (6) the absence of any third-party corroborating evidence.  The patentee also presented some affirmative evidence — testimony that nobody had heard of Mosaic until 2019.  The appellate panel found these holes sufficient to create a dispute of material fact and thus avoid summary judgment:

Under these circumstances, Ridge is entitled to an opportunity to cross-examine Kaminski, in order to allow the factfinder to evaluate his credibility and the related issue of the authenticity of the corroborating documentary evidence. If the factfinder were to find that Kaminski is not credible, and that the documents on which Mosaic relies are not authentic, the record would then lack the requisite corroborating evidence and Mosaic would be unable to meet its clear and convincing burden.

Slip Op.  As an aside, I’ll note that that decision relates directly to the recent petition for writ of certiorari filed in Innovation Scis., LLC v. Amazon.com, Inc. (Supreme Court 2022)

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I won’t go into this here, but the Federal Circuit opinion includes a discussion of product design trade dress. The court affirmed that the trade dress rights are invalid because the product design is functional.