Today in Patent Law Class: Markman v. Westview Instruments

Patent

by Dennis Crouch

Today in Patent Law Class, we covered the Supreme Court’s important decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) focusing on the question of whether the patentee has a 7th Amendment right to have a jury decide “genuine factual disputes about the meaning of a patent?”  The Supreme Court’s answer: No, although claim construction might involve underlying factual determinations, the doctrine is ultimately a question of law best decided by a judge.  Id.  Twenty years later, the Supreme Court reiterated these same principle in Teva Pharm. USA, Inc. v. Sandoz, Inc., 574 U.S. 318 (2015) (holding that, underlying factual findings should be given deference on appeal).

The underlying patent (RE33,054) was directed to an inventory control system for a drycleaner.  A jury sided with the patentee and found infringement, but the district court rejected the verdict. Rather, the district court awarded Judgment as a Matter of Law to the defendant on grounds of non-infringement.  The district court particularly considered the claim term “inventory” and construed that term to be tied to individual articles of clothing–as would be necessary to satisfy the claimed inventive result to “detect and localize spurious additions to inventory.”  Under that construction, the defendant could not infringe because its system tracked transactions rather than articles of clothing, and each transaction might include multiple articles.  On appeal, the Federal Circuit issued an in banc affirmance.  Then on certiorari, the Supreme Court also affirmed.  This double affirmance means that the Federal Circuit’s decision also continues to have precedential merit.  Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995), aff’d, 517 U.S. 370 (1996).

The law-fact divide is an important feature of complex civil litigation procedure — especially patent law.  The importance arises in several different contexts.  In Markman, the question was “who decides” judge or jury; In Teva, the question was appellate deference to district court fact finding; In Microsoft Corp. v. I4I, Justice Breyer explained that the law-fact divide is important for burdens of proof since burdens such as clear-and-convincing-evidence only apply to factual findings and no such burden is associated with issues of law. Microsoft Corp. v. I4I Ltd. Partn., 564 U.S. 91, 114 (2011) (Breyer, J, concurring). In addition, the evidentiary standards tied to the Federal Rules of Evidence applies to issues of fact, and does not (necessarily) bind the inquiry into questions of law.  Thus, in deciding a question of law, a court may consider information that might not be available to a jury when deciding a question of fact.

The Markman hearing quickly became a popular process for district courts to receive argument and evidence before construing the claims (often resulting in summary judgment). Because of their popularity, Markman is – by far – the most cited Supreme Court patent case of the 1990s.   Markman hearings show how timing is also important for the law-fact divide.  Claim construction is decided before trial; leaving juries regularly being seen as irrelevant to questions of infringement and anticipation.  This is especially true when parties craft their proposed claim construction to hone-in on the ultimate questions of infringement or validity.

To support its conclusion that the 7th Amendment does not require a jury trial to decide factual disputes about the meaning of a patent, the Supreme Court first looked to history.  The court suggested that historical preservation analysis is the best approach since the 7th Amendment requires that “trial by jury shall be preserved.”  This amendment was part of the Bill of Rights ratified in 1791 and so the court generally looks back to that time for its historic preservation analysis.  The problem though is that 1791 (and prior) patents did not include claims, and so there was no relevant historic answer as to who decides claim scope. The court then looked to precedent–citing a number of 19th century cases and treatises reflecting that claim construction was a judicial function.  And, the court also concluded that giving the authority to judges would get better results, since judges are better at construing legal documents than juries, and also lead to more uniformity of law.

In Markman, we learned that it is the judge’s role to construe the claims, but courts continued to argue for the next decade+ about claim construction methodology and procedure.  The proposed uniformity was lacking.  In my view, the uniformity has now largely been realized, at least within the court system, once Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) was decided and the dust settled.

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Written Description as a Subset of Novelty and Nonobviousness

Patent

by Dennis Crouch

Zahner Design Group v. Vidal (Supreme Court 2022)

D746,078 (Patent being litigated)

Zahner’s Design Pat. D746,078 covers the ornamental design of a shower curtain as shown in the figures above.  Zahner sued Katri Sales for infringement, and the defendant turned-around and filed a request for ex parte reexamination. The examiner found some great prior art from 2013, which predates this particular design application filing date. But, the design patent also claimed priority to Zahner’s prior utility patent application (Serial No. 09/617,402) that predates the reference. The utility application includes a number of drawings that are similar-to, but not exactly the same as those in the Design Patent. (Images below).

The basic question in the case then was whether the priority drawings provide sufficient written description support for the eventual design as claimed.

09/617,402 (Priority filing)

The PTAB found the design claim was not sufficiently supported by the priority disclosure and so the priority claim was invalid.  And, without the priority claim, the invention had become obvious by the time of the later actual filing date. The basic problem, can be seen in the design patent’s perspective view shown below.   The perspective shows that the inner surface of the aperture is flat and with right-angled edges.  According to the PTAB, those features are new to the design patent and not disclosed by Figure 21 of the priority filing.  On appeal, the Federal Circuit affirmed without opinion.

Close-up of the Design Patent drawing

Zahner disagrees with the merits of the decision here, but has also suggested that it will raise procedural challenges in an upcoming petition for writ of certiorari.  In particular, Zahner intents to raise the same question that Arthrex will likely raise, although this time in the reexamination context:

Question: Does the Reexamination Statute permit a challenge to priority claims?

Zahner has also argued that its situation is particularly egregious because the priority question was particularly addressed by the examiner during the original prosecution.  That is important because reexaminations are limited to “new” questions of patentability.

After receiving the R.36 no-opinion affirmance, Zahner filed a petition for panel rehearing that included the following line: “A written opinion on this issue is respectfully requested.”  The Federal Circuit though denied the petition without opinion.   This situation thus raises the issue I addressed in my 2017 paper titled Wrongly Affirmed without Opinion. In that paper, I argue that these no-opinion judgments are contrary to the statutory requirement of Section 144 requiring the court to issue an opinion in appeals from the PTO. Although this argument has been raised in dozens of cases, the court has not yet responded to the argument, and the peculiar procedural setup allows this status quo.  In a recent request for extension of time, Zahner indicated to the Supreme Court that it also plans to raise the no-opinion question.

I mentioned Arthrex above, its petition to the Supreme Court will be due in November 2022.  In its failed petition for rehearing on the IPR-priority issue, Arthrex asked the following question:

Whether 35 U.S.C. § 311(b)’s restriction “only on a ground that could be raised under section 102 or 103” permits IPR challenges that depend solely on compliance with the written description requirement of section 112.

Arthrex en banc rehearing petition.

Has Eligibility become Quixotic?

Patent

by Dennis Crouch

In re: Janke, Docket No. 22-1274 (Fed. Cir. 2022) (R.36 Judgment)

Mr. Garth Janke is a former HP engineer and now a patent attorney at Garth Janke LLC.  Janke is also an inventor. Most recently, he has been pursuing patent protection on his clog-free leaf rake.  His Dulcinea. I live in a forest and have a basic rule against raking or blowing leaves–otherwise my grass would grow and then I would need to mow. But, to each his own.

Janke’s invention can be seen in the two drawings above. The Fig. 1 is a traditional prior art rake. Janke’s improvement is shown in Fig. 3. The improvement is to put a hole toward the end of each rake-tine.  A user can thread a string-trimmer line through the holes to help prevent leaf-clog.  Janke’s claim 1 is directed at a rake with holes through the tines. And he did a nice job of making clear to everyone “the holes through the tines are the only thing about the product of Claim 1 that is new.”

But, Claim 1 isn’t at issue in this appeal. Rather, the appeal focuses on the steps of constructing the rake, which the PTAB concluded lacked eligibility.  Claim 21 is directed to putting a 3-d model of the rake on a computer; Dependent claim 26 is adds a step of actually building the rake by printing-out the model using a 3D printer.

21. A process for enabling a clog-resistant feature in a hand-held leaf rake, comprising installing a first mathematical model on a computer [that represents the rake with holes in the tines].

26. The process of claim 21, further comprising applying the first mathematical model on a commercially available 3D printer to result in transforming the first mathematical model into a real leaf rake head product as defined by the first mathematical equations.

The procedure of the case is a bit wonky. Janke agreed with the examiner and the PTAB that the claims lacked eligibility under Section 101 – as interpreted by the Supreme Court.  The PTAB thus complied and affirmed the examiner rejections.  Janke then brought his appeal to the Federal Circuit, again beginning with an opening statement against his interest:

Appellant agrees with the Patent Office that the Claims 21-35 on appeal fall within the judicial exceptions to the 35 U.S.C. § 101 statutory allowances for patent-eligibility arising from Gottschalk v. Benson and Parker v. Flook.

The brief went-on to argue that two decisions are wrongly decided because and that they create a difficult threshold problem.  Representing himself, Janke asks the Federal Circuit to answer the following question:

Starting with the mathematical model itself, i.e., the “first” mathematical model of the leaf rake head product recited in Claim 21, then considering the additional limitation in Claim 21 of installing the model on a computer, then considering the additional limitation in Claim 26 of applying the model on a 3D printer to result in making the product, and finally considering Claim 1 to the product itself, when does the claimed subject matter become patent eligible and why?

Janke Appellate Brief.  On appeal, the Federal Circuit did not bite, but rather has simply issued another Rule 36 Affirmance without opinion.  I expect Janke will climb back on Rocinante and continue his fight to the the Supreme Court.

Where’s Waldo: Global Discovery and Finding a Corporation

Patent

by Dennis Crouch

This post is about using U.S. Courts to obtain discovery in order to facilitate foreign litigation; with the pending global litigation between Eli Lilly and Novartis serving as our key example.

In 1938, the Federal Rules of Civil Procedure were adopted in the U.S., including powerful and expansive procedures for automatic disclosures and forced discovery.  The standard today is that prior to trial the litigating parties will share “mutual knowledge of all relevant facts.”  Hickman v. Taylor, 329 U.S. 495 (1947).  We do this through various required disclosures as well as requests for documents & admissions, depositions & interrogatories.  But, the U.S. is an outlier.  Although most international civil courts offer some access to discovery, no other country has as extensive or powerful of a process.   Italian law, for instance, has no obligation of discovery absent a specific court order.

Eli Lilly and Novartis are in the midst of complex European patent and competition (antitrust) litigation regarding their competing monoclonal antibody drugs used to treat autoimmune symptoms such as psoriasis and arthritis.  The cases are pending in Ireland, Italy, and Austria; with a German action already settled.  In each of these cases, Novartis is the plaintiff asserting patent infringement.  One quirk is that the Novartis patents were not developed alongside the company’s Cosentyx product.  Rather, Genentech held the patents and was actually looking to enforce them against both Novartis and Lilly.  In 2019/2020, Novartis purchased the portfolio from Genentech, took over prosecution of the pending cases (including some US applications) and started its enforcement campaign.

Lilly has argued that Novartis’ approach violates European competition laws.  Part of what is going-on is that Novartis was trying to challenge the patents when they were held by Genentech–arguing  invalidity at the time.  Novartis changed its tune once it became the owner.  In order to build its case, Lilly wants Novartis to turn-over its internal documents relating to its prior-opposition and subsequent purchase of the patents, including the actual Purchase Agreement.

If the lawsuits were pending in the U.S., a court would almost certainly compel discovery because the request appear to seek relevant information (absent an appropriate privilege or work-product exception).  BUT, the litigation is in Europe where discovery is much less powerful.  So far, Novartis has refused to produce the requested documents, such as the Purchase Agreement.

In 2021, Lilly brought the case to the U.S. with a petition in the E.D.Va. seeking “leave to obtain discovery for use in foreign proceedings.”  This type of application is authorized by Congress in 28 U.S.C. § 1782(a).

(a) The district court [where] a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal. . . . The order may be made . . . upon the application of any interested person.

Id.  The 1728 statutory provision has a key geographic limitation. The district court can only compel discovery from a person who “resides or is found” within the district.  Id.  Novartis is a Swiss company and so seemingly “resides” over there.  And, according to the 4th Circuit, a corporation can be “found” only in locations where its physical presence is shown “by its officers and agents carrying on the corporation’s business.” In re Eli Lilly and Co., 37 F.4th 160 (4th Cir. 2022).  Thus, the 4th Circuit concluded that 1782 does not authorize discovery E.D. Va.

In 2018, the 2nd Circuit interpreted the same provision and concluded that “resides or is found” should be more broadly interpreted to extent to the scope allowed by personal jurisdiction due process limitations.  In re del Valle Ruiz, 939 F.3d 520 (2d Cir. 2019).  If you recall International Shoe, personal jurisdiction includes “purposeful availment” leading to specific jurisdiction.  Here, specific jurisdiction likely works because Novartis has been prosecuting the offending patent family at the USPTO, which is located in the E.D. Va.  See Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343 (Fed. Cir. 2002) (“Obtaining such a patent is a meaningful contact with the United States; it requires a patentee purposefully to avail him or herself of a significant benefit of United States law.”).  That ongoing prosecution is arguably related to the European patent and competition litigation.  The 4th Circuit noted a second problem–the statute provides discretionary authority (“the district court … may order …”), and here discretion was properly denied.

Lilly has not yet filed its petition for writ of certiorari, but started the process with a request for extension of time that was granted by Chief Justice Roberts.  As is common, Lilly set out some aspects of its case within the request:

On appeal, the Fourth Circuit created a split of authority by holding that the word “found” means that the corporation must be “physically present by its officers and agents carrying on the corporation’s business.” The opinion conflicts with the Second Circuit’s decision in In re del Valle Ruiz, 939 F.3d 520 (2d Cir. 2019), which is the only other circuit court decision to have considered this issue.

Lilly Application for Extension.

A Corporation’s legal location has been in-flux for a number of years with several Supreme Court cases narrowing the scope to basically the corporation’s state of registration.  But, in my view, Section 1782 has the feel of a venue statute, rather being jurisdictional. One clue to that is the limit to the particular district rather than state. Another clue is that by 1948 (when this statute was originally passed) personal jurisdiction was recognized by as guided by the Constitution rather than federal statute.  The venue angle is important because Congress has spoken about the definition of “resides” in the context of venue:

(c)Residency.—For all venue purposes— (2) an entity with the capacity to sue and be sued … shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.

28 U.S.C. § 1391(c).  The petition for certiorari in the 4th Circuit case will be due in December.

There is one more pending case on the same issue with the same parties–this one in the 9th Circuit. Lilly filed a parallel application in the Northern District of California seeking discovery from the third party Genentech.  Novartis intervened in that litigation to try to block discovery, but was unsuccessful. As such, Genentech turned over some amount of information, such as the price Novartis paid.

Have you ever tried to put a cat in a bag? Once the cat is out, it is not going back in.  Information is the same.  Novartis has appealed the N.D. Cal. order, but it can’t exactly ask for the information to be totally excised. It doesn’t work that way.  Rather, Novartis is seeking a court order to prevent anyone who has learned of the purchase price from participating in any subsequent license negotiations between Lilly and Novartis, or at least an order prohibiting the use of the purchase price in any subsequent global license negotiations.  This would be pretty powerful since the folks who are working on the litigation have some of the best information about the patents themselves.  The district court denied Novartis’ motion for a protective order, but that has been stayed pending appeal.  Oral arguments in the 9th Circuit are set for November.

= = =

Katherine Helm and her team at Dechert is representing Lilly in the US litigation, including the Supreme Court briefing.  Willy Jay and his team at Goodwin represents Novartis.

Litigation Blackmail: Sanctions for Gaming IPR System

Patent

by Dennis Crouch

OpenSky Indus v. VLSI, IPR 2021-1064 (Before Dir. Vidal)

Stepping-in like a court of equity, Dir. Vidal today issued a Precedential Order finding that OpenSky had abused the IPR process.  OpenSky filed its IPR petition soon after VLSI won a $2 billion judgment against Intel.  At that point though, OpenSky offered to work on behalf of either VLSI or Intel. Essentially, asking for some pay-off to either continue its challenger or to bow-out. Dir. Vidal writes:

I determine that OpenSky, through its counsel, abused the IPR process by filing this IPR in an attempt to extract payment from VLSI and … Intel, and expressed a willingness to abuse the process in order to extract the payment. OpenSky’s behavior in this proceeding is entirely distinguishable from conventional settlement negotiations that take place in an adversarial proceeding. I also find that OpenSky engaged in abuse of process and unethical conduct by offering to undermine and/or not vigorously pursue this matter in exchange for a monetary payment. Taken together, the behavior warrants sanctions to the fullest extent of my power.  . . . The conduct of the individual attorneys in this case might also rise to the level of an ethical violation under the rules of their respective bars

Vidal Precedential Order.  As a sanction, the order excludes OpenSky from participating and also demands that OpenSky “show cause” as to why it should not be ordered to pay damages and attorney fees to VLSI.

Great work Dir. Vidal.

When Does Disclosure of a Chemical Genus Anticipate a Species?

Patent

by Chris Holman

Mylan Pharms. Inc. v. Merck Sharp & Dohme Corp., 2022 WL 4541687 (Fed. Cir. Sept. 29, 2022)

As a general rule of thumb, the prior art disclosure of a chemical species anticipates (and thus renders unpatentable) a chemical genus encompassing that species. The prior art disclosure of a chemical genus, on the other hand, generally does not anticipate a species falling within the scope of the genus – except when it does.  In re Petering, 301 F.2d 681 (C.C.P.A. 1962), decided by the Court of Customs and Patent Appeals (the predecessor of the Federal Circuit) in 1962, provides an example in which the court holds that prior art disclosing a genus of 20 chemical compounds anticipated a species falling within that genus. The Petering court explained that the prior art may be deemed to disclose each member of a genus when, reading the reference, a person of ordinary skill can “at once envisage each member of this limited class.”

Mylan v. Merck provides an example going the other way, with the Federal Circuit affirming a Patent Trial and Appeal Board decision finding that the prior art disclosure of a genus comprising 957 predicted salts did not anticipate the following claim, which recites one of those salts.

  1. A dihydrogenphosphate salt of a 4-oxo-4-[3-(trifluoromethyl)-5,6-dihydro [1,2,4]triazolo[4,3-a]pyrazin-7(8H)-yl]-1-(2,4,5-trifluorophenyl)butan-2-amine of Formula I:

or a hydrate thereof.

The claimed salt is sitagliptin dihydrogenphosphate (“sitagliptin DHP”), a dipeptidyl peptidase-IV (“DP-IV”) inhibitor and the active ingredient in JANUVIA, which is marketed by Merck for the treatment of non-insulin-dependent (i.e., Type 2) diabetes.  Mylan petitioned for inter partes review (IPR) of a number of patent claims of U.S. Patent 7,326,708 (the “’708 patent”), including the independent claim presented above, as part of its bid to bring a generic version of JANUVIA to market prior to expiration of the patent. Mylan argued that the challenged claims were anticipated and/or rendered obvious by the disclosure of the genus of 957 salts in an earlier Merck-owned U.S. patent and its equivalent International Patent Publication (referred to collectively as “Edmondson”).

In particular, Mylan argued that under In re Petering Edmondson’s disclosure of the genus anticipated the challenged claims because a skilled artisan reading Edmondson would “at once envisage” the sitagliptin DHP salt. But the Board rejected this argument, finding that none of the challenged claims were anticipated by Edmondson. The Federal Circuit affirmed, finding that while In re Petering does stand for the proposition that a skilled artisan may “at once envisage each member of [a] limited class,” the “key term” in this statement is the word “limited.”  The court found that the genus of 957 salts disclosed in Edmondson is a far cry from the 20 compounds “envisaged” by the narrow genus in Petering.

The Federal Circuit went on to explain:

We cannot provide a specific number defining a “limited class.” It depends on the “class.” But we agree with Merck and hold that the Board did not err in finding that a class of 957 predicted salts[, as disclosed in Edmondson,] is insufficient to meet the “at once envisage” standard set forth in Petering.

The manner in which Edmondson discloses the genus probably had some bearing on the outcome. Edmondson does not explicitly define a genus of 957 salts. Instead, Edmondson discloses a list of 33 compounds, one of which was sitagliptin.  It also discloses eight “preferred salts,” one of which was phosphate, the salt used in sitagliptin DHP.  The product of multiplying 33 x 8 is 264, so there are at least 264 possible combinations of the 33 chemical compounds with the eight salts. But there are also possible differences in stoichiometry, i.e., the ratio of the salt’s ions. For example, the stoichiometry of the claimed sitagliptin DHP is 1:1, i.e., a 1-to-1 ratio of sitagliptin to phosphate.  However, other stoichiometry’s are possible.  For example, Merck was also able to prepare sitagliptin phosphates having stoichiometries of 3:2 and 2:1. Taking into account the various possible stoichiometries, the court accepted Merck’s representation that the 33 compounds could potentially be formulated into a total of 957 different salt forms using the eight preferred salts.

Of course, the fact that Edmondson does not anticipate the claims does not necessarily mean that it would not render them obvious, particularly in combination with other prior art references. In this case, however, Edmondson could not be used as a prior art reference for purposes of obviousness with respect to a number of the claims at issue in the IPR, including Claim 1. In a nutshell, the reason for this was that under pre-AIA 35 U.S.C. 103(c)(1) Edmondson could not be used as 102(e)/103 prior art because Edmondson and the challenged patent were both owned by Merck, and Merck was able to antedate Edmondson as a 102(a)/103 reference with respect to Claim 1 and some of the other claims at issue.

Merck was not able to antedate Edmondson with respect to some of the other challenged claims, including Claim 4, which depends from Claim 1 and recites a crystalline monohydrate form of the (R)-enantiomer of sitagliptin DHP.  I think it is safe to assume that Claim 4 corresponds to the proposed generic product, given that in Canadian proceedings (discussed below) Mylan stipulated that its product would infringe the Canadian equivalent of Claim 4. The Board addressed the merits of Mylan’s assertion that Edmondson (in combination with other prior art) rendered Claim 4 obvious, and concluded that it did not. The Federal Circuit affirmed this conclusion.

This past April, a Canadian court issued a decision finding the Canadian equivalent of Claim 4 not invalid for obviousness and/or insufficiency (i.e., lack of enablement).  Significantly, the Canadian Court found that “[t]he evidence indicates that the [skilled artisan] would not have any specific motivation arising from [Edmondson] to focus on the particular crystalline form of a salt of sitagliptin over the other compounds disclosed within [Edmondson].”

Last month, Merck announced that the U.S. District Court for the Northern District of West Virginia had found the ‘708 patent not invalid and infringed in a Hatch-Waxman infringement suit brought against Mylan (which is now a part of Viatris).  I tried to take a look at that decision, but found that it had been filed under seal.  The case is being appealed to the Federal Circuit, and it will be interesting to see what happens if that appeal results in a decision.  Bear in mind that in patent infringement litigation the accused infringer (e.g., Mylan) is able to rely on prior art (e.g., public use or on-sale events) and grounds for invalidation (e.g., obviousness-type double patenting or lack of enablement) that are not available in IPR proceedings.

SCOTUS: Three Potential Patent Cases

Patent

At the “long conference” last week, the Supreme Court considered the fate of 13 pending petitions for writ of certiorari.  Three cases have survived. In two, the Court invited the Solicitor General to file an amicus brief “expressing the views of the United States.”

  • Teva v. GSK, 22-37 (Skinny Label)
  • Interactive Wearables v. Polar Electro, 21-1281 (Eligibility)

CVSG.  The SG’s brief typically takes several months to draft and so we’ll likely not see further action in these cases until 2023.

The court took no action in Juno v. Kite, 21-1566 (full scope written description), meaning that the case will be reconsidered at a later conference. The remaining 10 petitions were denied certiorari.

  1. CustomPlay, LLC v. Amazon.com, Inc., No. 21-1527
  2. Gilbert P. Hyatt v. United States Patent and Trademark Office, No. 21-1526
  3. Worlds Inc. v. Activision Blizzard Inc., No. 21-1554
  4. SawStop Holding LLC v. United States Patent and Trademark Office, No. 22-11
  5. Larry G. Junker v. Medical Components, Inc., No. 22-26
  6. CPC Patent Technologies PTY Ltd. v. Apple Inc., No. 22-38
  7. Ampersand Chowchilla Biomass, LLC, et al. v. United States, No. 22-69
  8. Aaron G. Filler, et al. v. United States, No. 22-53
  9. Lakshmi Arunachalam v. Kronos Incorporated, No. 22-133
  10. Biogen International GmbH, et al. v. Mylan Pharmaceuticals Inc., No. 21-1567

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Remote Work and Patent Venue

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by Dennis Crouch

In re Monolithic Power Systems, Inc., — F.4th — (Fed. Cir. 2022)

In a 2-1 decision, the Federal Circuit has denied Monolithic’s petition for writ of mandamus seeking to escape from Judge Albright W.D. Tex. courtroom for improper venue.  Since MPS is a Delaware Corp., the only way venue is proper in W.D. Tex. is if it “has committed acts of infringement and has a regular and established place of business.”  28 U.S.C. § 1400(b).  The company has employees, and various sales-channels within the district, but argues that it lacks a “regular and established place of business.”  As an alternative to its improper venue argument, MPS also argued that venue is inconvenient under 28 U.S.C. § 1404(a) and that the case should instead be transferred to N.D. Cal.

Judge Albright denied the motions to dismiss/transfer — holding that the “regular and established place of business” prong of the 1400(b) test was satisfied by three key findings:

  1. MPS employed local engineers and sales managers in WDTX to serve local customers;
  2. MPS stored property in WDTX (in the homes of its employees) and that equipment was used to service MPS’s WDTX customers, and
  3. MPS continually maintain a physical presence within WDTX, including by advertising for replacement employees should any of MPS’s existing WDTX employees leave the company or move to a new location.

In considering these issues, the district court relied upon prior Federal Circuit’s cases such as Cray and Cordis and evaluated the factors established there for non-retail  and informal “places of business.”

On mandamus, the majority refused to grant the petition — finding that the distric court’s ruling “does not involve the type of broad, fundamental, and recurring legal question or usurpation of judicial power that might warrant immediate mandamus review.”  To be clear, the appellate panel did not endorse Judge Albright’s decision, but simply found that it was not appropriate for mandamus.  Rather, MPS should wait until the lawsuit concludes and, if MPS it can still appeal on improper venue. Regarding inconvenient venue, the court found no clear abuse of discretion in refusing transfer.

The majority opinion was issued per curiam by Judges Chen and Stark.  Judge Lourie wrote in dissent and argued that the outcome is clear — “Monolithic’s four employees in the Western District do not constitute Monolithic’s ‘regular and established place of business.'”  Judge Lourie raised the particular concern that changing work environments (i.e., work-from-home) will potentially open up venue in unexpected ways:

The district court’s erroneous ruling threatens to bring confusion to the law relating to where a patent infringement suit can properly be brought based on the location of employee homes and to erode the clear statutory requirement of a regular and established place of business. Given the increased prevalence of remote work, I think immediate review by way of mandamus would be important to maintain uniformity of the court’s clear precedent.

Slip Op. Lourie Dissent.  The majority agreed that the shift to remote work is an important consideration, just not important enough to overcome the strong presumption against hearing a mandamus action:

The dissent may well be correct that the issue of imputing employee homes to a defendant for purposes of venue will become an issue of greater concern given the shift to remote work. But, in our view, at present, the district court’s ruling does not involve the type of broad, fundamental, and recurring legal question or usurpation of judicial power that might warrant immediate mandamus review.

Slip Op. Majority.

The court does not delve into the new W.D.Tex. rules that randomly assign Waco patent cases to a handful of judges (not just Judge Albright).  I expect that we will see a sharp diminution in venue mandamus decisions as the court waits to see whether the new approach changes outcomes.

= = =

Notes –  The underlying case alleges infringement of several patents relating to electric power modules.  U.S. Patent Nos. 6,936,999, 6,949,916, 7,000,125, 7,049,798, 7,080,265, and 7,456,617.  The primary accused product is a power management bus (MPM3695) used on integrated circuits

 

 

Eligibility: Patent’s Claims of Inventive Concept Overcome Eligibility Dismissal

Patent

By Dennis Crouch

Cooperative Entertainment, Inc. v. Kollective Tech, Inc., — F.4th — (Fed. Cir. 2022)

This pro-patentee eligibility decision offers some ideas for patentees seeking to help ensure that their patents survive eligibility challenges. The district court dismissed the case for lack of eligibility. On appeal, the Federal Circuit has reversed.

We know that eligibility is a question of law, but the doctrine at times requires examination of underlying questions of fact. Berkheimer v. HP, Inc., 881 F.3d 1360 (Fed. Cir. 2018) (J.Moore).  That distinction is important at the motion to dismiss stage.

An accused infringer’s motion to dismiss is only appropriate when “there are no plausible factual disputes after drawing all reasonable inferences from the intrinsic and Rule 12 record in favor of the” patentee. Slip Op. Here, that “intrinsic record” is the patent document and the “Rule 12 record” is the complaint.  In its amended complaint, the patentee alleged two “inventive concepts.” These include (1) a dynamic peer-to-peer network designed to “consume the same content within a predetermined time” and are controlled by a a content distribution network; and (2) the use of trace routs in content segmentation.  The complaint particularly notes that those novel features were discussed by the examiner in the reasons for allowance.  In addition, the patent application itself treats these features as important improvements to content distribution systems.

To be clear, I don’t know whether or not these features count as “inventive concepts” under Alice. But, all that is required at the pleading stage of a case are allegations that make the patentee’s claim plausible. And the allegations here seem to to at least meet that low standard.  The appellate decision finds some importance in the fact that the intrinsic evidence recognizes the inventive concept as inventive.

The specification explains how claim 1’s dynamic P2P network structure is different from and improves upon the prior art.

The patent repeatedly explains that the “prior art fails …” and that the feature “does not exist in the prior art.”  The specification also notes how the invention solves a network capacity problem.   Although the opinion focuses on these features, it does not explain how important it is for the patent documents to expressly call out their innovative features.  Bottom line here though is that these allegations (as supported by the intrinsic record) establish a plausible showing that the patent covers an patent eligible inventive concept under Alice Step 2.

The district court had sided with the accused infringer and dismissed the case on eligibility grounds. The district court first concluded that the claims were directed to the abstract idea of peer-to-peer communication via computer network.  And that the alleged inventive concepts were “merely” implementing that generic idea using conventional technology.  On appeal, that dismissal was reversed. But, the appellate panel refused to pass judgment on the district court’s Alice Step 1 opinion. This leaves the eligibility fight still alive at the district court.

We do not decide today that the claims are patent eligible under § 101. We hold only that there are plausible factual allegations that the claims include inventive concepts, and that is enough to preclude dismissal.

Slip Op.  On remand, the parties will need to present evidence (likely to a jury) on whether the patent is directed toward an inventive concept.  In addition, the district court will be asked to reconsider its Alice Step 1 determination.

= = = =

The decision is authored by Chief Judge Moore and joined by Judges Lourie and Stark.  Meredith Martin Addy (AddyHart) argued for the patentee; Michael Dowler (Park Vaughan) for the defendant-appellee.

 

Judge Albright Identifies Outcome-Determinative Discrepancies in Federal Circuit Interpretations of Fifth Circuit Law Under 1404(a)

Ethics, Patent

by David Hricik, Mercer Law School

Judge Albright granted Google’s motion to transfer venue under 28 U.S.C. 1404(a) from the Western District of Texas to the Northern District of California in an opinion in Motion Offense LLC v. Google, LLC (here).  Transfer is governed by regional circuit law, and so here, the law of the Fifth Circuit. What is interesting is the judge noting that the only reason transfer was granted is that the Federal Circuit had reached conclusions different from the Fifth Circuit on what Fifth Circuit law was.

First, one factor in determining whether the transferee venue is more convenient is whether process will be needed to compel testimony and so, if a witness is more than 100 miles from the courthouse, the witness is beyond subpoena power. Thus, if transfer makes it easier to compel more witnesses to testify, that indicates the transferee forum is more convenient.   Judge Albright noted that under Fifth Circuit precedent, the party seeking to transfer has the burden to show there are witnesses and they are unwilling and so transfer will aid in compelling testimony; but unpublished Federal Circuit cases “applying” Fifth Circuit law, say the opposite: unless there is a showing a witness is willing to testify, the court presumes they are not.

Second, the location of documents and volume of them in the transferee district indicates the transferee district is more convenient.  Under Fifth Circuit precedent, the party seeking to transfer has the burden to show the presence of documents, not just that it’s likely they exist, but under the Federal Circuit’s approach, there is a presumption the accused infringer has more relevant documents.

Third, the Fifth Circuit uses a 100 mile rule to determine convenience of the parties and witnesses for trial: the more such people within 100 miles of the transferee courthouse, the more likely it is more convenient.  But, the Federal Circuit instructed not to follow this approach, according to Judge Albright.

The opinion is interesting for a variety of reasons, and I haven’t done my independent look at the cases to see if the opinion fairly characterizes the difference between the Fifth Circuit’s precedent and what the Federal Circuit says is the Fifth Circuit’s precedent, but, plainly, unpublished decisions by the Federal Circuit about Fifth Circuit law can not bind a district court in the Fifth Circuit when it is bound to follow regional circuit law, just as those opinions cannot bind a panel of the Federal Circuit.

Supreme Court on Patent Law for October 2022

Patent

by Dennis Crouch

It is time to pick-up our consideration of Supreme Court patent cases for the 2022-2023 term. A quick recap: Despite dozens of interesting and important cases, the Supreme Court denied all petitions for writ of certiorari for the 2021-2022 term.  The most anticipated case last year was the 101 eligibility petition regarding automobile drive shaft manufacturing process.  American Axle (cert denied). Bottom line, no patent cases were decided by the Court in the 2021-2022 term and none were granted certiorari for the new term starting this week.

The court’s first order of business comes on September 28, 2022 when it meets for the “long conference” to consider a fairly large pile of petitions that have piled-up over summer break.  Of the 17 pending patent-focused petitions, 13 are set to be decided at the long conference.  I have subjectively ordered the cases with the most important or most likely cases toward the top.  Leading the pack are three cases focusing on “Full Scope” Enablement & Written Description. Topics:

  • Enablement / Written Description (All three are biotech / pharma): 3 Cases;
  • Infringement (FDA Labeling): 1 Case;
  • Anticipation (On Sale Bar): 1 Case;
  • Double Patenting (Still the law?): 1 Case;
  • Procedure / Standing: 6 Cases;
  • Eligibility (AmAxle Redux): 3 Cases; and
  • Randomness (don’t bother with these): 2 Cases

1. Full Scope Written Description in Juno Therapeutics, Inc. v. Kite Pharma, Inc., No. 21-1566

According to the Federal Circuit, US patent law contains separate and distinct written description and enablement requirements.  This case focuses on the required “written description of the invention” and challenges the court’s requirement that the specification demonstrate possession of “the full scope of the claimed invention” including unknown variations that fall within the claim scope.

Juno’s patent covers the highly successful and valuable CAR-T gene therapy. The claims require a “binding element” to bind T-cells to cancer cells. The specification  does not provide much of any disclosure regarding how these binding cells actually work but instead states that binding elements are “known” and “routine” and cites to a decade-old article on the topic.  The idea here is that the patentee did enough to enable someone to make and use the invention–isn’t that enough?   But, the Federal Circuit concluded that the specification should have done more to disclose those binding elements, including all “known and unknown” elements covered by the claims.

Juno argues that the Federal Circuit’s test “is simply impossible to meet” for biotech inventions and is not part of the law envisioned by Congress.  The argument on virtual impossibility is a centerpiece of several enablement/written description cases pending.  Although the focus here is biotech, the same arguments are brewing with regard to AI-assisted inventions.  In its responsive brief, Kite reiterates that “as precedent has held for over 50 years—§ 112’s requirement of a “written description” is distinct from the requirement to “enable any person skilled in the art to make and use the” invention.”  That 50-year reference makes me chuckle because that is roughly the same period that Roe v. Wade was good law before being overturned by the Court last term.

The Federal Circuit’s decision in Juno was also a big deal because it overturned the jury verdict–holding that no reasonable jury could have found written description support.  But, it is tough to get the Supreme Court to hear a review on detailed factual findings.

Chief Judge Moore issued the decision in the case that was joined by Judges Prost and O’Malley.  The petition was filed by noted Jones Day attorney Greg Castanias along with former SG Noel Francisco and BMS (Juno) deputy GC Henry Hadad.  Joshua Rosenkranz (Orrick) is running the show for the respondent Kite Pharma. The petition has been supported by five amicus briefs, the most of any pending case.

2. Written Description for an Effective Treatment in Biogen International GmbH v. Mylan Pharmaceuticals Inc., No. 21-1567

If the Supreme Court grants certiorari in Juno, there is a good chance that it would also hear the parallel written description case of Biogen v. Mylan.  Biogen’s patent claims is directed toward a drug treatment for multiple sclerosis.  The treatment has one easy step: administer “a therapeutically effective amount [of] about 480 mg” of DMF per day along with an excipient for treatment of multiple sclerosis.  The Federal Circuit found the claim lacked written description support — especially for a showing that 480 mg is an “effective” treatment.  The specification expressly states that “an effective dose … can be from … about 480 mg to about 720 mg per day.” But, the court found that singular prophetic “passing reference” “at the end of one range among a series of ranges” was insufficient to actually the notion that the patentee possessed an “effective treatment” at the 480 mg dosage.  Effectiveness is often relegated to the utility doctrine, but here it is an express claim limitation.

In some ways Biogen and Juno are both outliers–albeit at opposite ends of the spectrum.  In Juno, the patentee is seeking a broad genus claim based upon a somewhat narrower disclosure while in Biogen, the patentee is seeking a quite narrow claim based upon a much more general disclosure. It is a forest-tree situation.  If you describe several trees, can you claim possession of the forest? Likewise, if you describe the forest, can you claim possession of individual trees?  Note also that there are similarities with the pending enablement petition in Amgen v. Sanofi as well as with the likely upcoming petition in Novartis Pharm. Corp. v. Accord Healthcare, Inc., 38 F.4th 1013 (Fed. Cir. 2022) (written description).  The overlap between written description and enablement is inextricable.  It is usually true that the arguments that prove or disprove written description have the same impact on enablement.  But here in these cases the defendants and courts continue to reiterate the potential differences.

The decision was authored by Judge Reyna and joined by Judge Hughes.  Judge O’Malley wrote in dissent.  The court then denied en banc rehearing despite a dissenting opinion from Judge Lourie joined by Chief Judge Moore and Judge Newman. Supreme Court expert Seth Waxman is handling the petition along with his team from Wilmer.  Nathan Kelley (Perkins) is representing Mylan. Kelley is the former USPTO Solicitor and PTAB Chief Judge.

3. Full Scope Enablement in Amgen Inc. v. Sanofi, No. 21-757

Amgen also fits well as a companion case to Juno v. Kite.  The difference is that Amgen asks about enablement rather than written description.  Still, the focus is the same–does enabling “the invention” require enabling all potential embodiments (even those not yet comprehended by the patentee).  As in Juno, the genus claim here is also functionally claimed, a feature that appears to make it more susceptible to invalidation under both WD and Enablement doctrines. I would have previously put this case even higher in the ranking, but the Gov’t recently filed an amicus brief in the case suggesting that the Court deny certiorari.

Jeff Lamkin (MoloLamkin) is representing the patentee Amgen in the petition. George Hicks (Kirkland) is counsel of record on the other side.  The Gov’t CVSG brief was filed by folks at the DOJ SG’s. USPTO officials did not join. Although the internal politics are always unclear, this often means that the USPTO does not fully agree with the Gov’t position.

4. Skinny Label Infringement in Teva Pharmaceuticals USA, Inc. v. GlaxoSmithKline LLC, No. 22-37

This case delves deeply into the patent-FDA overlap and involves an increasingly common situation “skinny label” situation.  The setup involves an unpatented drug with multiple clinical uses, only some of which are patented.  What this means is that a generic producer should be permitted to market the drug for the unpatented uses, but excluded from marketing the drug for the patented uses.  One problem here is that the healthcare payers are going to recognize that the drugs are interchangeable and very quickly start buying the generic version even for the unauthorized patented use.  One way to think about this case is the level of responsibility that the generic manufacturer has to make sure that its drug is not used in an infringing way.  At what point do sales-with-knowledge equate with inducement?

The particular question presented focuses on FDA-approved labels that carve-out patented uses.  In the process, the FDA starts with the branded drug’s label and asks the brand manufacturer to identify which parts of the labeled uses are infringing.  Those labelled uses are then deleted from the label.  Teva and the FDA followed that exact process in this case.  But, the courts found that the “skinny label” still encouraged infringement — part of the problem was that the infringing and non-infringing uses were so similar to one another.  Petitioner here is seeking a safe-harbor, asking: “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?”

Chief Judge Moore wrote the opinion in this case joined by Judge Newman. Judge Prost wrote in dissent. After an initial outcry, the panel issued a new opinion that toned-things down a bit and suggested that labelling will usually not be infringing, but that this was somehow an exceptional case. Subsequently the full court denied en banc rehearing, with Chief Judge Moore re-justifying her position while Judges Prost, Dyk, and Reyna all dissented.  The jury had originally sided with GSK — finding infringement.  However, the district court rejected the verdict and instead granted Teva’s motion for judgment as a matter of no infringement. Judge Stark who is now a member of the Federal Circuit was the district court judge in the case.

Willy Jay (Goodwin) is handling the petition; Juanita Brooks (Fish) is in opposition.

5. Post IPR Estoppel in Apple Inc. v. Caltech, No. 22-203 (Briefing ongoing)

This important case raises a question of statutory interpretation regarding post-IPR estoppel: Does IPR estoppel 35 U.S.C. § 315(e)(2) extend to all grounds that reasonably could have been raised in the IPR petition filed, even though the text of the statute applies estoppel only to grounds that “reasonably could have [been] raised during that inter partes review.”  Apple would like to challenge the validity of Caltech’s patents, was barred by the District Court based upon Apple’s unsuccessful IPR against the same patent.

Bill Lee (Wilmer) is counsel of record for petitioner. Briefing is ongoing in the case.

6. Judicial Recusal in Centripetal Networks, Inc. v. Cisco Systems, Inc., No. 22-246 (Briefing ongoing)

Although a patent case, the focus here is about the judicial code.  Cisco lost a $2 billion verdict, but was able to get the decision vacated on appeal because the Judge’s wife owned $5,000 in Cisco stock.  The judge had placed it in a blind trust, but the appellate court found that was insufficient since the statute requires “divestment” under the statute.  The petition asks whether this strict  statutory interpretation is correct; and whether any impropriety can be excused as harmless error.

Former Solicitor Paul Clement is handling the petition.

7. Summary Judgment standard in Hyatt v. USPTO, No. 21-1526

My favorite part of this litigation is the mock-up created by folks at the USPTO of Gil Hyatt applying the “Submarine Prosecution Chokehold.” Although the image was a ‘just a joke,’ Hyatt is not joking about what it represents. In particular, Hyatt argues that the USPTO created a secret policy to block issuance of his patents, regardless of the merits of his particular claims. Hyatt filed an APA lawsuit seeking an order forcing the PTO to actually examine his patent applications. But, the district court issued a sua sponte summary judgment — finding that the office was already diligently working.  Oddly though, the court did not apply the summary judgment standard provided by R.56 but instead drew inferences against Hyatt.  The petition asks simply: “Whether the ordinary summary judgment standard of Rule 56 applies to review of agency action.”  Hyatt also argues that the district court applied too-high a standard with regard to setting aside past agency actions.

Famed professor of constitutional law Erwin Chemerinsky (Berkeley) filed the petition.  The U.S. Gov’t waived its right to file a responsive brief.

8. Double Patenting and SawStop Holding LLC v. USPTO, No. 22-11

The petition here focuses on the non-statutory judicially created doctrine of obviousness type double patenting.  It asks: “Is the judicially created doctrine of nonstatutory double patenting ultra vires?”

A good percentage of patents (about 10% or so) are tied to another patent via terminal disclaimer.  In general, the patent office requires a terminal disclaimer in situations where a patentee is seeking to obtain a second (or subsequent) patent covering an obvious variation of an already obtained patent.  Otherwise, the second patent will be rejected on grounds of obviousness-type double patenting.  When I previously wrote about the case, I compared it to the Supreme Court’s abortion decision in Dobbs.  In that case, the court explained that a right to abortion “is nowhere mentioned in the Constitution.”  Similarly, obviousness type double patenting has no grounding in the Patent Act.  Dobbs also rejected the 50 year old precedent of Roe v. Wade (1972).  The fact that a precedent is old does not convert that precedent to a sacred text. One difference here is that OTDP has a somewhat older provenance than did Roe.

The need for terminal disclaimers was greatly reduced following the 1995-GATT patent term transformation. For the most part, all family members expire on about the same date. The big difference happens with patent-term-adjustment that can sometimes make a really big difference — especially if the patentee has successfully appealed.  The SawStop situation represents an interesting case-study for anyone thinking about the ongoing importance of OTDP and Terminal Disclaimers.

David Fanning is inhouse counsel for SawStop and filed the petition.  The USPTO (through the SG) waived its right to file in opposition.

9. Eligibility in Worlds Inc. v. Activision Blizzard Inc., No. 21-1554

Worlds was an early developer of 3-D virtual chatrooms and its US7,181,690 has a 1995 priority filing date. This particular patent has two steps to be performed on the client device being operated by a first user:

  • (a) Receive position information about some user-avatars
  • (b) Using that position information, determine which avatars to display to the first user

The courts found the claims directed to the abstract idea of “filtering.”  The petition asks (1) what is the standard being “directed to” an abstract idea; (2) who bears the burden of coming forth with evidence on Alice Step 2.  In particular, does a party seeking to invalidate a claim need to provide evidence of what was well-known, routine, and conventional?  The petition here is really a follow-on to American Axle. That was denied certiorari at the end of the 2021-2022 term.

Wayne Helge (Davidson Berquist) is counsel of record for Worlds.  Sonal Mehta  (Wilmer) represents Activision, but only filed a statement waiving her client’s right to respond.

10. Mandamus Jurisdiction in CPC Patent Technologies PTY Ltd. v. Apple Inc., No. 22-38

This petition fascinated me for a couple of days as I tried to think through the scope of mandamus jurisdiction.  We know that the Federal Circuit hears patent appeals, but the petition argues that the same court does not necessarily hear mandamus actions filed in patent cases.  Rather, according to the petition, the Federal Circuit’s jurisdiction should depend upon whether the mandamus action itself arises under the patent laws.  Here, the mandamus focused on  transfer for inconvenient venue under Section 1404(a).  Everyone agrees that issue is not patent law specific.

George Summerfield (K&L Gates) is handling the petition. Apple did not file a response.

11. Eligibility in Interactive Wearables, LLC v. Polar Electro Oy, No. 21-1281

This case has similar features to Worlds v. Activision and was also filed in prior to the denial of American Axle.  The petition explains that the patents claim “electronics hardware device comprising a content player/remote-control combination having numerous concretely-recited components that undisputedly qualifies as a ‘machine’ or ‘manufacture’ under the statutory language of 35 U.S.C. § 101.”

12. Junker v. Medical Components, Inc., No. 22-26

Junker’s petition raises an issue that has repeatedly come before the court — the on sale bar.  Here, the purported “offer to sell” was made by “a third party who had no right to sell the invention and with no involvement by the patentee?”  Junker asks whether that counts as an offer?

13. Licensee Standing in Apple Inc. v. Qualcomm Incorporated, No. 21-1327

This petition raises the identical issue that Apple raised in a 21-746.  That case was denied certiorari earlier in 2022 and is very likely to be denied here as well.  The question presented: “Whether a licensee has Article III standing to challenge the validity of a patent covered by a license agreement that covers multiple patents.”   Qualcomm restated the question as follows: “Whether a licensee that offers no evidence linking a patent’s invalidation to any concrete consequence for the licensee nevertheless has Article III standing to challenge the validity of the licensed patent.”

Mark Fleming (Wilmer) represents Apple and Jonathan Franklin (Norton Rose) represents Qualcomm.

14. Eligibility and Hardware in Tropp v. Travel Sentry, No. 22-22

This eligibility petition attempts to distinguish Alice on grounds of computer-technology vs real hardware with the following question presented: “Whether the claims at issue in Tropp’s patents reciting physical rather than computer-processing steps are patent-eligible under 35 U.S.C. § 101.”  One issue with the petition is that the problematic claims don’t really claim the physical hardware (a padlock with a master key), but rather a process of giving the extra key to TSA. In some ways, I see this as a lower-quality version of American Axle.

15. PTO Acting Ultra Vires in CustomPlay, LLC v. Amazon.com, Inc., No. 21-1527

Anyone working with inter partes reviews (IPRs) knows that the PTAB first decides whether to institute the IPR and, after instituting, will hold the trial and issue a final written decision.  One oddity though is that the statute actually calls for the USPTO Director to decide the institution question with the PTAB only stepping in once the IPR is instituted.  The current procedure exists because the PTO Director has delegated her institution authority to the PTAB.  In its petition, CustomPlay asks the court to rule that this delegation is improper – a violation of “the statutory text and legislative intent.”  In addition, the petition asks a constitutional due process question: “Whether the PTO’s administration of IPR proceedings violates a patent owner’s constitutional right to due process by having the same decisionmaker, the PTAB, render both the institution decision and the final decision.”

16. Filler v. United States, No. 22-53

Filler had an interesting claim, but made a major error by dividing his patent rights between two entities in such a way that neither had enforcement power.  Filler argues that the U.S. Gov’t used his patented invention without paying and sued in the Court of Federal Claims. The petition here asks about whether his Fifth Amendment takings claim was properly barred by the Assignment of Claims Act.

Filler is the inventor and is also an attorney (and MD and PhD) filed the petition himself.

17. Arunachalam v. Kronos Incorporated, No. 22-133

Lakshmi Arunachalam has filed a number of patent related petitions over the past several years.  This one asks a number of questions including “Whether Trustees of Dartmouth College v. Woodward, 17 U.S. 518 (1819) was properly decided.”

Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

The Difficulty with Prior Art Sales

Patent

by Dennis Crouch

Today’s decision in Cap Export, LLC v. Zinus, Inc., 21-2159 (Fed. Cir. 2022) (non-precedential) offers some insight into the difficulty of proving an anticipation case with something other than a prior patent or printed publication.  Cap Export particularly focuses on a prior sale.  The problem is that the item sold way-back-when typically no longer exists in its original form.  And, although you might have product manuals, those documents themselves are not on-sale prior art.  They may still be admissible to help show what the prior art looked like, but only as a proxy for the real thing.

Zinus’ U.S. Patent No. 8,931,123 covers a bed-in-a-box system.  All the parts for the bed frame fit neatly within the headboard.  A zipper on the backside allows the purchaser to unpack them at home for assembly. Zinus did not invent this general concept, but rather offered an improvement with various limitations regarding how the parts are packaged and then connect together on assembly.  The particular claim limitation at issue requires a connector on a longitudinal bar (running down the center of the bed); that is configured to attach to a connector on the footboard.  This connection is shown in the image from the patent below.

The sales activity in the case is slightly quirky.  Zinus’ agent purchased “Mersin” beds from Woody Furniture.  As it was shipping those beds, the folks at Woody created an “inspection report” that included a number of photographs of the bed, including a photograph of how the longitudinal bar connects with the footboard, and a photo of the instructions being sent.

If the instructions were prior art, they would clearly be anticipating.  But the on sale bar does not relate to sales of instructions, but rather sales of the embodiment itself.  Zinus presented two arguments as to why the instructions differ from the product sent.  First, the instructions indicate that they are for a different “Fusion” bed rather than the “Mersin” bed.  Second, the actual photo of the product from the inspection report appears to potentially show a different connection mechanism.  I have included the photo below, and you cannot really tell how the longitudinal board is connecting with the base.  Zinus expert suggest that it might be a hole/slot in the base (a non-infringing alternative) rather than each party having their own ‘connectors.’

Zinus provided declarations of potential witness testimony in support of the hole/slot theory, and Cap Export responded with accusations that those were “inadmissible sham declarations.”  R.56 permits a district court to end a case on summary judgment prior to trial, but only in situations where the moving party “shows that there is no  genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).  At times, courts will rephrase the standard as stating: summary judgment is appropriate if “no reasonable jury” could decide the case otherwise.  The fact-law divide is relevant to this issue as well — juries decide the facts; why judges ordinarily decide the law.  And on this point, the Federal Circuit has repeatedly held that anticipation is a question of fact. After considering the evidence presented, the district court sided with the accused infringer on summary judgment. On appeal though, the Federal Circuit has vacated that determination–finding ongoing factual disputes.

Looking at the particular dispute, the appellate court found plenty of genuine disputes: “whether the Fusion bed and Mersin bed are the same structurally, whether the Fusion instructions describe the structure of the as-sold Mersin bed, and what exactly the ambiguous photo of the Mersin bed depicts. Accordingly, summary judgment was improperly granted.”

The court went on to particularly find that the district court had erred by making factual inferences in the movant’s favor. In particular, the district court had concluded that the Fusion/Mersin beds were the same and ignored the contrary declarations from Zinus.  “Taking the record as whole, some evidence supports a conclusion that the Fusion assembly instructions apply to the Mersin bed and some detracts from that conclusion.”

The court also found the issues here material since the challenger’s anticipation case relies upon the Fusion instruction manual to provide that the Mersin bed anticipates.

Should a jury agree with non-movant Zinus and find that the Fusion assembly instructions do not apply to the Mersin bed, Cap Export would be left with the photograph of the Mersin bed as the only evidence with which to prove that the on-sale Mersin bed anticipates the ’123 patent claims. But what exactly that photograph shows is also a disputed factual question for the jury to consider.

Slip Op.

= = =

Anyone practicing in this area knows that the Federal Circuit has lots of quirks regarding the fact/law divide.  Any given issue might be a question of fact; a question of law; a mixed question of fact and law; a question of law based upon underlying conclusions of fact; etc.  The particular fact/law framework will then determine judicial role on issues like summary judgment as well as the standard of review on appeal.

As I mentioned above, anticipation is a question of fact.  Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316 (Fed. Cir. 2001).  But, whether a patent is invalid under the on-sale bar is a question of law based on underlying fact findings. Meds. Co. v. Hospira, Inc., 827 F.3d 1363 (Fed. Cir. 2016).  In some ways, these two sentences seem in tension.

= = =

The decision here is authored by Judge Stoll and joined by Judges Dyk and Taranto.  Matthew Wolf led the winning team from Arnold & Porter representing Zinus.  David Beitchman (Beitchman & Zekian) for Cap Export.

Gov’t Brief on Full Scope Enablement: Specification Must Enable the Entire Genus

Patent

by Dennis Crouch

The Solicitor General’s new brief in Amgen v. Sanofi shrugs off the case–identifying petitioner’s arguments as meritless:

Petitioners contend that the court of appeals erred by treating enablement as a question of law and by examining the full scope of the claims in assessing whether they are fully enabled. Those arguments lack merit and further review is not warranted.

Gov’t CVSG Brief in Amgen Inc. v. Sanofi, 21-757 (Supreme Court 2022).

The petition argued that genus claims–especially those functionally claimed–are being asked to comply with a heightened enablement standard.  The Gov’t agreed that at times it may be difficult to enable an entire genus, but not because of any heightened standard.  Rather, “broad claims naturally require more extensive enablement” since the patent’s disclosure “must be commensurate with the scope of its claims. . . . When, as here, a patent claims an entire genus based on its function, the patent must enable that entire genus.” The brief cites to Consolidated Electric Light Co. v. McKeesport Light Co., 159 U.S. 465 (1895) and Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245 (1928) as representative.  In those cases, the Supreme Court used to enforce patents whose scope encompassed, but far exceeded, the examples given in the specification.  Of course, the Brief’s bold statements fail to contend with the reality that enabling the “entire genus” will effectively curtail genus claims, and the resulting policy shifts.  I expect that a Supreme Court decision in the the case would not go as far as suggested by the Gov’t Brief, but the middle ground might not be enough to flip the result here.

The Gov’t Brief also explains enablement as a mixed question of fact and law.  Although the jury sided with the patentee, the district court judge rejected the verdict on JMOL  — holding that the claims lacked enablement.  That JMOL determination was affirmed on appeal.  The Government brief does not delve deeply into the issues raised but simply states:

Petitioners complain about the formulation the court of appeals used in articulating the standard of review, but they do not identify any practical implications flowing from that disagreement.

Id.

Usually, the SG brief is the most important amicus brief at predicting certiorari.  However, that might no longer be true for today’s 6-3 conservative majority hearing remarks from a liberal administration.

Novartis: Inherency in Written Description

Patent

by Dennis Crouch

Novartis Pharms Corp. v. Accord Healthcare, Inc. (Fed. Cir. 2022)

Without any fanfare or dissent, the Federal Circuit has denied the Novartis en banc petition.  The court used a questionable procedure flip its own prior decision by replacing Judge O’Malley with a more defendant-friendly Judge Hughes for the rehearing.

The merits decision appears to further tighten-up on the written description requirement — especially with regard to ‘negative’ claim limitations.  The basic holding is that the written description must either expressly or inherently disclose the invention.  Novartis Pharm. Corp. v. Accord Healthcare, Inc., 38 F.4th 1013 (Fed. Cir. 2022) (rehearing majority decision).  Here, ‘inherently’ is a term of art in patent law and has much stricter definition than its cousin ‘impliedly.’  Inherency in patent law indicates unstated certainty.

The patent at issue in Novartis claims a drug treatment method.  Sometimes in drug treatment, you start a patient off with a high ‘loading dose’ to get the blood-levels up to an operational state.  The patent application does not discuss a loading dose one way or the other.  During prosecution, the patentee added a no-loading-dose negative limitation: “a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.”

Someone skilled in the art might read the specification as implying that no loading dose was necessary. But, that same person would have to admit that the specification could be interpreted in alternative ways–and that the absence of a loading dose was not necessarily inherent in the disclosures.  Since the majority required inherency, the claim lacked written description support.

 

Patents Issued Per Year

Patent

The USPTO’s fiscal year ends at the end of September, so this chart is slightly preemptive.  But, it shows that patent grants have fallen again this year by about 5.5% from 2021 and 11% below the all-time high in FY2020.  The drop shown here is likely reflective of the pull-back experienced in the first year of COVID.  I have not yet done a breakdown of the relative numbers on original filings vs continuations and US vs foreign.  – Crouch

Disclaimer and Dedication

Patent

The chart above shows the number of disclaimed/dedicated patents per year going back to 1995.  Every year it has been a relatively small number, and for each instance there is usually some strategic reason for the disclaimer. As you can see, FY2022 is figuratively off the charts–almost triple any year since 2005.   I have not yet figured out whether the change here reflects some important change in practice or just a statistical anomaly.  Can someone help me understand what is going on here?

You can find these in the Official Gazette notices.