Appellate Practice: Working Models for the Court

Patent, Patent Cases 2009

Farrago v. Rawlings Sporting Goodspic-36.jpg (Fed. Cir. 2009)

Farrago’s patent covers a pad for relieving knee stress. The argument focused on whether Rawlings’ product has four surfaces (as claimed) or only three surfaces (as Rawlings argues). On appeal, the Federal Circuit quickly affirmed summary judgment of noninfringement without opinion. (A narrowing amendment during prosecution precluded application of the doctrine of equivalents.)

I’ll only focus here briefly on the appellate practice. Farrago submitted a sample of the accused product to the appellate court so that the judges and clerks could examine the product prior to oral arguments. During oral arguments, the court thanked Farrago’s attorney – noting that the sample “was very helpful.” Of course, the court needed only 24 hours to release its opinion against Farrago.

Genentech & Volkswagen: Federal Circuit Splits on Venue Transfer Cases

Jurisdiction, Patent, Patent Cases 2009,

In re Genentech (Fed. Cir. 2009)(granting mandamus and ordering transfer) 09-M901.pdf
In re Volkswagen of America (Fed. Cir. 2009)(denying mandamus) 09-M897.pdf

Since deciding TS Tech, the Federal Circuit has received a gaggle of Mandamus petitions – most of them asking the appellate court to order cases transferred out of the Eastern District of Texas to more convenient locations. In a pair of opinions – both authored by Judge Linn and released on the same day – the appellate court has provided additional guidance on deciding these transfer issues.

Genentech – Transfer Granted:

  • Key Witnesses: Genentech identified several witnesses in Northern California and argued it would be more convenient for them to attend trial in that locale. The district court, however gave little weight to Genentech list because the did not identify location of “key” witnesses. On appeal, the Federal Circuit held that at such an early stage of trial, it is unreasonable to require a defendant to show that potential witnesses are “more than relevant” or face denial of transfer.
  • European Witnesses: Several identified witnesses would come from Europe. The Texas court held that it would be more convenient for the European witnesses to travel to Texas than to California because California is further from Europe than is Texas. Here, the district court directly followed the Fifth Circuit’s proportionality test that “[w]hen the distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled.” On appeal, the Federal Circuit noted that the difference in distance should be given less weight when the witnesses are already traveling a great distance.
  • Centralized Location: Although Texas is certainly a more central location, the Federal Circuit held that the factor could not favor a Texas venue because none of the identified witnesses reside in Texas. Rather, the court found that California is more centralized because a number of material witnesses reside within California.
  • Convenience to the Parties: Genentech is in Northern California, Biogen (another defendant) is in San Diego, Sanofi (the plaintiff) is in Germany.
  • Availability of Compulsory Process: If trial is in Texas, there may be several third-party witnesses that could not be compelled to attend because they are in California – outside the long-arm of Texas jurisdiction.
  • Evidence: “In patent cases, the bulk of the relevant evidence comes from the accused infringer.” Here, all of Genentech & Biogen’s relevant evidence is in California.
  • Prior Suit: Genentech has been a plaintiff in the Eastern District of Texas and the district court. On appeal, the Federal Circuit ruled that it would be legal error to consider a prior case that would not otherwise provide for judicial economy.
  • California’s Jurisdiction over Sanofi: There is some question of whether the California court has jurisdiction over Sanofi. The Federal Circuit held that the potential lack of personal jurisdiction in the transferred venue does not weigh heavily against transfer. “There is no requirement under § 1404(a) that a transferee court have jurisdiction over the plaintiff or that there be sufficient minimum contacts with the plaintiff.”
  • Court Congestion: This is a speculative factor and given little weight.

In re Volkswagen – Mandamus Denied:

  • The plaintiff – MHL – is a small company headquartered in Michigan, but registered in Texas.
  • In two lawsuits separate lawsuits (both in the Eastern District of Texas), MHL has sued over thirty US & Foreign automobile companies for patent infrignement.
  • VW has asked that the case be transferred from the Eastern District of Texas to the Eastern District of Michigan.
  • Multiple Lawsuits: The Federal Circuit identified the “existence of multiple lawsuits” involving the same patents and overlapping issues to be “a paramount consideration when determining whether a transfer is in the interest of justice. … Although these cases may not involve precisely the same issues, there will be significant overlap and a familiarity with the patents could preserve time and resources. Because the district court’s decision is based on the rational argument that judicial economy is served by having the same district court try the cases involving the same patents, mandamus is inappropriate under our precedents.”

Comment: In patent cases, these venue games tend to approach the absurd, and I am surprised that the Federal Circuit has taken these cases so seriously. Defendants want to move out of the Eastern District of Texas because they fear trial and the potential major damage award. The “convenient venue” argument is concocted because the Eastern District of Texas is clearly a “proper forum” with personal jurisdiction over the defendants.

MHL is a patent holding company that registered as a Texas business in June of 2007. That registration appears to have served its purpose – to win the Texas venue argument even though the principles of the business are all located in Michigan. On the other side – it looks like the Federal Circuit refused to consider the two most important facts of convenience in the Genentech case. First, in 2006, Genentech sued MedImmune for patent infringement in the Eastern District of Texas. At that time, Genentech calculated that Texas was perfectly suitable even though neither party was located in the state. Yet, the Federal Circuit held that it was legal error for the district court to consider Genentech’s prior activities in the present motion for Venue. The second issues is jurisdiction – it just does not make sense to transfer a case to a new forum without some assurances that the court has personal jurisdiction over the parties.

Disclaimer: I just noticed that my former firm MBHB (who is now a sponsor of Patently-O) is involved in the Genentech case. I do not represent any clients these days. One reason why I have enjoyed having MBHB as a sponsor is that the firm has never tried to exert editorial control over the blog or its content beyond the layout of the firm’s ad.

Impact of Merger/Buyout on Prior Agreement to Not Challenge Patent Validity

Invalidity, License, Patent, Patent Cases 2009

Epistar v. ITC (and Philips Lumileds Lighting) (Fed. Cir. 2009) 07-1457.pdf

Merger: Lumileds owns a patent covering a light-emitting diode (LED) with an electrically conductive window layer that is both brighter and more efficient than other LEDs. The conductive layer helps spread the flow of electrical current avoid “current crowding.”

At issue in this case is the impact of a corporate merger/buyout on a settlement agreement that included a promise to not challenge a patent’s validity.

Lumileds and Epistar have signed at least two prior settlement agreements involving the patent at issue here. In those agreements, Epistar agreed to pay a licensing fee for certain products, but reserved its right to challenge the patent if Lumileds asserted the patent against other patents. A third company, UEC, agreed that neither it nor its successors would later challenge the validity of the Lumileds patents.

Subsequently, Epistar purchased UEC, and the patentee argued that UEC’s agreement should also bind Epistar. On appeal, the Federal Circuit partially rejected that argument – holding that the UEC settlement continues to bind the parties, but only “as understood and intended by them, according to its ordinary terms.” Thus, even though Epistar took on all the legal obligations of UEC, Epistar can still challenge the Lumileds patent if the case does not involve UEC related products.

UEC’s settlement agreement has preclusive effect upon Epistar only “to the same extent as upon [UEC it]self.” Restatement (Second) of Judgments § 43 (1982). The preclusive effect of that agreement, if any, is limited to UEC’s pre–Epistar product lines. To paraphrase this court in International Nutrition v. Horphag Research, Epistar’s acquisition of UEC does not have the effect of limiting Epistar’s rights that are unrelated to the product lines it acquired from UEC. Accordingly, this court overturns the Commission’s final determination that Epistar is estopped from challenging validity of the ’718 patent when asserted against its own products, separate from the UEC–Lumileds settlement agreement.

Here, the court could have done well to cite the Supreme Court’s decision of Lear v. Adkins and its statements favoring the ability to challenge patent validity based on on “the strong federal policy favoring the full and free use of ideas in the public domain.”

Patent Licenses Include Inherent Rights Allowing Third-Party Manufacture

License, Patent, Patent Cases 2009

Corebrace, LLC. v. Star Seismic LLC pic-35.jpg (Fed. Cir. 2009) 08-1502.pdf

Corebrace’s patent covers an earthquake-resistant brace for steel framed buildings. The original rights-holder (the inventor, Benne Murthy Sridhara from Bangalore) first licensed patent rights to Star. Later, the patent rights were assigned to Corebrace.

Star’s nonexclusive license from the inventor grants a right to “make, use, and sell” licensed products. The license also includes a restriction that Star may not “assign, sublicense, or otherwise transfer” its rights – except to an affiliated company. The inventor did already have a relationship with CoreBrace and reserved for that company “all rights not expressly granted” including any improvements created “by a third party whose services have been contracted.”

The question on appeal is whether the license grants Star the right to use third-party contractors to manufacture licensed products for its own use. The Federal Circuit answered in the affirmative – holding that absent a clear disclaimer, a patent license includes a right to use a third party manufacturer.

The right to “make, use, and sell” a product inherently includes the right to have it made by a third party, absent a clear indication of intent to the contrary. (Following Utah law)

Patent licensing is complicated because the contracts are interpreted under state law. Here, the contract indicates that Utah law should be followed. There is not Utah decision on point. However, the Federal Circuit noted its own precedent as well as California Supreme Court cases that “have both persuasively held that a ‘have made’ right is implicit in a right to make, use, and sell, absent an express contrary intent. We consider that the Utah Supreme Court would therefore likely arrive at the same conclusion were it to consider the issue.”

Often, exclusive licensees are implicitly granted greater rights than their non-exclusive counterparts. In the non-exclusive setting – allowing the licensee to subcontract undercuts the patent-holder’s rights; while in an exclusive licensee scenario, the patentee is presumed to have fully exploited its patent rights in that one contract. In this case, however, the Federal Circuit ruled that the implicit right to sub-contract manufacturing does not depend on any exclusive license status.

Zuhn: A Model Patent Office for the Future

Bits and Bytes, Patent, Patent Legislation

Dr. Zuhn has been covering patent happenings at the BIO Conference. His article discussing a panel on suggestions for fixing the USPTO is a great read. The theme presented by Sherry Knowles (from GSK) is one that many Patently-O readers understand – stakeholders cannot count on someone else to address problems at at the PTO.

John Duffy, who participated followed-up with a note about GSK’s role in the case of Tafas v. Dudas.

GSK has been very well served by its attorneys, which includes an excellent team of lawyers from Kirkland & Ellis headed by John M. Desmarais. They’ve been successful in winning 99% of what GSK wanted. The rules still aren’t in effect, and they are unlikely ever to go into effect without substantial revision. Moreover, as for the last 1% percent that GSK attorneys weren’t able to win, I don’t think any attorneys could have won. The administrative law issues in the case were always very difficult for GSK’s position. I don’t think any set of attorneys could have produced a better result, and I don’t doub t that GSK’s lawyers recognize that Supreme Court review would have its risks.

Duffy also discussed the potential risks of a Supreme Court decision in Tafas v. Dudas.

Judge Prost did a masterful job on the administrative law issues in the Tafas case. If the case were appealed to the Supreme Court, I think the Court would largely affirm her opinion. The most difficult issue in the case has always been whether, giving the agency’s rules an appropriate amount of Chevron deference, a court should nonetheless hold Final Rule 78 inconsistent with the clear meaning of section 120 of the Patent Act. Judge Prost ruled against the agency on that issue, and her result seems to me to be one reasonable resolution of a difficult issue. But the issue is a close one, as even Judge Bryson’s concurrence suggests. If Tafas were to be heard by the Supreme Court, it is entirely possible that the Justices (a majority of whom either have taught ad law or have served on the ad law-heavy D.C. Circuit) might give the agency a bit more deference than the Federal Circuit panel did. Thus, if the case went to the Supreme Co urt, I think likely outcomes would be either a complete affirmance or a reversal limited to the one issue that GSK won at the Federal Circuit.

Other News:

  • The White House has again recognized Peer-to-Patent as an example of “approachable government.” http://www.whitehouse.gov/newmedia/. (“Improves the quality of issued patents”).

Dickson Industries: Inequitable Conduct Holding Vacated

Attorney Fees, Inequitable Conduct, Patent, Patent Cases 2009,

Dickson Industries, Inc. v. Patent Enforcement Team, L.L.Cpic-34.jpg . (Fed. Cir. 2009) (nonprecedential) 08-1372.pdf

Application of inequitable conduct jurisprudence continues to divide the Federal Circuit. Judge Rader has perhaps been the most outspoken critic of the current over-use of inequitable conduct allegations. In this case, Judge Rader was joined by Judges Mayer and Posner (by designation) in vacating a lower court finding of inequitable conduct.

The PET patent covers an apparatus for making drainage grooves at the edge of a roadway. Prior to litigation, PET had argued that the machines for making rumble strips at the side of the road also violate the patent rights. Subsequently, Dickson sued for declaratory relief.

The jury found the patent invalid and found the patent holder liable for $1.5 million for tortiously interfering with with Dickson’s business relationships. The court then also (1) found the patent unenforceable due to inequitable conduct during reexamination for failure to disclose material information and (2) awarded attorney fees to Dickson.

On appeal, the Federal Circuit affirmed the anticipation decision, but vacated the decision on inequitable conduct.

The case largely centered around one prior art reference – “Spangler” – which discloses an apparatus to make rumble strips. PET knew about Spangler during reexamination of its patent, but did not disclose that reference to the PTO.

Agreeing with the Jury, the Federal Circuit found substantial evidence indicating that Spangler discloses all the elements of PET’s patent – rendering the patent invalid.

Ordinarily, after finding the patent invalid, the court would not need to decide issues of inequitable conduct. Here, however, the appellate panel addressed inequitable conduct because that conduct served as the basis for the lower court’s award of exceptional case attorney fees.

Amending Pleadings to Add Inequitable Conduct Charges: Allegations of inequitable conduct are parallel to charges of fraud and ordinarily must be pled with specificity. Thus, in most cases the accused infringer does not have sufficient evidence to allege inequitable conduct in the initial filing of defenses. Here, the court initially denied Dickson’s motion to amend its complaint to add IC charges. However, at trial the court changed its mind and allowed the issue to be presented.

On appeal, the Federal Circuit found that PET was “prejudiced” by the inconsistent orders and was thus denied “the opportunity to adequately defend against the allegation of inequitable conduct at trial. For instance, PET was denied the opportunity to introduce evidence of good faith, which militates against a finding of deceptive intent.”

The district court’s contradicting positions undermine the legitimacy of its ruling on inequitable conduct. This court cannot say with confidence that the record regarding inequitable conduct is not incomplete. Thus, this court vacates the district’s decision on the issue of inequitable conduct and remands to provide an opportunity to fully develop the record regarding inequitable conduct. Further, this Court vacates the award of attorney fees premised on inequitable conduct as premature.

In a warning to the lower court, Judge Rader again raised the notion that inequitable conduct litigation “has become an absolute plague.”

Given the severe consequences of unenforceability when it is imposed on a patent, it is paramount that the district court exercise necessary caution to ensure that the patent owner met its burden of proof with respect to both the materiality and deceptive intent.

Vacated-in-part.

Notes:

  • Judges Mayer and Posner (sitting by designation) participated in the panel.
  • Update: I have fixed an important typographical error. Judge Rader indicated that inequitable conduct litigation is the problem (not inequitable conduct itself).

Deference to ITC Claim Construction Decisions?

Claim Construction, ITC, Patent, Patent Cases 2009

Erbe Elektromedizin v. ITC and Canady Techpic-33.jpg (Fed. Cir. 2009) 08-1358.pdf

Erbe’s patent appears to cover aspects of a surgical flesh-welding technique known as argon plasma coagulation (APC). After narrowly construing the claimed plurality of endoscopic “working channel,” the ITC found no evidence of direct infringement. On appeal, the Federal Circuit affirmed.

I’ll avoid the claim construction particulars, but focus here on whether the Federal Circuit can properly review ITC Claim Construction decisions de novo.

Claim construction is a matter of law, and under the Administrative Procedures Act, the Federal Circuit reviews ITC decisions of law for “correctness.” However, in the usual course, agency decisions interpreting a matter of law are ordinarily given at least Skidmore level deference. See Christensen v. Harris County.

En Banc Federal Circuit: Infringement of Product-by-Process Claim Requires Practicing the Process

En Banc, Method Claims, Patent, Patent Cases 2009,

Abbott Labs v. Sandoz (Fed. Cir. 2009) (en banc) 07-1400.pdf

The Federal Circuit had developed two opposing lines of cases for interpreting the scope of a product-by-process claim. Acting en banc sua sponte sub secretum, the appellate body sided with the Atlantic Thermoplatics line in holding that infringement of a product-by-process claim requires practicing the claimed process steps. This decision makes Judge Newman’s 1991 Scripps decision no longer good law. (Note, the en banc portion is only Section III.A.2).

[T]his court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.”

The holding here explicitly focuses on claim construction for the purposes of infringement. Based on my first-pass, it appears that the court has left undecided whether this rule applies for validity purposes. I.e., can a product-by-process claim now cover a well known product made through a new process?

Notes

  • This is a very interesting decision and more analysis will be forthcoming.
  • Perhaps the most interesting portion of the decision is Judge Newman’s 39 page dissent.
  • Based on this Decision, generic Omnicef will continue to be available.

Patently-O Bits and Bytes No. 111

Patent

Courtoon via David Mills.

Although patent activity may be down 10%, it is still much more active than it was a decade ago. Folks are hiring:

Patently-O Bits and Bytes No. 111

Patent

Courtoon via David Mills.

Although patent activity may be down 10%, it is still much more active than it was a decade ago. Folks are hiring:

Patently-O Bits and Bytes No. 111

Patent

Courtoon via David Mills.

Although patent activity may be down 10%, it is still much more active than it was a decade ago. Folks are hiring:

BPAI Precedential Opinion on Rejecting Software Means Claims

BPAI, Indefinite, Patent, Patent Cases 2009,

Ex parte Catlinpic-32.jpg (BPAI 2009)(precedential) fd073072.pdf.

The first-time around, the BPAI found some of Catlin’s claims patentable. On rehearing (requested by the SPE), the BPAI reversed course – finding the means-plus-function claims indefinite under 35 USC § 112.

Catlin’s claim one reads as follows:

1. A method for implementing an on-line incentive system, said method comprising the steps of:
providing, at a merchant’s web site, means for a consumer to participate in an earning activity to earn value from a merchant; and
transferring value from said merchant to said consumer for participation in said earning activity, if said consumer qualifies, without re-directing said consumer away from said merchant’s web site, whereby said consumer’s focus of activity remains at said merchant’s web site.

The Patent Act allows a patentee to claim inventive elements using “means plus function” language. A means plus function term is construed to cover the corresponding structures as described in the specification as well as any equivalents. This rule of construction means that seemingly broadly written means limitations are often quite limited in practice — especially when the specification is not thoroughly drafted.

If no corresponding structure can be identified in the disclosure, then the claim will be found “invalid as indefinite.”

Here, the claim recites a “means for a consumer to participate in an earning activity to earn value from a merchant.” On rehearing, the BPAI could not find any corresponding structure in the specification. In particular, the Board was looking for an algorithm for performing the claimed function.

[W]e have thoroughly reviewed the Appellants’ Specification and have not been able to locate an adequate disclosure of structure, material, or acts corresponding to the functions of allowing a consumer to participate in an earning activity and earn value from an earning activity. In particular, the Specification does not disclose any specific algorithm that could be implemented on a general purpose computer to allow a consumer to participate in an earning activity and earn value from an earning activity.

Holding: Claims indefinite.

Irreparable Harm of Generic Competition: Federal Circuit Affirms Finding that Generic Entry Does not Cause Irreparable Harm

Dissent, Injunctions, Obviousness, Patent, Patent Cases 2009, Pharma,

Altana Pharma & Wyeth v. Teva (Fed. Cir. 2009)200905141300.jpg

Altana’s Patent No. 4,758,579 claims the proton pump inhibitor pantoprazole – the active ingredient the anti-ulcer drug Protonix®. Of course, PPI’s were known before Altana’s patent and even one of Altana’s own prior patents discusses a “compound 12” that is structurally similar to those claimed in the ‘579 patent.

Teva and Sun filed for permission to begin making generic versions of the drug, and Altana subsequently filed this infringement action. (Altana filed separate actions that were consolidated.)

This appeal stems from the New Jersey district court’s denial of Altana’s motion for a preliminary injunction. The lower court found that the patentee had failed to prove two critical prerequisites of equitable preliminary relief: (1) a likelihood of success on the merits and (2) irreparable harm.

The equitable test for preliminary injunctive relief requires that the requesting party prove:

  1. a reasonable likelihood of success on the merits;
  2. irreparable harm if an injunction is not granted;
  3. a balance of hardships tipping in its favor; and
  4. the injunction’s favorable impact on the public interest.

Although the ultimate grant or denial of preliminary relief is within the “sound discretion of the district court,” failure to abide by these four factors would be reversible error. Orders to grant or deny a preliminary injunction are immediately appealable.

Likelihood of Success: The Federal Circuit has held that preliminary relief should be denied if the accused infringer raises a “substantial question” of invalidity of the asserted claims. At the PI stage, the court need not consider the ultimate “clear and convincing” standard. Rather, the focus is on “vulnerability.”

Obviousness of Chemical Compound: When considering the obviousness of a chemical compound, courts ordinarily first look for a “lead compound” known in the prior art and then consider whether a chemist would have had some reason to modify the known compound in the particular manner to achieve the new compound. Courts are not rigidly bound by this ordinary approach – thus, for instance, a court may look to multiple lead compounds:

Moreover, to the extent Altana suggests that the prior art must point to only a single lead compound for further development efforts, that restrictive view of the lead compound test would present a rigid test similar to the teaching-suggestion-motivation test that the Supreme Court explicitly rejected in KSR.

Here, the appellate panel found “ample evidence” that a chemist would have chosen “compound 12” as a natural choice for further PPI research. The particular modification of compound 12 was then suggested in articles by Sachs and Bryson who were researching properties of effective PPIs.

Considering this evidence as a whole, the Federal Circuit found it sufficient to raise a substantial question of obviousness.

Irreparable Harm: The district court could not find any irreparable harm of allowing infringement during the course of the litigation. Often, money damages are seen as insufficient when the defendant does not have cash-on-hand. Here, however, Teva and Sun both have plenty. The court also found that Altana almost certainly has a business plan to deal with the launch of generics. During the litigation, Nycomed purchased Altana — seemingly in the lower court’s view, that purchase also indicates that money damages are adequate (since a price can be placed on the company & its patent rights).

Perhaps most harmful to Altana was that the lower court found the patentee’s statements of harms “exaggerated” and lacking “credibility.” A court sitting in equity righty places a dim light on activities suggestive of unclean hands.

On appeal, the Federal Circuit affirmed without significantly commenting on the merits. Rather, the court made this case about equitable discretion: “the law cited by the district court highlights this court’s deference to a district court’s determination whether a movant has sufficiently shown irreparable harm.”

Denial of Preliminary Injunction Affirmed

Judge Newman wrote a short concurring opinion.

Although the evidence presented to the district court does not, in my view, establish invalidity of the patent on the pharmaceutical product pantoprazole, see, Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429 (2006) (“the burdens at the preliminary injunction stage track the burdens at trial.”) at this preliminary stage deference is warranted to the district court’s weighing of the conflicting expert opinions interpreting the evidence. On this basis, I concur in sustaining this discretionary action.

People (lots of) vs. The Breast Cancer Gene Patents

Patent, , ,

Assn for Medical Pathology v. USPTO & Myriad & the Directors of the University of Utah Research Foundation (S.D.N.Y. 2009)

A host of medical organizations, researchers, and cancer patients have filed a Section 1983 action against the USPTO, Myriad Genetics, and the University of Utah Research Foundation (via its directors) demanding that the BRCA gene patents be declared invalid as unpatentable under 35 USC Section 101.

“Because human genes are products of nature, laws of nature and/or natural phenomena, and abstract ideas or basic human knowledge or thought, the challenged claims are invalid under Article I, section 8 of the Constitution and 35 U.S.C. Section 101.”

In addition, the suit alleges that the patents are unconstitutional under the First and Fourteenth Amendments to the US Constitution.

Myriad’s patents allow the company to maintain a monopoly in the US over genetic testing for human BRCA1 and BRCA2 genes – markers for breast cancer. Claim 1 is directed to “an isolated DNA coding for BRCA1 polypeptide.” (The patent defines the amino acid sequence of the polypeptide).

PubPat and the ACLU are serving as attorneys for the plaintiffs.

Notes:

  • Read the Complaint: BRCA1 complaint.pdf
  • NYTimes Article
  • ACLU Blogs Here (with pictures of the plaintiffs).
  • The gene patenting debate has been interesting – emphasis here on has been. The genome has been mapped and sequences published. Very few new patents claiming isolated human genes are being filed. The ones already patented will expire within the next decade — most of them will expire before being put to any practical use.  
  • Caplan of CNN Says “Lawyers who work on patents in the pharmaceutical and biotechnology industries are sweating bullets today.” This is good, because the US is currently suffering under a bullet shortage.
  • On May 6, PubPat filed two other lawsuits.
  • PubPat v. Cumberland Packing (alleging false marking of its Sweet n Low sugar packets).
  • PubPat v. Iovate (alleging false marking of Xenadrine).

Actonel Patent Validity Affirmed: Nonobviousness of Positional Isomer

Obviousness, Patent, Patent Cases 2009,

Procter & Gamble (P&G) v. Teva Pharmaceuticals (Fed. Cir. 2009)

P&G’s osteoporosis drug Actonel reportedly has $1.5 billion in annual sales. Hoping to manufacture a generic version, Teva challenged P&G’s patent – arguing obviousness in light of a prior P&G patent (the ‘406 patent) and obviousness-type double patenting. The district court rejected those challenges, and on appeal the Federal Circuit affirmed the patent’s validity. The patent is set to expire in 2013.

New Compound is Nonobvious: The claimed active compound – risedronate – is a bisphosphonate. In arguing obviousness, Teva pointed to P&G’s ‘406 patent which listed “central problems” in using bisphosphonates to treat osteoporosis. Although the prior art patent does not list risedronate, it does suggest the use of thirty-six similar molecules in the same class including one a positional isomer of the claimed risedronate. The positional isomer (2-pyr EHDP) includes the same atoms as risedronate, but those atoms are arranged in a somewhat different order.

In risedronate, the hydroxy-ethane-diphosphonate group is connected to the #3 carbon of a pyridine ring, while in 2-pyr EHDP, the hydroxy-ethane-diphosphonate group is connected to the #2 carbon. Because the nitrogen atom is in a different position in the two molecules, they differ in three dimensional shape, charge distribution and hydrogen bonding properties.

In addition to these structural differences, P&G pointed to “contemporaneous writings from Herbert Fleisch, the preeminent authority on bisphosphonates during the relevant time period.” Fleisch wrote that “every … bisphosphonate, exhibits its own physical-chemical, biological and therapeutic characteristics, so that each bisphosphonate has to be considered on its own. To infer from one compound the effects in another is dangerous and can be misleading.”

On appeal, the Federal Circuit agreed that these differences were sufficient to push development of the new compound beyond the obvious – additionally noting that Teva had not shown that a PHOSITA would have had a “‘reasonable expectation of success’ in synthesizing and testing risedronate.” Here, the court quoted its 1988 O’Farrell decision: “Patents are not barred just because it was obvious ‘to explore a new technology or general approach that seemed to be a promising field of experimentation, where the prior art gave only general guidance as to the particular form of the claimed invention or how to achieve it.'”

This holding further supports the conventional wisdom that the KSR case will have much less impact in the area of pharmaceutical research.

Secondary Factors: In arguing secondary considerations of nonobviousness, TEVA argued that the element of long-felt but unmet need could not be proven because another drug (aledronate) was available prior to risedronate. The Federal Circuit rejected that argument – holding that the need may still have existed because the P&G patent application was filed before the other drug was on the market. “Under Monarch, we look to the filing date of the challenged invention to assess the presence of a long-felt and unmet need.”

Swearing Behind Not Allowed: P&G’s researcher had evidence that it had invented risedronate prior to the filing of the ‘406 patent. In particular, the inventor submitted a lab notebook with detailing the structure of risedronate and the procedure for its synthesis. However, the Federal Circuit rejected the evidence because the entry “was unwitnessed and was not corroborated by any other evidence.”

Double Patenting: “Having concluded that risedronate was not obvious under 35 U.S.C. § 103, we similarly conclude that the [risedronate] patent is not invalid for obviousness-type double patenting … [because] the claims of the [risedronate] patent are distinct from the claims of the ‘406 patent.”

Further Discussion:

Claim Construction Disclaimer & Judicial Estoppel

Patent,

Fitness Quest (FQ) v. Jonathan Monti (Fed. Cir. 2009) (non-precedential)

In 2002, Monit – an individual inventor – approached FQ with his idea for personal exercise equipment. FQ agreed to a confidentiality & nondisclosure agreement, but FQ eventually walked away from the deal.

In 2003, FQ began making the now-popular “Ab Lounge” and Monti sent a letter accusing the company of infringement and breach of the confidentiality agreement. FQ quickly filed for declaratory relief.

The district court ruled for FQ on summary judgment – finding that FQ had not violated the confidentiality agreement and that its new product did not infringe Monti’s patent. On appeal, the Federal Circuit vacated-in-part – holding that summary judgment of non-infringement was improper as to claim 28 of Monti’s patent.

Disclaimed Needed Scope: Claim construction focused first on the term “back extension” in the apparatus claims. Monti argued that “back extension” could include pushing back in the Ab Lounger. The court rejected that argument because Monti’s application specifically disclaimed coverage of back extensions that require pushing.

From the patent: “Many Nautilus TM type machines have been constructed in the prior art to mimic this movement and add resistance to it, biomechanically, the core movement of this type of machine was a pushing movement. This is a distinct disadvantage of the prior art methods of back extension. Also, this does not fall within the scope of Kinesiologically Correct TM [i.e., this invention].”

One of the asserted claims (claim 28) does not, however, include the back extension limitation. Apparently, the disclaimer only applies to the coverage of the “back extension” term. Consequently, the Federal Circuit held that that claim may still be infringed (pending reconsideration by the lower court.)

Judicial Estoppel: During litigation, Monti explained the claim term “selectively applying a force” as applying a different force based on the weight of the user, but then later wanted to expand the definition after learning that the relevant portion of the Ab Lounger does not apply a force based on the weight of the user. Following the equitable doctrine of judicial estoppel, the district court refused to allow Monti to change his argument.

Monti clearly advocated that the system must determine that amount of force to apply with reference to the weight of the individual using the device. This position is directly contrary to his current position, which is that the force producing assembly applies a force irrespective of the user’s weight. The Court adopted Monti’s previous construction and finds that FQ would suffer an unfair detriment if Monti was not estopped because Monti could defeat summary judgment by assuming a contrary position now that the facts show his prior position is unhelpful to him.

In New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001), the Supreme Court outlined the guidelines for finding judicial estoppel in federal courts:

First, a party’s later position must be “clearly inconsistent” with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party’s earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled. Absent success in a prior proceeding, a party’s later inconsistent position introduces no risk of inconsistent court determinations, and thus poses little threat to judicial integrity. A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Here, the Federal Circuit vacated the finding of judicial estoppel – finding that Monti’s new claim construction argument was not “clearly inconsistent” with his prior winning position. Rather, the Federal Circuit saw Monti’s explanation as an attempt to distinguish “selectively applying” in the asserted claim from a “selectively adjusting” limitation in another claim. “This was not “clearly inconsistent” with his arguments on summary judgment, making the application of judicial estoppel inappropriate.”

Breach of Contract (Confidentiality): The breach of contract ruling is also interesting. During discussions Monti sent the following message to FQ: “After using the machine I noticed that it would be better for me to take the back extension out and lower the pivot point.” According to Monti, FQ then disclosed the beneficial aspects of lowering the pivot point (but not removing the back extension). On appeal, the Federal Circuit did could not find any breach of confidentiality because Monti had not disclosed that “lowering the pivot point alone has any benefit.”

 

US News Top IP Programs

Patent

[Updated 5/12/09 at 2:00 pm]

The US News & World Report ranking of Intellectual Property focused law schools was released in late April. The ranking is created by polling professors who teach at least one IP course. The professors then list up to fifteen programs with good IP programs. Those "votes" are then used to create a ranking. Of course, most IP professors are not patent professors. All of the programs on the list have excellent IP faculty. However, only a few have a patent focus.

The US News list:

Rank

Law School

1.

Stanford University

2.

University of California–Berkeley

3.

George Washington University

4.

Columbia University; Illinois Institute of Technology (Chicago-Kent) (tie)

6.

Franklin Pierce Law Center

7.

University of Houston

8.

Santa Clara University; Yeshiva University (Cardozo) (tie)

10.

Duke University

Link

Patently-O Rankings: I have redone my list of "the top thirty law school patent programs" based solely on the number of Patently-O visits received from the associated university in the past year. There are many issues with problems with this study – although it is probably at least as good as the US News IP Specialty ranking. Some of the problems: Many schools may not use their name in their IP address — making them lose their ranking. This appears to be largely true of Franklin Pierce Law Center. Schools where students (and professors) primarily study away from campus building may also rank relatively lower.  Finally, many of the visits to Patently-O may come from other departments – such as the Technology Transfer office – rather than the law school.

Rank

School

Relative Score

1

GWU

100%

2

Stanford

65%

3

Harvard; Columbia

50%

5

Texas; Missouri; Washington U; George Mason; Santa Clara

45%

10

Richmond; NYU

40%

12

BU; Berkeley; Georgetown; Virginia

35%

16

Duke; Minnesota; Northwestern; U Washington

30%

20

SUNY Buffalo; Loyola (LA); Cornell

25%

23

Illinois; BC; Houston; Denver; Arkansas; Ohio State; Depaul

20%

30

Iowa; Fordham; William & Mary; Suffolk; Wisconsin; Colorado; Penn State; Utah; Florida; Yale; Chicago; Syracuse; UPenn

15%

 

To add an additional layer of confusion, remember that many folks access Patently-O through the free daily e-mail. The following list ranks law school's according to the number of Patently-O e-mail subscribers. Here, we may have bias if some subscribers use their personal e-mail account (such as gmail) instead of the university account.

Rank

Law School

Relative Score

1

Pierce Law (Franklin Pierce)

100%

2

University of Michigan

75%

3

Stanford

55%

4

GWU

40%

5

NY Law School; Columbia; Colorado; Case Western, U Washington, Elon

35%

11

Michigan State; Chicago-Kent; Denver

30%

14

George Mason; Cornell; BU; Berkeley; Albany; Washington U; SMU

25%

 

Lieter Ranking: One part of the 'reputational' ranking of an IP program is based on the scholarship of the faculty. In 2007, Professor Lieter compiled a list of the top-ten intellectual property / cyberlaw faculty and ranked them according to the number of times their work had been cited in law review articles. The Lieter ranking is listed below:

  • Mark Lemley (Stanford University):  2110 citations, age 41.
  • Robert Merges (University of California, Berkeley):  1280 citations, age 48.
  • Thomas McCarthy (University of San Francisco), 1100 citations, age 70.
  • Pamela Samuelson (University of California, Berkeley):  970 citations, age 59.
  • Jessica Litman (University of Michigan):  870 citations, age 54.
  • Dan Burk (University of Minnesota [Now IRVINE]):  840 citations, age 45.
  • Jane Ginsburg (Columbia University):  840 citations, age 52.
  • Rochelle Dreyfuss (New York University):  790 citations, age 60.
  • Paul Goldstein (Stanford University):  790 citations, age 64.
  • Julie Cohen (Georgetown University):  740 citations, age 43.

Runners-up for the top ten:  Yochai Benkler (Harvard University):  730 citations; Rebecca Eisenberg (University of Michigan), 690 citations; Neil Netanel (University of California, Los Angeles), 640 citations; Wendy Gordon (Boston University), 610 citations; A. Michael Froomkin (University of Miami), 600 citations. 

Other highly-cited scholars who don't work exclusively in this area::  Lawrence Lessig (Stanford University [Now Harvard]), 2500 citations; William Landes (University of Chicago), 1550 citations; Margaret Jane Radin (University of Michigan), 1210 citations; William W. Fisher (Harvard University), 1020 citations; James Boyle (Duke University), 710 citations.

 

Design Patent Law: The New Ordinary Observer Test

Patent,

Sofpoool LLC v. Intex Recreation Corppic-31.jpg . (Fed. Cir. 2009)(Nonprecedential)

In Egyptian Goddess, an en banc Federal Circuit eliminated the points of novelty test as a separate requisite test of infringement of a design patent. Rather, the court held that design patent infringement should be determined based on the “ordinary observer test” — a test that originated in the 19th century Gorham case.

In Sofpool, a pre-Egyptian Goddess District Court asked a jury to determine infringement based on both the points of novelty test and the ordinary observer test. As expected in essentially all point of novelty cases, the jury returned a verdict of noninfringement.

On appeal, the Federal Circuit vacated. The interesting portion of this opinion stems from the patent holder’s request that the appellate court issue a judgment of infringement. During trial, Intex admitted that its design might infringe under the ordinary observer test. The Federal Circuit disregarded that admission and broke from tradition by noting that Egyptian Goddess created a “new” ordinary observer test. Thus, the prior admission does not satisfy the new test.

Sofpool argues that it “is entitled to an instruction on remand that the ’817 patent is infringed, because both Intex’s expert and its attorney conceded that the accused design satisfied the ordinary observer test.” We disagree. Although Intex acknowledged that its oval pool might infringe the ’817 patent under the ordinary observer test as it existed prior to Egyptian Goddess, Intex has never conceded that its oval pool infringes under this court’s newly articulated ordinary observer standard.

Attorneys will need to work-out how this decision meshes with the statement in Egyptian Goddess that the court was reviving the Gorham test:

From Egyptian Goddess: [I]n accordance with Gorham and subsequent decisions, we hold that the “ordinary observer” test should be the sole test for determining whether a design patent has been infringed.

If anything, Egyptian Goddess changed the Gorham test by stating that similar prior art may be used to “highlight[] the differences between the claimed and accused design.”

BPAI Precedential Opinion: The Nexus for Obviousness and Nonobviousness

BPAI, Obviousness, Patent, Patent Cases 2009,

Ex parte Jellá (BPAI Precedential Opinion) fd081619-1.pdfpic-30.jpg

Most modern metal garage doors have four or five panel sections. The older wooden doors often had only one panel. Jella’s invention is simple — have three panels each “substantially twenty-eight inches” in hight. The prior art taught “any number” of panels including one, four, five, or six. Following the examiner’s lead, the Board of Patent Appeals and Interferences (BPAI) found the invention obvious.

The BPAI issued a precedential opinion focusing on obviousness. The prima facie case of obviousness is easy under KSR even without any evidence that anyone had previously considered a twenty-eight inch door.

The Court in KSR noted that “[wlhen a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, Section 103 likely bars its patentability.” Changing a conventional seven foot high overhead garage door from a four panel section door to a three panel section door is nothing more than a predictable variation sparked by design incentives in the hope that a new look to the door would result in increased sales.

What it looks like here is that the driver for the innovation really was a need for a new ornamental design – motivating PHOSITA to create the obvious variation.

In our minds, this is an example of market demand driving a design trend, and the Supreme Court in KSR warned against granting patent protection to advances such as this that would occur in the ordinary course without real innovation . . . .

We further find that market pressure existed in the garage door industry to create a new design trend by updating the look of garage doors to spur additional sales in the industry.

In addition to allowing ornamental design needs to serve as the motivator to try a new design, the Board did not require any tight nexus between the design motivation and the new design (other than the need for a new design).

I highlight the lax approach on obviousness to contrast the Board’s strict approach when considering objective or secondary factors of nonobviousness.

Nexus: The bulk of the Jellá opinion is spent repeatedly shooting down the applicant’s arguments on secondary considerations of non-obviousness and the accompanying declarations. The most often repeated point was that any objective evidence must have a clear nexus with the invention as claimed.

“To be given substantial weight in the determination of obviousness or non-obviousness, evidence of secondary considerations must be relevant to the subject matter as claimed, and therefore the examiner must determine whether there is a nexus between the merits of the claimed invention and the evidence of secondary considerations.”

The nexus requirement include being “commensurate in scope with the claims.”

Ornamental Features in Utility Patents: Additionally, the ornamentality or striking good looks of a design cannot be used as evidence of nonobviousness. Here, the BPAI rejected a declaration discussing the “unique” look of the garage door based on a desire to avoid overlap with design patent law: “Were we to allow secondary considerations of non-obviousness to be based on the industry’s reaction to the ornamental appearance of the claimed invention, we would be blurring the distinction between design and utility patent protection. Objective evidence of secondary considerations of non-obviousness should be tied to the functional aspects of the claimed invention for a utility patent application.” Oddly enough, the BPAI did allow the PTO to use the ornamental features to prove a “market pressure” — finding that “market pressure existed in the garage door industry to create a new design trend by updating the look [and appearance] of garage doors to spur additional sales in the industry. …  In our minds, this is an example of market demand driving a design trend, and the Supreme Court in KSR warned against granting patent protection to advances such as this that would occur in the ordinary course without real innovation.”

Rejection Affirmed.