Pending En Banc Petitions at the Federal Circuit

by Dennis Crouch

The Federal Circuit recently decided the en banc design patent case of LKQ v. GM, but the court has not issued an en banc decision in a utility patent case since 2018.  There are currently four interesting petitions pending before the court.

• Brumfield Rehearing Petition
• Edwards LifeSci Rehearing Petition
• Salix Rehearing Petition
• Luv N’ Care, Rehearing Petition

Brumfield – Consistency and Proving International Damages: The Federal Circuit panel affirmed the district court’s grant of summary judgment that the asserted claims of the two asserted patents are invalid under 35 U.S.C. § 101. Brumfield v. IBG LLC, No. 2022-1630 (Fed. Cir. Mar. 27, 2024).  Although the Federal Circuit had previously held that the claimed invention was “technological,” the court here concluded that it was not bound by that prior non-precedential decision. In the petition for rehearing, Brumfield argues the improperly disregarded the Federal Circuit’s prior finding that the patents claim technological improvements.  The contention here is that “the interest of consistency would be ‘ill served'” by allowing different panels to make contradictory findings about the same patent claims.” See, Burke, Inc. v. Bruno Indep. Living Aids, Inc., 183 F.3d 1334 (Fed. Cir. 1999). Id.

The panel also affirmed the district court’s exclusion of Brumfield’s damages expert’s testimony on obtaining foreign damages based on IBG’s domestic making of the accused product. The panel held that although the Supreme Court’s WesternGeco  decision permits awarding damages based on foreign conduct in cases involving domestic infringement, the expert had failed to establish the required causal relationship between the domestic infringement and the foreign conduct. In the rehearing petition, Brumfield argues the improperly decided this fact-intensive causation issue sua sponte, depriving Brumfield of the opportunity to present evidence on an issue that IBG never disputed below or on appeal. [Note: I was involved in litigating patents from this patent family when owned by the predecessor-in-interest. I am no longer involved the litigation. DC]

Edwards Lifesciences – Expanded 271(e)(1) Safe Harbor: In Edwards Lifesciences Corp. v. Meril Life Sciences Pvt., a split Federal Circuit panel affirmed the district court’s summary judgment that Meril’s importation of its transcatheter heart valve fell within the safe harbor provision of 35 U.S.C. § 271(e)(1) and thus, did not infringe Edwards’ patent. No. 2022-1877 (Fed. Cir. Mar. 25, 2024). The majority held that the safe harbor applied because Meril’s importation was “reasonably related to submitting information to the FDA,” even though there was evidence of other commercial uses. The dissent argued that the majority perpetuated the court’s failure to give meaning to the word “solely” in the statute, which cabins the safe harbor to uses solely related to the federal regulatory process. Section 271(e)(1) states that it “shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

Edwards has now petitioned for en banc rehearing, arguing that the panel decision vastly expands § 271(e)(1)’s safe harbor by reading the term “solely” out of the statute, in contravention of the provision’s plain text, history, and purpose. According to Edwards, any non-regulatory use is disqualifying under the correct reading of “solely.” Edwards contends the panel was bound by circuit precedent incorrectly holding that once a defendant identifies any use reasonably related to FDA approval, the safe harbor applies regardless of other non-regulatory uses. (citing AbTox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997)).

Edwards argues this precedent flouts the statutory text and history showing Congress struck a “careful balance” in § 271(e)(1) to allow infringement only for the singular purpose of seeking regulatory approval. By judicially rewriting this compromise to protect non-regulatory and commercial conduct, Edwards claims the Federal Circuit has distorted the market for patented products, undermined the patent bargain, and created a powerful statutory immunity ripe for abuse.

Salix Pharms – Improper Appellate Obviousness Fact Finding: The Federal Circuit recently affirmed the district court’s judgment that several claims of Salix’s patents covering methods of treating irritable bowel syndrome with diarrhea (IBS-D) using rifaximin were invalid as obvious. Salix Pharms., Ltd. v. Norwich Pharms. Inc., 2022-2153 (Fed. Cir. Apr. 11, 2024). Salix has petitioned for rehearing en banc, arguing that the panel majority improperly found facts in the first instance rather than reviewing and analyzing the district court’s fact-finding as required by precedent. See Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709 (1986); Atl. Thermoplastics Co. v. Faytex Corp., 5 F.3d 1477 (Fed. Cir. 1993).

The petition contends that after correctly determining the district court erred in its obviousness analysis by misapplying the prior-art range precedent, the CAFC panel majority should have reversed or remanded for further fact-finding by the district court. Instead, Salix argues, the majority improperly made its own findings on key disputed factual issues never resolved by the district court, such as whether skilled artisans would have viewed small intestinal bacterial overgrowth (SIBO) as a cause of IBS-D or as a separate disorder. The majority relied on prior art references and made factual findings that the district court never made to conclude there was a reasonable expectation of success in using the claimed rifaximin dosage to treat IBS-D.

Additionally, Salix asserts the panel majority applied the wrong standard in determining that the district court’s erroneous reliance on a non-prior art reference (the “RFIB 2001 Press Release”) was harmless error. Rather than considering whether that reference induced the district court to make findings it otherwise would not have made, the majority simply concluded other evidence “established” the relevant fact. But as Judge Cunningham noted in dissent in the original panel decision, the district court heavily relied on the press release to discount evidence of skepticism in the art. The press release factored significantly into the court’s analysis.

Luv N’ Care – Scope of Unclean Hands Defense: The Federal Circuit affirmed the district court’s application of the unclean hands doctrine to bar Eazy-PZ’s patent and trade dress claims against Luv N’ Care due to Eazy-PZ’s litigation misconduct. Luv N’ Care, Ltd. v. Laurain, 2022-1905 (Fed. Cir. Apr. 12, 2024). In its petition for rehearing, Eazy-PZ argues that the panel majority departed from Supreme Court and Federal Circuit precedent requiring that unclean hands be based on misconduct having an “immediate and necessary relation to the equity that he seeks.” Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933); see also Gilead Scis., Inc. v. Merck & Co., 888 F.3d 1231 (Fed. Cir. 2018).

The district court concluded that the patentee Eazy-PZ had engaged in litigation misconduct—all of which was associated with the asserted utility patent. However, the resulting unclean hands penalty was to dismiss the entire case, including the design patent and trade dress claims. The petition argues this was an improper extension without analyzing how the alleged misconduct related to or provided Eazy-PZ an unfair advantage regarding those claims. The petition asserts that withholding information relevant to utility claim construction could not have advantaged the design and trade dress claims. Eazy-PZ argues this expansive application of unclean hands, untethered to the specific relief sought, vitiates the Supreme Court’s “immediate and necessary” relation requirement.

Regarding the ‘903 utility patent itself, Eazy-PZ argues the panel affirmed based on factual findings the district court never made about how any false or evasive testimony impacted Luv N’ Care, violating the rule that appellate courts cannot make factual findings in the first instance.