Tag Archives: Affirmed Without Opinion

The Federal Circuit decides a substantial number of its cases without opinion, but rather simply issues a judgment of “affirmed without opinion.” This procedure began in the late 1980’s and has been relatively noncontroversial. Lately, however, the patent statute has been reconsidered and the process appears to violate Section 144 of the Patent Act.

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.

Holman: A Contrarian Law Professor’s Two Cents on the Arkansas Carpenter’s (Ciprofloxacin) Petition for Certiorari

Academic Studies, Articles and Publications, Patent,

By Christopher M. Holman, Ph.D., J.D., Associate Professor at UMKC Law School

Professor Mark Lemley recently filed an amici curiae brief on behalf of himself and a cohort of prominent professors of law, economics, and business in support of a petition for certiorari in Arkansas Carpenter's Health and Welfare Fund v. Bayer (the "Professors’ Brief").[1] Joining the professors as amici on the brief are the American Antitrust Institute, the Public Patent Foundation, and AARP. These professors and organizations are asking the Supreme Court to review and reverse the Federal Circuit's decision in In re Ciprofloxacin Hydrochloride Antitrust Litigation.[2] Arkansas Carpenter's is the latest in a string of certiorari petitions that have been filed in cases involving an unsuccessful antitrust challenge to a so-called “reverse payments settlement” between a drug patent owner and a potential generic competitor. So far the Supreme Court has denied all of the petitions.

The defining characteristic of a reverse payments settlement is the transfer of some form of consideration, often but not always cash, from the patent owner to the alleged infringer. In most settlements of patent infringement suits any payment typically flows from the alleged infringer to the patent owner, i.e., in the "forward" direction. Reverse payment settlements of challenges brought against prescription drug patents under the Hatch-Waxman Act have been controversial for years. The FTC and others charge that these agreements are anti-competitive and result in substantially higher prescription drug prices for consumers (and ultimately third-party payers such as the government). The atypical direction of the payment is considered suspect by many who view it as evidence that the merits of the patent case must be weak, and argue that the branded drug company is in effect paying the generic company to stay off the market and using the patent as a mere pretense to skirt antitrust liability. Clearly, absent the patent a naked agreement by a generic drug company to stay off the market in exchange for cash would constitute an antitrust violation.

Nonetheless, courts who have considered the legality of reverse payment settlements have repeatedly concluded that, in view of the incentives and dynamics created by the unique structure of a patent infringement suits brought under the Hatch-Waxman Act, it is neither surprising nor particularly suspicious to find payments flowing from the patent owner to the alleged infringer in the settlement of these suits. In fact, even the FTC has acknowledged that at least some reverse payment settlements are legitimate and even pro-competitive. In most patent infringement litigations, the alleged infringer faces the prospect of potentially large money damages based on its past infringement, so there is often an incentive to pay the patent owner to settle the lawsuit and avoid this risk. In contrast, Hatch-Waxman litigation generally occurs before the potentially infringing generic drug goes on the market. The generic drug company typically faces no risk of money damages for past infringement. At the same time, the drug patent owner faces huge potential financial losses if even one court finds its patent invalid or not infringed, and given the uncertainty patent litigation, particularly at the district court level, it is not surprising that some patent owners would be willing to pay to settle the lawsuit and resolve the uncertainty.

The Professor's Brief is essentially an updated version of a brief Professor Lemley filed in 2006 in support of a petition for certiorari in In re Tamoxifen, a reverse payment settlement antitrust challenge arising out of the Second Circuit. In 2006, I seriously considered signing on to his Tamoxifen amici brief; without having delved into the issue, the notion of reverse payments settlements as characterized by Professor Lemley and others struck me as suspicious and anti-competitive . After all, why would a patent owner pay an alleged infringer to settle a lawsuit unless the merits of the patent case were weak? Under these circumstances, is it not logical to infer that the parties are using the patent lawsuit as a mere pretense to provide cover for what is in actuality an agreement between potential competitors not to compete? However, before I signed on to the brief I decided to read the Second Circuit'sTamoxifen decision, as well as the reverse payments settlement decisions that had already been issued by the Sixth and Eleventh circuits. In his brief, Professor Lemley argued that the decisions from these other circuits were in conflict with the Second Circuit's decision in Tamoxifen. After reading the cases, I found that I disagreed with Professor Lemley's interpretation of the decisions, and concluded that in fact there is no split between the circuits. In fact, the decisions by the Second, Sixth and Eleventh circuits (and now the Federal Circuit) are all quite consistent, taking into account that each case involves its own unique settlement agreements and other surrounding facts, and that the decisions necessarily reflect the facts of the individual case being decided.

Reading these decisions sparked my curiosity, particularly since my interpretation of the case law diverged substantially from that of Lemley and many other academic commentators. I decided to research the topic, and in 2007 I published an article entitled “Do Reverse Payments Settlements Violate the Antitrust Laws?”[3] In the article, I survey the diverse array of patent settlements that have been lumped together under the imprecise label "reverse payment settlement,” and explain the factors that motivate the structure of these settlements. After reviewing the facts surrounding specific settlement agreements, and considering the well reasoned explanations of various judges who have rejected the notion that the mere presence of a reverse payment can render an otherwise legitimate patent settlement illegal, I came to disagree with the position propagated by the FTC and academics such as Professor Lemley, i.e., that the mere inclusion of a reverse payment in an otherwise legal patent litigation settlement renders the agreement per se or presumptively in violation of the antitrust laws. Moreover, my view is aligned with that of the vast majority of courts that have addressed the issue. After a close reading of the decisions, it is clear to me that the purported split between the circuits has so far failed to materialize, although the situation could change if and when other circuits weigh in on the issue.

In this short article penned for Patently-O, I will challenge some of the specific assertions made in the Professors’ Brief. For simplicity, many of the citations in this article are to my law review article. Those interested in a more expansive treatment of the subject are encouraged to consult the law review article, which includes primary cites to the cases and other authorities.

(more…)

Federal Circuit Awards Sanctions for Frivolous Appeal

Attorney Fees, CAFC, Patent, Patent Cases 2009, Software

E-Pass v. 3Com, Palm, Visa, et al. (Fed. Cir. 2009)

This litigation began in 2000 when E-Pass sued for infringement of its electronic credit card patent. Patent No. 5,276,311. The district court granted summary judgment of non-infringement, which was affirmed on appeal. The district court then found the case exceptional under 35 U.S.C. § 285 and awarded attorneys’ fees to the defendants. E-Pass appealed that judgment. In a counter-motion, PalmSource also asked for attorneys fees for the appeal – arguing that the appeal was frivolous as well. The Federal Circuit affirmed the trial court without opinion, but wrote an extensive opinion finding a frivolous appeal.

Frivolous Appeal: An appeal is frivolous if the appellant fails “to present cogent or clear arguments for reversal.” In addition, the court may award sanctions based on misconduct or misrepresentations to the appellate court.

Here, the court found that E-Pass did not present any specific argument relating to the attorney fees for one of the defendants – PalmSource. Instead, the plaintiff-appellant focused on its case against the other defendants. E-Pass did not “challenge any finding of the district court relating to litigation misconduct in the case against PalmSource.” Furthermore, E-Pass did not change its strategy even after being notified of PalmSource’s frivolous appeal argument. Adding to E-Pass’s problems are “multiple misrepresentations” to the Federal Circuit – primarily in referring to the defendants collectively when each stood in different situations. Perhaps the straw-that-broke-the-camel’s-back was E-Pass’s use of the quote that “a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless.” With the help of PalmSource and the CAFC clerks, the court easily found that a critical exception to the sanctions rule had been left off. Notably, the full quote reads: “Absent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless.”

Sanctions and attorney fees granted against E-Past and its counsel, jointly and severally.

In dissent, Judge Bryson saw serious misconduct, but would not have imposed sanctions.

Accepting that in those regards E-Pass’s briefs on appeal fell short of the standards we expect of counsel in this court, I nonetheless conclude that the shortfall is not so egregious as to call for the imposition of sanctions.

Improper Summary Judgment on Doctrine of Equivalents; Marking Products that Perform Method Claims

Damages, Doctrine of Equivalents, Method Claims, Patent, Patent Cases 2009, Summary Judgment, , ,

Crown Packaging v. Rexam Beverage Can (Fed. Cir. 2009)

On summary judgment, the district court held that Rexam did not infringe Crown’s patent beverage can-top patent. The lower court also found that that Crown did not infringe Rexam’s beverage can “necking” patent. On appeal, the Federal Circuit reversed both rulings.

The Doctrine of Equivalents: Over the past two decades, the doctrine of equivalents been pushed out of the usual infringement discussion. Part of the doctrine’s downgrade is due to restricted application due to prosecution history estoppel (Festo) and tighter doctrine (Warner-Jenkinson). Perhaps equally important in the decline of the DOE has been the rise of claim construction as the primary variable of patent litigation. Rather than arguing for infringement as an equivalent, applicants are instead arguing for broad construction of the claim terms. Finally, patent drafters are – on average – better today than they were twenty years ago and spend more energy on considering how to draft claims that capture literal infringement. In a 2007 paper, Professors Lemley and Allison found something similar – that since the late 1990’s (even before Festo), that “equivalents claims usually failed, most often on summary judgment.” Their paper title – “Demise of the Doctrine of Equivalents” – overstates its case. The DOE is sometimes valuable.

Function-Way-Result Test: There are at least two alternate tests for infringement under the doctrine of equivalents. The function-way-result test considers “on a limitation by limitation basis” whether “the accused product performs substantially the same function in substantially the same way with substantially the same result as each claim limitation of the patented product.”

Summary Judgment on DOE: Here, the issue was not so much the law of the DOE, but rather the requirement for summary judgment that there be no remaining material issue of fact. Crown’s patent claims an “annular reinforcing bead,” while Rexam’s product uses a reinforcing fold. The lower court found those different enough to avoid infringement under the DOE. On appeal, however, the Federal Circuit reversed – finding at least one unresolved material issue of fact that precluded summary judgment. DOE requires expert testimony to step through the function-way-result test. And, here, the patentee’s expert stepped through each element and his testimony had not been completely indicted or even refuted.

Because Crown provided evidence in support of its position that the annular reinforcing bead of claim 14 of the ‘826 patent had only one function, and because we must resolve any reasonable factual inferences in favor of the nonmoving party, we conclude that there is a material issue of fact regarding the function of the claimed bead. Accordingly, we reverse and remand the district court’s grant of summary judgment of noninfringement.

This decision by Judge Moore is in line with the court’s 2008 Voda case which was affirmed after parsing expert testimony to ensure that the elements had been properly proven. (In Voda, the court used the alternative “insubstantial difference” test.)

Unmarked Sales by Licensee: In a scenario reminiscent of the recent Quanta v. LG case, Rexam licensed its patents to Belvac to make “neckers” used to stretch out the top of the can bodies. Under the license, Belvac was required “to notify its customers that they would require a separate license from Rexam to perform the smooth die necking method” that is claimed in Rexam’s patents. The license did not require Belvac to mark the machines that it sold. And, in fact, Belvac did not mark them with the Rexam patent number. Crown then used the machine to make over one hundred billion cans.

Marking under 35 U.S.C. § 287(a): The district court found that this past infringement was not actionable because Crown was not on notice of the patent. That decision seemingly follows from 35 U.S.C. § 287(a). Under that provision, a patentee who does not properly mark a patented article “is not entitled to damages for infringement prior to actual notice.” (quoting CAFC decision).

Marking of Method Claims: Rexam’s trick here was to assert only method claims. On its face, Section 287 applies to “any patented article,” and Federal Circuit precedent has clearly stated that the marking requirement does not apply when only method claims are asserted. With palpable regret, Judge Moore writes:

“The law is clear that the notice provisions of § 287 do not apply where the patent is directed to a process or method. Bandag, Inc. v. Gerrard Tire Co., 704 F.2d 1578, 1581 (Fed. Cir. 1983). In Hanson, 718 F.2d 1075 (Fed. Cir. 1983)—we held that 35 U.S.C. § 287(a) did not apply where the patentee only asserted the method claims of a patent which included both method and apparatus claims. Hanson is factually identical to this case, and we are therefore bound by the rule of Hanson.”

Thus the patentee is free to claim damages back six years under Section 286 even without marking or providing actual notice. This decision thus provides an additional reason to include method claims in a patent application. Now, it would be improper to conclude that there is no reason to mark products that perform method claims. In the 1993 American Medical Systems case, the Federal Circuit ruled that marking would be required if “both apparatus and method claims” were asserted and there is a “tangible item to mark.” In this case, the patent claimed both a method and apparatus, but Rexam sued only on the method claims.

Written Description: Federal Circuit Again Invalidates Broadened Claims

Enablement, Patent, Patent Cases 2009, , , ,

ICU Medical v. Alaris Medical System (Fed. Cir. 2009)

This is the second post on the ICU case. Part I discusses the $4.6 million award of attorney fees to the accused infringer based on the patentee’s litigation misconduct.

The district court found several of ICU’s claims invalid for lack of written description under 35 U.S.C. § 112, ¶ 1. On appeal, the Federal Circuit affirmed. (Judges Michel (CJ), Prost, and Moore; Opinion by Moore). Although similar to enablement, the written description requirement pushes an applicant to “convey with reasonable clarity to those skilled in the art that, as of the filing date sought, he or she was in possession of the invention.” Most often, written description arises in cases where new matter is added to the claims during prosecution. That is also the case here – during prosecution ICU amended its claims to include “spikeless” claims — directed to a valve mechanism for adding drugs to an IV without using needles.

To be clear – the original claims included the “spike.” That element was removed during prosecution – seemingly broadening the claims. As the court stated “we refer to these claims as spikeless not because they exclude the preferred embodiment of a valve with a spike but rather because these claims do not include a spike limitation—i.e., they do not require a spike.” It is that failure to include any discussion of a spike in the claim that lead to the claim being held invalid for lack of written description.

The Federal Circuit does not cite Gentry Gallery or the infamous “omitted element” or “essential element” theories. However, the court does rely heavily on LizardTech. In that case, the court did not point to any claim limitation that was not sufficiently described. Rather, the court found the claim invalid because an embodiment arguably covered by the claim was not sufficiently disclosed.

We addressed a similar issue in LizardTech . . . We explained that “the specification provides only one method for creating a seamless DWT, which is to ‘maintain updated sums’ of DWT coefficients. That is the procedure recited by claim 1. Yet claim 21 is broader than claim 1 because it lacks the ‘maintain updated sums’ limitation.” We determined, however, that “[a]fter reading the patent, a person of skill in the art would not understand how to make a seamless DWT generically and would not understand LizardTech to have invented a method for making a seamless DWT, except by ‘maintaining updat[ed] sums of DWT coefficients.'” We therefore concluded that claim 21 was invalid under the written description requirement of § 112, ¶ 1.

In LizardTech, the court explicitly rejected the argument that the written description requirement “requires only that each individual step in a claimed process be described adequately.”

In this case, ICU’s original disclosure focused on spiked embodiments, but the more generic claims are not so limited.

ICU’s asserted spikeless claims are broader than its asserted spike claims because they do not include a spike limitation; these spikeless claims thus refer to medical valves generically—covering those valves that operate with a spike and those that operate without a spike. But the specification describes only medical valves with spikes.

Since all the embodiments included the “spike,” the court concluded that “Based on this disclosure, a person of skill in the art would not understand the inventor … to have invented a spikeless medical valve.”

Invalidity affirmed

Notes:

  • This case also includes an important discussion of claim differentiation that will be dissected in a later post.  
  • Of course, this case suggests the best patent drafting practice of providing multiple embodiments of each claim element, and considering whether each and every limitation in the broadest original claims are necessary.
  • ICU broadened its claim by dropping a limitation — did ICU introduce new matter?
  • In a powerful rhetorical approach, Judge Moore chose to refer to the broad claims as “spikeless claims.” As mentioned, those claims do not include a “spikeless” limitation. Rather, they simply omit a “spike” element. As it turns out more than 99.9% all patent claims issued in 2008 are silent about “spikes,” and under the traditional interpretation of the “comprising” transition – all those claims would literally cover embodiments without spikes. The holding here cannot be that all those claims are invalid. I believe that the holding here is largely a result of the fact that the accused device was in-fact spikeless. Unfortunately, this decision does not provide helpful guidance as to when it will apply. Rather, it appears to simply be an additional vague tool available to defense attorneys.
  • The court did not mention enablement – since it was easy to remove the needle from a syringe and the disclosure includes a preslit seal that could arguably work with a spikeless syringe. That modification would have been enabled based on the original disclosure.

Patent Attorney Argument as Inequitable Conduct

Inequitable Conduct, Patent, Patent Cases 2009, ,

Rothman v. Target Corp. (Fed. Cir. 2009)

A New Jersey jury found Rothman’s patent invalid, not infringed, and unenforceable due to inequitable conduct. (Pat No. 6,855,029). On appeal, the Federal Circuit reversed the inequitable conduct holding, but otherwise affirmed.

Obviousness: The asserted patent covers a breastfeeding shirt that includes a concealed, but fully supportive nursing bra. The original prototype was built by Ms. Rothman by sewing a Jockey brand tank-top together with an Olga brand nursing bra and some additional fabric. Thus, here we have a situation where the inventor took off the shelf items and took a few hours (a day into the night) to form them into a new combination. The appellate panel recognized that the particular manner in which an invention is actually made does not negate patentability. However, the appellate panel did see the simple inventive process as evidence of “the predictability and expectations in this field of art.” Based on these facts, the court could find no reason to disturb the obviousness holding since a PHOSITA “would have been motivated to combine an existing tank top with an existing nursing bra to arrive at the claimed invention.”

Inequitable Conduct: The Federal Circuit reversed the jury’s finding of inequitable conduct. One point of interest involved the patent attorney argument that “nursing garments are highly specialized … as distinguished from maternity garments, [and] are not analogous prior art to women’s garments in general…. Therefore, it is improper to combine a prior art reference from nursing garments with a prior art reference from garments generally, with no connection to nursing garments.” It turned out that the patent attorney had no prior experience in nursing garment technology and did not consult any industry experts before making his claims regarding the ‘highly specialized’ nature of the art and the impropriety of combining prior art.

The Federal Circuit no problem with these attorney statements:

[The attorney’s] remarks show an effort to persuade that does not even approach an effort to deceive the PTO or abuse the prosecution process. …

Appellees find fault with the final sentence from the excerpt above. However, [the attorney’s] conclusion that it is “improper to combine a prior art reference from nursing garments with a prior art reference from garments generally, with no connection to nursing garments” is nothing more than attorney argument based on the foregoing facts … [derived] from his analysis that nursing garments are different from regular women’s wear. … In any event, this type of conclusory analysis betrays no intent to deceive the PTO and obtain a patent with objectively false information. Rather, it is an attempt to characterize the prior art in a manner favorable to the attorney’s client—far from deception. No reasonable jury could rely on Mr. Jacobson’s statements as clear and convincing proof of inequitable conduct.

While the law prohibits genuine misrepresentations of material fact, a prosecuting attorney is free to present argument in favor of patentability without fear of committing inequitable conduct. . . . This court has little basis to find deceptive intent in the routine back and forth between examiner and applicant. Moreover, this court recognizes that the Patent Act gives the examiner the discretion to reject or accept an applicant’s arguments based on the examiner’s own conclusions regarding the prosecution record.

Attorneys should take this decision with a grain of salt based on the fact that Judge Rader authored the opinion and Judge Friedman was on the panel. Judge Rader is well known for his opinion that inequitable conduct is too liberally adjudged.

Federal Circuit Affirms (Not) “Obvious to Try” Jury Instructions

Patent, , ,

Rentrop v. Spectranetics Corp. (Fed. Cir. 2008)

Dr. Rentrop is the chief of research at St. Vincent’s Hospital in NYC. For several years Rentrop used Spectranetics optical catheters to deliver LASER treatment. The Spectranetics catheters came in various tip diameters ranging from 1.4 mm to 2 mm. Finding those diameters too inflexible, Rentrop had the idea of using a 0.9 mm tip. Rentrop told Spectranetics of his idea and help them to create a prototype. Eventually Spectranetics obtained FDA approval and began marketing. In the meantime, the parties began to dispute over financial issues. Rentrop wanted a cut of the profits and so he filed for patent protection and eventually sued Spectranetics for infringement. The jury awarded $500,000 in damages.

On appeal, the Federal Circuit quickly affirmed. The most interesting legal issue of the case involves the pre-KSR jury instructions. The first part focused on the teaching-suggestion-motiviation test:

“In evaluating the scope and content of the prior art, you should keep in mind that there must have been some suggestion for a person skilled in the art to make the combination covered by the claims of the patent in issue in order for the claims to have been obvious. In other words, a claim in a patent is not obvious and invalid, simply because the claim combines elements that can all be found among the prior art references. It must have been a motivation or a suggestion to combine the limits in a manner disclosed by the patent.”

The Federal Circuit found this instruction proper – in context – because the instructions defined motivation as potentially arising “from common knowledge, or common sense of the person of ordinary skill in the art, without any specific hint or suggestion in a particular reference.”

Obvious to Try: The jury instruction on obviousness also included the statement that a “the test for obviousness is not whether or not it would have been obvious to try to make the invention.” The defendant argued that the instruction violates KSR. In KSR, the Supreme Court held that the Federal Circuit was in error to hold that a “patent claim cannot be proved obvious merely by showing that the combination of elements was obvious to try.” The Federal Circuit, however, was able to logically reconcile the two statements – noting that the jury instruction “does not imply that a showing that the specific combination of elements was obvious to try is insufficient to find obviousness.”

Notes:

  • Northern District of California Chief Judge Vaughn Walker authored the opinion while sitting by designation on the Federal Circuit.
  • Spectranetics recently filed for ex parte reexamination of two of Rentrop’s patents. [LINK]

Federal Circuit Affirms (Not) “Obvious to Try” Jury Instructions

Patent, , ,

Rentrop v. Spectranetics Corp. (Fed. Cir. 2008)

Dr. Rentrop is the chief of research at St. Vincent’s Hospital in NYC. For several years Rentrop used Spectranetics optical catheters to deliver LASER treatment. The Spectranetics catheters came in various tip diameters ranging from 1.4 mm to 2 mm. Finding those diameters too inflexible, Rentrop had the idea of using a 0.9 mm tip. Rentrop told Spectranetics of his idea and help them to create a prototype. Eventually Spectranetics obtained FDA approval and began marketing. In the meantime, the parties began to dispute over financial issues. Rentrop wanted a cut of the profits and so he filed for patent protection and eventually sued Spectranetics for infringement. The jury awarded $500,000 in damages.

On appeal, the Federal Circuit quickly affirmed. The most interesting legal issue of the case involves the pre-KSR jury instructions. The first part focused on the teaching-suggestion-motiviation test:

“In evaluating the scope and content of the prior art, you should keep in mind that there must have been some suggestion for a person skilled in the art to make the combination covered by the claims of the patent in issue in order for the claims to have been obvious. In other words, a claim in a patent is not obvious and invalid, simply because the claim combines elements that can all be found among the prior art references. It must have been a motivation or a suggestion to combine the limits in a manner disclosed by the patent.”

The Federal Circuit found this instruction proper – in context – because the instructions defined motivation as potentially arising “from common knowledge, or common sense of the person of ordinary skill in the art, without any specific hint or suggestion in a particular reference.”

Obvious to Try: The jury instruction on obviousness also included the statement that a “the test for obviousness is not whether or not it would have been obvious to try to make the invention.” The defendant argued that the instruction violates KSR. In KSR, the Supreme Court held that the Federal Circuit was in error to hold that a “patent claim cannot be proved obvious merely by showing that the combination of elements was obvious to try.” The Federal Circuit, however, was able to logically reconcile the two statements – noting that the jury instruction “does not imply that a showing that the specific combination of elements was obvious to try is insufficient to find obviousness.”

Notes:

  • Northern District of California Chief Judge Vaughn Walker authored the opinion while sitting by designation on the Federal Circuit.
  • Spectranetics recently filed for ex parte reexamination of two of Rentrop’s patents. [LINK]

Gardner: Patent Bar Should Use Its High Priced Skills to Overcome Bilski et al.

Patent, ,

In my last post on Bilski, I added my Comiskey ‘fear factor’ to Paul Gardner’s analysis of post-Bilski claim strategies. In response, Mr. Gardner first notes that the Comiskey language I quoted is “dicta, supported only by arguably inapposite precedent, and presumably uninformed by any discourse in the briefing.” Beyond that, however, Gardner explains that the Patent Bar should stand-up and explain to the PTO and courts that “the application of novel and nonobvious software to otherwise computer hardware is neither ‘routine’ nor ‘typical.'”

Paul Gardner: The verbiage in Comiskey from which you opine in the September 20, 2007 issue of Patently O that “Comiskey could be read to indicate that any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious” is dicta, supported only by arguably inapposite precedent (n. 16 in Comiskey), and presumably uninformed by any discourse in the briefing (given the fact that the court remanded the case to the Patent Office for ruling on the Section 103 issue). Moreover, the opinion says only that “[t]he routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness.” (Emphasis added.) I can’t help but wonder whether such gratuitous, patent-negative dicta is in large part the unintended but predictable consequence of the patent bar too often capitulating to rejections rather than aggressively asserting their clients’ rights to protection (caused, perhaps, by clients’ limited funding of patent prosecution). By “aggressively asserting,” I mean arguing forcefully in a given case that the application of novel and nonobvious software to otherwise conventional computer hardware is neither “routine” nor “typical,” and that labeling it “routine” or “typical” at the front end is to prejudge the 103 issue and forestall reasoned analysis.

I submit that a compelling argument can and should be made that the application of nonobvious software to conventional hardware renders the combination patentable, in much the same way that purification of a naturally-occurring substance renders the purified substance patentable if its therapeutic value is nonobvious. The discovery of the therapeutic value of the naturally-occurring substance makes the purified substance nonobvious notwithstanding the fact that the purification process itself is old and well known. It seems to me that the same logic applies to nonobvious software implemented by old and well known hardware.

One of the two questions you posed last Friday was whether skilled patent attorneys will be able to alter their claim strategies to fit within Bilski’s pronouncements. I believe that it is more important than ever for the patent bar to use their high priced skills to argue against the kind of short-sighted rejections that are coming out of the Patent Office and being affirmed by the courts. The balance has clearly shifted against inventors and patentees in recent years, and only the skills of the advocate can move the balance back to the appropriate position.

Please understand that I do not take issue with your statement that “Comiskey could be read to indicate that any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious.” My concern is that, left without countervailing exposition, such commentary may discourage the patent bar from advocating the contrary.

Written Description: Single Embodiment Insufficient

Enablement, Patent, Patent Cases 2008, ,

This decision is nothing new. Broad claims must either be supported by multiple embodiments or some general principles describing how the single embodiment is applicable to other configurations. Failing that, a broad claim may fail the enablement prong. As seen here, even when enabled, a broad claim without sufficient support will be invalid under the written description requirement.

In re Alonso (Fed. Cir. 2008)

The PTO Board of Appeals (BPAI) rejected claim 92 of Kenneth Alonso’s for failing the written description requirement of Section 112. “To satisfy this requirement, the specification must describe the invention in sufficient detail so that one skilled in the art can clearly conclude that the inventor invented the claimed invention as of the filing date sought.” (quoting case). In an opinion written by Judge Stearns (D.M.A.) sitting by designation, the Federal Circuit affirmed.

Claim 92 of the Alonso patent application claims a “method of treating neurofibrosarcoma in a human by administering an effective amount” of an idiotypic monoclonal antibody (mAb) secreted in a human-human cell hybridoma.

In his application, Alonso only described the preparation of a single mAb, but claimed essentially all Mab’s that bind to neurofibrosarcoma, and the PTO found that a “skilled artisan would reasonably conclude that applicant was clearly not in possession of the claimed genus of compounds. Applicant should direct the claim language toward the only described embodiment (e.g., a mAb produced by hybridoma HB983).”

Standard of Review: The PTO’s factual determinations are reviewed for “substantial evidence.” Thus, the Federal Circuit will affirm when “a reasonable mind might accept [the evidence] as adequate to support a conclusion.” Even if the Federal Circuit might ultimately have seen the facts differently, it will affirm if the PTO’s position is reasonable.

Predictability: The Federal Circuit acknowledged that disclosure of a single embodiment can be sufficient for a broader genus claim. However, more disclosure is necessary when the composition and effectiveness of members of the genus is heterogeneous or unpredictable.

We have previously held in a similar context that “a patentee of a biotechnological invention cannot necessarily claim a genus after only describing a limited number of species because there may be unpredictability in the results obtained from species other than those specifically enumerated.” Noelle v. Lederman, 355 F.3d 1343, 1350 (Fed. Cir. 2004).

Alonso argued that his single embodiment should be given more weight because he had actually reduced it to practice (unlike the Rochester COX-2 case). The Federal Circuit rejected that argument because Alonso had not provided the necessary predictive information – “nothing about the structure, epitope characterization, binding affinity, specificity, or pharmacological properties common to the large family of antibodies implicated by the method.”

Notes:

  • The court gives the following justification for the written description requirement: “The requirement ‘serves a teaching function, as a quid pro quo in which the public is given meaningful disclosure in exchange for being excluded from practicing the invention for a limited period of time.'” quoting Univ. of Rochester, 358 F.3d 916 (Fed. Cir. 2004) (in turn quoting Enzo Biochem, 323 F.3d 956 (Fed. Cir. 2002)).
  • In his 2005 book on Electronic and Software Patents, Steve Lundberg, et al. include the understatement: “The purpose of the written description requirement has been in flux recently.”

In re Bilski: Patentable Process Must Either (1) be Tied to a particular machine or (2) Transform a Particular Article

Patent, Patent Cases 2008, Patentable Subject Matter, , , , , ,

In re Bilski, __ F.3d __ (Fed. Cir. 2008)(en banc)

The Federal Circuit has affirmed the PTO’s Board of Patent Appeals (BPAI) finding that Bilski’s claimed invention (a method of hedging risks in commodities trading) does not satisfy the patentable subject matter requirements of 35 U.S.C. § 101. In doing so, the nine-member majority opinion (penned by Chief Judge Michel) spelled out the “machine-or-transformation” test as the sole test of subject matter eligibility for a claimed process.

The Supreme Court … has enunciated a definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself. A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.

….

Because the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants’ claim here plainly fails that test, the decision of the Board is AFFIRMED.

State Street Test Is Out: In State Street, the Federal Circuit used the “useful, concrete, and tangible result” of a process as a touchstone for patentability. In Bilski, the en banc panel found the State Street formulation “insufficient to determine whether a claim is patent-eligible under § 101.”

[W]e also conclude that the “useful, concrete and tangible result” inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply.

Some Business Methods and Software Are Still In: Still, the court made clear that business methods and Software will still be patentable – if they meet the machine-or-transformation test.

We rejected [a categorical] exclusion in State Street, noting that the so-called “business method exception” was unlawful and that business method claims (and indeed all process claims) are “subject to the same legal requirements for patentability as applied to any other process or method.” We reaffirm this conclusion.

…

[A]lthough invited to do so by several amici, we [also] decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court

To be clear, the machine-or-transformation test is not a physicality test – i.e., a claim can still be patentable even if it does not recite sufficient “physical steps.” On the flip-side, “a claim that recites ‘physical steps’ but neither recites a particular machine or apparatus, nor transforms any article into a different state or thing, is not drawn to patent-eligible subject matter.” Here, the court spelled out the specific issue in mind: a claimed process where every step may be performed entirely in the human mind. In that situation, the machine-or-transformation test would lead to unpatentability. “Of course, a claimed process wherein all of the process steps may be performed entirely in the human mind is obviously not tied to any machine and does not transform any article into a different state or thing. As a result, it would not be patent-eligible under § 101.”

Along this line, the court also dispelled two rising concerns, noting that that (1) neither novelty nor obviousness have any relevance to the section 101 inquiry, and (2) the fact that an individual claim element is – standing alone – patent ineligible does not render the claim unpatentable because patent eligibility is considered while examining the claim as a whole.

What is a Transformation?: The courts have already developed an understanding of transformation as it relates to the Section 101 inquiry. Here, the Federal Circuit referred to the distinction made in the 1982 Abele case. There, the court distinguished between two of Abele’s claims – finding only one patentable. The unpatentable claim recited “a process of graphically displaying variances of data from average values” without specifying “any particular type or nature of data … or from where the data was obtained or what the data represented.” The patentable dependent claim identified the “data [as] X-ray attenuation data produced in a two dimensional field by a computed tomography scanner.” In retrospect, the Federal Circuit sees the difference between these two claims to be that of transformation. The second claim included sufficiently specific transformation because it changed “raw data into a particular visual depiction of a physical object on a display.” Notably, the transformation did not require any underlying physical object. As the court noted later in the opinion, the transformed articles must be “physical objects or substances [or] representative of physical objects or substances.”

The Bilski claims themselves were not seen as transforming an article:

Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances. Applicants’ process at most incorporates only such ineligible transformations. . . . As discussed earlier, the process as claimed encompasses the exchange of only options, which are simply legal rights to purchase some commodity at a given price in a given time period. The claim only refers to “transactions” involving the exchange of these legal rights at a “fixed rate corresponding to a risk position.” Thus, claim 1 does not involve the transformation of any physical object or substance, or an electronic signal representative of any physical object or substance.

The principle behind the test is to prevent a patentee from obtaining claims that preempt the use of fundamental principles. That principle reaches back more than 150 years to the Morse case where the inventor was precluded from claiming all uses of electromagnetism to print characters at a distance.

We believe this is faithful to the concern the Supreme Court articulated as the basis for the machine-or-transformation test, namely the prevention of pre-emption of fundamental principles. So long as the claimed process is limited to a practical application of a fundamental principle to transform specific data, and the claim is limited to a visual depiction that represents specific physical objects or substances, there is no danger that the scope of the claim would wholly pre-empt all uses of the principle.

What is a “Particular Machine”?: For software and business methods, the question will remain as to whether a general purpose computer is sufficiently particular to qualify as a “particular machine.” “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.” As Professor Duffy noted in an earlier Patently-O article, the PTO Board of Patent Appeals (BPAI) has already answered this question: “A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer.” See Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008). More commonly, the claim may tie the software to computer memory or a processor – is that sufficiently particular? I suspect this fact pattern will arise shortly.

Unpatentability Affirmed

Notes:

  • Although three dissenting opinions were filed, Judge Newman is the only judge who found patentable subject matter in Bilski’s claim.
  • In Dissent, Judge Mayer thought the decision did not go far enough: “Affording patent protection to business methods lacks constitutional and statutory support, serves to hinder rather than promote innovation and usurps that which rightfully belongs in the public domain.” Citing work by Professors Dreyfuss and Pollack, Mayer argues that business method patents have the overall effect of stifling innovation by restricting competition.
  • In his Dissent, Judge Rader asks the insightful question of why a new test is necessary when settled law already answers the question. Rader would have decided the opinion with one line: “Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.” I believe Rader’s position is quite defensible. In particular, the majority justifies its need for the test as a way to ensure that we avoid the “preemption of fundamental principles.” In the majority construct, the machine-or-transformation test serves as a fairly accurate proxy for preventing preemption. The court does not, however, answer why any proxy is necessary – if the purpose is to exclude overbroad abstract ideas why not simply rely on the current rule preventing patenting of abstract ideas (as well as the law requiring full enablement)?

Concurring opinion by Judge DYK (joined by Judge LINN) attempt to reconcile the history of the patent system with the new rule of patentability.

Federal Circuit Affirms $46m Default Judgment Against Bodog

Patent, Patent Cases 2008,

1st Technology v. Rational Ent. and Bodog (Fed. Cir. 2008)

1st Technology won a default patent infringement judgment against the online gambling company Bodog and the Nevada district court awarded $46 million in damages plus interest. The patentee has been enforcing the judgment by attaching Bodog’s US assets – including its domain names and trademark registrations. Without opinion, the Federal Circuit has affirmed that judgment.

On appeal, Bodog argued that it was not properly served notice of the litigation and that the Nevada court lacked personal jurisdiction over the company. 1st argues that the service (to a Bodog’s Costa Rica office) was proper and that by not arriving in court Bodog had waived its personal jurisdiction argument. In addition, plaintiffs cite to a 2005 Forbes article noting how “in 2005, the Bodog entities handled $7.3 billion in online wagers, 95% of which came from the United States, with sales increasing every year. [Bodog’s founder] Mr. Ayre pays no United States income tax, and prides himself on the fact that he and the Bodog entities routinely evade United States law.”

Links:

Prior Art Must Enable a Skilled Artisan to Make the Invention without Undue Experimentation

Enablement, Patent, Patent Cases 2008, Pharma, ,

Impax Labs v. Aventis Pharmaceuticals (Fed. Cir. 2008)

This appeal focuses on the question of when a prior art disclosure is sufficiently enabled.

An Aventis patent covers the use of RILUTEK (riluzole) to treat ALS. Impax filed an ANDA with the FDA (seeking to market a generic version of the drug). In subsequent litigation, Impax also alleged, inter alia, that the listed patent should be held invalid. In particular, Impax argued that an earlier Aventis patent (the ‘940 patent) anticipates the asserted Aventis patent (the ‘814 patent) by suggesting a class of compounds may be used to treat ALS. The district court, however found that the ‘940 patent “does not enable a person of ordinary skill in the art to treat ALS with riluzole and therefore does not anticipate claims 1-5 of the ‘814 patent.”

Burden particularly heavy: A defendant who hopes to use previously considered art to invalidate a patent has a “particularly heavy” burden.

Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence. When the examiner considered the asserted prior art and basis for the validity challenge during patent prosecution, that burden becomes particularly heavy. See Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1467 (Fed. Cir. 1990).

In this case, the ‘940 patent had been considered by the examiner during prosecution of the asserted patent.

Enabled Prior Art: To anticipate, the prior art must be enabling – i.e., it must “enable one of ordinary skill in the art to make the invention without undue experimentation.”  This enablement standard is different from the applicant’s 112 enablement requirement which requires enablement of both making and using the invention.  That distinction becomes lost in cases like this, however, where the patent covers a method of treatment.  Here, the Federal Circuit appears to require anticipatory prior art to enable practicing the claimed method.

Enablement of prior art is a question of law, but is based on underlying factual findings. In close cases, the important factual finding is the amount of experimentation that would have been necessary. Applying Wands factors, the Federal Circuit agreed that the prior reference was not enabling.

As shown by the trial court, the [prior art] ‘940 patent’s dosage guidelines are broad and general without sufficient direction or guidance to prescribe a treatment regimen. The alleged prior art also contains no working examples. Finally, nothing in the ‘940 patent would have led one of skill in the art to identify riluzole as a treatment for ALS. In sum, each component of the claimed invention—identifying riluzole as a treatment for ALS and devising dosage parameters—would require undue experimentation based on the teachings of the ‘940 patent.

Burden of Proving Enabled Prior Art: In judging anticipation, courts generally presume that prior art is enabled. That presumption may be overcome by a patentee by providing “persuasive evidence” of nonenablement. At that point, the ultimate burden of proof (with clear and convincing evidence) lies with the accused infringer. In this case, the district court did not explicitly follow this burden shifting framework. On appeal, the Federal Circuit held that articulation of the rule was not necessary. The burden was properly shifted because Aventis presented “sufficient evidence to overcome the presumption of enablement.”

Holding: Affirmed. Validity challenge defeated because prior art was not enabled.

Notes:

  • The opinion did not focus on timing: As technology develops more and more prior art references become enabled. Thus, it is important to consider at what point in time the reference must be enabling.

Disclosure: My former colleagues at MBHB represent Aventis in this case. The district court case was ongoing while I was there.

Shaping Nuanced Patent Injunctions: Broadcom v. Qualcomm

Injunctions, Patent, Patent Cases 2008,

Broadcom v. Qualcomm (Fed. Cir. 2008) [Part II]

On appeal, the Federal Circuit affirmed the permanent injunction against Qualcomm – finding that the district court acted within its equitable discretion and properly followed the injunctive relief guidelines set forth by the Supreme Court in eBay v. MercExchange (2006).

Although recognizing the importance of its eventual decision, the Federal Circuit again refrained from determining whether a finding that a patent has been infringed should serve as presumptive evidence of irreparable harm.

“It remains an open question ‘whether there remains a rebuttable presumption of irreparable harm following eBay.'” Quoting Amado (Fed. Cir. 2008)

Irreparable Harm: The patentee Broadcom is a non-practicing entity in the sense that it does not make or sell the invention claimed in the asserted patents. The patentee does, however, compete indirectly with Qualcomm by making an alternative chipset. Here, the Federal Circuit agreed that eBay does not allow a general rule that would prevent a non-practicing from obtaining injunctive relief and that in this Broadcom had been able to show the potential for irreparable harm.

“Broadcom provided evidence of irreparable harm, despite the fact that it does not currently practice the claimed inventions. This result is consistent with eBay, in which the Supreme Court cautioned that ‘traditional equitable principles do not permit such broad classifications’ as presuming that a patentee cannot establish irreparable harm based on a patentee’s ‘willingness to license its patents’ or ‘its commercial activity in practicing the patents.'”

Adequate Remedy at Law: Broadcom had licensed its patents Verizon. A license can theoretically show that monetary damages are adequate. However, the particular market situation is important for that determination. In this case the Verizon license is a vertical license while a license to Qualcomm would be a horizontal license. Thus, the court agreed that “the Verizon license has little bearing on the effect of a compulsory license to a direct competitor.”

Hardships and Public Interest: The district court created the injunction order with a “sunset provision.” Under the plan, Qualcomm may continue infringing for twenty-months while paying a compulsory license rate. At the end of those twenty months, the company will be enjoined from further infringement. The delayed nature of the injunction consequently removed any notion that the a balance of hardships or the public interest would favor the adjudged infringer because it gives plenty of time to redesign and redeploy to customers without any interruption of service.

This decision is insightful in how it moves the proper focus from whether an injunction should issue to the more nuanced issues of how to shape the injunction in a way that best serves the public interest while still protecting property rights. One problem with complex injunctions and ongoing compulsory licenses is that the district court must continue to monitor and make judgments on the situation. In this case the district court recently found Qualcomm in contempt for failing to pay its ongoing royalties of more than $93 million. As a sanction, the court ordered Qualcomm to pay gross profits – noting that “[w]hile an award of gross profit may overcompensate … it will do so in an amount which bears a direct relationship to the degree of infringement. The more that were sold, the greater the award.”

Notes:

Read more about the case here.

Public & Experimental Use: Reduction to Practice Requires Knowledge that Invention Works for Intended Purpose

Patent, Patent Cases 2007, Public Use,

In re Omeprazole Patent Litigation (Fed. Cir. 2008)

The CAFC has affirmed a lower court trial finding that AstraZeneca’s Prilosec (omeprazole with an enteric coating and a subcoating) patents are infringed by the ANDA filings of Apotex, Torpharm, and Impax. (See U.S. Patent Nos. 4,786,505 and 4,853,230). This complex consolidated case has been handled by Judge Jones of the Southern District of New York. The case includes several important procedural issues, but here I focus on public use.

Public Use of a Pharmaceutical Formulation: Under 35 U.S.C. § 102(b), a patent will be considered invalid if the invention was “in public use” more than one year before the filing date. (i.e., before the “critical date”). The use in question was Astra’s large clinical trials used to test its omeprazole formulation. The district court ruled for Astra on two separate grounds: First that the clinical trials were an “experimental use” and therefore cannot qualify as public uses and second that the formulation was not yet ready for patenting until after the trials were completed.

Experimental Use and Reduction to Practice: In a series of cases over the past decade, the Federal Circuit has made clear that the experimental use defense “cannot negate a public use” that occurs after the invention is reduced to practice. At the same time, public use now requires proof that an invention is “ready for patenting” which generally requires reduction to practice (or at least being enabled to practice). For the most part, this rather new interpretation of public use subsumes the experimental use defense.

Here, the pills had been manufactured and were being used by clinical subjects. However, there were not “reduced to practice” because RTP requires knowledge “that the invention would work for its intended purpose.” On appeal, the Federal Circuit refused to overturn the lower court’s factual findings – instead agreeing the formulation was not reduced to practice because the company lacked experience of how it would perform clinically:

[Astra’s expert witness] testified that as of May 1983 the Astra scientists did not have enough information to satisfy themselves that the Phase III formulation would work for its intended purpose. Instead, he testified that the Astra scientists thought the Phase III formulation “had a good possibility to be used as a marketing drug” but that the team did not have long-term stability data and had “no experience of how it performed in clinical studies.”

….

The Astra scientists had long understood that omeprazole could provide a safe and effective treatment for certain gastrointestinal diseases. The challenge they faced was developing a formulation to deliver omeprazole to the small intestine, a challenge that was made difficult by omeprazole’s sensitivity to acidic environments, such as the stomach. Impax has not demonstrated that, without conducting the Phase III clinical tests, the inventors knew that the Phase III formulation would achieve the goals of long-term stability and in vivo stability such that it would be effective as a treatment for gastrointestinal disease.

Because the efficacy of the formulation was not reduced to practice, its use could not be a public use.

Notes:

  • Of interest here is the idea that reduction to practice requires knowledge that the invention will work for its “intended purposes.” The specification of these patents detail the need for stability, so that purpose is clear. Because “purposes of the invention” have been used to limit claim scope, many modern patent applications don’t include such information. In those cases, will the purpose be found in extrinsic evidence?
  • The court here focused on reduction to practice to fulfill the “ready for patenting” prong of the public use analysis. Seemingly, the defendants may have had a better shot trying to show ready for patenting based on evidence that “prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.”

Marking of Prescription Drug Does Not Create DJ Jurisdiction for Generic Competitor

Patent, ,

PatentLawPic392Prasco LLC v Medicis Pharmaceutical Corp. and Imaginative Research (Fed. Cir. 2008)

Imaginative Research owns of several patents covering a prescription strength benzoyl peroxide wash. Medicis is the exclusive licensee and sells the product under the brand name TRIAZ.  The patents are listed on the box.

Prasco makes a generic version (OSCION) and allegedly competes directly with TRIAZ.

Wanting to avoid the cloud of potential infringement, Prasco filed a declaratory judgment lawsuit against the patentee and licensee alleging non-infringement of the listed patents. The case was dismissed for lack of declaratory judgment jurisdiction, Prasco appealed.

Prasco admits that the DJ defendants did not know about the generic competition until it received the complaint. However, Prasco argued that Article III jurisdiction exists because the defendants (1) listed its patents on a directly competitive product and (2) Medicis had previously sued Prasco (for infringement of a different patent by a different product).  The defendants also refused to sign a covenant not to sue.

Cases or Controversies: Article III of the Constitution limits the reach of federal judicial power to the adjudication of “cases” or “controversies.”  This requirement has been interpreted to encompass only disputes that are “definite and concrete, touching the legal relations of parties having adverse legal interests,” “real and substantial,” and “admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.”

In MedImmune, the Supreme Court rejected the CAFC’s original test for DJ Jurisdiction that required a “reasonable apprehension” of immanent litigation and replaced it with an amorphous requirement of a “substantial controversy . . . of sufficient immediacy.”

On appeal, the CAFC affirmed that Prasco’s controversy is not sufficient to be justiciable.

Although MedImmune clarified that an injury-in-fact sufficient to create an actual controversy can exist even when there is no apprehension of suit, it did not change the bedrock rule that a case or controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants—an objective standard that cannot be met by a purely subjective or speculative fear of future harm.

The court further held that DJ jurisdiction does not exist “without some affirmative act by the patentee.”

Regarding marking, the court found that the marking of “products with the applicable patents provides little, if any evidence that [the patentee] will ever enforce its patents.”

Inequitable Conduct: Out of the Frying Pan?

Patent, , , ,

By Prof. Paul M. Janicke, HIPLA Professor of Law, University of Houston Law Center< ?xml:namespace prefix ="" o ns ="" "urn:schemas-microsoft-com:office:office" />

In the 1980s patent practitioners were being pressed by clients to keep costs down. At the same time they were seemingly presumed by courts to understand right away any prior-art reference that made its way into their offices, and how that reference might relate to patent applications they were writing or prosecuting. They were rather upset with the drift of the law on inequitable conduct. It seemed the courts were allowing something short of intentional deception to make out that defense and to ruin a client’s otherwise solid case for validity and infringement. Language like “gross negligence” had crept into some of the appellate decisions. With enough time and funding by the challenger, many non-cited things in a patent practitioner’s possession could be made years later to look important to patent prosecution, and explanations for non-citation always seemed at that late date a little lame. All the challenger needed to do is find one of those things and persuade the judge to label the non-citation as gross negligence.

Patent.Law129The Federal Circuit recognized the problem and in 1988 handed down Kingsdown Medical Consultants Ltd. v. Hollister Inc.,[1] wherein the court reiterated that intent to deceive the PTO had to be proved by clear and convincing evidence. In an in banc section of the opinion labeled “Resolution of Conflicting Precedent,” the court held that gross negligence could not alone suffice to make out inequitable conduct.[2] The profession breathed a little easier. They were perhaps out of the frying pan.

However, shortly after Kingsdown a number of other cases rightly pointed out that deceivers seldom come forth and say they acted with intent to deceive. “Such intent usually can only be found as a matter of inference from circumstantial evidence.”[3] Through the 1990s the Federal Circuit appreciated the continuing need to make an actual finding that a particular person acted to mislead the PTO in a particular way. It told us “a finding of intent to deceive the PTO is necessary to sustain a charge of inequitable conduct.”[4] In a withholding-type accusation, reaching that conclusion of course requires a subsidiary finding that the person appreciated the significance of the withheld item. Without that appreciation, he can hardly be trying to deceive the examiner about the item. 

In the last three years Federal Circuit panels have slipped back into “should have known” language to arrive at the conclusion of intent to deceive or mislead the PTO.[5] That is the language of simple negligence. Even more troublesome, they seem to have reached the “should have” finding by reference to the importance (materiality) of the item to the prosecution proceeding, the logic of which is somewhat elusive. In 2008 a number of cases have now explained how all this is consistent with Kingsdown. Negligence alone might not be enough, but when material information is found in the hands of persons connected to patent prosecution, they need to provide a “credible explanation” or suffer a finding of bad intent.[6]

The trouble with this approach is that it allows even simple negligence (“should have known”) to shift the burden of persuasion on intent to the patent owner. This shift will happen in just about every case, because the finding of materiality in a combative courtroom setting will nearly always generate the “should have known” prong, shifting the entire burden of credibly showing benign intent onto the patentee. In the dynamic of actual patent litigation years after the events in question, that burden is indeed a fearsome one. In life, consider how often we ask ourselves when bad situations arise: “Why did I do that? Why didn’t I see the connection?” Credible-sounding explanations are not that easy to come by, even when we know we are innocent. Explanations on the ground of human fallibility feel hollow, and this is especially so in the majestic setting of a court proceeding. The patent bar and their clients have gone out of the frying pan and into the fire.

Some rays of hope have appeared for rectifying the situation. Judge Newman dissented in Nilssen, the small-entity status case.[7] And Judge Rader has seen the problem in what I regard as its proper light. In May of this year two panel judges sitting with him upheld a district court’s finding of inequitable conduct in a withholding-of-information case. The two were unwilling to reverse the lower court’s conclusion that the explanation given for non-citation was not credible.[8] Dissenting, Judge Rader said: “[M]y reading of our case law restricts a finding of inequitable conduct to only the most extreme cases of fraud and deception. . . Although designed to facilitate USPTO examination, inequitable conduct has taken on a new life as a litigation tactic. The allegation of inequitable conduct opens new avenues of discovery; impugns the integrity of patentee, its counsel, and the patent itself; excludes the prosecuting attorney from trial participation (other than as a witness); and even offers the trial court a way to dispose of a case without the rigors of claim construction and other complex patent doctrines.”[9] Amen to that. This is not the place to try to rectify perceived weaknesses in the patent examination process or to make amends with district judges by according more weight to their rulings. Worthy and important goals those may well be, but shifting burdens on inequitable conduct is not the way.

Inequitable conduct burdens have in the past rightly been placed on the challenger. Establishing this defense has required a finding not about what a person should have known, but that the person involved actually did appreciate of the significance of the information to the prosecution process. Now the burden on the intent prong has de facto shifted. Hopefully it will return to where it was. I have always thought the relative importance of the item as seen years later has little to do with finding an intent to mislead. Most of the time it is just as easy in life to fail to connect important dots as unimportant ones.


[1] 863 F.2d 867 (Fed.Cir. 1988), cert. denied, 490 < ?xml:namespace prefix ="" st1 ns ="" "urn:schemas-microsoft-com:office:smarttags" />U.S. 1067 (1989).

[2] Id. at 876.

[3] Hewlett-Packard v. Bausch & Lomb, 882 F.2d 1556, 1562 (Fed. Cir. 1989).

[4] RCA Corp. v. Data General Corp., 887 F.2d 1056, 1065 (Fed. Cir. 1989), emphasis in original.

[5] See Ferring BV v. Barr Labs. Inc., 437 F.3d 1181, 1191-92 (Fed. Cir. 2006) (applicant should have known non-disclosed relationships of affiants to assignee company were important); Cargill Inc. v. Canbra Foods Ltd., 476 F.3d 1359, 1367-68 (Fed. Cir. 2007) (applicant should have known lab tests on a property were important); Bruno Indep. Living Aids Inc. v. Acorn Mobility Services Ltd., 394 F.3d 1348, 1351 (Fed. Cir. 2005) (from what was said to FDA, applicant should have known prior powered staircase was important to PTO).

[6] See Nilssen v. Osram Sylvania, Inc., 528 F.3d 1352, 1359-60 (Fed. Cir. 2008) (inequitable conduct finding upheld based on wrongful claiming of small entity status, where explanation testimony was not credible); Pfizer Inc. v. Teva Pharms. USA, 518 F.3d 1353, 1367 (Fed. Cir. 2008) (finding of no inequitable conduct in non-citation of reference showing similar structure affirmed where explanation was credible); Monsanto Co. v. Bayer Bioscience N.V., 514 F.3d 1229, 1241 (Fed. Cir. 2008) (inequitable conduct finding upheld where explanation for non-citation of meeting notes was not credible).

[7] Supra, note 6, 528 F.3d at 1362-65.

[8] Aventis Pharma S.A. v. Amphastar Pharm. Inc., 525 F.3d 1334, 1349 (Fed. Cir. 2008).

[9] Id. at 1349-50.

Claim Construction Not Required Before Preliminary Injunction Decision

Patent,

PatentLawPic388Novo Nordisk v. Sanofi-Aventis (Fed. Cir. 2008) (nonprecedential)

Novo sued Sanofi alleging infringement of its patent covering an insulin pen. In a Feb 19, 2008 order, the district court denied Novo’s request for a preliminary injunction – finding that Sanofi has a strong non-infringement argument. On appeal, the CAFC quickly affirmed.

The decision to not issue a preliminary injunction rests within the discretion of the district court.

We will reverse such a decision only when an appellant demonstrates that the “factors relied on by the district court [were] clearly erroneous” and “that a denial of the preliminary relief sought would amount to an abuse of the court’s discretion upon reversal of an erroneous finding.” New Eng. Braiding Co. v. A.W. Chesterton Co., 970 F.2d 878 (Fed. Cir. 1992).

In this case, the district court did not construe the claims prior to denying the PI request. It did note, however, that “questions exist” as to whether the patented invention requires direct gearing and a non-rotatable piston — elements not found in the accused product.

In its appellate decision, the CAFC found that the lower court had acted properly in denying the PI request without deciding the claim construction issue: 

At the preliminary injunction stage, however, it is irrelevant whether this case presents greater issues of claim construction or validity—the existence of one or both of these issues is sufficient to justify the district court’s decision to deny a preliminary injunction.

Affirmed

  • Note: My former firm, MBHB, represents Sanofi-Aventis in this appeal.

 

 

BPAI Factual Findings Affirmed Based on Substantial Evidence

Patent, Patent Cases 2008, ,

In re Stauffer (Fed. Cir. 2008) (nonprecedential)

PatentLawPic381This is a nice idea: A device for automatically printing out caller ID records. What I prefer (and have used in the past) is to receive an e-mail receipt for all incoming calls and with messages attached in an mp3.

SEI (the party in interest) has a simple enough claim:

1. A caller ID printing device, comprising:

a controller configured to detect caller ID information from an incoming call; and
a printer configured to automatically print the caller ID information; and
a message template onto a call record immediately after the first receipt of a first ring signal and without user intervention.

The BPAI rejected the claim as obvious. On appeal, the CAFC reminded the applicant that the BPAI’s underlying factual determinations need only be supported by “substantial evidence.”

‘Substantial evidence is evidence that “a reasonable mind might accept as adequate to support a conclusion.” In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000). “[W]here two different inconsistent conclusions may reasonably be drawn from evidence in the record, an agency’s decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence.” In re Jolley, 308 F.3d 1317 (Fed. Cir. 2002). This court will not determine that a decision made by the Board is unsupported “simply because the Board chose one conclusion over another plausible alternative.” Id.’

In this case, the panel easily found that two references combined teach each element of the invention and render it obvious.

Apotex Challenge to ACULAR LS Patent Barred by Res Judicata

Patent,

Roche Palo Alto and Allergan v. Apotex (Fed. Cir. 2008)

Roche’s patent covers drug formulations for treating eye inflammation and covers products sold as ACULAR and ACULAR LS. The two formulations differ in their proportion of various drugs such as an ammonium preservative and a surfactant.

Hoping to sell generic versions, Apotex filed two ANDAs with the FDA – one for each formulation.  In response, Roche filed two separate infringement actions against Apotex (the ACULAR and ACULAR LS cases respectively). In 2007 the CAFC put a final nail in the ACULAR case by affirming the district court’s holding that the patent was not invalid and not unenforceable (infringement had already been decided).  This appeal involves ACULAR LS.

Reverse Doctrine of Equivalents Remains Dead: In the 1950 Graver Tank opinion, the Supreme Court discussed how the reverse DOE can be used to limit the scope of claim coverage: “where a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim.” Although Graver Tank stands as good law, the CAFC has “never affirmed a finding of non-infringement under the reverse doctrine of equivalents.”  Here, the CAFC continued to reject the doctrine of reverse equivalents.

Relying on a technical expert, Apotex argued that its formulation – although covered by the literal claims – operated under a different principle (involving the formation of micelles). The CAFC rejected this argument for several reasons: (1) the principle was derived from expert testimony without relying on the prosecution history which was not entered into evidence in the case; (2) the principle was not required in the specification; and (3) there was no evidence that the examiner relied on the principle in allowing the patent to issue.

Claim Preclusion: Apotex hoped to challenge the patent’s validity a second time — this time with the benefit of the new KSR standards for obviousness. The district court, however, refused a second go-round — finding the claims precluded. In the Ninth Circuit, claim preclusion applies to prevent subsequent litigation where “(1) the same parties … were involved in the prior litigation, (2) the prior litigation involved the same claim or cause of action as the later suit, and (3) the prior litigation was terminated by a final judgment on the merits.”  In patent cases, the second suit is considered the “same claim” when the accused products are “essentially the same.”  The party asserting claim preclusion has the burden of proving that the accused products are essentially the same.

Essentially the Same: On appeal, the CAFC held that analysis of whether two products are essentially the same (for claim preclusion) should focus on the claims. Here, the court affirmed that both the ACULAR and ACULAR LS formulations are essentially the same “because both formulations are encompassed by the [patent] claims.”

“Though the court recognized that there are differences in the concentrations of the ingredients in the ANDA-1 and ANDA-2 formulations, it also realized that all of the concentrations are well within the ranges claimed in the ’493 patent. The fact that they are stabilized by different mechanisms, even if true, is irrelevant because both formulations are encompassed by the claims of the ’493 patent. Thus, any difference in composition between the two formulations is merely colorable and the two formulations are “essentially the same.”

In addition, the CAFC confirmed that there is no “change of law” exception to claim preclusion — what is done is done. Thus, KSR gives no right to re-open closed claims. (*There are of course some exceptions to this role of no exception.).

Notes:

  • Claim preclusion is also known as res judicata. The CAFC did not need to reach whether issue preclusion should also apply.
  • The CAFC’s claim preclusion jurisprudence appears to be developing a pro-patentee bias. Compare this Roche with the Acumed v. Stryker (a patentee does not lose rights by filing suit against only some of an accused infringer’s products).