Tag Archives: Inequitable Conduct

CAFC Explains Materiality Standard for Inequitable Conduct

Patent, Patent Cases 2006,

AIPLATalk056

Digital Control (DCI) v. Charles Machine Works (aka DitchWitch) (Fed. Cir. 2006).

By Mark Chael,

DCI appealed the lower courts’ decision that its patents were unenforceable for inequitable conduct. DCI’s three asserted patents involve Horizontal Directional Drilling, which enables the creation of horizontal holes in the ground through with utility lines can be placed by allowing a worker to locate and/or orient the boring tool as it moves through the ground.

The district court previously awarded partial summary judgment to DitchWitch finding that there was no genuine issue of material fact that misstatements and omissions made by the inventor during prosecution of the patents were material. After a bench trial, the lower court held that the misstatements and omissions were made with intent to deceive and the level of materiality and inference of intent were both high. Thus, the lower court held that the patents were unenforceable.

The CAFC, however, held there were genuine issue of material fact regarding the materiality of the inventor’s failure to disclose prior art. The CAFC thus vacated the district court’s ruling that the patents were unenforceable and remanded for further proceedings regarding the materiality of the failure to disclose prior art.

Before reviewing the lower court’s determination that DitchWitch was entitled to summary judgment on the issue of materiality, the CAFC addressed the proper standard for determining whether a misstatement by omission is material. What follows in the text of the opinion is a comprehensive, yet succinct, summary of the development and current standing of the law of inequitable conduct and material misrepresentation, in view of the Patent Office’s amendment of Rule 56 (duty of candor and good faith / duty of disclosure). This panel followed the “reasonable examiner” materiality standard of old Rule 56, which “new Rule 56 was not intended to replace or supplant.”

Dr. Mark Chael’s prior research in biochemistry, molecular biology, and cellular biology make him well equipped to understand the intricacies involved in biotech and pharmaceutical patents. He is an associate at the intellectual property law firm McDonnell Boehnen Hulbert & Berghoff in Chicago.

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Read the opinion.

Misleading prophetic examples only marginally relevant to materiality in inequitable conduct review

Patent, Patent Cases 2006

Purdue Pharma L.P. v. Endo Pharms. Inc. (Fed. Cir. 2006).

In a dramatic reversal of fortune, the Federal Circuit has reversed itself and the district court findings that Purdue’s Oxycontin patents-in-suit were unenforceable due to inequitable conduct that occurred during prosecution of the patents.

The district court found that Purdue repeatedly referred to its “surprising discovery” during prosecution, but did not inform the PTO that the “discovery” was based on “insight” without “scientific proof.”  In its initial decision, the Federal Circuit determined that the district court did not error in finding the two elements of inequitable conduct: materiality and intent.

On rehearing, the same three-member panel of Judges Gajarsa, Plager, and Linn came to a new conclusion — vacating the holding of inequitable conduct. 

The panel began by reviewing the law of inequitable conduct:

Applicants for patents have a duty to prosecute patents in the PTO with candor and good faith, including a duty to disclose information known to the applicants to be material to patentability. A breach of this duty may constitute inequitable conduct, which can arise from an affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive or mislead the PTO.  A party asserting that a patent is unenforceable due to inequitable conduct must prove materiality and intent by clear and convincing evidence. Once threshold findings of materiality and intent are established, the trial court must weigh them to determine whether the equities warrant a conclusion that inequitable conduct occurred.

The court applies a “careful balance:”

[W]hen the misrepresentation or withheld information is highly material, a lesser quantum of proof is needed to establish the requisite intent. In contrast, the less material the information, the greater the proof must be.

Regarding materiality, the CAFC agreed with the district court that “Purdue’s actions met a threshold level of materiality.” However, the panel found that the “level of materiality [was] not especially high” — thus requiring solid proof to establish intent. The trial court, however failed to “properly consider the [low] level of materiality.” 

Based on the lack of evidence intent presented in the trial court’s opinion, the CAFC vacated with instructions to reconsider the evidence of intent based on a low level of materiality.

Links:

 

Court Finds Standing for Consumers to Bring Antitrust Claim of Asserting an Invalid Patent.

Patent, Patent Cases 2005,

TAQMolecular Diagnostics Lab v Hoffman La Roche (D.D.C. 2005)

By S. Richard Carden

MDL, a purchaser of Thermus aquaticus DNA polymerase or “Taq” (a component used in performing polymerase chain reaction), brought suit against Roche, Applera and others for violations of the Sherman Act, allegedly arising from Roche’s enforcement of U.S. Patent No. 4,889,818 (“the ‘818 patent”) knowing that it had been procured through inequitable conduct.  The ‘818 patent claims a thermostable DNA polymerase isolated from the Thermus aquaticus bacteria.  Defendants moved to dismiss the complaint on several bases including (1) lack of standing, (2) tolling of the statute of limitations, (3) failure to sufficiently allege a conspiracy, and (4) failure to comply with the pleading requirements of Rule 9.  The D.C. District Court denied Defendants’ motion in its entirety, with a minor exception that precluded MDL from seeking damages for the period prior to the four year statute of limitations period prior to its filing of the suit.

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Disclosing Expected Result as an Actual Result Leads to Unenforceable Patent

Patent

Patentlyo009Novo Nordisk v. Bio-Technology (Fed. Cir. 2005).

The district court held Novo’s patent unenforceable due to inequitable conduct during prosecution.  The patent, covering a synthetic human growth hormone (hGH).

Inequitable conduct was based on:

  • The wording of a prophetic example in the past tense — thus hiding the fact that the example was merely a prediction.  
  • The fact that during the nine years of prosecution, Novo never alerted the PTO to the prophetic example — especially in light of the fact that Novo was never able to produce hGH using the described methodology.
  • During interference, Novo failed to inform the BPAI that it was unable to produce hGH using the described methodology — even though it presented extensive expert testimony regarding use of the methodology.

On appeal, the CAFC affirmed, finding no “clear error” in the district court’s decision.  In addition, the CAFC rejected Novo’s argument that its attorneys should not be charged with inequitable conduct because the inventors had not fully informed the attorneys.

At the same time, Novo asks us to hold that its counsel’s failure to disclose the truth about Example 1 to the PTO or Board is excused because the inventors failed to fully inform them of the details surrounding Example 1. As we have done in similar situations in the past, we reject the “circular logic” of this request.

 

Terminal Disclaimer Does Not Bind Two Patents For Purposes of Inequitable Conduct Unenforceability

Patent

PatentlyOImage047Pharmacia v. Par Pharmaceuticals (Fed. Cir. 2005).

Inequitable conduct includes an intent to deceive coupled with either:

  • Affirmative misrepresentation of a material fact
  • Failure to disclose material information, or
  • Submission of false material information.

In this case, the CAFC affirmed a district court’s finding of inequitable conduct based on the patentee’s failure to submit certain prior art articles to the PTO along with the filing of a declaration that contradicted the articles.  Intent was inferred by the materiality of the references and because one of the unsubmitted articles was co-authored by the declarant himself. 

Regarding a second patent in suit that was joined to the first by a terminal disclaimer, the CAFC found that the inequitable conduct during prosecution of in the first patent did not extend to the second.  Specifically, the appellate panel affirmed the conclusion that a terminal disclaimer alone does not bind two patents together for purposes of unenforceability due to inequitable conduct.

Inaccurate Video Submission Results in Unenforceable Patent

Patent, Patent Cases 2005

Frazier v. Roessel Cine Photo Tech (Fed. Cir. 2005)

by Jessica Lunney

The CAFC (Judges Bryson, Linn, and Dyk) affirmed the district court’s finding of inequitable conduct but vacated and remanded the award of attorney’s fees. 

In a patent infringement suit, the district court based its inequitable conduct finding on two references:  (i) a video submitted to the PTO to overcome a rejection and (ii) an unsubmitted, clipped advertisement in the client’s patent file.  Generally, the patent was directed towards a video camera lens, and the submitted video footage allegedly showed lens functionality.  As it turns out, the video was not actually created with the claimed lens.  The CAFC was unimpressed with the inventor’s assertion that the footage could have been filmed using his invention. 

Materiality + Intent: Because the video allowed a traversal of the PTO’s multiple rejections, the court deemed the video footage to be material.  Intent was implied from both the inventor’s repeated changing of his sworn testimony and the myriad misrepresentations he made to his business partner and his patent attorney.

The CAFC reversed the inequitable conduct finding inasmuch as it was based on the advertisement and therefore vacated the award of fees and remanded to the district court to determine whether the case was still exceptional.  Bryson’s separate opinion supported the entirety of the district court’s holding.

NOTE: Jessica Lunney is a law clerk at MBHB and a law student at Emory.  She will complete law school in June 2006.

Library of Congress Issues Report on Proposed Patent Reform

Patent

Wendy Schacht along with Georgetown Professor Jay Thomas have authored a new report on patent reform on behalf of the Library of Congress. Without being judgmental, the report outlines the major elements of the proposed patent reform bill H.R. 2795. The report reviews changes in the following areas, and importantly, how the specific change would affect particular groups and industries (individual inventors; universities; technology companies; biotech; etc.).

  • First Inventor to File
  • Grace Period
  • Elimination of Sections 102(c), (d)

and (f)

  • Assignee Filing
  • Elimination of the Best Mode Requirement
  • Inequitable Conduct
  • Publication of Pending Applications
  • Pre-Issuance Submissions
  • Continuation Applications
  • Prior User Rights
  • Injunctions
  • Limitation Upon Damages
  • Willful Infringement
  • Post-Issuance Opposition Proceedings

    • Link: File Attachment: Schacht-Thomas Report on Patent Reform (183 KB)

    CAFC Finds Jurisdiction To Hear Declaratory Judgment Issues After Patentee Files Covenant Not To Sue

    Patent, Patent Cases 2005

    PatentlyOImage007Fort James Corp. v. Solo Cup (Fed. Cir. 2005).

    Fort James sued Solo for infringement of its patents on paper plates. After a trial, the jury found that the patents were not invalid but were likewise not infringed.  Solo then sought attorney’s fees and a counterclaim of unenforceability.  The district court, however, dismissed Solo’s counterclaim as moot after Fort James submitted a covenant not to sue on the patents at issue. Solo appealed that ruling.

    On appeal, the CAFC reversed — finding that the “district court’s literal application” of CAFC precedent was improper.

    The district court erred as a matter of law in holding that it did not have jurisdiction to hear Solo Cup’s counterclaim. The case is remanded for resolution of the issues properly before the court prior to its order to bifurcate, namely Solo Cup’s claims of unenforceability on the basis of inequitable conduct and its request for attorney fees pursuant to 35 U.S.C. § 285.

    Citing the recent Teva v. Pfizer case, Judge Schall argued in dissent that “Fort James’s covenant not to sue eliminated any live case or controversy between the parties and thereby rendered Solo Cup’s unenforceability counterclaim moot.”

    On Remand: Knorr-Bremse District Court Finds Willfulness Even Without Adverse Inference Rule

    Patent,

    KnorrBremseBrakeKnorr-Bremse v. Dana Corp. (E.D. Va. 2005).

    In a 2004 landmark decision, an en banc panel of Federal Circuit judges found that “no adverse inference that an opinion of counsel was or would have been unfavorable flows from an alleged infringer’s failure to obtain or produce an exculpatory opinion of counsel.”Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., et al., 383 F.3d 1337 (Fed. Cir. 2004).  Because the adverse inference comprised a portion of the district court’s decision, the CAFC vacated the original finding.

    On remand, Judge T.S. Ellis, III in the Eastern District of Virginia took a new look at the issues of treble damages for willful infringement and attorney’s fees under the “exceptional case” standard.  In doing so, the court found that even absent the prohibited adverse inference, there were sufficient factors supporting the finding of willful inference.

    [T]he totality of the circumstances presented here — and wholly without the now-proscribed adverse inference — still compels the conclusion that defendants’ use of the Mark II air disk brake, and indeed their continued use of the Mark II air disk brake throughout the instant litigation, amounted to willful infringement of the ‘445 patent.

    Regarding attorney fees, the court noted that “an award of attorney’s feed does not automatically follow from a finding of willful infringement.”  In this case, the court determined that Knorr had “failed to establish by clear and convincing evidence that defendants engaged in any bad faith litigation or inequitable conduct” and the defendant’s willful infringement was “not so egregious . . . as to justify an award of attorney’s fees.”

    Pain for Purdue Pharma: CAFC affirms inequitable conduct finding

    Patent, Patent Cases 2005,

    Surprisingly DiscoveredPurdue Pharma L.P. v. Endo Pharms. Inc. (Fed. Cir. 2005).

    by Marcus Thymian

    The Federal Circuit affirmed a finding by the District Court for the Southern District of New York that Purdue’s Oxycontin patents-in-suit are unenforceable due to inequitable conduct that occurred during prosecution of the patents.  The decision, if it withstands further appeal efforts, would open the door to generic equivalents of Purdue’s popular controlled-release pain treatment medication.  According to various news stories on the Federal Circuit ruling, Purdue has indicated it plans to request en banc review of the 3-judge panel decision by the full 12-judge Federal Circuit. 

    The inequitable conduct determination was based primarily on variations of the following Purdue statement:

      It has now been surprising discovered that the presently claimed controlled release oxycodone formulations acceptably control pain over a substantially narrower, approximately four-fold [range] (10 to 40 mg every 12 hours — around the clock dosing) in approximately 90% of patients.  This is in sharp contrast to the approximately eight-fold range required for approximately 90% of patients for opioid analgesics in general.

    The district court found that Purdue repeatedly referred to this “surprising discovery” during prosecution, but did not inform the PTO that the “discovery” was based on “insight” without “scientific proof.”  The Federal Circuit decided that the district court did not error in finding the two elements of inequitable conduct: materiality and intent.

    Materiality was based on the district court’s examination of the entire record.   Purdue had repeatedly argued that the four-fold dosage range distinguished the invention over prior art, according to the district court.  The district court found that Purdue’s use of language that “implied, if not suggested” experimental results, when in reality the “discovery” was based solely on inventor “insight,” constituted withholding material information from the PTO.

    Intent was inferred from the context in which Purdue’s statements were made.  Purdue’s “carefully chosen language suggests that it had obtained clinical results, and that suggestion was left unclarified by any disclosure that discovery of the four-fold dosage range for oxycodone was based on insight.”  The Federal Circuit agreed that Purdue had engaged in a “clear pattern of misdirection throughout prosecution of Purdue’s controlled release oxycodone patents.”

    This case is an interesting exercise in standards of review and burdens of proof and persuasion.  Inequitable conduct requires a showing by “clear and convincing evidence,” which is quite high (patent infringement requires only a showing by a “preponderance of the evidence”).  The Federal Circuit conducted a deferential review of the district court’s inequitable conduct ruling.  This heightened standard involves reviewing the materiality and intent factual findings for “clear error” and reviewing the ultimate inequitable conduct conclusion for an “abuse of discretion.”  So, while an initial inequitable conduct showing is a tough burden, if a district court’s ruling is well supported, it may be relatively tough to overturn. 

    Marcus Thymian is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Concentrating primarily on the electrical, software, and mechanical arts, he is experienced in planning, creating, enforcing, and defending against patent portfolios. [Marcus Thymian’s Bio]

    [Copyright 2005 – Originally published at www.patentlyo.com]

    Inconsistency Between Views of Two PTO Examiners Found Relevant to Obviousness Determination During Litigation

    Patent, ,

    PatentlyOImage043Syntex v. Apotex (Fed. Cir. 2005).

    Apotex filed an ANDA to begin marketing a generic version of ACULAR, an ophthalmic NSAID protected by a patent owned by Syntex.  Based on the Section IV filing, Syntex filed suit against Apotex for patent infringement.

    After a bench trial, the district court determined that the proposed generic infringed the claims of the ACULAR patent and that the patent was not invalid.

    Regarding invalidity, the district court concluded that Syntex had overcome obviousness issues by showing that the prior art taught away from the use of the drug/surfactant for opthalmic uses and that such a use created “unexpected results.” In its decision, district court noted that because the prior art at issue had been before the examiner during prosecution, the burden of proving the challenged claims obvious “is particularly high” — and that Apotex had failed to meet this heightened burden. 

    On appeal, the CAFC reversed — finding “clear error by the district court in several of the grounds that led it to conclude that the invention claimed by the claims in suit would not have been obvious.” 

    Of the several grounds for reversal, the issues of examiner discrepancy, expert testimony, and commercial success may be the most interesting:

    Examiner Discrepancies:

    Two different PTO examiners worked on various portions of the asserted application and its parent applications and had seemingly inconsistent views regarding patentability of the application.  The CAFC found this relevant to the obviousness determination.

    This statement contradicted the express finding of the initial PTO examiner that Syntex’s earlier data failed to show unexpected results. Whether the second examiner was aware of the earlier rejection of Syntex’s claims is unknown. But the relevance of the inconsistency between the views of two examiners is not insignificant.

    Although we conclude . . . that Syntex did not commit inequitable conduct . . . we think the unvarnished view of the prosecution history shows some weakness in the conclusion that the patentee established unexpected results for the claimed surfactant.

    Expert Testimony:

    The Appellate Panel found that the district court erred by failing to examine Apotex’s expert testimony on the question of motivation to combine and unexpected results.

    Commercial Success:

    The district court relied heavily on the commercial success of ACULAR in its nonobviousness decision.  However, the CAFC requested that the lower court revisit this issue in light of the recent case of Merck v. Teva.

    In Merck, the court found that commercial success of an FDA restricted product “has minimal probative value on the issue of obviousness. . . . Financial success is not significantly probative . . . because others were legally barred from commercially testing the [] ideas.”

    Concurrence:

    In a concurring opinion, Judge Prost disagreed with a portion of the majority opinion that made note of “inconsistency between the views of two examiners” who examined the asserted application and a parent application.

    In general, I fail to see how the conduct of a patent applicant is relevant to an obviousness determination. Alleged misconduct at the PTO, in terms of either mischaracterizations or omissions, goes to the heart of an inequitable conduct inquiry but is simply irrelevant to an obviousness inquiry.

     Links:

    PATENT REFORM: Preventing Inequitable Results Under Knorr-Bremse Willfulness

    Patent,

    This post is part of our continuing series discussing a US House of Representatives working draft of patent legislation, by Marcus Thymian, Jennifer Swartz, and Dennis Crouch.

    In the landmark decision of Knorr-Bremse v. Dana Corp., an en banc panel of Federal Circuit judges recently held that no adverse inference is to be drawn from the absence of an opinion of counsel in willfulness determinations.  This ruling overruled the Court’s earlier precedent in Quantum and was a dramatic change.  The proposed legislation attempts to balance this swing in jurisprudence by adding a section on willfulness that incorporates the Knorr-Bremse holding while carving out broad exceptions.  

    The proposed changes repeat the Knorr-Bremse holding that “[t]he absence of an opinion of counsel shall not create an inference that the infringement was willful.”  Further, the legislation makes mere knowledge of a patent or its contents insufficient for a finding of willfulness against the defendant.

    The legislation diverges from Knorr-Bremse by listing “other factors” that may be considered in increasing damages against an infringer.  Included as one such factor is intentional copying by a defendant who has specific knowledge he is infringing patented subject matter.  However, unlike Knorr-Bremse, the defendant must rebut proof of specific knowledge by proffering evidence of an “informed good faith belief” that the patent is invalid, not infringed, or unenforceable (i.e. an opinion).  Thus, while no adverse inference of willfulness will be drawn in the absence of an opinion under the proposed changes, the defendant will still have the onus to provide an opinion in cases in which the plaintiff proves the defendant’s specific knowledge of infringement.

    Finally, the legislation also proposes adding to the statute for increased damages the “factor” of prior litigation between the parties for substantially similar infringement.  Thus, in a later action between parties for colorably similar infringing conduct, willfulness may be based on the knowledge the infringer has maintained since the earlier litigation.< ?xml:namespace prefix ="" o />

    Eli Lilly wins patent ruling on Zyprexa

    Patent, ,

    PatentlyOImage024Eli Lilly v. Zenith Goldline (N.D. Ill. 2005).

    In a much anticipated decision, Judge Richard Young of the Southern District of Indiana has ruled that Eli Lilly’s patent covering the drug Zyprexa is valid, enforceable and infringed.  The patent is not scheduled to expire until 2011.

    The well-written 224 page opinion reads like a biography of Patent No. 5,229,382, the Zyprexa patent.  In particular, the court details the prosecution history of the patent and provides a full analysis of the prior art references that the generic manufacturers cited against the patent.  In the end, court determined that the generics could not prove invalidity or unenforceability:  

    Defendants have failed to prove by clear and convincing evidence that claims 1, 2, 3, 7, 8, and 15 of the ’382 patent are invalid as anticipated under 35 U.S.C. § 102, as obvious under 35 U.S.C. § 103, under the double patenting doctrine, or as barred by prior public use under 35 U.S.C. § 102. Defendants have further failed to prove by clear and convincing evidence that the ’382 patent is unenforceable for inequitable conduct.

    The defendant generic manufacturers had stipulated that if the ’382 patent is valid and enforceable, then their actions constitute infringement. Thus, the court found that their ANDA submissions constituted an act of infringement. 

    Court Agrees that Sony PlayStation Infringes Immersion Patent

    Patent

    Immersion Picture

    Brandon Rash at the EEJD blog provides info on the most recent win for Immersion technology.  Sony has been ordered by the Court to pay $90 million and halt to PlayStation sales in the United States for violating Immersion’s patents on “tactiley responsive” technology. Today’s ruling comes in the wake of last September’s jury verdict of infringement.  Microsoft was a named defendant, but settled prior to trial.

    The permanent injunction is stayed pending appeal to the Federal Circuit. In her decision to issue the stay, Judge Claudia Wilken of the Northern District of California determined that four factors weighed in Sony’s favor: (i) the strength of Sony’s showing that it is likely to succeed on the merits of its appeal, (ii) whether Sony will be irreparably injured absent a stay, (iii) whether the stay will substantially injure Immersion, and (iv) where the public interest lies. Following Standard Havens Products, 897 F.2d 511, 512 (Fed. Cir. 1990).  “The Court finds that on balance, these factors weigh in favor of granting a stay.”

    Here are the case documents:

    Request for Attorneys Fees Does Not Create Subject Matter Jurisdiction

    Patent, Patent Cases 2005

    Sony Electronics v. Soundview Technologies (D. Conn. 2005) [pdf]

    The district court granted summary judgment of non-infringement to the alleged infringers, and that decision was affirmed at the Federal Circuit.  Now Soundview, the patentee, has moved to dismiss all pending counterclaims because the patent has expired and, in light of the summary judgment, the remaining counterclaims are moot.

    One defendant, however, argued that its declaratory judgment counterclaim seeking a finding of inequitable conduct during reexamination is not moot because it is a basis for an award of attorneys fees under 35 U.S.C. § 285.

    Connecticut District Court Judge Janet Bond Arterson determined that the counterclaim should be dismissed because there was no actual controversy remaining that would be sufficient to create subject matter jurisdiction:

    Section 285 . . . is not an independent basis for jurisdiction, providing only that "the court in exceptional cases may award reasonable attorney fees to the prevailing party." Thus, Sharp is entitled to seek attorneys fees on the underlying litigation on which Sharp has prevailed, but cannot create more litigation that is otherwise moot merely to create an alternative basis for attorneys fees.

    Case Dismissed.

    Appeals Court Orders New Trial in $500 Million Microsoft-Eolas Web Browser Case

    Patent, , ,

    Eolas v. Microsoft

    Eolas v. Microsoft (Fed. Cir. March 2, 2005).

    Eolas and the University of California sued Microsoft for infringement of its patent that involves a method of using a web browser to open third-party applications using plug-ins.  The District Court for the Northern District of Illinois granted final judgment to Eolas after a jury found that Microsoft infringed the patent and actively induced United States users of Internet Explorer to infringe. The district court also invoked 35 U.S.C. § 271(f) to include foreign sales of Internet Explorer in the royalty awarded to Eolas.  The jury awarded Eolas a royalty of $1.47 per unit of infringing product, which amounted to a total award of $520,562,280.

    On appeal, the Court of Appeals for the Federal Circuit (CAFC) found that district court improperly granted judgment as a matter of law (JMOL) in Eolas’ favor on Microsoft’s anticipation and obviousness defenses and improperly rejected Microsoft’s inequitable conduct defense — and thus vacated the district court’s decision and remanded for a new trial on these issues. The CAFC also affirmed the district court’s claim construction and related jury instruction. 

    Finally, the biggest news from a patent law perspective is that the Court affirmed the district court’s holding that "components," according to section 271(f)(1), include software code on golden master disks.

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    Eight is Enough: Eight important patent cases for Spring 2005

    Patent, Patent Cases 2005, , , , , , , ,

    There are lots of great cases on the Federal Circuit’s spring calendar.  Several cases pending at either the Federal Circuit or Supreme Court that are ‘worth a special look,’ according to Hal Wegner.  Here are some highlights of Mr. Wegner’s list, with my own comments.

    • Merck v. Integra, Supreme Court decision by June 27, 2005.
    • LabCorp v. Metabolite, petition for cert submitted, Supreme Court has requested Solicitor General’s Opinion on Cert.  The case involves a patentability question — whether Metabolite’s patented method of detecting vitamin B deficiency should be invalid as "because one cannot patent laws of nature, natural phenomena, and abstract ideas." 
    • Purdue Pharma v. Endo, CAFC heard oral arguments in early November on the question of whether patentee’s conduct was ‘inequitable’ for failing to disclose that results used to establish patentability were prophetic rather than experimental. A decision is expected soon.
    • SmithKline Beecham v. Apotex, awaiting decision on petition for rehearing.  This case now revolves around the question of whether use of an invention to confirm utility for FDA approval is an ‘experimental use’ that saves a patent from anticipation under 102(b).
    • Phillips v. AWH, awaiting en banc decision on claim construction methodology.
    • Eolas Technologies v. Microsoft, Federal Circuit decision awaited, hopefully discussing the scope of 271(f). The upcoming appeal of AT&T v. Microsoft presents the same ‘golden master disk‘ scenario as Eolas, and will become important if Eolas is decided on other grounds.
    • Independent Ink v. Illinois Tool Works, In January, the CAFC determined that, in an antitrust tying case, a patent presumptively defines the relevant market as the nationwide market for the patented product itself.  There is some potential for cert in this case.
    • NTP, Inc. v. Research in Motion, Ltd., there is a good chance for a rehearing in this case involving RIM’s BlackBerry product.  This case will be important in defining extraterritorial application of U.S. patent laws in the modern era of networked computing systems.
    • In re Fisher is not yet on the CAFC calendar.  In this case, the BPAI affirmed a rejection for lack of utility and enablement (101 and 112 p1) because the specification lacked a specific teaching of a substantial utility.  According to the decision, without a specific teaching of substantial utility, then virtually all chemicals would meet the requirements of section 101 as at least "useful in research."

    Although not patent litigation, Sarah Stirland (one of the few reporters focusing on intellectual property) at the National Journal has written a nice article regarding the potential for legislation in the 109th Congress.

    Printable Version

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    Patent Owner Held Liable For Attorney Fees In Case Brought By Licensee

    Patent, Patent Cases 2005, ,

    Evident v. Church & Dwight (Fed. Cir. 2005)

    Evident sued Church & Dwight for infringement of its licensed technology covering toothpaste. The patent owner, Peroxydent, was joined to the lawsuit early-on through a counterclaim by Church & Dwight.  After a bench trial, the district court found that the inventors had withheld material references from the PTO with intent to deceive.  As a result, the patent was unenforceable due to inequitable conduct.  This holding was affirmed without opinion. Evident Corp. v. Church & Dwight Co., Inc., 78 Fed. Appx. 113 (Fed. Cir. Oct. 9, 2003). The district court also determined that the case was exceptional and awarded almost $1.3 million to Church & Dwight for attorney fees and expenses.  Evident & Peroxydent were found jointly liable for the fees — these fees are the subject of the appeal.

    On appeal, Peroxydent and Evident argue that Evident had no standing to sue in the first place, and thus, that the court did not have jurisdiction to find attorney fees.

    In effect, Evident and Peroxydent, being on the losing side of both their own patent infringement claim and an opposing claim for attorney fees, now appear to seek escape from the judgment by arguing that Evident lacked standing in the first place and that the original lawsuit was improperly filed.

    The court found that the defendants’ counterclaim that brought Peroxydent into the suit eliminated any standing problem.

    Nonetheless, regardless whether Peroxydent was brought into the suit by the accused or the licensee, there is no standing problem. . . . Accordingly, we conclude that Peroxydent’s presence in the litigation as a third-party defendant fully satisfied any standing requirements.

    Affirmed

    Federal Circuit: Cryogenically Cooled Components Obvious

    Patent, Patent Cases 2005,

    Cryogenically Cooled Base Station Patent

    ISCO International v. Conductus and Superconductor Technologies (Fed. Cir. 2005) (Unpublished).

    Background: ISCO sued Conductus for infringement of ISCO’s patent directed to a receiver front end for a cellular base station.  The claims in question provide for the base station having cryogenically-cooled components.  At trial, the jury sided with the defendants — finding that the patent was invalid, not infringed, and unenforceable for inequitable conduct.  The Jury also found that ISCO had engaged in unfair competition — a verdict that was overturned on JMOL by the district court.  ISCO appealed the remaining decision.

    Holding: In contrast with its track record with bench trial appeals, the Federal Circuit is rather unlikely to overturn a jury verdict of invalidity.  This case provides no exception.  On appeal, the court was unable to find any grounds for reversal:

    [O]ur review of the record under the substantial evidence standard accorded to the jury’s conclusions provides us with no grounds for disturbing the verdict.

    Judgment for Defendant affirmed.

    Federal Circuit: Corroboration of Evidence Needed to Prove Patent Invalidity

    Patent, Patent Cases 2005

    Rosco, Inc. v. Mirror Lite Company (Fed. Cir. 2005).

    by Joseph Herndon

    Rosco and Mirror Lite are competitors in the school bus mirror market.  Rosco sought a declaratory judgment that Mirror Lite’s mirror patent was invalid, and Mirror Lite counterclaimed for infringement of the patent.

    Rosco argued that prior to the date of invention, it conceived, reduced to practice, and sold mirrors as in the patent, thus rendering the patent invalid under 35 U.S.C § 102(a) (e.g., known or used by others).  The trial court held the patent invalid.  However, on appeal, the Fed. Cir. found that testimonial evidence of invalidity must be corroborated.

    Weight of the Evidence: The trial court relied upon two pieces of evidence, other than Rosco’s testimony, to find that Exhibit 110, an example of the alleged prior art mirror, disclosed a decreasing radius of curvature as in the patent: testimony of Rosco’s patent expert (indicating that Rosco demonstrated to him Exhibit 110’s decreasing radius of curvature), and the court’s own inspection of the mirror.  The Fed. Cir. held that none of this evidence provided sufficient corroboration that Exhibit 110 had a decreasing radius of curvature because both the district court and the patent expert were not skilled in the mirror arts.  Thus, the Fed. Cir. found no basis for a finding of invalidity.

    Inequitable Conduct: On the issue of inequitable conduct, the trial court held that Mirror Lite intended to mislead the examiner by failing to disclose Trial Exhibit EC, a prior art oval Mirror Lite mirror that existed more than one year prior to the patent’s priority date.  However, the Fed. Cir. held that “[a]n applicant’s conduct in its entirety must ‘manifest a sufficiently culpable state of mind to warrant a determination that it was inequitable.’” The Exhibit was not so undisputedly material that intent could be inferred from materiality. Thus, there must be other evidence supporting a finding of intent. The district court found that Mirror Lite’s use of terms inconsistently in other patents having the same inventor suggested the requisite intent. The Fed. Cir. held that use of terms inconsistently (one way in the earlier patents and one way in testimony) does not render testimony deceptive, given admission in the testimony that terms could have two meanings. Thus, the Fed. Cir. reversed the judgment of inequitable conduct.

    The case was remanded for further proceedings solely on the issue of infringement.

    Joseph Herndon is a law clerk and at MBHB and is a registered patent agent.  Joe has a stellar background in electrical engineering and will graduate from law school this year. herndon@mbhb.com.