Get a Job doing Patent Law
By Dennis Crouch
Prometheus Labs v. Roxane Labs (Fed. Cir. 2015)
In this case, the Federal Circuit has affirmed the district court’s holding that that Prometheus’ asserted patent claims are invalid as obvious. The district court had also rejected the claims as invalid based upon the doctrine of obviousness-type double-patenting, however that issue was not reached in the appeal.
The patent at issue is U.S. Patent No. 6,284,770 and claims a method of treating “diarrhea-predominant female IBS” by giving the patient “an effective amount of alosetron or a pharmaceutically acceptable derivative thereof.”
At a bench trial, the district court held that the elements of the claim were found in the prior art – with “insubstantial” differences.” In particular, the prior art taught treating IBS using alosetron, but apparently not particularly treating “female IBS.”
In the appeal, the Federal Circuit recognized the starting-point rule in genus-species patenting – that a particular species (adding new limitations) may be patentable even if the broader genus is in the prior art. Eli Lilly & Co. v. Bd. of Regents of Univ. of Wash., 334 F.3d 1264 (Fed. Cir. 2003). And here, in the somewhat-personalized-medicine context, the court wrote that these additional limitations may be quite important because it represents focusing treatment on populations where it works best (and causes the least harm).
After reciting the potential for patentability, the court then found that the case at hand failed to present non-obvious subject matter. Notably, the court found that the “female” limitation was simply obvious since women represent half of the population and the majority of IBS patients, and the prior art taught differences in male/female reaction to the proposed treatment:
The first limitation of asserted claim 5 of the ‘770 patent pertains to treating women. Prometheus argues that the district court erred in framing its inquiry as whether alosetron was administered to women with IBS-D in the prior art, rather than as whether it was obvious to focus on treating women rather than men. It is not disputed that it was well known in 1997 that a majority of IBS patients were women. As the district court found, it was well known that “approximately 75% to 80% of IBS-D patients . . . have always been[] women.” For example, the 1992 Thompson article reported that female IBS patients predominate in Western countries. Even if the claims should be read as focusing treatment on women, as Prometheus urges, the district court found the prior art taught precisely that. The Hysu study (1995) taught that females taking alosetron “had higher concentrations of alosetron in their blood and total amount of the drug absorbed compared to [males taking alosetron]” and the district court found that “[t]his could reasonably suggest that women would have a greater response to the drug than men.” At the time of the ‘770 patent’s priority date, it would have been obvious to a person having ordinary skill in the art to treat women as a separate group of IBS patients.
With this reading of the prior art, it was an easy conclusion for the Federal Circuit that the patent was invalid.
Double Patenting: The patent at issue in this case (U.S. Patent No. 6,284,770) was originally owned by Glaxo as was the primary prior art reference (U.S. Patent No. 5,360,800). Because the ‘800 patent was public well before the priority filing of the ‘770 it was clearly prior art. The non-statutory obviousness type double patenting doctrine is generally designed for a different situation – one derived from a judicial pushback against the statutory limitation on counting certain actions of the patentee as prior art. Because OTDP is a non-statutory action by the courts, it was appropriate here for the Federal Circuit to focus on statutory obviousness as the issue and not reach the alternative non-statutory OTDB issues.
Of course, it remains to be seen whether OTDP remains in post-AIA world.
The following is a post from Under Secretary of Commerce for Intellectual Property and Director of the USPTO Michelle K. Lee and was published on the PTO Director’s blog.
Patent quality is central to fulfilling a core mission of the USPTO, which as stated in the Constitution, is to “promote the Progress of Science and useful Arts.” It is critically important that the USPTO issue patents that are both correct and clear. Historically, our primary focus has been on correctness, but the evolving patent landscape has challenged us to increase our focus on clarity.
Patents of the highest quality can help to stimulate and promote efficient licensing, research and development, and future innovation without resorting to needless high-cost court proceedings. Through correctness and clarity, such patents better enable potential users of patented technologies to make informed decisions on how to avoid infringement, whether to seek a license, and/or when to settle or litigate a patent dispute. Patent owners also benefit from having clear notice on the boundaries of their patent rights. After and after successfully reducing the backlog of unexamined patent applications, our agency is redoubling its focus on quality.
We asked for your help on how we can best improve quality—and you responded. Since announcing the Enhanced Patent Quality Initiative earlier this year, we received over 1,200 comments and extensive feedback during our first-ever Patent Quality Summit and roadshows, as well as invaluable direct feedback from our examining corps. This feedback has been tremendously helpful in shaping the direction of our efforts. And with this background, I’m pleased to highlight some of our initial programs under the Enhanced Patent Quality Initiative.
First, we are preparing to launch a Clarity of the Record Pilot, under which examiners will include as part of the prosecution record definitions of key terms, important claim constructions, and more detailed reasons for the allowance and rejection of claims. Based on the information we learn from this pilot, we plan to develop best examiner and applicant practices for enhancing the clarity of the record.
We also will be launching a new wave of Clarity of the Record Training in the coming months emphasizing the benefits and importance of making the record clear and how to achieve greater clarity. Recently, we provided examiners with training on functional claiming and putting statements in the record when the examiner invokes 35 U.S.C. 112(f), which interprets claims under the broadest reasonable interpretation standard and secures a complete and enabled disclosure for a claimed invention. Training for the upcoming year includes an assessment of a fully described invention under 35 U.S.C. 112(a) and best practices for explaining indefiniteness rejections under 35 U.S.C. 112(b).
Second, we are Transforming Our Review Data Capture Process to ensure that reviews of an examiner’s work product by someone in the USPTO will follow the same process and access the same facets of examination. Historically, we have had many different types of quality reviews including supervisory patent examiner reviews of junior examiners and quality assurance team reviews of randomly selected examiner work product. Sometimes the factors reviewed by each differed, and the degree to which the review results were recorded. With only a portion of these review results recorded and different criteria captured in those recordings, the data gathered was not as complete, useful, or voluminous as it could have been. As a result, the USPTO has been able to identify statistically significant trends only on a corps-wide basis, but not at the technology center, art unit, or examiner levels. We are working to unify the review process for all reviewers and systematically record the same and all review results through an online form, called the “master review form,” which we intend to share with the public.
What are the implications of this new process and new form? This new process will give us the ability to collect and analyze a much greater volume of data from reviews that we were already doing, but that were not previously captured in a centralized, unified way. As we roll out this new review process the amount of data we collect will significantly increase anywhere from three to five times. This will allow us to use big data analytic techniques to identify more detailed trends across the agency based upon statistically significant data including at the technology center, art unit, and even examiner levels. Also, this new process will give us better insight into not just whether the law was applied correctly, but whether the reasons for an examiner’s actions were spelled out in the record clearly and whether there is an omission of a certain type of rejection. For example, for an obvious rejection we are considering not only whether a proper obvious rejection was made, but whether the elements identified in the prior art were mapped onto the claims, whether there are statements in the record explaining the rejection, and whether those statements are clear.
The end result will be the (1) ability to provide more targeted and relevant training to our examiners with much greater precision, (2) increased consistency in work product across the entire examination corps, and (3) greater transparency in how the USPTO evaluates examiners’ work product. You can read more about these and our many other initiatives, such as our Automated Pre-examination Search pilot and Post Grant Outcomes, which incorporates insight from our Patent Trial and Appeal Board and other proceedings back into the examination process on our new Enhanced Patent Quality Initiative page on our website.
Finally, let me close by emphasizing that our Enhanced Patent Quality Initiative is not a “one-and-done” effort. Coming from the private sector, I know that any company that produces a truly top quality product has focused on quality for years, if not decades. The USPTO is committed to no less. The programs presented here are just a start. My goal in establishing a brand new department within the USPTO was to focus exclusively on patent quality and the newly created executive level position of Deputy Commissioner for Patent Quality will ensure enhanced quality now, and into the future. With your input we intend to identify additional ways we can enhance patent quality as defined by our patent quality pillars of excellence in work products, excellence in measuring patent quality, and excellence in customer service.
To that end, we will continue our stakeholder outreach and feedback collection efforts in various ways, such as our monthly Patent Quality Chat webinars. The next Patent Quality Chat webinar on November 10 will focus on the programs presented in this blog and our other quality initiatives. I encourage you to join in regularly to our Patent Quality Chats and visit the Enhanced Patent Quality Initiative page on our website for more information. The website provides recordings of previous Quality Chats as well as upcoming topics for discussion. We are eager to hear from you about our Enhanced Patent Quality Initiative, so please continue to provide your feedback to WorldClassPatentQuality@
Belden v. Berk-Tek (Fed. Cir. 2015) on appeal from IPR2013-00057 (Patent Trial & Appeal Board) .
In an inter partes review appeal, the Federal Circuit has sided with the patent challenger – finding that the PTAB had erred by upholding the patentability of two of Belden’s claims. This case is important largely for its result. The case is also one to be studied for some attempt to tease out the Federal Circuit’s purported legal analysis.
In the IPR of U.S. Patent No. 6,074,503, the PTAB cancelled claims 1-4 as obvious over a combination of prior art references but upheld claims 5-6. In this process, the Federal Circuit must give substantial deference to PTAB factual findings (such as the factual underpinnings of the obviousness analysis) but reviews questions of law (such as the ultimate determination of obviousness) de novo on appeal. Thus, all other things being equal, it is a much less daunting process to base your appeal on an issue of law rather than upon a factual dispute.
In reversing the PTAB’s decision upholding claims 5-6, the Federal Circuit wrote that the Board’s “contrary finding rests on legal errors.” However, the analysis in the analysis that followed, the court appeared to point out a series of incorrect factual conclusions and perhaps suggests that ‘motivation to combine’ should truly be considered a question of law rather than of fact.
There is no meaningful dispute here, and the Board did not deny, that the two pieces of prior art in combination teach or suggest the methods of claims 5 and 6. The dispute concerns motivation to combine. The Petition and the Institution Decision reveal the two related ways in which that issue was presented and considered: whether a skilled artisan would substitute the twisted pairs of CA ’046 into the method of JP ’910; alternatively, whether a skilled artisan making the cable of CA ’046 would look to the JP ’910 method to make it. The brief discussion in the Petition suggests both views of the matter. …
As the Board found, it is “undisputed that CA ’046 discloses ‘a helically twisted cable.’” There is no dispute that the twisted pairs in CA ’046 need to fit into the notches of (i.e., be aligned with) the separator, as shown in the two figures from CA ’046 reproduced above, for the resulting cable to be made. And the Board correctly recognized in its discussion of claims 1 and 2 that JP ’910 clearly teaches the importance of aligning conductors with a separator (core), and suggests doing so with a die to prevent twisting of the separator, before they are all bunched together for twisting in a stranding device. That evidence points clearly toward a motivation of a skilled artisan to arrive at the methods of claims 5 and 6 based on JP ’910 and CA ’046, as the Board reasoned in its preliminary determination in the Institution Decision.
None of the Board’s reasons for concluding otherwise in its Final Written Decision withstands scrutiny through the lens of governing law. The Board’s first reason was that JP ’910 shows only conductors that are not individually insulated, so that “one of ordinary skill…would not have been motivated … simply to substitute twisted pairs of insulated conductors for the bare metal conductors.” But JP ’910 plainly discloses the need to align the conducting wires with the core and how to do so, as the Board recognized in its analysis of claims 1 and 4. The alignment problem and solution do not depend on whether the wires are insulated. The Board’s disregard of the insulation-independent alignment teaching of JP ’910 violates the principle that “[a] reference must be considered for everything it teaches by way of technology and is not limited to the particular invention it is describing and attempting to protect.” EWP Corp. v. Reliance Universal Inc., 755 F.2d 898, 907 (Fed. Cir. 1985) (emphases in original); see In re Applied Materials, Inc., 692 F.3d 1289, 1298 (Fed. Cir. 2012). . . .
The Board, returning to its focus on insulation of individual conductors, further reasoned: “Berk-Tek also has not explained why a person of ordinary skill in the art would have had sufficient reason to use the final jacketing/extrusion step of JP ’910, which serves to insulate electrically the bare-metal conductors of JP ’910, to manufacture a cable comprising twisted pairs of individually insulated conductors that do not require additional electrical insulation.” The Board found no answer to Belden’s statement that the final jacketing step, if the conductors themselves were insulated, would be “‘redundant.’ ” But that logic misconstrues the claim language and overlooks on-point evidence. . . .
In short, the record is one-sided on the proper question of whether JP ’910 taught a solution to the problem of aligning cable components that a skilled artisan would have been motivated to use in making CA ’046’s cables. The Board erred in determining that Berk-Tek had not proven the obviousness of the methods of claims 5 and 6 of the ’503 patent by a preponderance of the evidence.
Read the decision here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1575.Opinion.11-3-2015.1.PDF.
Following up on the Shukh v. Seagate petition for en banc rehearing, the Federal Circuit has now taken an important first step of asking Seagate for its response to the petition, due by November 13, 2015.
The issue here is the construction of an employment agreement where the patentee “hereby assigns” all future inventions (created within the scope of the employment). The Federal Circuit rule is that the agreement serves as an effective property right transfer such that, at the moment* of invention, rights to the invention automatically transfer to the employer.
One reason why the issues in the case are interesting to me is because the current Federal Circuit rule is contrary to the traditional property law notion expounded in the UCC that “a purported present sale of future goods or of any interest therein operates as a contract to sell.” Although relatively new, these same limits on property transfer stretch back hundreds of years in our common law history. In the background of the case is the notion that the Federal Circuit has created a federal law of assignment agreements that seemingly operates worldwide — again going against the norm that in the patents are to be treated as personal property in the exchange context, and personal property exchanges are normally governed by local state or foreign law.
In the patent context the question the Federal Circuit’s rule serves as an important and additional thumb on the side of employers rather than their employee inventors. In addition questions of legal tradition noted above, the the case raises important innovation policy questions and questions of inventor/employee rights. The issues here can be thought of as in parallel to other areas where the law places limits on how far employment contracts can go to strip an employee of her rights. Consider, for example, covenants-not-to-compete, inventions outside of the scope of employment, and post-employment secrecy requirements limiting what someone can do with learned skills and knowledge. In those contexts, the courts (and legislatures) have found that it doesn’t make sense to enforce overreaching employment contracts except when very particularly bargained for.
Employers obviously prefer the current rule because it so strongly favors them. Thus, I expect that any IPO/AIPLA (and probably PTO) commentary on this front will support the current automatic-assignment rule.
****
* I included the asterisk next to “moment” of invention because of the reality that invention is typically a process distributed over time. As the courts have repeatedly written, invention begins with a full and complete conception of the invention remains inchoate until the invention is reduced to practice (either actually or constructively). Updated for spelling.
WARF v. Apple (W.D. Wisconsin 2015)
Following a jury verdict on infringement and validity (October 10) and another verdict on damages awarding $230 million in reasonable royalty (October 19), Judge Conley (W.D.Wisc.) has now quickly disposed of the case by entering judgment in favor of the patentee (WARF) the amount awarded and denying Apple’s motion for judgment as a matter of law. The case is now set for appeal to the Federal Circuit.
During trial the Judge rejected WARF’s willfulness claim – finding that Apple had a pretty good – thought ultimately losing – obviousness argument:
Apple demonstrated at trial that the elements of the asserted claims of the ‘752 patent were all known in the prior art, and many were well-known for those skilled in the art. Indeed, WARF did not meaningfully dispute this. As a result, the only factual dispute as to Apple’s obviousness defense was whether a person of ordinary skill in the art would have combined those elements and had a reasonable chance of doing so successfully.
Under the current requirement of both objectively and subjectively willful behavior, the court found that WARF could not prove with clear and convincing evidence that Apple acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent.”
It turns out that Apple had also presented its obviousness argument to the PTAB in an inter partes review challenge. In that case, the Board refused to grant the IPR petition – finding that Apple “has not shown, under 35 U.S.C. § 314(a), that there is a reasonable likelihood that it will prevail with respect to at least one of the challenged claims.” Back in the lawsuit, Judge Conley rejected WARF’s argument that the PTAB’s denial is relevant. Unfortunately, it appears that the Judge’s ruling is based upon a misunderstanding of PTAB procedure and burdens. In particular, the judge rested his decision upon the incorrect notions that IPR cancellation requires “clear and convincing evidence” and that granting an IPR petition requires proof that the challenger is “likely to prevail” on the merits. The Judge writes:
All PTAB found was that Apple was not likely to prevail on its defense by proving obviousness by clear and convincing evidence. PTAB did not consider whether this defense was objectively reasonable or raised a substantial question. As such, the PTAB finding — like the jury’s finding rejecting the invalidity challenge — does not settle the issue of whether Apple’s defense was objectively reckless.
Of course, the PTAB cancellation is based upon a substantially lower standard – a preponderance of the evidence – not clear and convincing evidence. In addition, the PTAB decision at the petition stage looks only for a “reasonable likelihood” of prevailing rather than simply being “likely” to prevail. (In most cases, the ‘reasonable’ modifier makes it easier to prove a conjecture: compare “certainty” with “reasonable certainty.”)
Although the PTAB decision is not identically written to the willfulness test, it is not clear to me which standard is higher. And, I think that the statistics would play out here to easily show that it is a rare case where a well-pled obviousness argument was rejected by the PTAB at the petition stage and then relied upon by a jury to invalidate a patent.
The comparison:
I will pause here to apologize for the complexity of the comparison. You can thank the Federal Circuit for creating these tricky rules to replace what has traditionally (and by statute) been a much more open doctrine. The Supreme Court is addressing these issues in Halo and Stryker.
The point here for me is that Apple was unable to pass the petition stage of an IPR – i.e., they did not have a reasonable chance of winning on the lowered standard for invalidity. At least we can say that they had even less of a shot of winning with the same challenge presented in court with the higher burden. In context, this seems to me that the PTAB decision is quite relevant to the question presented here.
= = = = =
I’ll note here that the district court briefing on the issue was all filed under seal and not available. In addition, the district court has just agreed to seal a large set of trial evidence and demonstrative exhibits. It appears that WARF offered no objection – why would they? Here, at the least the court should order a redaction rather than complete sealing to support the strong public interest in patent cases and in an open court system. See also, Secret Patent Trials are OK; Access to Courts; A Call for Restraint in Sealing Court Records.
By David Hricik
On October 27-28, 2015, the Ninth Annual Corporate IP Institute® is being held in Atlanta. I’ll be speaking along with a lot of other folks. As usual, the Intellectual Property Owners Association (IPO) has organized a panel for the event for corporate IP management best practices. Registration for the Institute (and a bonus charity golf game, the CIP CUP® — these folks obviously have trademark and marketing lawyers around) is available here.
The Federal Circuit released two more “Rule 36” from the Federal Circuit: Hill-Rom Services, Inc. v. Stryker Corporation; and First Quality Baby Products v. Kimberly-Clark Worldwide, Inc. Both of these cases involved the patentee appealing PTAB obviousness determinations during reexamination proceedings.
The Federal Circuit’s local Rule No. 36 provides:
Rule 36. Entry of Judgment – Judgment of Affirmance Without Opinion
The court may enter a judgment of affirmance without opinion, citing this rule, when it determines that any of the following conditions exist and an opinion would have no precedential value:
(a) the judgment, decision, or order of the trial court appealed from is based on findings that are not clearly erroneous;
(b) the evidence supporting the jury’s verdict is sufficient;
(c) the record supports summary judgment, directed verdict, or judgment on the pleadings;
(d) the decision of an administrative agency warrants affirmance under the standard of review in the statute authorizing the petition for review; or
(e) a judgment or decision has been entered without an error of law.
Since January 2015 (10 1/2 months), the court has issued 101 precedential opinions.
Although the two cases here do seemingly turn on factual questions, they also deal with obviousness – which is the key issue in the vast majority of Patent Office decisions.
Over the past year, the Federal Circuit has decided a large number of Patent Office appeals with R.36 judgments or non-precedential opinions. Looking at Federal Circuit decisions since January 1, 2015 that stem from Patent Office appeals: approximately 20% are precedential opinions; 20% are non-precedential opinions; and 60% are Rule 36 affirmances without any opinion at all.
As we sit here today, there are no pending patent cases before the Supreme Court where the court has granted certiorari. That said, there are a large number of pending petitions. These include Cuozzo & Pulse that I have previously discussed. WilmerHale has been covering these, but is a few months behind.
The following are a few recently filed petitions:
Teva Follow-On: FiveTech v. SouthCo: (1) Can the Federal Circuit limit the role of the intrinsic evidence in construing patent claims under the exacting “lexicography and disavowal” standard; (2) Does the “lexicography and disavowal” standard improperly circumscribe the objective standard of the person of ordinary skill in the art in construing claim terms.
Teva Follow-On: Chunghwa Picture Tubes v. Eidos: Whether a district court’s factual finding(s) underlying its construction of a patent claim term must be reviewed for clear error under Rule 52(a)(6) as this Court held in Teva, or is an exception created to clear error review where the appellate court finds the intrinsic record clear after a de novo review of that record, as the Federal Circuit held in this case.
Attorney Fees in Copyright:
Kirtsaeng v. John Wiley (Kirtsaeng II): What is the appropriate standard for awarding attorneys’ fees to a prevailing party under § 505 of the Copyright Act?
Omega v. Costco (Costco II): (1) Can Copyright attorney fees be based on a finding that petitioner engaged in copyright misuse when the issue of misuse was appealed but left undecided on appeal? (2) Can the pursuit of a claim of copyright infringement constitute “copyright misuse” when the allegedly infringing copy is a “pictorial, graphic, or sculptural work” that is reproduced in a “useful” article.
Inter Partes Review Challenges:
Automated Merchandising v. Michelle Lee: (1) Must the federal judiciary await the substantive conclusion of an agency proceeding before it can evaluate whether an express statutory limitation on that agency’s jurisdiction requires that agency to terminate its proceeding? (2) Did the Federal Circuit err in refusing to order the USPTO to terminate the subject inter partes reexaminations under 35 U.S.C. § 317(b)?
Luv N’ Care v. Munchkin: Did the Federal Circuit err by affirming a PTAB administrative judgment based on new issues raised sua sponte by the PTAB at the Final Hearing, thus depriving the patent owner of notice and a meaningful opportunity to respond?
ANDA Loophole Cases:
Mylan v. Apotex: (1) Whether Article III’s case or controversy requirement can be satisfied by a suit which seeks a judgment of non-infringement of a disclaimed patent. (2) Whether Congress can create Article III jurisdiction by imposing statutory consequences that turn on obtaining a judgment of non-infringement of a disclaimed patent.
Daiichi Sankyo v. Apotex: Whether an action seeking a declaration judgment of non-infringement presents a justiciable case or controversy under Article III of the Constitution where the patent at issue was previously disclaimed and thus cannot be enforced.
Design Patent Summary Judgment: Butler v. Balkamp: Is summary judgement proper in a District Court when a factual dispute exists in a Design Patent action and the District Court substitutes its own opinion for that of the ordinary observer?
Reasons to Combine and Obviousness: Arthrex v. KFX Medical: (1) Is the “reason to combine” inquiry a subsidiary question of fact, subject to deferential review on appeal, or a legal question for the court, and reviewed de novo. (2) Should the ultimate legal issue of obviousness be resolved by the court rather than submitted to the jury for resolution.
Guest post by Ben Roxborough. Mr. Roxborough is one of a few dual citizens who have completed federal court clerkships in both the United States and Australia. He has clerked in the U.S. for three years and practiced in Australia for five years, writing articles on how Australian courts developed a workable doctrine for patentable subject matter. He earned an LL.M. degree at Stanford Law School, specializing in intellectual property. This is not legal advice, and he welcomes any comments or criticisms: ben.roxborough@gmail.com
To say that the sands have been shifting with respect to Section 101 jurisprudence would severely understate the seismic change that it has experienced in recent years; ever more so in recent months. The consequence is that the lines between sections 101, 102 and 103 have been blurred. This consequence appears to stem from statements in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1304 (2012), where Justice Breyer suggested that the inquiries “overlap.” Indeed, three years later, the Federal Circuit panel in Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1347 (2015), went as far as saying that a “pragmatic analysis of § 101 is facilitated by considerations analogous to those of §§ 102 and 103.”
Because the lines have blurred, defendants have been able to rely on 102/103 arguments to invalidate patents on 101 grounds. These arguments, which defendants tend to advance at the second step of the Mayo/Alice framework, generally state that the additional steps—beyond the putative ineligible subject matter—are conventional because they can be found in the specification or are so ubiquitous that the court can treat them as routine and well understood by those in the scientific community. In Mayo, 132 S. Ct. at 1298, for example, Justice Breyer cited admissions in the specification that the processes for determining the level of metabolites in a patient’s blood were “well known in the art.” The patent lacked inventive concept because of this. Relying on Mayo, among other cases, defendants now make a simple argument. The argument may be summed up as: “Your Honor, if you combine what’s described in the specification and prior art with the ineligible subject matter, you’ll find that the patent claims are routine and conventional and do not meet the 101 threshold.”
In effect, the 101 ineligibility defense has become a de facto 103 defense, targeting primarily combination patents. But putting aside the fact that this de facto argument reflects a conclusion (rather than any real analysis), the argument is extraordinary because prior art in the specification is used against the patentee. No evidence other than the specification is being proffered to support the defendant’s position (which may mean that the prior art in the specification is an admission, but no patentee would say that the combination of the prior art elements were well known in the art at the time of the invention). And although some district courts have acknowledged this paradox, the argument tends to be successful as it was in McRO, Inc. v. Namco Bandai Games Am., Inc., No. CV 12-10327-GW, 2014 WL 4749601, at *11 (C.D. Cal. Sept. 22, 2014).
But it doesn’t end there: the patentee’s perilous position is only compounded further when the defendant seeks dismissal of the claim pursuant to Federal Rule of Civil Procedure 12(b)(6) because the patentee generally cannot proffer evidence outside the four corners of the complaint (and patent) that could undercut the defendant’s position. This seems unfair from not only a procedural perspective, but also a substantive one. When looking at a combination patent, what courts most want to know (or should want to know) is: “Who would have thought to combine the elements of the invention in the first place, and why?”
These basic concerns are central in the 103 context. But they should be equally relevant in the 101 context. Defendants have had a field day eviscerating patent after patent since Alice using ‘obviousness-like’ arguments to show that the patent lacks inventive concept. What is required in response to these developments is judicial recognition of ‘obviousness-like’ arguments that cut the other way. The article I am writing seeks to develop these themes, so to place plaintiffs and defendants on equal footing under Section 101. They are summarized here (and, admittedly, are far from fully developed):
In addition, the Mayo decision also spoke of “how much future innovation is foreclosed relative to the contribution of the inventor.” Mayo, 132 S. Ct. at 1303. Does this mean that a pioneer patent should be given more latitude in a 101 context than a patent that provides a mere incremental improvement? I think it does. But a workable doctrine must emerge—much like one emerged with respect to the doctrine of equivalents in the infringement context. The article will address this.
by Dennis Crouch
Spectrum Pharma and the University of Strathclyde v. Sandoz Inc. (Fed. Cir. 2015)
In this case the Federal Circuit shoots down two fairly silly arguments, but not without first giving them full credence and consideration. Although the patentee lost here, the Federal Circuit appears to agree with the patentee that its less-pure compound could have been patentable over a purer version identified in the prior art even though the added impurities provided no benefit, functionality, or synergy — PHOSITA simply would not have been motivated to make the less-pure version.
Background: The ANDA lawsuit here centers around Strathclyde’s patent (licensed to Spectrum) covering the the drug Fusilev aka l-leucovorin and Sandoz’s related generic drug application. The drug leucovorin was found to be effective at treating iron deficiency that can occur with 5-FU cancer treatment. Later, researchers discovered that it was actually one isomer of leucovorin (6S) that was effective and the other isomer (6R) was just along for the ride. The patentee here substantially purified the 6S isomer and attempted to patent it as part of a therapeutic composition. Claim 1 requires “a mixture of (6S) and (6R) diastereoisomers and consists of at least 92% by weight of the (6S) diastereoisomer, the balance of said compound consisting of the (6R) diastereoisomer.” It turns out that years earlier a researcher had manufactured a pure form of the 6S isomers and the 50/50 mixture of 6S/6R isomers was known as well. By the time of the invention in question here it was also known that the 6S isomer was the effective one. Later studies proved that the substantially pure form was clinically no better than the 50/50 mixture having the same effective amount of the 6S isomer.
Obviousness:
A patent claim is invalid as obvious if an alleged infringer proves that the differences between the claims and the prior art are such that “the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art.” 35 U.S.C. § 103(a) (2006) (pre-AIA). Obviousness is ultimately a conclusion of law premised on underlying findings of fact, including the scope and content of the prior art, the differences between the claimed invention and the prior art, and the level of ordinary skill in the pertinent art. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007); Graham v. John Deere Co., 383 U.S. 1 (1966). “The presence or absence of a motivation to combine references in an obviousness determination is a pure question of fact.” Alza Corp. v. Mylan Labs., 464 F.3d 1286 (Fed. Cir. 2006). In addition to common knowledge or teachings in the prior art itself, a “design need or market pressure or other motivation” may provide a suggestion or motivation to combine prior art elements in the manner claimed. Rolls Royce, PLC v. United Techs. Corp., 603 F.3d 1325 (Fed. Cir. 2010);
Here, the patented mixture could be made by simply mixing the known pure 6S isomer with the 50/50 mixture so as to reach the claimed 92% ratio. The patentee argued that there would have been no motivation to combine these references — going from a pure substance to a less-pure substance. The Federal Circuit sees merit in that argument:
[I]f the pure material is known, no reason has been shown why one would want to have an impure material. Although one may not be motivated to obtain an impure material and, in effect, it therefore can be argued to have been nonobvious—which is Spectrum’s position here, that the 92–95% pure material was nonobvious over the known pure material.
The Federal Circuit ultimately rejected that argument “despite its superficial appeal” by looking at the patent from the starting point of a 50/50 mixture – and finding that there would have been a motivation to improve its purity. The court also noted that the new mixture offered no “unexpected advantages over the prior art pure material, the less-than-pure material, and any others of similar concentration.” In essence, this case is can be seen as very much parallel to KSR – where a combination of two known elements, with each element being used as expected, is unlikely to be patentable absent some unexpected results or synergy.
Objective Post-Invention Evidence Showing Obviousness: Of interest, the Federal Circuit approved of two additional bits of evidence that occurred post-invention that helped prove obviousness. The first was evidence that several other researchers were able to obtain the 92% isomer concentration shortly after the patentee obtained its results — that appears have provided some evidence of obviousness. Secondly, the court relied upon post-invention studies showing no benefit of the pure drug to negate any synergy argument.
Infringement by Importation: A second set of claims included a limitation that the composition was provided in “a quantity at least sufficient to provide multiple doses of said mixture of (6S) and (6R) diastereoisomers in an amount of 2000 mg per dose.” Although Sandoz was planning to sell drug in single-use vials of ~200 mg per dose, the patentee argued that Sandoz did plan to import the drug in larger shipments and, at that importation would be infringing. The Federal Circuit rejected that argument – finding that the ANDA infringement inquiry under 271(e)(2) “focuses on a comparison of the asserted patent claims against the ANDA product that is likely to be sold following FDA approval.” Thus, the fact that Sandoz plans bulk-imports does not create liability.
On this front, it seems that the Federal Circuit may have left open the possibility that Sandoz imports may still infringe under 271(a) once the generic maker begins imports.
Doctrine of Equivalents: The patentee had argued for infringement under the DOE even though it had narrowed the very amount element during prosecution. Its argument was that the amendment should not count as narrowing because other claims in the patent were still broader. That argument fell on deaf ears:
[B]y claim amendments and distinguishing statements on the prior art during prosecution, Spectrum is now estopped from invoking the doctrine of equivalents to prove infringement. When submitting an amendment with the application claims that eventually issued as claims 5–9, the applicants asserted that the newly added claims “include specific limitations as to quantities of materials,” and distinguished the prior art by pointing to the “quantities of these specific mixtures specified in the claims.” Those claims were also added following an office action rejecting the previous original claims as obvious in view of Rees. The applicants again explicitly highlighted the significance of the dosage limitation during an appeal to the Board, their brief stating that the claims “require a minimum of four grams,” the “quantity limitations set forth in the claims” which “define an aspect of the invention that is of great practical significance.” The applicants unequivocally argued that Rees, which allegedly only produced experimental quantities, “do[es] not teach, suggest, or otherwise render obvious the claimed compositions in the quantity specified” in the application claims that became claims 5–9. Those statements are clear and unmistakable expressions of the applicants’ intent to surrender coverage of quantities of the compound in lower doses.
Thus, Sandoz wins here on all fronts.
I gave a talk last night in New York City, and I talked about various prosecution and litigation issues. In attendance was a primary examiner. We got to discussing nasty communications from practitioners.
She told me some things that should be obvious, but apparently my sense of what is obvious differs from a lot of practitioners.
First, being snarky doesn’t work. Telling someone they are stupid is not going to advance prosecution.
Second, when a particularly nasty communication comes in, it becomes the topic of conversation. “You won’t believe this one…” It’s a small world so if you’re practicing in one area, being nasty to one examiner may affect your reputation among several examiners in that art group.
Despite those two fairly common-sense things, nasty-grams continue. The OED occasionally gets involved.
Patent prosecution is, of course, an adversary process, with the practitioner attempting to overcome an examiner’s arguments as to why certain claims are unpatentable (among other things). Examiners are under time pressures, as are practitioners whose clients need efficiently delivered legal services. Sometimes that leads one “side” or the other to lose its cool.
That is understandable, and perhaps forgivable.
What seems to happen too often is that practitioners unload vituperative communications on examiners. This is probably counter-productive – telling someone they are stupid and wrong in my experience is likely not to change that person’s mind. Yet, practitioners persist in this nasty conduct.
Primary examiners have told me that when these sorts of nasty communications come in, they are passed around and ridiculed at the office. I doubt that is testimony to their effectiveness.
Beyond that, these are passed along to the OED. The OED has made it clear that it will not tolerate unprofessional behavior. In one recent disciplinary case, In re Schroeder, D2014-08 (May 5, 2015), the OED entered a default judgment against a practitioner who clearly went beyond the boundaries of decency. The practitioner wrote:
Are you drunk? No, seriously … are you drinking scotch and whiskey with a side of crack cocaine while you “examine” patent applications? (Heavy emphasis on the quotes). Do you just mail merge rejection letters from your home? Is that what taxpayers are getting in exchange for your services? Have you even read the patent application? I’m curious. Because you either haven’t read the patent application or you are … (I don’t want to say the “R” word) “Special.”
The practitioner also stated:
Since when did the USPTO become a post World War II jobs program? What’s the point in hiring 2,000 additional examiners when 2,000 rubber stamps would suffice just fine? So, tell me something Corky, what would it take for a patent application to be approved? Do we have to write patent applications in crayon? Does a patent application have to come with some sort of pop-up book? Do you have to be a family member or some big law firm who incentivizes you with some other special deal? What does it take Corky? Perhaps you might want to take your job seriously and actually give a sh.t! What’s the point in having to deal with you Special Olympics rejects when we should go straight to Appeals? While you idiots sit around in bathtubs farting and picking your noses, you should know that there are people out here who actually give a sh. t about their careers, their work, and their dreams.
Perhaps indicating that he was having a bad day, on the same day that practitioner filed a response in another application. That examiner had also rejected the claims based on the prior art. Rather than overcoming the substance of the rejection, the practitioner wrote:
Apparently, the current Examiner to which this application has been assigned, does not speak the native language here in the United States of America. Perhaps in Farsi, really ancient Latin, or even the post-Nimoy Vulcan dialect, the word “stud” just so happens to be synonymous with the term “ridge”. But here in this country, the same country to which [sic] Examiner receives his stipend, the word “stud”, and the word “ridge” have two separate and distinct meanings.
He also wrote examiners were like “athletes who participate in the Special Olympics [who] might initially make the same mistake after a wild night of cocaine and strippers in Las Vegas.” Finally, he said he had consulted an online dictionary “called www.USPTOexaminerswhoaremorons.com,” where, sure enough, a picture and name of the current examiner was found. Not surprisingly, enumerated synonyms include the following: ‘Down’s Syndrome, idiot, lazy, incompetent, blind, stupid, worthless.’”
Don’t do this.
By Jason Rantanen
As part of my standard preparation for teaching a given doctrine in my patent law class, I like to review the relevant section of the Manual of Patent Examination and Procedure (MPEP). The MPEP typically offers a relatively well-organized description of the doctrine, with critical cases referenced. But my review leaves me frustrated almost every time.
The reason for my frustration is that the MPEP, while doing a terrific job with legal issues on which there is clear precedent, frequently elides over the doctrinal fractures and fault lines that are at the heart of contemporary patent law disputes. Or worse, it simply does not acknowledge their existence at all. The result is a resource that, in presenting patent law as clear and determinate on its face, masks the existence of sharp tensions and breakpoints in patent law.
For example, today I’ll be covering § 102 “public use” and “on sale.” A glance through the MPEP’s sections on public use under the First-to-File regieme reveals a landscape that seems dry and barren, with the only major feature being the question of whether pre- or post-AIA § 102 applies. From reading MPEP § 2152, one gets the sense that post-AIA, the only issue once the question of regime is resolved is whether the activity was “accessible to the public.” Secret sales or offers for sale, for example, do not place the invention “on sale”:
“AIA 35 U.S.C. 102(a)(1) does not cover secret sales does not cover secret sales or offers for sale. For example, an activity (such as a sale, offer for sale, or other commercial activity) is secret (non-public) if it is among individuals having an obligation of confidentiality to the inventor.”
MPEP § 2152.02(d). Experimental use has been entirely dropped from the MPEP’s discussions of post-AIA public uses and sales. It’s as if it never existed.
Yet, these are far from resolved issues. There are plausible arguments that Congress legislatively changed the meaning of “public use” through the AIA; there are at least equally plausible arguments that Congress did not. The PTO’s position on secret commercial activity is on even weaker footing. Inevitably, the Federal Circuit, and likely the Supreme Court, will weigh in on this issue of statutory construction. But the MPEP’s characterization of this issue as settled hides a very real tension in patent law, one that will really matter to inventors and patent attorneys. It’s not difficult to imagine a hypothetical situation in which someone relies on the MPEP’s language about secret commercial activity not constituting sales for purposes of § 102(a)(1), only to be placed in a very bad position should the Federal Circuit or Supreme Court conclude otherwise.
These issues are only the most obvious fault lines hidden under the MPEP’s seemingly solid description of patent law doctrine. But there are others, and creative, knowledgeable attorneys likely know many of them already. One that has always fascinated me is the question of what constitutes a “use” for purposes of § 102 “public use.” The casebook I use for patent law, Craig Nard’s The Law of Patents, does a good job of setting up this issue through Motionless Keyboard Co. v. Microsoft Corp., 486 F.3d 1376 (Fed. Cir. 2007). The issue is whether just showing, or perhaps even demonstrating, an embodiment of the invention constitutes a public use. Motionless Keyboard suggests that sometimes not, at least if the invention is not used for its intended purpose. But in other cases, the Federal Circuit brushes aside the “intended purpose” language of Motionless Keyboard. See, e.g. Pronova Biopharma Norge AS v. Teva Pharmaceuticals USA, Inc., 549 Fed. Appx. 934, 939-943 (Fed. Cir. 2013) (nonprecedential). This question of what constitutes a use is a substantial fracture point where the law is indeterminate, but one gets no hint of this potential tension from the MPEP. See § 2133, 2152. Other fracture points and fault lines are apparent if one digs into the recent cases: the question of what constitutes an offer for sale versus an assignment or license is another fracture point within the § 102 space on which disputes ultimately get resolved, See, e.g. Elan Corp. v. Andrx Pharmaceuticals, Inc., 366 F.3d 1336 (Fed. Cir. 2004), but which one gets no hint of from the MPEP. Likewise, while there is an extensive discussion in the MPEP of whether an invention is “ready for patenting,” see § 2133.03(c), there is no discussion about a fundamental important question: what is the invention for purposes of a product claim? Is it just an embodiment of the invention or is it the technical know-how (i.e.: what we usually think of as “the invention” when talking about patents)?
My point is not that the MPEP should definitely include extensive discussions of fault lines and fracture points within the caselaw. Indeed, the MPEP isn’t much worse than most treatises, which similarly elide or ignore all but the most well-recognized tension points in the law. And “on sale” and “public use” issues, which typically involve information within the inventors’ own possession rather than information that is easily found by the examiner, are perhaps not the most efficient places for the MPEP to offer substantial guidance. Whether or not the MPEP would benefit from greater detail is a normative question that I’d be curious to hear folks’ thoughts on. I do note, though, that on some issues, such as experimental use prior to the AIA, the MPEP goes into substantial detail already, so it’s treatment is more inconsistent than uniformly thin.
My point is simply that the MPEP’s presentation of patent law doctrine inherently implies a patent law that is far more determinate and clear than it really is. There are hard questions in patent law, but reading the MPEP gives the impression that they are just complicated questions with definite answers. The caselaw suggests otherwise.
Shire LLC v. Amneal Pharma, et al. (Fed. Cir. 2015)
This ANDA patent litigation arose after the defendants filed Abbreviated New Drug Applications (ANDAs) with the FDA requesting permission to make and sell a generic version of Shire’s “safe” amphetamine Vyvanse. According to the unreputable urban dictionary: “Unlike other amphetamine pills like Adderall that have distinct ups and downs, and relatively quick effects, Vyvanse is like a big slow moving amphetamine truck that hits you all day long.”
Under 35 U.S.C. 271(e)(2), the filing of an ANDA with the FDA is a form of patent infringement so long as the original NDA owner has listed covering patents in the FDA’s Orange Book. Shire sued the ANDA filers for infringement under this provision.
The money-ruling: The Federal Circuit affirmed the lower court’s finding that – as a matter of law – the claimed inventions of the asserted patents are not obvious and that the lower court did not abuse its discretion by denying a late-filed on-sale-bar defense. The result is that patents will remain in force until their expiration in 2023 – protecting Shire’s billion dollar market.
Supplier Liability: As part of each case, Shire also sued Johnson Matthey who was partnering with each of the ANDA filers and supplying the drug to those entities. As part of its work, Matthey had (1) filed a drug master file with the FDA (but did not itself file an ANDA) and (2) supplied each of the ANDA filers with product covered by one of the patents. In the appeal, the Federal Circuit ruled that these acts do not constitute infringement – either direct or by inducement.
First, the appellate court found that Matthey’s supply of the infringing product qualified under the research exemption of Section 271(e)(1) –
Johnson Matthey is correct that it cannot be liable for the [active ingredients – API] it sold the ANDA defendants up to this point. Johnson Matthey, as an API supplier, has thus far done nothing more than provide material for use by the ANDA defendants in obtaining FDA approval. As the district court found, these sales, and the ANDA defendants’ use of the API for filing the ANDA, were “reasonably related to the submission of an ANDA.” As such, Johnson Matthey’s activities are protected by the safe harbor of § 271(e)(1), and the district court erred by entering judgment that Johnson Matthey has induced infringement of the compound claims at issue.
Second, the appellate court found that Matthey “cannot be liable for infringement under § 271(e)(2)” because it did not submit an ANDA.
The court here seems to skirt its prior holding in Forest Laboratories, Inc. v. Ivax Pharmaceuticals, Inc., 501 F.3d 1263 (Fed. Cir. 2007). In that case, the Federal Circuit found that a supplier could be held enjoined to prevent it from inducing infringement: “Section 271(e)(2) may support an action for induced infringement. . . . Under the standards for inducement which we apply to 35 U.S.C. § 271(b), [the supplier] has therefore actively induced the acts of [the ANDA filer] that will constitute direct infringement upon approval of the ANDA, and it was thus not inappropriate for the district court to include [the supplier] within the scope of the injunction.”
In Forest, the court explained though that – at the point of an ANDA lawsuit – that the supplier was not infringing (for the two reasons discussed above), but that it would be infringing/inducing if the ANDA was approved. As such, the Forest court found that it was appropriate to preemptively enjoin the suppler from taking that action that would constitute infringement. Coming back to the Shire case, the appellate panel distinguished Shire – finding that “Forest involved the scope of an injunction under § 271(e)(4). No such injunction has been issued against Johnson Matthew here and thus Forest is inapposite. Johnson Matthey is therefore not currently liable for infringement.”
By Dennis Crouch
It is hard for me to believe that the America Invents Act of 2011 is now four-years old. Some changes (Joinder, Fees, e.g.) had fairly immediate impact. Although somewhat slower coming on-line, the new Inter Partes Review and Covered-Business-Method Review systems are now major fixtures in patent enforcement-defense strategies.
The final major element of the AIA is actual implementation of transformation of the prior art rules in 35 U.S.C. 102. The new first-to-file law applies to patent applications having at least one claim whose earliest effective priority filing date is on or after March 16, 2013. In the past 30 months since then, hundreds of thousands of AIA patent applications have been filed – and those are beginning to trickle out as issued patents. I pulled-up the PAIR files for 800+ recently issued patents (from the first two weeks of Sept 2015) and looked at the reported AIA-Status of those patents. (Table 1 below)
| Table 1: | All Patents | Only Patents Filed Post-AIA |
| AIA Patents |
147 |
147 |
| Non-AIA Patents |
721 |
262 |
| Total |
868 |
409 |
| Percent AIA |
17% |
36% |
| 95% CI (+/-) |
3% |
5% |
Of the 868 patents, 147 are “AIA” patents – meaning that none of the claims of the patent (or application) could have effectively an effective filing date before March 16, 2013 (the “AIA-date”). This represents 17% of the total number of patents in my sample and 36% of the number of patents in my sample that were filed after the AIA-date. I also report the 95% confidence interval that is based upon the simple binomial calculation (p(1-p)/n). The chart below considers the same type of data, but uses a time-series stretching back to the beginning of 2015 showing a linear fit to the data.
Where the AIA Status is Defined: My understanding is that the AIA data field in PAIR has been populated as “no” for any application filed prior to the AIA date; populated as “yes” for any application filed after the AIA-date that has no pre-AIA claims for priority or benefit; and finally, for transitional applications filed post-AIA but with a pre-AIA priority claim, populated according to the AIA-question in the Application Data Sheet. [The AIA-status of an application is obviously information material to patentability and so we will likely see some inequitable conduct allegations down the line.]
Not Yet Litigated: Although there are now several thousand AIA patents issued, there have been no court cases yet involving an AIA patent or patent application. Likewise, we have no Post Grant Review (PGR) final decisions and we have no PTAB decisions from ex parte cases involving AIA applications. Those will come, but meanwhile many patent attorneys will continue to operate with some ambiguity regarding how Section 102 will be interpreted going forward. Important big questions: Do non-enabling commercial uses; confidential sales; and confidential offers-to-sell still qualify as invalidating prior art? What activities will count as “otherwise available to the public?” How narrowly will the narrowed grace period of 102(b)(1) be interpreted? (e.g., does the grace period only apply to pre-filing disclosures of the claimed invention itself as suggested by the text or instead can any pre-filing disclosure by or from the inventor qualify?) What is the impact of elimination of Section 102(f)?
Ivera Medical v. Hospira (Fed. Cir. 2015)
On summary judgment, the district court found Ivera’s asserted patent claims invalid as obvious under 35 U.S.C. § 103. On appeal, the Federal Circuit has reversed – finding that Ivera’s submitted expert testimony raised genuine issues of material fact.
Ivera’s patents are directed to a more reliable mechanism for disinfecting connectors (such as an IV port). The idea is basically a screw-on cap full of disinfectant. 
The patented cap at issue here is an improvement on the original idea found in several prior art references. In particular, Ivera added a vent in the cap “to allow evaporation of the cleaning agent from the inner cavity and to inhibit a buildup of pressure in the cap when the cleaning material is compressed by the site of the medical implement.”
Although the primary prior art reference (Hoang) did not disclose the vent limitations, the district court found – as a matter of law on summary judgment – that a person of skill in the art would have recognized the need for a vent to relieve pressure. I suspect that the district court was swayed by the fact that the patent is also under final-rejection in an inter partes reexamination based upon the same prior art reference. On appeal, the Federal Circuit found that the facts were not so clear.
Law of Obviousness:
“A party seeking to invalidate a patent on obviousness grounds must demonstrate by clear and convincing evidence that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so.” InTouch Techs., Inc. v. VGO Commc’ns, Inc., 751 F.3d 1327 (Fed. Cir. 2014). Determining whether one of ordinary skill in the art would have been motivated to combine the teachings of different references is a flexible inquiry, and the motivation is not required to be found in any particular prior art reference. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).
Here, the evidence before the district court included declarations from Huang (the inventor of the prior art) and others explaining how the Ivera idea was a significant invention because it broke with the conventional wisdom of having a fluid tight seal. The appellate court saw these submissions as sufficient to raise a genuine dispute of fact that cannot be resolved on summary judgment.
The panel also noted in passing that the examiner during the inter partes review had refused to consider the same declarations because they were filed late in the process — leading to the implication that – if filed earlier – the declarations might have changed the examiner’s viewpoint. The examiner’s reexamination decisions have been appealed to the PTAB and are awaiting judgment.
This case again highlights the power of expert evidence to explain the invention within the context of the prior art.
= = = = =
I should also note Ivera has a separate infringement case going against Hospira for another cap patent. In that case, the PTAB instituted an IPR (brought by another defendant) that case was settled before final judgment. In a recent determination, the district court ruled on motion-in-limine to exclude evidence of the PTAB’s decision to institute the inter partes review – finding that it has “little probative value” and “would be confusing to the jury and prejudicial.” [OrderInLimine]
by Dennis Crouch
Dome Patent v. Michelle Lee in her capacity as Director of the USPTO (Fed. Cir. 2015)
Patent No 4,306,042 issued in 1981 and expired in 1998, but is still being litigated. The patent covers a method of making oxygen-permeable material used for contact lenses. Back in December 1997, the patent owner (Dome) sued a set of defendants for infringement. That lawsuit has been stayed since 1999 pending resolution of an ex parte reexamination requested by one of the defendants. In a 2006 final ruling, the USPTO confirmed patentability of claims 2-4, but cancelled claim 1 as obvious. Dome then filed a civil action in DC challenging the PTO ruling. That case – filed in 2007 – concluded in July 2014 with the district court’s de novo determination that claim 1 was obvious over a combination of three prior art patents. On appeal here, the Federal Circuit has affirmed that ruling – finding that “district court did not commit reversible error in its determination that the claimed subject matter would have been obvious to a person of ordinary skill during the relevant time period.” Judge Hughes penned the opinion that was joined by the two other panel members, Judges Reyna and Schall.
In typical close cases, each of the major elements of a claimed invention are found in a collection of prior art — leaving the question of whether the combination as claimed would have been obvious to a person of ordinary skill in the art. An important intermediary factual question is whether there is any evidence showing why a skilled artisan might or might not be inclined to combine the references. In the Supreme Court’s KSR decision, the Supreme Court indicated that the motivation question involves an ‘expansive and flexible’ analysis and can consider the common sense of the skilled artisan. Citing KSR, Judge Hughes writes:
If all elements of a claim are found in the prior art, as is the case here, the factfinder must further consider the factual questions of whether a person of ordinary skill in the art would be motivated to combine those references, and whether in making that combination, a person of ordinary skill would have had a reasonable expectation of success.
Evidence of a motivation to combine prior art references may flow from “the nature of the problem to be solved.” Here, the district court found that the motivation came from the prior art evidence indicating a search for high oxygen permeability in contact-lens materials. That finding was then affirmed on appeal: “This understanding would have motivated a person of ordinary skill to combine the Tris monomer disclosed in Gaylord with the Tris-type cross-linking agent disclosed in Tanaka to increase the oxygen permeability of a contact lens.” There was also some amount of teaching away (the non-Tris prior art outlined the problems of using Tris), but the appellate court affirmed the obviousness finding.
It was important for the appeal here that the ‘motivation’ found by the district court was seen as an issue of fact — a subset of some unnamed Graham factor — rather than a question of law. Thus, although the appellate court may have disagreed with some aspects of the original decision, the district court’s findings were not “clearly erroneous.”
Review of Civil Action: As I mentioned above, the case began as a reexamination and, after losing, the patentee filed a civil action in district court who reviewed the case de novo. Under i4i, a court patent may only invalidate a patent after being presented with clear and convincing evidence proving that result. See also 35 U.S.C. 282(a) (“In General. – A patent shall be presumed valid.”). On the other hand, the USPTO operating in reexamination mode only requires a preponderance of the evidence to render the claims null and void. These competing standards came to a head in the civil action challenging the reexamination finding. On appeal here, the Federal Circuit affirmed that in this situation only a preponderance is necessary.
“‘[A reexamination] is in essence a suit to set aside the final decision of the board.’ Fregeau v. Mossinghoff, 776 F.2d 1034 (Fed. Cir. 1985).
[I]f the Patent Office decides after an ex parte reexamination that a preponderance of the evidence establishes the claimed subject matter is not patentable, § 145 authorizes the district court to review whether that final decision is correct. The § 145 action in such a case does not concern the different question of whether, as part of a defense to an infringement action, clear and convincing evidence establishes that an issued and asserted patent should be held invalid.
Somewhat oddly, the court ruled that Section 282 does not apply here because that section only relates to defenses in patent infringement litigation. “The § 145 action before the district court did not involve a defense to a charge of infringement of an issued patent. Section 282 therefore does not apply in this instance.
by Dennis Crouch
[Prof Hricik may have more to say on this conflict-of-interest case, but I believe it is an interesting one and important for discussion.]
Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, SJC-11800.
A patent law malpractice case is pending before the Massachusetts Supreme Court that has major implications for patent prosecution practice. Many patent patent attorneys and law firms develop technology-specific specialties as a marketing strategy. The professional responsibility problem arises when the strategy is successful enough to attract multiple clients with substantial technological crossover. Of course, this likelihood is intensified in larger law firms where more lawyers means more clients and more (potentially overlapping) invention disclosures.
Back in 2003, Maling hired Finnegan Henderson to prosecute a set of patent applications relating to screwless eyeglass hinges. According to the allegations, it turns out that Finnegan was also representing a competitor (Masunaga) with a similar invention in the same screwless eyeglass hinge field. Finnegan says that these were “attorneys in different offices.” Neither client was informed or gave consent to this alleged conflict of interest and Maling argues that Finnegan’s “independent professional judgement” was impaired by the conflicting representation in violation of the Massachusetts Rules of Professional Conduct. Among the various harms Maling alleges a delay in filing his application and wasted efforts on technology not sufficiently protected by patent.
The state trial court dismissed on failure-to-state-a-claim for the civil action with the court finding no direct adversity of interests and no nexus between the conflicting representation and the claimed harm. The Supreme Judicial Court of Massachusetts (MA’s highest court), is now focused on the question of whether an actionable conflict arises when a single law firm files and prosecutes patent applications for similar inventions on behalf of two existing clients.
Massachusetts law:
Finnegan here argues that the allegations of filing and prosecuting a competitor’s “similar” invention is “insufficient” to even suggest a conflict of interest. Rather, Finnegan argues an ethical conflict only arises if one of the client’s inventions are blocked by patent disclosures made by another client.
The distinction between “similar” and “novel and non-obvious” is well-illustrated by the Maling and Masunaga inventions described in the patents at issue in this case. Both inventions attempt to solve the problem of how to construct an eyeglass frame without utilizing screws. As the PTO concluded, however, each patent claims a novel solution to this problem. . . .Here, there is no allegation that Maling and Masunaga ever were “directly adverse” to one another, in patent proceedings or otherwise. Maling cites to no case law, nor is Finnegan aware of any, in which a court has held that parties are directly adverse to one another simply because each seeks to patent technology in the same field. Such a standard, moreover, would be inconsistent with the statutory-framework discussed above, which recognizes that multiple patents may be granted in the same field so long as each claims a “new and useful” invention, or a “new and useful improvement thereof.”
Finnegan also explains that conflicting-out large law firms would make it difficult for inventors to find representation — quoting Hricik as saying that “a rule that limits a firm to representing only one client in a particular technical field ‘imposes unnecessary costs on lawyers, clients, and the system.'” Hricik & Meyer, Patent Ethics: Prosecution (2015).
In his brief, the plaintiff-appellant argues that its allegations of violation and harm are sufficient to overcome a motion to dismiss. Their brief does not detail an explanation of how similarity should be treated.
In an amicus filing, a group of major law firms, including Knobbe Martins; Honigman Miller; Nixon Vanderhye, and others arguing that direct conflict issues only arise if the inventions are so close as to lead to an interference (pre-AIA).
The amicus brief suggests that the rules may be different post-AIA because the new law sets up more of a race to the PTO (first-to-file vs first-to-invent). This, of course, is disingenuous as the pre-AIA system included a large number of adverse impacts caused by delays in filing.
One interesting issue that arises here is that Maling had Finnegan conduct a pre-filing prior art search in 2003. At that point, the Masunaga patent was on file, but not yet published and so did not turn-up in the search results – even though Finnegan attorneys knew of the reference and knew that it was prior art.
Michael McCabe has more of a discussion of the case on his IP Ethics and Insights Blog.
= = = = =
Most civil-action malpractice claims fail because of the difficulties of proving harm. At the USPTO and State Bars, mere violation – even without client harm – is actionable as a violation of the rules of professional responsibility. It will be interesting to see how the USPTO treats this case.
= = = = =
Read the Briefs:
[This post includes links to the 12 amicus briefs supporting Sequenom’s petition for en banc rehearing in this Subject Matter Eligibility Case.]
by Dennis Crouch
Ariosa Diagnostics, Inc v. Sequenom, Inc. (Fed. Cir. 2015) (en banc petition 2015)
This subject matter eligibility case revolves around an important scientific discovery that a pregnant woman’s blood plasma/serum contains fetal DNA and that the fetal DNA can teased-out by amplifying paternally-inherited sequences from the cell-free fractions of the mother’s blood. Sequenom’s patents focus on methods of prenatal genetic diagnoses that rely upon these discovery by the inventors. U.S. Patent No. 6,258,540.
Invalid: Applying Mayo v. Prometheous, the Federal Circuit held all the claims in-suit to be ineligible. In step one of the Mayo inquiry, the court found that the claims were all directed to a natural phenomenon: the existence of paternally-inherited cell-free fetal DNA (cffDNA) in the maternal bloodstream. In step two, the search for an ‘inventive concept,’ the court found that the practical implementation of the natural phenomenon was insufficient because it merely involved well known methods of amplifying DNA. (CitingFlook). Without an inventive concept beyond the excluded subject matter – the claims were left ineligible for patent protection.
In his usual understated approach, Professor Chris Holman identified the Federal Circuit decision “not good news for innovation in the life sciences.” The USPTO has also seemingly delayed providing examiner’s with guidance on how to implement Ariosa during examination.
En Banc Rehearing Petition: The patentee has now put forward a strong move for rehearing en banc with a well drafted petition and support from a host of amici. Aptly describing the core issue, Sequenom’s counsel Tom Goldstein explains:
[Under the Federal Circuit’s rule] the person who first discovers a natural phenomenon can never obtain a patent on any practical application of that new knowledge, however surprising or revolutionary the results, unless the steps she teaches to use it are independently novel. . . . that cannot be correct.
Read the Ariosa.Petition. The petitioner’s main argument here is with the Supreme Court’s broad language used in Mayo that also revitalized Flook. Of course, those cases conflict with other Supreme historic precedent. In the coming months, the Federal Circuit will decide this en banc request, but the case is very much being set-up for Supreme Court review.
The 12 amicus briefs filed in support of the petition are strong and well written.
My former boss Kevin Noonan is counsel of record for a group of 23 law professors, including Adam Mossoff, Dan Burk, Tim Holbrook, and Richard Epstein. The brief makes two main arguments: (1) the genetic diagnostic tests developed and commercialized here are the type “historically unforeseen invention” that the patent system is designed to promote; and (2) the panel’s approach here of requiring novelty beyond straightforward application of excluded natural phenomenon “would call into question nineteenth century patented innovation the Supreme Court deemed valid.”Read Ariosa.lawprof. The sentiment of the Law Professor Brief is consistent with the brief filed by Matthew Dowd on behalf of JYANT Tech, explaining that “in Diamond v. Diehr … the [Supreme] Court explained that “a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made.” Read Ariosa.JYANT
As we will discuss in a parallel post, the brief of Professors Lefstin and Menell provide their reading of recent Supreme Court cases of Mayo and Alice — arguing that (1) a close reading shows that inventive application of a law of nature is not required but instead a non-preemptive or non-generic application; and (2) the Flook-type claim dissection is prohibited. Read Ariosa.Leftsin. This analyze-it-as-a-whole sentiment was repeated by the IPO Brief field by Tiege Sheehan as well as the brief from Amarantus filed by Gideon Schor. Read Ariosa.IPO and Ariosa.Amarantus.
My Fellow Missouri Professor Chris Holman filed a brief on behalf of the major industry organizations BIO and PhRMA making the credible argument that all this is a very big deal in the diagnostic space and that the resulting uncertainty is having a negative impact on research. Read Ariosa.BIO.
Preemption: When the Supreme Court explained its two two-step approach in Mayo andAlice, it noted the purpose was to avoid preemption of any excluded subject matter — that is, to ensure that no single entity could claim exclusive sovereignty over an abstract idea, law of nature, or natural phenomenon. Rather, those basic fundamentals of society should not be subject to private claims of right. Although the purpose behind the test is preventing this preemption, the test itself seemingly does not ask whether preemption has occurred. In its brief, the NYIPLA argues that this fundamental question of preemption must be asked and the Mayo/Alice framework does not authorize a court to ignore that inquiry.READ Ariosa.IPLA. This focus on preemption is repeated by WARF’s brief filed by Dan Bagatell — writing that “the critical question is whether a patent impermissibly claims and prevents others from using a natural phenomenon, law of nature, or abstract idea itself, or instead permissibly claims a practical application of one of those things.”Read Ariosa.WARF.
Myriad‘s counsel Benjamin Jackson filed a brief on behalf of the industry organization21st Century Medicine that challenges the “gist” method of determining whether a claim encompasses excluded subject matter and suggests that the claim here is simply a technological improvement over the prior art.
Sequenom’s patent teaches it was known in the art that fetal cells can pass into the mother’s blood. Diagnostic techniques had been devised to isolate these cells and analyze fetal DNA extracted from them, but these techniques were expensive and time consuming. The phrase “cell-free fetal DNA” was therefore not an attempt to claim a natural phenomenon but instead a key claim limitation to distinguish over the art. Fifteen years ago, back when patent claiming and examination focused on prior art rather than ill-defined “natural phenomena,” Sequenom appropriately emphasized that its methods used cell-free fetal DNA rather than the cell-derived fetal DNA known in the art.
Thus, the claimed invention is a significant technical improvement in the laboratory process for prenatal diagnosis, allowing laboratories to eliminate the costly and labor-intensive step of isolating fetal cells and then fetal DNA. Such an inventive improvement to the technical performance of an existing technological process is precisely what patents are for.
Read Ariosa.21st. The Novartis brief, filed by its in house counsel Corey Salsberg, makes the important point eligibility has become a tougher test that patentability (nonobviousness). Read Ariosa.Novartis.
Taking a more international approach,Paul Cole and Donald Zuhn teamed-up to file a brief indicating, inter alia, that the panel’s approach in Ariosa creates a potential TRIPs Violation. “This case is an example of an internationally discordant, not harmonious, result, contrary to the eligibility requirements of TRIPS Article 27.” Read Ariosa.COLE. Similarly, the Bioindustry Association (BIA) also argues that the panel’s approach here means that U.S. eligibility is substantially narrower than that of our global trading partners. Read Ariosa.BIA.
The Federal Circuit may take several weeks to decide this en banc petition. This case is a hot potato and the court’s likely reason for ducking the case would be to avoid being scalded.