Tag Archives: Section 271(e)(1)

Pending En Banc Petitions at the Federal Circuit

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by Dennis Crouch

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

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held that the claimed invention was “technological,” the court here concluded that it was not bound by that prior non-precedential decision.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

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

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

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

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

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

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

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

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

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

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

The Use of Mandated Public Disclosures of Clinical Trials as Prior Art Against Study Sponsors

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By Chris Holman

Salix Pharms., Ltd. v. Norwich Pharms. Inc., 2024 WL 1561195 (Fed. Cir. Apr. 11, 2024)

Human clinical trials play an essential role in the discovery, development, and regulatory approval of innovative drugs, and federal law mandates the public disclosure of these trials. Pharmaceutical innovators are voicing concern that these disclosures are increasingly being used as prior art to invalidate patents arising out of, or otherwise relating to, these trials, in a manner that threatens to disincentivize investment in pharmaceutical innovation. A recent Federal Circuit decision, Salix Pharms., Ltd. v. Norwich Pharms. Inc., illustrates the concern.  In Salix, a divided panel upheld a district court decision to invalidate pharmaceutical method of treatment claims for obviousness based on a clinical study protocol published on the ClinicalTrials.gov. website. The case garnered amicus curiae briefs filed by several innovative pharmaceutical companies in support of the patent owner, Salix Pharmaceuticals. (more…)

Amgen Scores Partial Victory in Efforts to Maintain OTEZLA Exclusivity

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By Chris Holman

Amgen Inc. v. Sandoz Inc., 2023 WL 2994166, — 4th —   (Fed. Cir. Apr. 19, 2023)

In 2019, Amgen acquired worldwide rights to apremilast (OTEZLA) from Celgene $13.4 billion in cash, in connection with Celgene’s merger with Bristol-Myers Squibb. Apremilast was the only oral, non-biologic treatment for psoriasis and psoriatic arthritis, and in 2020 apremilast generated $2.2 billion for Amgen.

At the time Amgen’s acquired apremilast, Celgene was involved in Hatch-Waxman litigation with numerous generic challengers, including Sandoz. Celgene had asserted three of its 11 Orange Book-listed patents against Sandoz, and in 2020 Amgen was substituted as plaintiff.

The primary patent asserted is U. S. Patent 7,427,638, which is directed to pharmaceutical compositions comprising stereochemically pure apremilast. The original expiration date of this patent was in 2024, but the patent received a patent term extension of more than three years, resulting in an effective patent expiration date of February 16, 2028, according to the Orange Book.

Celgene also asserted U. S. Patent 7,893,101, which is directed to enantiomerically pure solid forms (e.g., crystalline polymorphic forms) of apremilast. This patent is due to expire December 9, 2023.

The third patent asserted by Celgene was U. S. Patent 10,092,541, directed to methods for treating a patient using dose titration of apremilast. According to the Orange Book, this patent was set to expire on May 29, 2034.

The district court found the claims of the ‘638 and ‘101 patents to be infringed and not invalid, and enjoined generic apremilast until the expiration of the ‘638 patent in February 2028. On appeal the Federal Circuit affirmed, an outcome that Amgen characterizes as a win.

On the other hand, the district court found the asserted claims of the ‘541 patent to be invalid for obviousness, which reportedly “pleased” Sandoz because the ruling “enables Sandoz to launch [its] generic apremilast product in the U. S. in 2028, six years prior to the expiry date of the latest-expiring Amgen patent asserted in litigation.”  On appeal, the Federal Circuit affirmed with respect to the obviousness of the ‘541 patent.

Here is a brief overview of the court’s decision regarding the asserted obviousness of these patents.

The ‘638 patent claims apremilast, which is the stereochemically pure (+) enantiomer of a compound falls that within a class of molecules referred to as phosphodiesterase-4 (“PDE4”) inhibitors.  Sandoz’s obviousness argument was based primarily upon a prior art Celgene patent, U. S. Patent 6,020,058, which includes an Example 12 that describes a racemic mixture containing apremilast, but that does not disclose the purified (+) enantiomer. The Federal Circuit found that the district court had not erred in holding that Sandoz had not proven that a skilled artisan would have had sufficient motivation to purify the (+) enantiomer from the racemic mixture disclosed in Example 12, nor that a skilled artisan would have had a reasonable expectation of success in resolving that mixture into its enantiomeric components, given the unpredictable nature of resolving racemic mixtures.

The Federal Circuit further found that the district court had not erred in its finding of strong objective indicia of nonobviousness, particularly given the unexpected potency of apremilast relative to the apremilast-containing racemic mixture disclosed in Example 12. The court credited testimony from a Celgene researcher listed as an inventor on the ‘638 patent, who noted a 20-fold difference in potency between apremilast alone and the racemic mixture, and stated that the inventors “didn’t expect a 20-fold difference in potency… Normally, if a racemate is a 50/50 mixture of two enantiomers, you might expect a two-fold difference in potency, all things being equal.” The district court also did not err in determining that apremilast satisfied a long felt need for an improved psoriasis treatment suitable for oral administration, that others in the field had tried and failed to develop other PDE4 inhibitors as drugs, and that there had been a degree of skepticism about the safety of apremilast because of its structural similarity to thalidomide, a drug notorious for its teratogenic effects in fetuses leading to severe and debilitating birth defects.

The issue with respect to the ‘101 patent was whether it could rely upon the filing date of a provisional application to which it claims priority. The ‘101 patent claims crystalline Form B of apremilast, and the provisional application includes an Example 2 which discloses a synthetic procedure for preparing apremilast. Although Example 2 does not explicitly disclose that the resulting apremilast has the Form B crystalline structure, Amgen provided the court with the results of over a dozen experiments following the procedure of Example 2, all of which resulted in crystalline Form B of apremilast, while Sandoz had provided no evidence to establish that Example 2 was capable of producing a crystalline Form other than Form B. Although the district court had based its holding on its conclusion that the provisional application inherently disclose crystalline Form B of apremilast, the Federal Circuit found that it did not need to reach the issue of inherent disclosure because the evidence established that Example 2 actually disclosed crystalline Form B of apremilast, albeit without specifically disclosing the crystal structure of the resulting product.

The ‘541 patent claimed a method of treating a patient with apremilast that basically involves starting with a relatively low dose and, over a course of days, gradually increasing the dosage to arrive at a full dosage which is significantly higher than the initial dosage, i.e., a dose-titration schedule. The court found this to be an obvious method, in view of prior art disclosing a similar dosage schedule. The Federal Circuit observed that, as a general matter, varying doses in response to the occurrence of side effects is well-known and obvious to the skilled artisan.

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Only Some of the Claims are Invalid

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by Dennis Crouch

Hantz Software v. Sage Intacct (Fed. Cir. 2023) (non-precedential) 

The district court sided with the defendant Sage, dismissing the complaint for lack of eligibility.  In a short opinion, the Federal Circuit has largely affirmed, but made an important caveat — that the district court held only that claims 1 and 31-33 are invalid.

[W]e agree that the operative complaint asserted infringement of only claims 1 and 31–33 of each asserted patent, and because Sage did not file any counterclaim of its own (instead, it simply moved to dismiss Hantz’s complaint), we conclude that the ineligibility judgment should apply to only claims 1 and 31–33 of the asserted patents. We therefore vacate the district court’s judgment insofar as it held any claim other than claims 1 and 31–33 of each asserted patent ineligible and affirm in all other respects.

Slip Op.  Despite the limit here, claim preclusion will prevent Hantz from reasserting any of the remaining claims against Sage. Non-mutual collateral estoppel should also apply here to to prevent Hantz from asserting any of the claims against a third party — unless the claims are meaningfully distinct on eligibility grounds from those already adjudged to be invalid.  Normally, collateral estoppel only applies to issues actually litigated, but in the patent context, the Federal Circuit has ruled that it may also apply to non-litigated claims when the differences do not “materially alter the question of invalidity.” Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013); MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1377-78 (Fed. Cir. 2018) (Asking “whether the remaining claims present materially different issues that alter the question of patentability”).

 

(more…)

Federal Circuit Gives Stare Decisis Effect to a Judgment of Claim Validity

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by Chris Holman

C.R. Bard, Inc. v. Med. Components, Inc., 2023 WL 2064163 (Fed. Cir. Feb. 17, 2023)

In Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation (1971), the Supreme Court held that a judgment of invalidity in a suit against one infringer accrues to the benefit of any other accused infringer unless the patent owner shows that he did not have a fair opportunity procedurally, substantively and evidentially to pursue his patent claim the first time.  Collateral estoppel (i.e., issue preclusion) under Blonder-Tongue is non-mutual.  While a judgment of invalidity binds the patent owner and its successors in interest because it is a party to the suit with adequate opportunity to contest the matter, a judgment of validity cannot operate in the patent owner’s favor to bind persons who are neither parties nor in privity with parties to the suit.

Stare decisis,  Latin for “to stand by things decided,” is a legal principle that directs courts to adhere to previous judgments, i.e., precedent, when resolving a case with comparable facts.  According to Chisum on Patents, “Federal Circuit decisions decline to give great weight or stare decisis effect to prior validity rulings.”  For example, in Gillette Co. v. S.C. Johnson & Son, Inc., (1990), the court held that the fact that the validity of a patent claim has previously been upheld in an earlier litigation is not to be given  stare decisis effect, citing Stevenson v. Sears, Roebuck & Co. (Fed. Cir. 1983).

In a recent non-precedential opinion, C.R. Bard, Inc. v. Med. Components, Inc., the Federal Circuit applied stare decisis to a prior validity ruling involving a different patent and a different accused infringer.  The Bard patents at issue are directed to radiopaque markings and structural features that can be used to identify whether a venous access port is power injectable, specifically a venous access port with an alphanumeric message that can be seen on an X-ray and that identifies the port as power injectable.

Representative claim 5 of U.S. Patent No. 7,785,302 claims:

A venous access port assembly for implantation into a patient, comprising:

a housing having an outlet, and a needle-penetrable septum, the needle penetrable septum and the housing together defining a reservoir, wherein:

the assembly includes a radiopaque alphanumeric message observable through interaction with X-rays subsequent to subcutaneous implantation of the assembly, and

the alphanumeric message indicating that the assembly is power injectable.

On motion for summary judgment, the district court found the asserted claims ineligible under § 101 because the claims were solely directed to non-functional printed matter and because the claims were directed to the abstract idea of “[using] an identifier to communicate information about the power injectability of the underlying port” with no inventive concept.

On appeal, the Federal Circuit reversed, explaining:

We are bound by our precedent in C R Bard Inc. v. AngioDynamics, Inc., 979 F.3d 1372 (Fed. Cir. 2020). There, we considered a case that is virtually identical to the one before us now. AngioDynamics also involved patents directed to radiopaque markers that could be used to identify venous access ports as power injectable, and the claims at issue were substantially similar to the asserted claims here. Furthermore, that case asked to consider the exact same question that is before us now: whether claims that include non-functional printed matter could be eligible under § 101. The court in AngioDynamics concluded that, although the asserted claims contained some non-functional printed matter, they were nonetheless eligible under § 101 because the claims were not solely directed to non-functional printed matter—they were also directed to “the means by which that information is conveyed.” Given these similarities, we must reach the same conclusion here as in AngioDynamics.

Because we are bound by our precedent, we conclude that the asserted claims in Bard’s three patents are directed to eligible subject matter under § 101.

As noted above, Chisum’s authoritative treatise on U. S. patent law states that the Federal Circuit does not give “great weight or stare decisis effect to prior validity rulings,” and does not identify any cases which this has occurred.  The C.R. Bard court does not cite to any precedent, case law, or statute to justify its application of stare decisis in the present case.

Perhaps patent eligibility is uniquely amenable to stare decisis, given the amorphous nature of the Alice two part inquiry.  In its opening brief, Bard argued that:

Despite acknowledging the obvious similarities between AngioDynamics and the instant case, the district court . . .  declined to follow it because “the facts and procedural posture are different.” But in AngioDynamics, this Court held that Bard’s patents were valid at Alice step one. Because Alice step one presents a legal question that can be answered based on the intrinsic evidence, CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358, 1372 (Fed. Cir. 2020), any supposed differences in the record are irrelevant and thus provide no basis to depart from this Court’s holding that claims directed to features on ports for the purposes of post-implantation identification traverse Alice step one.

AngioDynamics (the company that lost on the issue of patent eligibility in the AngioDynamics decision) filed an amicus brief in C.R. Bard in support of the accused infringer, urging affirmance of the district court’s decision finding the claims patent ineligible. The company argued that the AngioDynamics decision addressed a different factual record and different legal issues, and that:

Unlike the district court in AngioDynamics, the district court here performed a full two-step Alice analysis. The district court also considered a significantly more developed record than the one in AngioDynamics, including multiple prior art references, Bard’s admissions that it did not invent radiopaque identifiers, and Bard’s admissions that adding radiopaque identifiers to ports would be trivial. . . . Bard’s reliance on AngioDynamics is misplaced.

AngioDynamics states in its amicus brief that its interest in the case stems from its involvement in litigation related to the patents asserted in C.R. Bard, as well as other Bard patents directed to “nearly identical subject matter,” which it believes would be impacted by Bard’s appeal. Presumably, the company was hoping to benefit from the collateral estoppel effect of the district court’s patent ineligibility ruling.