Evidence of Actual Physician Practice Is Relevant in Determination of Direct Infringement
In Genentech, Inc. v. Sandoz Inc. Appeal No. 22-1595, the Federal Circuit held that the district court did not clearly err in considering evidence of actual physician practice when determining whether a generic drug’s instructions encouraged, recommended, or promoted infringement.
Genentech brought a Hatch-Waxman suit against Sandoz for infringement of its patents directed to dose modification methods for managing side effects when using pirfenidone to treat idiopathic pulmonary fibrosis (IPF). The district court concluded that Genentech’s liver function test (LFT) patents were unpatentable as obvious and the sale of Sandoz’s generic product would not directly infringe Genentech’s drug-drug interaction (DDI) patents. Genentech appealed.
The Federal Circuit held that the district court properly found that the dose modifications claimed in the LFT patents would have been obvious over the prior art in view of well-known, standard medical practices. The district court’s analysis of the prior art properly relied on extensive record evidence including expert testimony and FDA guidance. The Federal Circuit also found Genentech’s evidence of objective indicia of nonobviousness unpersuasive since Genentech did not provide evidence showing skepticism or an unmet need for the claimed methods.
Regarding the DDI patents, the Federal Circuit held that the district court did not clearly err in weighing all relevant evidence, including Sandoz’s proposed label and physician practice. Genentech argued that there was no evidence to negate the language of the proposed label, which encourages, recommends, and promotes infringement. The Federal Circuit explained that evidence of actual physician practice suggested that Sandoz’s instructions would not result in direct infringement of the DDI patents. Thus, the Federal Circuit concluded that the district court “did not clearly err by considering physician evidence, weighing it against the language in Sandoz’s proposed label, and finding that Genentech failed to prove direct infringement.” Accordingly, the Federal Circuit affirmed the district court’s findings of obviousness and noninfringement.
Restrictive Definitions Incorporated by Reference Do Not Necessarily Control for Later Patents in the Same Family
In Finjan LLC v. Eset, LLC, Appeal No. 21-2093, the Federal Circuit held that specific definitions provided in an earlier application in a patent family incorporated by reference into a later patent do not restrict the later patent if that patent does not include the definition.
Patent owner Finjan, LLC, sued Eset, LLC for infringement. The district court held a Markman hearing to determine the definition of the term “downloadable” in the asserted patents. In the hearing, the district court relied on a definition of the term from a non-asserted patent in the same family incorporated by reference into the asserted patents. Based on this definition, the court construed the term to mean “a small executable or interpretable application program which is downloaded from a source computer and run on a destination computer.” With the narrow definition in place, Eset moved for summary judgment of invalidity based on indefiniteness. The court granted the motion, finding the asserted patents indefinite based on the word “small.” Finjan appealed.
On appeal, the Federal Circuit reversed the district court’s claim construction. The Federal Circuit explained that, though incorporation by reference does include the incorporated patent into the body of the host patent, the disclosure of the host patent controls how the incorporated patents are viewed. Here, the incorporated patents contained more and less restrictive definitions of the term “downloadable,” but the asserted patents used the term in its broader sense by listing examples of downloadables that are not small. Thus, the Federal Circuit reversed the district court’s ruling adopting the more restrictive construction, vacated the district court’s grant of summary judgment, and remanded the case for further proceedings.
Failure to Vacate Adverse Standing Decision Upon Settlement Stops Subsequent Suits
In Uniloc USA, Inc. v. Motorola Mobility LLC, Appeal No. 21-1555, the Federal Circuit held that failure to vacate an adverse ruling regarding a lack of standing when settling a prior suit collaterally estopped the patentee in subsequent suits for lack of standing.
Uniloc sued Motorola in the U.S. District of Delaware for patent infringement. The district court dismissed, holding that Uniloc lacked Article III standing because it had granted Fortress Credit Co. a license and right to sublicense the asserted patent, pursuant to a default under a revenue sharing agreement. In a related case, Uniloc sued Blackboard Inc. for patent infringement of two other patents, both of which were subject to the same agreement between Uniloc and Fortress. There, the district court dismissed for lack of standing, applying the Motorola decision as a matter of collateral estoppel.
On appeal, Motorola and Blackboard defended the district court’s decision by asserting that a decision in another Uniloc case against Apple established that Uniloc lacked standing as a matter of collateral estoppel. In the Apple case, Uniloc asserted a patent that was subject to the same agreement with Fortress and the district court dismissed the Apple case for lack of standing, finding that: (1) Uniloc had granted Fortress a license and the right to sublicense; and (2) that Uniloc lacked exclusionary rights in the asserted patent, thereby depriving Uniloc of standing. Uniloc appealed the Apple decision, but the parties reached a settlement agreement before the appeal was decided and the district court’s judgment was not vacated.
Against this backdrop, the Federal Circuit affirmed the dismissal of the Motorola and Blackboard cases for lack of standing. The Federal Circuit rejected Uniloc’s argument that Motorola waived the defense of collateral estoppel at the district court, indicating that waiting for the Apple appeal to conclude before raising the issue did not constitute waiver. The Federal Circuit also rejected the argument that because the Apple case incorrectly found a lack of standing, such an incorrect decision should prevent the application of collateral estoppel. Thus, the Federal Circuit concluded that the Apple decision was a valid and final prior judgment precluding relitigation of the standing issue even though granting a license generally does not deprive a patentee of Article III standing.