Government’s Pre-Litigation Conduct Cannot Justify a Court of Claims Fee Award
In Fastship, Llc V. Us., Appeal No. 19-2360, A Court of Claims fee award under 28 U.S.C. § 1498(a), turns on whether the government’s litigation conduct was substantially justified without regard to its pre-litigation conduct.
The Court of Claims found the Navy’s development of certain ship models infringed two FastShip patents. The Court of Claims then awarded $6 million in fees under 28 U.S.C. § 1498(a), finding the government’s conduct, before and during litigation taken “as a whole,” was not substantially justified. The Claims Court faulted the government for failing to award FastShip a contract after it responded to a request for proposals and discussed potential ship designs with government contractors under confidentiality agreements. The Claims Court also found the Navy took an “exceedingly long time” to act on FastShip’s administrative claim that FastShip had initially filed before bringing its Complaint in the Claims Court.
The Federal Circuit vacated the fee award. It held that the relevant conduct for determining whether to award fees does not include “the act of infringement itself, any purported breach of contract, or any other underlying governmental action.” The Claims Court could not consider the Navy’s conduct during the ship procurement process or during the administrative proceeding. The Federal Circuit vacated the fee award and remanded so the Claims Court could consider whether the government’s litigation conduct alone was sufficient to justify the fee award.
Limiting Terms in Preamble May Render Entire Preamble Limiting
In Bio-Rad Laboratories, Inc. V. 10x Genomics Inc., Appeal No. 19-2255, the Federal Circuit held that where elements of preamble are limiting, indivisible terms in the remainder of the preamble are also limiting; under balance of hardships analysis a permanent injunction should not extend to products for which there are no non-infringing alternatives.
Bio-Rad sued 10X for infringing three patents covering systems for forming microscopic fluid droplets for medical diagnostics and screening. A jury found 10X liable for willful infringement. The district court denied 10X’s JMOL motion of noninfringement and granted Bio-Rad’s motion for a permanent injunction.
On appeal, 10X argued that for two of three patents, the district court misconstrued the independent claims by failing to find the preambles limiting. The district court found some preamble terms provided an antecedent basis for use of those terms in the body of the claim, but that did not convert the entire preamble into a limitation. The Federal Circuit disagreed. It determined the preamble could not be neatly divided into separate portions and the preamble must be read together as a whole. It held the district court erred in giving limiting effect to certain terms in the preamble, but not to other terms surrounding those limiting parts. The Federal Circuit remanded for a new infringement determination considering the preamble as a whole as limiting the scope of the claims.
10X also challenged the scope of the permanent injunction. The district court determined that the hardship to 10X was mitigated because it could still generally sell non-infringing alternative systems for some, but not all of the enjoined systems. The Federal Circuit evaluated 10X’s hardship product-by-product, and vacated the injunction for two of five product lines because those products had no non-infringing alternatives.
Essentially Standard Questions of Fact
In Godo Kaisha Ip Bridge 1 V. Tcl Commc’n Tech. Holdings Ltd., Appeal No. 19-2215, addressed whether a patent is essential to a technical standard is a question of fact for the jury.
Godo Kaisha sued TCL for infringement of two patents covering aspects of the LTE mobile communications standard. At trial, Godo Kaisha asserted that TCL’s products infringed the patents because (1) the patents’ claims were essential to mandatory aspects of the LTE standard; and (2) TCL’s products practiced the LTE standard. The jury found TCL infringed Godo Kaisha’s patents and awarded damages. After trial, TCL filed a renewed motion for judgment as a matter of law asserting that the question of whether a patent was essential to a standard should be decided only by the court during claim construction. The district court denied the motion and TCL appealed.
The Federal Circuit affirmed. The Federal Circuit acknowledged there was an open question as to whether the jury, or the court as part of claim construction, should determine whether a patent’s claims are essential to a standard. However, prior precedent contemplated parties proving the question as a factual matter. See, e.g., Fujitsu Ltd. v. Netgear, Inc., 620 F.3d 1321, 1327 (Fed. Cir. 2010) (“An accused infringer is free to … prove that the claims do not cover all implementations of the standard”). References to claim construction in precedent were “simply a recognition that the first step in any infringement analysis is claim construction.” Thus, the Federal Circuit held the question of whether a patent was essential to a standard was properly decided by the jury.
Constitutional Issues Arising from PTAB Decisions Must be Appealed to the Federal Circuit
In Security People, Inc. V. Iancu, Appeal No. 19-2118, Congress foreclosed the possibility of Administrative Procedure Act (APA) review of an Inter Partes Review (IPR) proceeding by district courts. The America Invents Act (AIA) provides an adequate remedy in a court for a constitutional challenge through appeals to the Federal Circuit of the Patent Trial and Appeal Board’s final written decisions.
The Board issued a final written decision finding the only instituted claim of a Security People patent unpatentable. Security People appealed the Board decision to the Federal Circuit, raising only issues of patentability. The Federal Circuit affirmed and the Supreme Court denied certiorari. Security People then filed suit in district court alleging the Board decision violated its Fifth Amendment due process right under the APA.
The district court dismissed for lack of subject matter jurisdiction, reasoning that the AIA, codified in relevant part at 35 U.S.C. §§ 319, 141(c), provides for broad Federal Circuit review of Board final written decisions, including constitutional challenges, but only allows for review by the Federal Circuit. Security People appealed the dismissal. First, Security People argued that the Board lacks authority to consider constitutional claims, and that Security People could not assert constitutional challenges for the first time on appeal because doing so would raise issues requiring factual resolution. Second, Security People argued that it’s as-applied challenge ripened only after cancellation of its patent claim following affirmance of the Board decision.
The Federal Circuit affirmed the district court and rejected both arguments advanced by Security People. First, even if the Board could not decide a constitutional question, the Federal Circuit, on review of the Board decision, could do so. Furthermore, the Federal Circuit can take judicial notice of facts, and in the rare situation where facts, beyond those that can be judicially noticed, are needed, the Board can pursue the necessary fact-finding—even if the Board cannot decide the legal questions for which those factual questions are relevant. Second, the Federal Circuit clarified that a final written decision from the Board is agency action that directly affects the parties, and is thus final. Therefore Security People’s as-applied challenge ripened when the Board issued its final written decision.
Dismissal on Procedural Grounds May Bar Claims for Later Infringement Under Res Judicata
In Richard Sowinski V. California Air Resources Board, Appeal No. 19-1558, Res judicata may bar subsequent claims regarding conduct substantially similar to conduct accused in a prior action that was dismissed for failure to prosecute.
In a prior case, Sowinski sued California Air Resources Board (“CARB”) for patent infringement. Following the filing of several motions to dismiss, both parties filed a joint stipulation that included the statement that the motions were “potentially case dispositive.” After Sowinski failed to respond to the motions to dismiss, the district court dismissed the complaint with prejudice pursuant to a local rule, which provides that such failure can be deemed consent to the granting of a motion. Sowinski appealed the dismissal, and the Federal Circuit affirmed.
In the present case, Sowinski filed a substantially identical complaint against CARB, seeking damages only for alleged infringement occurring after the first case was dismissed. The district court dismissed the complaint on the ground of res judicata. Sowinski appealed, raising two principal arguments. Sowinski first argued that the merits of patent infringement were not adjudicated in the first suit, and thus res judicata should not apply. The Federal Circuit held that the district court properly applied preclusion, explaining that a dismissal for failure to prosecute operates as an adjudication on the merits under FRCP 41(b). Sowinski next argued that preclusion cannot apply since he sought damages only for infringement occurring after the conclusion of the prior case. The Federal Circuit rejected this argument, noting that “Dr. Sowinski alleges no different conduct or acts, and the defendant is the same.” The Federal Circuit distinguished between allowing subsequent suits when an act has been adjudged wrongful, and the present case, where the act in question had been adjudged not wrongful.
Canceled Patent Claims Do Not Entitle Former Patent Owner To A Refund
In Christy, Inc. V. United States, Appeal No. 19-1738, The go ernment’s refusal to refund patent issue and maintenance fees after patent claims are canceled during inter partes review does not constitute a Fifth Amendment taking or an illegal exaction.
Christy, Inc. (“Christy”) obtained a patent for its “ambient air backflushed filter vacuum” and paid all required maintenance fees after it issued. During inter partes review (“IPR”), the Patent Trial and Appeal Board (“PTAB”) canceled several claims of the patent. Christy then filed a class-action lawsuit against the government in the Court of Federal Claims (“CFC”). Christy asserted that the United States owed it just compensation for the issuance and maintenance fees, investments it made in the patented technology, the attorneys’ fees spent in defending the IPRs, and the value of the patent claims. Christy asserted six government compensation claims: a Fifth Amendment takings claim, four contractual claims, and an illegal exaction claim raised in the alternative to the takings claim.
The government moved to dismiss all claims for both lack of subject matter jurisdiction and failure to state a claim. The CFC granted the government’s motion. The CFC found that it had jurisdiction to consider the takings claim, but that Christy failed to state a claim for relief. In contrast, the CFC held that it did not have jurisdiction to consider the illegal exaction claim. It held that a statute granting authority to the USPTO to refund mistakenly excessive patent-related fees displaced Tucker Act jurisdiction over those fees. Nonetheless, the CFC still addressed the merits of the illegal exaction claim, finding that Christy’s issuance and maintenance fees paid for the patent “were owed at the time they were paid, and as such, were not fees paid by mistake.” Thus, it found Christy’s theory that damages were illegally exacted without merit. Christy appealed to the Federal Circuit.
The Federal Circuit clarified that the America Invents Act (“AIA”) did not displace Tucker Act jurisdiction for takings claims arising due to canceled patent claims during IPRs, based on its ruling in Golden v United States. However, the Federal Circuit affirmed that Christy failed to state a plausible claim for a taking based on its canceled patent claims.
The Federal Circuit also affirmed the finding of no illegal exaction for the government’s failure to refund Christy’s issue and maintenance fees. The Court explained “Christy’s argument fails because the law requires payment of these issuance and maintenance fees without regard to any later result of post-issuance proceedings, see, e.g., 35 U.S.C. §§ 41, 151. Christy identifies no statute, regulation, or constitutional provision compelling the fees’ refund if claims are later canceled in post-issuance proceedings. Without showing how the PTO’s actions ‘contravene[ed] . . . the Constitution, a statute, or a regulation,’ Christy cannot state a claim for an illegal exaction.” The Court concluded by noting that Christy’s arguments that payment of issue and maintenance fees for canceled claims was unjust were a matter of public policy, more fit for Congress or the USPTO.
Imaginary Slice of Accused Product Failed to Satisfy Structural Claim Limitation
In Neville V. Foundation Constructors, Inc., Appeal No. 20-1132, the Federal Circuit affirmed a construction of “end plate” that required a flat external surface, and therefore precluded an infringement theory in which the “end plate” was an imaginary slice inside the accused product.
Plaintiffs Steve Neville, Substructure Support, Inc., and TDP Support, Inc. (collectively, “Substructure”) sued Foundation Constructors, Inc. and Foundation Pile, Inc. (collectively, “Foundation”) alleging infringement of two patents relating to “foundation piles.” Foundation piles are “tubular structures placed into the ground” to provide support for foundations built over them. The patent claims recited tubular piles with screw-shaped pile tips. The district court granted summary judgment of non-infringement based in part on its construction of the phrase “end plate having a substantially flat surface.” The figure below, submitted by Substructure’s expert, shows the alleged “end plate” in Foundation’s accused pile tip.
Substructure alleged that the highlighted region of the accused pile tip was an “end plate,” having two substantially flat surfaces—one facing the interior of the pile tip and another that interfaces with the point shaft. The district court rejected this theory because it found that the plain meaning of “end plate having a substantially flat surface” did not encompass an interior surface within the pile tip. Substructure appealed.
The Federal Circuit explained that the word “end” itself suggests that the relevant surface of the end plate is an external part of the pile tip. The specification and prosecution history also supported the district court’s construction. Thus, the Federal Circuit affirmed the grant of summary judgment.
Federal Circuit Rejects Claim Construction That Contradicts Dependent Claims
In Baxalta Inc. V. Genentech, Inc., Appeal No. 19-1527, A district court erred by interpreting a specification’s description of an “antibody” as a definition, when that description contradicted other portions of the specification and several dependent claims.
At the district court, Baxalta and Genetech disputed the construction of “antibody.” The court determined that the specification had expressly defined “antibody” consistent with the narrow construction Genentech proposed. Although the court recognized that this construction was inconsistent with several dependent claims, it ruled that the express definition controlled, rendering the dependent claims invalid. The parties stipulated to non-infringement under the district court’s narrow construction, and Baxalta appealed.
The Federal Circuit ruled that the plain language of the independent claim did not require any particular definition of “antibody,” and that the dependent claims confirmed that the independent claim used a broad meaning of “antibody.” The district court’s construction, which excluded the embodiments in the dependent claims, was “inconsistent with the plain language of the claims.” The Federal Circuit rejected the district court’s conclusion that the specification expressly defined “antibody.” Although the passage the district court relied on was plausibly definitional in isolation, a definitional reading of the passage rendered the specification as a whole internally inconsistent. The Federal Circuit therefore determined that the passage was a “generalized introduction,” not a definition. Accordingly, the Federal Circuit broadened the construction of “antibody,” vacated the judgment of non-infringement, and remanded for further proceedings.
An “Agreement to Agree” Is Unenforceable Under Washington State Law
In Phytelligence, Inc. V. Washington State University, Appeal No. 19-2216, Under Washington law, a contract must be definite enough for a court to enforce it without needing to supply missing terms.
Washington State University (“WSU”) obtained a plant patent for a cultivated variety of apple trees. WSU entered into a Propagation Agreement with Phytelligence, Inc., which allowed Phytelligence to propagate the trees, but not to sell them. Instead, the Agreement provided that Phytelligence is “hereby granted an option” to sell the trees, but “will need to sign a separate contract with [WSU], or an agent of [WSU], to exercise this option.” The Agreement did not specify the terms of the “separate contract.”
Phytelligence later sought a license to sell pursuant to the option in the Agreement, but reached an impasse with WSU regarding the terms of the license. When Phytelligence began selling and delivering the trees to a third-party without a license, WSU terminated the Agreement. Phytelligence then sued WSU in Washington state court, alleging that WSU breached the Agreement by refusing to grant a license on terms acceptable to Phytelligence. WSU asserted patent and trademark infringement counterclaims, removed the action to the district court, and moved for summary judgment on the breach-of-contract claim. WSU argued that the section in the Agreement granting the option was an unenforceable “agreement to agree.” The district court granted summary judgment to WSU, and Phytelligence appealed.
Applying Washington law, the Federal Circuit found that the Agreement did not supply the material terms for the option, and therefore required a further meeting of the minds to make it binding. Because the option was not binding, the Federal Circuit affirmed the grant of summary judgment to WSU.
Inventor Removed From Patent May Be Restored Due to Claim Construction
In Egenera, Inc. V. Cisco Systems, Inc., Appeal No. 19-2015, A patentee that successfully petitioned to correct a patent’s inventorship by removing a named inventor was permitted to seek a second correction to restore the same inventor, based on an intervening claim construction that the patentee had opposed.
Egenera sued Cisco Systems for patent infringement. In response, Cisco petitioned for inter partes review (IPR) of Egenera’s patent. Seeking an earlier invention date for the patent so it could swear behind prior art in the IPR, Egenera successfully petitioned to remove one of the named inventors from the patent. The Patent Trial and Appeal Board declined to institute the IPR for reasons unrelated to the inventorship change.
After the inventor was removed, the district court construed the claim language “logic to modify” as a means-plus-function limitation, over Egenera’s opposition. The court found that the structure in the specification corresponding to this claim language was what the parties called the “tripartite structure.”
Following claim construction, Cisco argued that the removed inventor had invented the tripartite structure, and because he was no longer listed as an inventor, the patent was invalid for incorrect inventorship. Egenera responded that the patent’s inventorship should simply be corrected under 35 U.S.C. § 256 to restore the removed inventor. The district court found that Egenera was judicially estopped from restoring the removed inventor, and thus held the patent invalid. Egenera appealed, challenging the claim construction and the invalidity ruling.
Reviewing the claim construction, the Federal Circuit explained that claim terms lacking the word “means” are presumed not to be means-plus-function terms. However, this presumption is rebutted if a claim term recites “function without reciting sufficient structure for performing that function.” Egenera argued that the claim at issue recited structure in the form of “software, firmware, circuitry, or a combination thereof.” However, the Federal Circuit clarified that “the question is not whether a claim term recites any structure but whether it recites sufficient structure” for performing the recited function. In Egenera’s claim, the alleged structure was not sufficient to perform the functions attributed to the “logic to modify.” Thus, the Federal Circuit affirmed the district court’s means-plus-function construction.
Turning to invalidity, the Federal Circuit stated that judicial estoppel exists to prevent a litigant from taking a litigation position inconsistent with one successfully asserted in an earlier court proceeding. Egenera did not advance any “clearly inconsistent” positions because its petition to remove the inventor was consistent with the claim construction it was asserting at the time of the petition. Further, no other factors weighed in favor of judicial estoppel. Thus, the Court vacated the district court’s invalidity judgment and remanded for further proceedings.
Federal Circuit has Jurisdiction to Review Joinder Decisions in IPRs
In Facebook, Inc., v. Windy City Innovations LLC, Appeal No. 18-1400, the Federal Circuit held that it has jurisdiction to review challenges to the Board’s joinder decision in an instituted IPR. An IPR petitioner may not join itself to an earlier IPR to which it was already a party, and it may not add new claims or issues to an IPR through joinder.
Windy City sued Facebook for infringement of three patents. Facebook timely petitioned for inter partes review of several claims of each patent. After Facebook filed its IPR petitions, Windy City identified its asserted claims. By this time, the one-year time bar in 35 U.S.C. § 315(b) to file an IPR had lapsed. Facebook filed two additional IPR petitions challenging the asserted claims, and filed a motion asking the Board to join the new IPR petitions to the previously instituted IPRs under § 315(c). Although the additional petitions would have otherwise been time-barred under § 315(b), the Board granted the motions for joinder, allowing the new claims into the existing proceedings. In its final written decisions, the Board cancelled some of the claims that Facebook challenged in its later petitions.
On appeal, the Federal Circuit held that the Board erred in (1) allowing Facebook to join itself to its own prior IPRs and (2) joining challenges to additional patent claims. As the Federal Circuit explained, § 315(c) authorizes the USPTO to join a person as a party to an existing proceeding, not to join two separate proceedings. The “clear and unambiguous text of § 315(c) does not authorize same-party joinder, and does not authorize the joinder of new issues.”
Facebook filed a combined petition for panel rehearing and rehearing en banc. The en banc court denied Facebook’s petition. The original panel revised its opinion to address the Supreme Court’s intervening decision in Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367, 1370 (2020). In Thryv, the Supreme Court held that the USPTO’s interpretation of § 315(b)’s time bar is not appealable under § 314(d) because it is closely related to the USPTO’s institution decision. In its revised opinion, the Federal Circuit held it has jurisdiction to review the Board’s joinder decisions. The Federal Circuit noted § 315(c) requires (1) an institution decision, whether the joinder applicant’s petition for IPR warrants institution, and (2) a joinder decision, whether to “join as a party” the joinder applicant. The Federal Circuit held that the joinder decision is separate and subsequent to the institution decision. The Federal Circuit acknowledged it may not review the institution decision, such as for timeliness as in Thryv, but found that nothing overcomes the strong presumption that it has jurisdiction to review the joinder decision.
Thus, the Federal Circuit vacated the part of the Board’s final written decision that cancelled claims raised in the improperly joined petitions. Additionally, the Federal Circuit, noting it lacks authority to review the Board’s institution of the two late-filed petitions, remanded to the Board to consider whether the termination of the proceedings finally resolves them.
Joining an IPR Triggers IPR Estoppel Only for Instituted Grounds
In Network-1 Technologies, Inc. v. Hewlett-Packard Company, Hewlett Packard Enterprise Company, Appeal No. 18-2338, the Federal Circuit held that a party joined to an IPR under 35 U.S.C. § 315(c) is not statutorily estopped from raising in district court any invalidity grounds other than those that were instituted in the IPR.
Network-1 sued HP, Avaya, and other defendants alleging infringement of one patent. Avaya petitioned for inter partes review (“IPR”) of the asserted patent, and the Patent Trial and Appeal Board instituted IPR based on two grounds. After institution, HP filed its own petition for IPR of the asserted patent and also moved to join Avaya’s IPR. The Board found that HP’s petition was time barred under 35 U.S.C. § 315(b) because it had been filed more than one year after Network-1 served HP with its district-court complaint, but the Board granted HP’s motion to join Avaya’s IPR. Thereafter, the Board issued a final written decision in Avaya’s IPR upholding patentability of the asserted patent over the instituted grounds.
The district court case later proceeded to trial, where HP argued that Network-1’s asserted patent was rendered obvious both by public use of an allegedly prior-art system and by patents and printed publications that had not been included in the instituted IPR. Using a general verdict form, the jury found the asserted patent was invalid. But following the verdict, the district court granted a motion by Network-1 for judgment as a matter of law (“JMOL”) on invalidity. The district court reasoned that the proffered public use was not prior art and that HP was estopped under 35 U.S.C. § 315(e) from raising its obviousness challenges based on patents and printed publications because HP had joined Avaya’s IPR. Network-1 appealed regarding other issues and HP cross-appealed the portion of the district court’s invalidity decision regarding estoppel.
The Federal Circuit vacated the district court’s JMOL regarding invalidity and remanded for further proceedings. It stated that, although HP had been time barred under § 315(b) from bringing its own IPR petition, HP was permitted to join Avaya’s IPR as a party under § 315(c). The Federal Circuit noted that § 315(c) does not permit the joining party to raise new grounds of invalidity that had not been instituted. The court therefore reasoned that HP, as the joining party, could not have raised any additional invalidity challenges in Avaya’s IPR. The estoppel statute, § 315(e), applies only to grounds that a party “raised or reasonably could have raised” during the subject IPR. The Federal Circuit concluded that because HP could not have raised in Avaya’s IPR its obviousness challenges based on patents and printed publications that had not been instituted, HP was not estopped under § 315(e) from raising those obviousness challenges in district court.
An Old Method Using an Old Product from a New Source is Not New
In Biogen Ma Inc. v. Emd Serono, Inc., Appeal No. 19-1133, the Federal Circuit held that a known method of administering a known product made by a new process is not novel.
Biogen sued Serono and other parties for contributory infringement of Biogen’s patent directed toward a method of treating viral conditions by administering a pharmaceutically effective amount of recombinant interferon-β produced by a non-human host. Serono argued that the patent’s claims were anticipated by prior art teaching the administration of native interferon-β harvested from human cells to treat viral conditions. The jury agreed with Serono, holding that all claims were invalid as anticipated.
Biogen moved for judgment as a matter of law, arguing that the claims were not anticipated. The district court granted Biogen’s motion of no anticipation, reasoning that no reasonable jury could find anticipation because the prior art entailed administration of native interferon-β, which was undisputedly not recombinantly produced. The district court declined to apply a product-by-process analysis to the method claim with a product-by-process limitation nested therein, concluding that no precedent required such an analysis. In the alternative, the district court held that even by employing a product-by-process analysis, the structural differences between recombinant and native interferon-β precluded a finding of anticipation.
On appeal, the Federal Circuit held that there was sufficient evidence to support the jury’s finding and that it was improper for the district court to reject the product-by-process analysis and rely on structural differences between recombinant and native interferon-β. The Federal Circuit reasoned that there was no logical reason to reject the novelty analysis of a product-by-process limitation based on its inclusion within a method of treatment. Moreover, the Federal Circuit had previously applied the product-by-process analysis to a nested limitation in Purdue Pharma L.P. v. Epic Pharma, LLC, 811 F.3d 1345 (Fed. Cir. 2016). Accordingly, the Federal Circuit explained that the source limitation of producing recombinant interferon-β by a non-human host cannot confer novelty unless the product itself is novel. The Federal Circuit further explained that here, just as in Amgen Inc. v. Hoffman-La Roche Ltd., 580 F.3d 1340 (Fed. Cir. 2009), the recitation of a recombinant origin of a recited composition is not enough to avoid anticipation in view of the prior art non-recombinant product—native interferon-β. The Federal Circuit provided that the rule from Amgen was a necessary outgrowth of the principle that an old product made by a new process is not novel and that logic compels extending that rule such that an old method of administering an old product made by a new process is not novel. Lastly, the Federal Circuit explained that the structural differences between recombinant and native interferon-β were not distinguishing because such differences were absent from the claim limitations. Accordingly, the Federal Circuit reversed the district court’s judgment as a matter of law of no anticipation and remanded with instructions to reinstate the jury verdict of anticipation.
Skinny Labelling on Generic Drugs Does Not Avoid Induced Infringement of Patents Covering Non-Indicated Uses
In Glaxosmithkline LLC v. Teva Pharmaceuticals Usa, Inc., Appeal No. 18-1976, the Federal Circuit held that evidence of inducement for a method of administering a drug is not limited to the indications of use on a generic drug label. Promoting a generic drug as equivalent to branded drug may be sufficient to induce infringement of a method covering a use for which the generic drug is not indicated.
GSK sued Teva for inducing patent infringement based on its sale of a generic for carvedilol sold under GSK’s brand Coreg®. GSK’s patent for the compound expired in 2007. Here GSK accused Teva of inducing infringement of GSK’s patent covering the method of using carvedilol to treat congestive heart failure. Teva sold its generic version with a “skinny label” that included some but not all of the indications for which the branded drug was approved. Teva’s skinny label indicated use for hypertension, but specially carved out and did not reference congestive heart failure. A jury found Teva willfully infringed and assessed damages. The district court granted Teva’s JMOL motion of no inducement based on a lack of evidence that Teva actually caused physicians to directly infringe a patent directed to the method of treating congestive heart failure.
The Federal Circuit reinstated the induced infringement verdict and damages award. The court rejected Teva’s argument that it did not cause cardiologists to directly infringe because the doctors already knew of carvedilol and its uses before Teva’s generic sales. The court found that Teva’s promotional materials, press releases, product catalogs, FDA labels, and witness testimony all stating that Teva’s generic was equivalent to Coreg® were substantial evidence of inducement. The court stated that, “when the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met.”
Judge Prost dissented. She noted that Congress specifically recognized the practice of skinny labelling for exactly these circumstances.
The Mere Presence of Patent Issues in a Contract Dispute Does Not Create Federal Jurisdiction
In Antennasys, Inc. v. Aqyr Technologies, Inc., Appeal No. 19-2244, the Federal Circuit held that claim construction issues in a contract dispute did not meet the “substantiality” prong of the Supreme Court’s Gunn v. Minton test for independent federal jurisdiction.
AntennaSys co-owned the patent in suit with a company named Windmill. AQYR is a wholly owned subsidiary of Windmill. AntennaSys sued AQYR for patent infringement and Windmill for breach of a license agreement. The district court granted summary judgment for Defendants and AntennaSys appealed.
On appeal, Defendants argued for the first time that (1) AntennaSys lacked standing to bring a patent infringement claim absent joinder of Windmill as a co-plaintiff and (2) AQYR was authorized to practice the patent by Windmill. The Federal Circuit noted that joinder is not a standing issue, but remanded both issues to the district court to consider in the first instance. The Federal Circuit then addressed whether the district court would have jurisdiction over the breach of contract claim if it dismissed the patent infringement claim. The Federal Circuit held that the claim construction issues required to resolve the contract claim failed to meet the “substantiality” prong of Gunn v. Minton. Thus, if the district court dismissed the patent infringement claim, it would have no independent basis to exercise jurisdiction over the state law contract claim.
Expiration of a Patent Does Not Always Trigger Application of Phillips Standard on IPR Appeal
In Immunex Corporation v. Sanofi-Aventis U.S. LLC, Appeal No. 19-1749, the Federal Circuit held that expiration of a patent during appeal from IPR does not trigger claim construction under the Phillips standard when the expiration was caused by litigant’s filing of terminal disclaimer and the IPR was filed before the Phillips standard applied in all IPRs.
Sanofi filed petitions for inter partes review of a patent owned by Immunex. The patent at issue described a “human antibody” for binding to interleukin receptors. Under the broadest reasonable interpretation (“BRI”) standard, the PTAB found that the term “human antibody” included “humanized” antibodies, or antibodies comprising some regions derived from non-human origins. Based on that interpretation, the PTAB invalidated the claims over the cited prior art.
The Federal Circuit acknowledged that today, in all newly filed IPRs, the Board applies the Phillips standard. However, when Sanofi filed its IPRs, the Board only applied this standard to expired patents and applied the BRI standard to unexpired patents. After the parties filed appellate briefs, Immunex filed a terminal disclaimer of its patent, and subsequently, the patent expired before the Federal Circuit heard oral argument. Immunex argued, on appeal, that because the patent had expired, the court should construe the terms under the Phillips standard rather than the BRI standard. Though the Federal Circuit acknowledged that it had applied the Phillips standard when a patent expired on appeal, the court distinguished the present case because the patent term was unexpectedly cut short by Immunex’s terminal disclaimer after the appellate briefing. Construing “human antibody” under the BRI standard, the court affirmed the PTAB’s finding of invalidity.
Federal Court Allowed to Defer to State Court on Contract Dispute that Raised Patent Validity Questions
In Warsaw Orthopedic, Inc., v. Sasso, Appeal No. 19-1583, a federal court properly exercised its discretion to abstain from deciding declaratory judgment claims when the parties’ dispute could be better addressed in a co-pending state court proceeding.
Dr. Rick Sasso entered an agreement with Warsaw Orthopedic, Medtronic, and Medtronic Sofamor Danek (collectively, “Medtronic”) providing for quarterly royalty payments to Sasso based on Medtronic’s sales of medical devices covered by two U.S. patents. Sasso sued Medtronic in Indiana state court for breach of contract, claiming that Medtronic was not paying royalties on sales of all covered devices. Medtronic disagreed, stating that the devices in question were not covered by any valid claim of Sasso’s patents. The state court held a jury trial and excluded the issue of patent validity, finding that it was not relevant under the contract. The jury found for Sasso. Medtronic appealed to the Indiana Court of Appeals.
Before the state court trial, Medtronic filed a complaint in federal district court seeking a declaration that it did not violate its royalty obligations. After the state court entered judgment for Sasso, the district court dismissed Medtronic’s complaint without prejudice. The district court applied the Wilton/Brillhart standard of abstention, articulated in Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995), and Brillhart v. Excess Insurance Co. of America, 316 U.S. 491 (1942). Under this standard, district courts have significant discretion to dismiss or stay claims seeking declaratory relief.
Medtronic appealed the district court’s dismissal. At the time of the Federal Circuit’s decision, Medtronic’s appeal to the Indiana Court of Appeals was still pending.
The Federal Circuit held that the district court did not abuse its discretion in abstaining under the Wilton/Brillhart standard. Federal courts are permitted to abstain from deciding declaratory judgment claims when the parties’ dispute can be better settled in a pending state court proceeding. The Federal Circuit found the district court’s exercise of discretion to be reasonable and therefore affirmed the dismissal.
The Federal Circuit Interprets Claims in Light of the Specification to Revive Heart Valve Patent
In St. Jude Medical, LLC v. Snyders Heart Valve LLC, Appeal No. 19-2108, the Federal Circuit held that even the broadest reasonable interpretation of a claim must be determined in light of the specification.
St. Jude Medical, LLC (“St. Jude”) filed two petitions for inter partes review of a patent owned by Snyders Heart Valve LLC (“Snyders”). The patent described and claimed an artificial heart valve and a system for inserting the valve, which can be installed via catheter without invasive surgery and “without removing [a] damaged native heart valve.” In the first IPR, the Board found that the patent claims were not anticipated by the prior art. In the second IPR, the Board found that four of the claims were anticipated by the prior art, but found the rest of the claims patentable.
In finding four of the claims anticipated, the Board applied the “broadest reasonable interpretation” of the Snyders patent claim limitation requiring a “frame sized and shaped for insertion between the upstream region and the downstream region.” The key prior art also disclosed a valve insert, which was sized to fit the valve after the damaged native valve was removed. The Board broadly interpreted “frame sized and shaped” as also covering a frame that fits in place after removal of a damaged heart valve. Therefore, the Board found that the prior art anticipated the claims.
The Federal Circuit reversed the Board’s anticipation finding. The Federal Circuit noted that the prior art required removal of a damaged native heart valve before installation of the artificial valve. In contrast, the Snyders patent specification stressed that the disclosed artificial heart valve can be inserted without removing the native valve — an express improvement on the prior art. The Federal Circuit found that such language in the specification made it unreasonable for the Board to read the “sized and shaped” limitation as covering an artificial valve fitted for the space left after removing the native valve. Reading the Snyders claim limitation in light of the spec, the Federal Circuit held that none of the claims in the Snyders patent were anticipated by the prior art.
Reasonable or Not, Make Sure You Don’t Believe You Infringe
In Tecsec, Inc., v. Adobe Inc., Appeal No. 19-2192, the Federal Circuit held that, even if it would be objectively reasonable to view a defendant’s conduct as noninfringing, the intent element of induced infringement may still be established through the defendant’s subjective beliefs.
TecSec alleged that Adobe directly infringed and induced third parties to infringe TecSec’s patents. Under an initial claim construction order by the district court, TecSec and Adobe stipulated that Adobe did not infringe. The Federal Circuit reversed that initial claim construction but did so just two weeks before TecSec’s patents expired. Adobe argued that the parties’ stipulation of noninfringement prevented it from possessing the requisite intent to induce infringement, and Adobe moved in limine to exclude from trial all evidence of induced infringement after the date of that stipulation. The district court granted that motion in limine. At trial, the jury found direct infringement but no induced infringement, and it awarded TecSec $1.75 million in damages. The district court vacated the jury’s damage award, reasoning that TecSec’s only relevant damages evidence related to sales that the court had previously determined did not alone constitute direct infringement. TecSec appealed.
On appeal, TecSec challenged the district court’s order excluding all evidence of induced infringement after the date the parties had stipulated to noninfringement. Adobe argued that the district court’s initial claim construction order was reasonable and thus, as a matter of law, Adobe could not have had the specific intent required to establish induced infringement. The Federal Circuit disagreed, reasoning that the requisite intent could be based on the subjective bad faith of the infringer, even if it would have been objectively reasonable to view the conduct as noninfringing. Adobe could still have had the required intent, for example, if it subjectively believed that the district court’s initial claim construction was incorrect. The Federal Circuit further held that excluding the entire issue of induced infringement from trial was not properly decided on Adobe’s motion in limine, which did not call or provide for consideration of all relevant evidence, as on a motion for summary judgment. The Federal Circuit therefore reversed in relevant part and remanded for further proceedings on TecSec’s claim of induced infringement.
No Harm, No Stay: Petition for Certiorari Not Enough to Stop Mandate
In American Axle & Manufacturing v. Neapco Holdings LLC, Appeal No. 18-1763, the Federal Circuit issued its mandate notwithstanding the appellant’s co-pending petition for certiorari.
American Axle & Manufacturing, Inc. (AAM) sued Neapco Holdings LLC (Neapco) for infringement of AAM’s patent. The district court granted summary judgment of invalidity under 35 U.S.C. § 101, and AAM appealed. The Federal Circuit affirmed with respect to some patent claims and remanded with respect to the others, and AAM petitioned the Supreme Court for certiorari. AAM also moved to stay issuance of the Federal Circuit’s mandate in view of its pending petition.
The Federal Circuit denied AAM’s motion. In its decision, the Court adopted the Supreme Court’s three-prong test for a stay of mandate, which requires the applicant to show “(1) a reasonable probability that four Justices will consider the issue sufficiently meritorious to grant certiorari; (2) a fair prospect that a majority of the Court will vote to reverse the judgment below; and (3) a likelihood that irreparable harm will result from the denial of a stay.” The court limited its inquiry to the third prong regarding likelihood of irreparable harm. It held that neither the potential recall of the Federal Circuit’s mandate nor the costs of continued litigation of the remanded claims constituted irreparable injury. Finding the third prong not satisfied, the court denied AAM’s motion to stay issuance of the mandate.
Judge Moore concurred in the decision to elaborate on the application of the three-prong test. Her opinion reiterated the Federal Circuit’s request for guidance on § 101 jurisprudence and underscored the need for the Supreme Court to grant certiorari in a § 101 case to resolve the Federal Circuit’s “bitter divide” on the application of § 101.
Lexmark Framework to Determine Eligibility to Bring Statutory Causes of Actions Applies to Trademark Cancellation Proceedings
In Corcamore, LLC v. Sfm, LLC, Appeal No. 19-1526, the Federal Circuit ruled that whether a party has satisfied the requirements to bring a petition for trademark cancellation under 15 U.S.C. §1064 is determined under the analytical framework established in Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014).
SFM owned a federal trademark registration for SPROUTS for use in connection with retail grocery-store services. Corcamore owned a federal trademark registration for SPROUT for use in connection with vending-machine services. SFM filed a petition under 15 U.S.C. § 1064 to cancel Corcamore’s registration for SPROUT. In the petition, SFM alleged that SFM’s use of the SPROUTS trademark predated Corcamore’s use by several years and that the confusion likely to result from Corcamore’s trademark would damage SFM.
Corcamore moved to dismiss SFM’s petition for lack of standing under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Trademark Trial and Appeal Board denied Corcamore’s motion, applying the standard in Empresa Cubana del Tabaco v. General Cigar Co., 753 F.3d 1270 (Fed. Cir. 2014). The Board concluded that SFM had sufficiently alleged a real interest in the cancellation proceeding and a reasonable belief of damage as required to bring an action under § 1064. At the close of discovery, the Board entered a default judgment against Corcamore for litigation misconduct, cancelling the SPROUT trademark.
On appeal, the Federal Circuit held that the analytical framework established by the Supreme Court in Lexmark was the correct standard to apply for determining eligibility to bring a claim under § 1064. The Federal Circuit noted that the Lexmark analytical framework applies to all statutory causes of action, including actions before the Board under § 1064. Although the Board had declined to apply Lexmark, the Federal Circuit affirmed the determination of eligibility to bring the cancellation proceeding because the Board had appropriately addressed the Lexmark zone-of-interest and proximate-causation requirements and ultimately reached the correct conclusion. The Federal Circuit additionally affirmed the default judgment canceling the trademark, holding the Board did not abuse its discretion.
District Court Ordered to Take a Second Look at the First-To-File Rule
In In Re: Nitro Fluids, Appeal No. 20-142, the Federal Circuit held that the balance of transfer factors must favor keeping a case in a second-filed court in order to justify an exception to the first-to-file rule.
Cameron filed a patent infringement suit against Nitro in the Southern District of Texas concerning fracking technology. Two years later, Cameron filed a second infringement suit on the same accused products in the Western District of Texas asserting additional patents from the same patent family. Nitro asked the Western District of Texas to decline jurisdiction or transfer the case to Southern District of Texas. Nitro invoked the first-to-file rule, which generally dictates that a dispute raised in multiple courts should be decided in the first-filed case. The Western District of Texas did not apply the first-to-file rule and denied the motion. The court’s rejection of the first-to-file rule rested on the legal proposition that the rule is only applicable when the balance of the 28 U.S.C. § 1404(a) transfer factors favors the first-filed court. The Western District of Texas found that, because a balance of the transfer factors did not weigh in favor of transfer, compelling circumstances existed to avoid application of the first-to-file rule. Nitro then filed a mandamus petition.
On appeal, the Federal Circuit found that the district court’s reasoning was backwards. It held that the first-to-file rule is applicable unless the balance of transfer factors favors making an exception to the rule and keeping the case in the second-filed court. Upon reviewing the district court’s finding that two factors favored the first court, two favored the second court, and the remainder were neutral, the Federal Circuit criticized the depth of the district court’s analysis. It also indicated that additional proceedings were needed to address errors in assessing the two factors favoring the second court and the lynchpin of the district court’s analysis—its purported ability to hear the case quicker. In vacating the district court’s order, the Federal Circuit instructed the district court to reconsider the transfer factors in view of the availability of multi-district procedures and whether keeping the case in the second-filed court would impermissibly thwart the first-to-file rule.
Not A Cowboy Claim Construction, University of Wyoming’s Patent Adequately Defined Claim Term
In Chevron U.S.A. Inc. v. University Of Wyoming Research, Appeal No. 19-1530, the Federal Circuit held intrinsic evidence is sufficient support for claim construction in an interference proceeding.
In an interference proceeding between the University of Wyoming and Chevron, the PTAB construed the claim terms “gradually and continuously” as used in a method claim for processing solvents. For its construction, the Board relied on Wyoming’s definition contained in its patent specification. On appeal, Chevron argued that the Board improperly relied on extrinsic expert testimony to construe the relevant terms. The Federal Circuit disagreed, finding that the Board correctly relied on the definitions of “gradually” and “continuously” as explicitly contained in Wyoming’s own patent. Though the Board cited expert testimony in its decision, its final determination was consistent with the definition contained directly in Wyoming’s patent.
Judge Newman dissented, stating that institution of the interference proceeding was improper because Wyoming and Chevron’s patents did not claim the same invention.
Venue in Hatch-Waxman Cases Tied to Acts of ANDA Submission
In Valeant Pharmaceuticals v. Mylan Pharmaceuticals, Appeal No. 19-2402, the Federal Circuit venue in Hatch-Waxman cases is proper only in districts where actions related to the Abbreviated New Drug Application (“ANDA”) submission occur.
Mylan Pharmaceuticals Inc. (“MPI”) sought to market a generic version of a drug sold under the brand name Jublia. Valeant Pharmaceuticals North America LLC, Valeant Pharmaceuticals Ireland Ltd., Dow Pharmaceutical Sciences, Inc. (“Dow”), and Kaken Pharmaceuticals Co., Ltd. (collectively “Valeant”) sued MPI and related companies for patent infringement in New Jersey. The defendants included MPI (a West Virginia based corporation), Mylan Inc. (a Pennsylvania corporation with its principle place of business in Canonsburg, PA) and Mylan Laboratories Ltd. (“MLL”) (an Indian corporation based in Hyderabad, India). The defendants sought dismissal on venue grounds. The district court found in favor of MPI, dismissing the relevance of planned future acts of infringement in the district. Valeant appealed.
The Federal Circuit affirmed the district court’s decision that venue was not proper for MPI and Mylan Inc., but reversed and remanded as to foreign defendant MLL. The Federal Circuit held that venue under § 1400(b) requires a past act of infringement and cannot be premised on future acts of infringement, such as where a product is likely to be distributed. The Federal Circuit held that the Hatch-Waxman Act defines one and only one act of infringement—an ANDA submission. As a result, venue is proper only where acts related to the ANDA submission took place. Because the district court found that no act related to MPI’s ANDA submission took place in New Jersey, the Federal Circuit affirmed the lower court’s decision. With respect to MLL, the Federal Circuit held that venue was proper because MLL was subject to venue in any judicial district as a foreign entity. The Federal Circuit remanded for the lower court to address the substance of MLL’s motion to dismiss under Rule 12(b)(6).
No Shortcuts to the “Reasonable Pertinence” Analysis in the Analogous Art Inquiry
In Donner Technology, LLC v. Pro Stage Gear, LLC, Appeal No. 20-1104, the Federal Circuit determination as to whether a reference is analogous art to a claimed invention requires, in part, an identification and comparison of the purposes or problems to which the reference and the invention relate, from the perspective of a person having ordinary skill in the art (“PHOSITA”).
Donner requested IPR of a patent owned by Pro Stage relating to a mounting board for guitar effects pedals. In its IPR request, Donner asserted that the patent was obvious, in part, in view of a prior art reference related to electrical relay structures (“Mullen”). The PTAB rejected Donner’s obviousness challenges on the ground that Donner failed to demonstrate that Mullen was analogous art. Donner appealed.
The Federal Circuit vacated the Board’s decision. It was undisputed that Pro Stage’s patent and Mullen were not from the “same field of endeavor.” Thus, the analogous art inquiry hinged on whether Mullen “is reasonably pertinent to the particular problem with which the inventor [of Pro Stage’s patent] is involved.” The Federal Circuit first found that the Board erred in improperly dismissing Donner’s detailed expert testimony concerning reasons that would have compelled a pedalboard inventor to consider art in the field of electrical relay technologies. The Federal Circuit then held that the Board failed to identify and compare the purposes or problems to which Mullen and Pro Stage’s patent related from the perspective of the PHOSITA and improperly conflated the “reasonable pertinence” and “field of endeavor.” Thus, the analogous art inquiry hinged on whether Mullen “is reasonably pertinent to the particular problem with which the inventor [of Pro Stage’s patent] is involved.” The Federal Circuit first found that the Board erred in improperly dismissing Donner’s detailed expert testimony concerning reasons that would have compelled a pedalboard inventor to consider art in the field of electrical relay technologies. The Federal Circuit then held that the Board failed to identify and compare the purposes or problems to which Mullen and Pro Stage’s patent related from the perspective of the PHOSITA and improperly conflated the “reasonable pertinence” and “field of endeavor” tests. The Federal Circuit also noted that the relevant question in the analogous art inquiry is not whether there are “significant differences” between the reference and the patent or whether the PHOSITA would understand every detail of the reference, but rather, whether the PHOSITA “would reasonably have consulted” the reference when attempting to solve the relevant problem. Vacating the Board’s decision, the Federal Circuit remanded the case for resolution of the relevant factual issues under the proper standard for analyzing reasonable pertinence.
Claims to Printed Matter Are Patent-Ineligible Only if They Lack an Inventive Concept
In C R Bard Inc. v. Angiodynamics, Inc., Appeal No. 19-1756, the Federal Circuit claims that recited printed matter but arguably included an inventive concept beyond the printed matter itself were not patent-ineligible.
C R Bard Inc. (“Bard”) sued AngioDynamics, Inc. for patent infringement. The asserted patent claims recited assemblies and systems for identifying a vascular access port. Access ports are “devices implanted underneath a patient’s skin that allow medical providers to inject fluid into the patient’s veins.” The claims required an access port with a radiographic marker that is visible in x-ray images and that identifies the port as suitable for power injections (i.e., injections at a high pressure and flow rate). AngioDynamics moved for summary judgement of ineligibility under 35 U.S.C. § 101, arguing that the identifying information on the radiographic marker was non-functional printed matter, which is not entitled to patentable weight. The district court agreed, and Bard appealed.
The Federal Circuit explained that under the printed matter doctrine, information that is claimed for the content it communicates is entitled to no patentable weight unless it is “functionally related” to its “substrate” (i.e., the structural elements of the claimed invention). Here, the identifying information on the radiographic marker lacked the requisite functional relationship, so the Federal Circuit gave it no patentable weight. The Federal Circuit further explained that a patent may be ineligible under § 101 if it is directed solely to non-functional printed matter and contains no additional inventive concept. But here, even if the printed matter was the focus of Bard’s claims, AngioDynamic failed to show that the claims’ use of a radiographic marker to verify suitability for power injections was not an inventive concept. Thus, the Federal Circuit reversed the district court’s judgment of ineligibility under § 101.
Claim Construction Arguments Not Made to the PTAB Are Forfeited on Appeal
In Re: Google Technology Holdings LLC, Appeal No. 19-1828, the Federal Circuit claim construction arguments are forfeited if not raised before the PTAB.
The PTAB sustained the final rejection of Google Technology Holdings LLC’s (“Google”) claims as obvious. Google appealed.
On appeal, Google argued that the PTAB’s claim interpretations were incorrect and improperly resulted in the claims being found obvious. The Federal Circuit found that Google failed to raise its claim construction arguments rebutting obviousness to the PTAB or during examination; therefore, Google forfeited its ability to raise its claim construction arguments on appeal. Google argued that an exception applied—that because the PTAB sua sponte construed terms in Google’s claims, Google should be allowed to raise a rebuttal construction before the Federal Circuit. The Federal Circuit rejected this argument, ruling that Google should have raised its preferred claim construction argument before the Board and that any attempt to do so for the first time before the Federal Circuit “deprives the Board . . . of its important role in reviewing the rejection of patent applications.” The Federal Circuit also noted that its holding was important to discourage future litigants from concealing new arguments until the appellate stage. Thus, the Federal Circuit affirmed the PTAB’s obviousness determination.
Eligibility for CBM Review Is Not Appealable
In Sipco, LLC v. Emerson Electric Co., Appeal No. 18-1635, The Board’s determination that a patent qualifies for CBM review is non-appealable under 35 U.S.C. § 324(e).
Emerson petitioned the Patent Trial and Appeal Board (Board) for covered business method (CBM) review of SIPCO’s patent. The Board determined the patent qualified for CBM review, instituted review, and issued a final written decision finding the challenged claims patent-ineligible under § 101 and obvious under § 103. The Federal Circuit vacated the Board’s decision, including its determination that the patent qualified for CBM review.
Emerson petitioned for writ of certiorari to the U.S. Supreme Court based on 35 U.S.C. § 324(e), which prohibits appeals of the Board’s decision to institute CBM review. Emerson asserted that § 324(e) extends to prohibit appeals of the Board’s determination that a patent qualifies for CBM review. The Supreme Court granted Emerson’s petition, vacated the Federal Circuit’s opinion, and remanded for further consideration in light of the Supreme Court’s decision in Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367 (2020).
On remand in light of Thryv, the Federal Circuit agreed that § 324(e) extends to prohibit appeals of the Board’s determination that a patent qualifies for CBM review. In Thryv, the Supreme Court held that a no-appeal provision for inter partes review (IPR) prohibits appeals of the Board’s determination regarding whether an IPR petition is time barred. The Federal Circuit noted that, as set forth in Thryv and other precedent, judicial review is not available “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” Applying that rationale to the CBM context, the Federal Circuit reasoned that a patent’s qualification for CBM review is expressly and exclusively tied to the decision to institute the proceeding. The Federal Circuit therefore held that it was precluded from reviewing the Board’s determination that SIPCO’s patent qualified for CBM review. The Federal Circuit affirmed the Board’s determination that the challenged claims would have been obvious, and did not reach the Board’s patentability decision under § 101.
To Limit or Not to Limit: What is the Basis of Your Prior Art Distinction?
In Vectura Limited v. Glaxosmithkline LLC., Appeal No. 20-1054, the Federal Circuit distinguishing prior art based on the structure of the particles, not the process used to manufacture them, does not import a process limitation into the claims.
Vectura sued GlaxoSmithKline and Glaxo Group (“GSK”) for patent infringement. The asserted patent described a method of producing composite particles using high-energy milling. The asserted claims covered the particles not the method of producing them. GSK argued it did not infringe because the claims should be construed to require milling and GSK’s process does not include milling. The district dourt construed the claims to not require milling and the jury found that GSK infringed. The district court denied GSK’s post-trial motions and GSK appealed.
GSK argued the claim construction was erroneous because (1) the specification indicates that the milling process is essential and (2) the applicants disclaimed processes other than milling by distinguishing a prior art reference on the ground that it did not include the same milling step. The Federal Circuit recognized some portions of the specification suggested that milling is required but otherwise made clear that milling was merely a preferred process. The Federal Circuit also found that the applicant had distinguished the prior art based on the unique structure of the claimed particles, not the process to make them. Thus, the Federal Circuit affirmed.
California Law Prohibits Some Contracts Requiring Assignment of Post-Employment Inventions
In Whitewater West Industries, Ltd. v. Alleshouse, Appeal No. 19-1852, the Federal Circuit assignment provisions are invalid under California Business and Professions Code § 16600 if they require assignment of inventions that were conceived post-employment without using the employer’s proprietary information.
Alleshouse worked for Whitewater and signed an employment contract requiring him to assign any patents conceived post-employment that were “in any way connected to any subject matter within the existing or contemplated business of Company.” Alleshouse left Whitewater and started his own company. He then filed patent applications for inventions he conceived after leaving Whitewater and without using Whitewater’s proprietary information. Whitewater sued for breach of contract and correction of inventorship. The district court found for Whitewater and Alleshouse appealed.
The Federal Circuit reversed. California Business and Professions Code § 16600 states: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Although lacking authority from California courts that was directly on point, the Federal Circuit concluded that assignment provisions are invalid under § 16600 if they both (1) require assignment of inventions conceived after employment and (2) are not necessary to protect proprietary information.
It’s a Date – Twitter Reply Proves Prior Art Publication Date
In Vidstream LLC v. Twitter, Inc., Appeal No. 19-1734, the Federal Circuit evidence of a prior art reference’s publication date submitted after an IPR petition may be appropriately considered by the Board if the evidence is a legitimate reply to a challenge by the patent owner.
Twitter requested two inter partes reviews of a patent assigned to VidStream LLC. having a priority date of May 9, 2012. Twitter asserted that the system was not patentable as obvious, identifying a book authored by Anselm Bradford and Paul Haine (“Bradford”) as prior art to VidStream’s patent.
Twitter’s petitions included a copy of Bradford’s copyright page that contained the following legend: “Copyright © 2011.” In response, VidStream argued that Bradford was not prior art because a page in Bradford indicated it was published on December 13, 2015. In its reply, Twitter cited additional documents evidencing the 2011 publication date, including: (i) a copy of Bradford that was obtained from the Library of Congress marked, “Copyright © 2011,” (ii) a copy of Bradford’s Certificate of Registration with the Copyright Office that stated Bradford’s date of first publication was November 8, 2011, and (iii) evidence from the Internet Archive showing Bradford was available on Amazon in 2011. Relying on the collective evidence submitted in Twitter’s petitions and replies, the Board held Bradford was prior art and invalidated claims in VidStream’s patent. VidStream appealed, arguing that the Board erred by relying on evidence first presented in reply briefs.
The Federal Circuit affirmed the Board’s decision. The Federal Circuit explained that both parties were permitted an opportunity to provide evidence concerning the reference date of the Bradford book, that VidStream was provided with an opportunity to respond to Twitter’s evidence submitted in its replies, and that the collective evidence submitted well supported the Board’s finding that Bradford had been published and publicly available before VidStream’s 2012 priority date.
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