Federal Circuit Finds No Constitutional Defect in Appointment of TTAB Judges
In Piano Factory Group, Inc. v. Schiedmayer Celesta GmbH, Appeal No. 20-1196, the Federal Circuit held that the appointments of TTAB judges do not share the constitutional defect that the Supreme Court remedied for PTAB judges in Arthrex.
Schiedmayer Celesta filed a petition with the Trademark Trial and Appeal Board (TTAB) seeking to cancel a registration for the “Schiedmayer” mark owned by Sweet 16 Musical Properties, Inc. The Board cancelled the registration and Sweet 16 appealed.
At the Federal Circuit, Sweet 16 argued that the administrative trademark judges (“ATJs”) who sat on the TTAB panel were appointed in violation of Article II of the Constitution, and that the TTAB’s decision therefore must be vacated. The Federal Circuit disagreed, finding that the Director of the Patent and Trademark Office held authority to modify TTAB decisions unilaterally. Because the Director held this unilateral authority, the ATJs were “inferior officers” under the Constitution and were properly appointment by the Secretary of Commerce. The Federal Circuit distinguished United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021), where the Supreme Court held that administrative patent judges had not been constitutionally appointed to the Patent Trial and Appeal Board because the Director lacked sufficient authority to review their decisions.
On the merits, the Federal Circuit affirmed the cancellation of Sweet 16’s registration.
Arguments to the Patent Office That Contradict Information Submitted to the FDA Support an Inference of Deceptive Intent
In Belcher Pharmaceuticals v. Hospira, Inc., Appeal No. 20-1799, the Federal Circuit held that a patentee committed inequitable conduct by advancing an argument during patent prosecution that contradicted the patentee’s prior arguments and evidence submitted to the FDA.
Belcher Pharmaceuticals, through its Chief Science Officer, Mr. Rubin, sought and received approval from the FDA for a drug formulation of l-epinephrine. To obtain this approval, Belcher relied on prior literature that described the well-known effects of a 2.8 to 3.3 pH range on the racemization of l‑epinephrine.
Mr. Rubin later helped prosecute a patent application for Belcher’s drug formulation. To distinguish prior art that described a similar formulation with a pH range of 2.2 to 5.0, Belcher argued that a range of 2.8 to 3.3 was “unexpectedly found to be critical” by the inventor for reducing racemization. Accepting this argument, the USPTO issued a patent to Belcher.
Belcher asserted its patent against Hospira in an infringement suit under the Hatch-Waxman Act. Hospira argued that the patent was unenforceable due to inequitable conduct. The district court agreed, finding that Mr. Rubin had failed to disclose prior art references that were but-for material to patentability because they disclosed the allegedly unexpected pH range. The court also found that Mr. Rubin was aware of these references, and their disclosure of the claimed pH range, due to his work on the FDA approval of Belcher’s drug formulation. Thus, Belcher’s patent was unenforceable. Belcher appealed.
Belcher argued on appeal that Rubin believed the references he withheld from the Patent Office were irrelevant because they failed to disclose certain features other than the claimed pH range. The Federal Circuit found no clear error in the district court’s finding that this excuse was implausible and not credible in view of the record evidence. The Federal Circuit thus affirmed the district court’s judgment of unenforceability.
A General Warning Against Infringement Is Not Actual Notice of Infringement
In Lubby Holdings LLC v. Chung, Appeal No. 19-2286, the Federal Circuit held that specific charges of infringement by a specific accused product are required to provide actual notice under 35 U.S.C. § 287 and thereby support an award of pre-suit damages.
Patent owner Lubby Holdings LLC and its licensee Vaporous Technologies, Inc. (collectively, “Lubby”) sued Henry Chung for infringement. After a jury awarded damages, Chung moved for judgment as a matter of law, arguing that Lubby was not entitled to damages for any infringement prior to the lawsuit because it failed to show marking of its own patented products or actual notice to Chung of his infringement, as 35 U.S.C. § 287 requires. The district court denied the motion and Chung appealed.
The Federal Circuit held that Lubby had not carried its burden to show marking or actual notice under § 287. Although the evidence at trial showed that Chung was aware of the patent’s issuance, and received a general warning not to infringe, Lubby provided no evidence that it communicated specific charges of infringement by a specific accused product prior to the lawsuit. Thus, the Federal Circuit held that Lubby was not entitled to pre-suit damages and remanded for a new trial to determine the number of infringing products sold after the lawsuit was filed.