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To Collect Damages for Patent Infringement, a Patentee Must Affirmatively Provide (1) Constructive Notice by Marking Products or b) Actual Notice to the Accused Infringer

| March 11, 2020

ARCTIC CAT, INC. v. BOMBARDIER RECREATIONAL, INC.

February 20, 2020

Lourie, Moore, and Stoll (Opinion by Lourie)

Summary

Arctic Cat sued Bombardier for patent infringement. Despite the court’s holding that Bombardier “willfully” infringed, Arctic Cat was unable to collect any damages for pre-trial sales, much less treble damages due to the courts holding that Arctic Cat did not provide proper notice as required under 35 U.S.C. 287, whether provided (a) constructively through proper patent marking or (b) actually through direct notice to Bombardier. The Federal Circuit also emphasized that the facts that Bombardier had actual knowledge of the patents and even willfully infringed were immaterial, and explained that affirmative notice by the patentee is statutorily required.

Background

a. Factual Setting

            Arctic Cat, Inc. (Arctic Cat) sued Bombardier Recreational Products, Inc. (Bombardier) for infringement of U.S. Patent Nos. 6,793,545 and 6,568,969 related to steering systems for personal watercraft.

            Artic Cat only sold product via its licensee, Honda.   According to the terms of the licensee agreement, Honda was expressly not required to provide patent marking to provide constructive notice of the ‘545 or ‘969 patents to which the licensed products applied.

b. Procedural Background

Arctic Cat initially sued Bombardier in the Southern District of Florida for infringement of the ‘545 and ‘969 patents.  The district court held that Bombardier willfully infringed.  Additionally, the district court also held that Bombardier failed to meet its burden to prove that unmarked products sold by Honda practiced the claimed invention. 

Bombardier previously appealed to the Federal Circuit, and the Federal Circuit previously affirmed the district courts holding of willful infringement.  However, the Federal Circuit previously remanded the case back to the district court on the issue of patent marking, explaining that the burden was on the patentee to prove that the identified products do not practice the claimed invention once the alleged infringer identifies a product alleged to practice the claimed invention. 

On remand, the district court held that Arctic Cat was unable to recover any pre-complaint damages for failure to provide constructive or actual notice to Bombardier.

The Federal Circuit’s Decision

            Patent Marking Statute

            In the opinion, the Federal Circuit explains that “[i]n this appeal, we are tasked with interpreting the marking statute, 35 U.S.C. § 287. Statutory interpretation is a question of law that we review de novo.”

            Under 35 U.S.C. 287, “patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented … by fixing thereon the word “patent” … . In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.”

            Requirements under the Patent Marking Statute

The Federal Circuit explains that under 35 U.S.C. 287, “a patentee who makes or sells patented articles can satisfy the notice requirement of § 287 either by providing constructive notice—i.e., marking its products—or by providing actual notice to an alleged infringer,” and explains that “[a]ctual notice requires the affirmative communication of a specific charge of infringement by a specific accused product or device.”

Constructive Notice

With respect to the requirement of “constructive notice,” Arctic Cat argued that such notice wasn’t required because after initially selling unmarked products, Honda ceased sales.  As a result, Arctic Cat asserts that such cessation of sales excuses non-compliance with the notice requirement in a similar manner to how a patentee that does not make any sales is not required to provide such notice.  However, the Federal Circuit explained that after an unmarked product is sold into the market, such products “remain on the market, incorrectly indicating to the public that there is no patent,” and held that “once a patentee begins making or selling a patented article, the notice requirement attaches, and the obligation imposed by 35 U.S.C. 287 attaches and is discharged only by providing actual or constructive notice.”

Actual Notice

With respect to the requirement of “actual notice,” Arctic Cat argued that the defendant had actual knowledge of the patent and, thus, had actual notice of the patent.  Moreover, Arctic Cat argued that such actual knowledge was also evidenced by the district court’s holding of “willful” infringement.  However, the court explained that “whether a patentee provided actual notice must focus on the action of the patentee, not the knowledge or understanding of the infringer, and that it is irrelevant whether the defendant knew of the patent or [even] knew of his own infringement.”

            Licensees

            With respect to sales through licensees, the Federal Circuit explained that “[a] patentee’s licensees must also comply with § 287.” While licensees have such an obligation, the court further explained that “courts may consider whether the patentee made reasonable efforts to ensure third parties’ compliance with the marking statute.”  However, the court noted that in this case Arctic Cat’s “license agreement with Honda expressly states that Honda had no obligation to mark.”

Takeaways

1. With respect to “constructive notice,” an important take away is to remember that constructive notice can be provided at any time by starting proper patent marking.  Thus, in the event that a patentee initially does not provide proper patent marking, proper patent marking can be correctively initiated at a later date.
   
2. With respect to “actual notice,” an important take away is to remember that an alleged infringer’s “actual knowledge” of the patent (and even “intentional” or “willful” infringement of that patent) is irrelevant to the notice requirement under 35 U.S.C. 287, which is entirely dependent on the actions of the patentee.
   
   a. For example, if an infringer is aware that the patentee’s product is not marked, the infringer could potentially continue infringement without concern of potential damages until receipt of actual notice from the patentee.
   
3. With respect to sales of patented products through licensees or third parties, an important take away is to remember that such licensees or third parties “must also comply” with 35 U.S.C. 287.  However, the court indicates that “a court may consider whether the patentee made reasonable efforts to ensure third parties compliance with the marking statute.”  Accordingly, another important takeaway is to ensure that licensing agreements include reasonable requirements for marking by the licensee.
   
4. With respect to the requirement of patent marking, the opinion also provides some other helpful reminders that:
   
   a. The patent marking requirement does not apply in the context of “process” or “method” claims.  Notably, this provides another reason to consider inclusion of “method” or “process” claims.  
   
   b. The patent marking requirement also does not apply in the event that a patentee never makes or sells a product.  Notably, this provides some advantage to non-practicing entities (NPEs).

Should’ve, Could’ve, Would’ve; Hindsight is as common as CDMA, allegedly!

| March 5, 2020

Acoustic Technology, Inc., vs., Itron Networked Solutions, In.

February 13, 2020

Circuit Judges Moore, Reyna (author) and Taranto.

Summary:

i. Background:

Acoustic owns U.S. Patent No., 6,509,841 (‘841 hereon), which relates to communications systems for utility providers to remotely monitor groups of electricity meters.

Back in 2010, Acoustic sued Itron for infringement of the ‘841 patent, with the parties later settling. As part of this settlement, Acoustic licensed the patent to Itron. As a result of the lawsuit, Itron was time-barrred from seeking inter partes review (IPR), of the patent. See 35 U.S.C. § 315(b).

Six years later, Acoustic sued Silver Spring Networks, Inc., (SS) for infringement, and in response, SS filed an IPR petition that has given rise to this Appeal.

Prior to and thereafter filing the IPR, SS was in discussions with Itron regarding a potential merger. Nine days after the Board instituted IPR, the parties agreed to merge. It was publicly announced the following day. The merger was completed while the IPR proceeding remained underway. SS filed the necessary notices that listed Itron as a real-party-in-interest.

Finally, seven months after Itron and SS completed the merger, the Board entered a final written decision wherein they found claim 8 of the ‘841 patent unpatentable. Acoustic did not raise a time-bar challenge to the Board.

ii. Appeal Issues:

ii-a: Acoustic alleges the Boards final written decision should be vacated because the underlying IPR proceeding is time-barred under 35 U.S.C. § 315(b).

ii.b: Acoustic alleges the Boards unpatentability findings are unsupported.

iii. IPR

35 U.S.C. § 315(b)

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.

The CAFC held that “when a party raises arguments on appeal that it did not raise to the Board, they deprive the court of the benefit of the Board’s informed judgment.” Thus, since Acoustic failed to raise this issue to the Board, the CAFC declined to resolve whether Itron’s pre-merger activities rendered it a real-party-in-interest. Concluding, the CAFC stated that “[A]lthough we do not address the merits of Acoustic’s time-bar argument, we note Acoustics concerns about the concealed involvement of interested, time-barred parties.”

iv. Unpatentability

The sole claim at issue is as follows:

      8. A system for remote two-way meter reading comprising:

a metering device comprising means for measuring usage and for transmitting data associated with said measured usage in response to receiving a read command;

a control for transmitting said read command to said metering device and for receiving said data associated with said measured usage transmitted from said metering device; and

a relay for code-division multiple access (CDMA) communication between said metering device and said control, wherein said data associated with said measured usage and said read command is relayed between said control and metering device by being passed through said relay.

Fig. 1:

Key: 16 = on-site utility meters: 14 = relay means: 12 = contro means. The relay means can communicate via CMDA (code-divisional mutliple access), which is descibred as “an improvement upon prior art automated meter reading systems that used exspensive and problematic radio frrequency transmitter or human meter-readers.” 

• Novelty

The CAFC upheld both anticipation challenges.

The first, anticipation by Netcomm, Acoustic claims that the Board erred by finding the reference disclosed the claimed CDMA communication limitation. Acoustic argued that the Board based its final decision entirely upon SS’s expert Dr. Soliman, who applied an incorrect standard. Specifically, that Dr. Soliman’s statements used the word “recognize” which, Acoustic alleged, was akin to testimony about what a prior art reference “suggests”, and so goes to obvious not anticipation. CAFC disagreed with Acoustic.

CAFC held that the “question is whether a skilled artisan would “reasonably understand or infer” from a prior art reference that every claim limitation is disclosed in that single reference.” Further that, “Expert testimony may shed light on what a skilled artisan would reasonably understand or infer from a prior art reference,” and “expert testimony can constitute substantial evidence of anticipation when the expert explains in detail how each claim element is disclosed in the prior art reference.”

The CAFC held that “Dr. Soliman conducted a detailed analysis and explained how a skilled artisan would reasonably understand that NetComm’s disclosure of radio wave communication was the same as CDMA,” and “Acoustic provided no evidence to rebut Dr. Soliman’s testimony.”

The second, anticipation by Gastouniotis, Acoustic argued that “the Board’s finding is erroneous because the Board relied on “the same structures to satisfy separate claim limitations.” Specifically, Acoustic asserts that the Board relied on the same “remote station 6” in Gastouniotis to satisfy the “control” and “relay” limitations of claim 8.” CAFC disagreed with Acoustic.

Specifically, the CAFC held that Gastouniotis disclosed a system that included a plurality of “remote stations” and “that individual “remote stations” may have different functions in a given embodiment.” So, “In finding that Gastouniotis anticipated claim 8, the Board relied on separate “remote station” structures to meet the “control” and “relay” limitations.” Again, the CAFC held that “Dr. Soliman provided unrebutted testimony that a skilled artisan would understand that these remote stations disclosed in Gastouniotis” meet the limitations of claim 8.

• Obviousness

Acoustic challenged the Boards determination of obvious in view of Nelson and Roach. “Acoustic asserts two errors in the Board’s obviousness analysis: (i) that the Board erroneously mapped Nelson onto the elements of claim 8; and (ii) that the Board’s motivation-to-combine finding is not supported by substantial evidence.”  The CAFC rejected both arguments.

Regarding point (i): “Acoustic asserts that the Board relied on the same “electronic meter reader (EMR)” in Nelson to satisfy both the “metering device” and “relay” limitations of claim 8.” Again, the CAFC held that the Board had correctly relied on “separate EMR structures to meet the “metering device” and “relay” limitations,” and that “Dr. Soliman provided unrebutted testimony that a skilled artisan would recognize” the metering apparatus of Nelson as meeting the limitations of claim 8.”

Regarding point (ii): “Acoustic requests that [the CAFC] reverse the Board’s finding because the Board relied on “attorney argument,” and “generically cited to [Dr. Soliman’s] expert testimony.” The CAFC held that “The motivation to combine prior art references can come from the knowledge of those skilled in the art, from the prior art reference itself, or from the nature of the problem to be solved.” That, the CAFC “have found expert testimony insufficient where, for example, the testimony consisted of conclusory statements that a skilled artisan could combine the references, not that they would have been motivated to do so.”

However, ultimately, the CAFC found that “Dr. Soliman’s testimony was not conclusory or otherwise defective, and the Board was within its discretion to give that testimony dispositive weight.” That the Board did not merely “generically” cite to Dr. Soliman’s testimony, but cited specific pages. Thus concluding that the “expert testimony constituted substantial evidence of a motivation to combine prior art references.”

Additional Note:

The subject ‘841 Patent is a continuation of U.S. Patent Application No., 08/949,440 (Patent No., 5,986,574). Acoustic filed a related appeal in said Patent on the same day as filing this Appeal. (Acoustic Tech., Inc. v. Itron Networked Solutions, Inc., Case No. 2019-1059). Oral arguments were heard in both cases on the same day, and the CAFC simultaneously issued opinions in both cases.

In the related Appeal, Acoustics argued again that the CAFC “must vacate the Board’s final written decisions because the inter partes reviews were time-barred under 35 U.S.C. § 315(b).” For the same reasons outlined above, Acoustics were unsuccessful.

The second issue on Appeal in the related case centered on Acoustic arguing that the CAFC “should reverse the Board’s obviousness findings on grounds that the Board erroneously construed the “WAN means” term.” However, the CAFC noted that “Acoustic’s argument on appeal is new. Rather than arguing that the prior art fails to disclose a conventional radio capable of transmitting over publicly available WAN, Acoustic now argues that the prior art fails to disclose any conventional WAN radio” Thus, “[B]ecause Acoustic never presented to the Board the non-obviousness arguments it now raises on appeal, we find those arguments waived,” and so the Board’s decision was affirmed.

Take-away:

1. Ensure all arguments are presented to the Board.

2. Ensure that any arguments against an unpatentability rejection directly address the actual reasons for rejection. That is, the CAFC repeatedly stated that Acoustic had failed to rebut any of the actual reasons outlined in the expert testimony that the Board ultimately relied upon in its holding.

3. Be aware of Broadest Reasonable Interpretation. Here, Acoustic argued

What role does inherency have in an obviousness analysis?

| February 22, 2020

Persion Pharmaceuticals LLC v. Alvogen Malta Operations Ltd.

December 27, 2019

Before O’Malley, Reyna, and Chen (Opinion by Reyna).

Summary

 The Federal Circuit affirmed the district court’s decision invalidating as obvious patents directed to method of using a hydrocodone-only formulation to treat pain in patients with hepatic impairment. Important to the obviousness determination was the concept of “inherency”. Specifically, the Federal Circuit agreed with the District Court that where the claimed method of would have been obvious from the prior art, claim limitations directed to the pharmacokinetic properties of the formulation would be inherent in the combination of the prior art.

Details

Hydrocodone is an opioid pain medication commonly prescribed to treat prolonged, severe pain. The bulk of metabolism of many opioids, including hydrocodone, occurs in the liver. People suffering from hepatic impairment (i.e., liver dysfunction) are at increased risk of opioid overdose, because their livers cannot clear the drugs from their bloodstreams as quickly and effectively as would be the case for people with healthy livers. As such, when prescribed to patients with impaired livers, dosages of opioids are often adjusted to prevent build-ups.  

Persion Pharmaceuticals, LLC (“Persion”) commercializes a hydrocodone drug under the brand name Zohydro ER. The drug is an extended-released hydrocodone-only product—that is, it contains no other active ingredients. Clinical trials on Zohydro ER revealed, to its inventors’ surprise, that the concentration of hydrocodone in the bloodstream of subjects with mild and moderate hepatic impairment was not dramatically higher than in patients with unimpaired livers. The inventors of Zohydro ER filed U.S. patent applications that eventually issued as U.S. Patent Nos. 9,265,760 (“760 patent”) and 9,339,499 (“499 patent”).

The 760 and 499 patents were directed specifically to methods of treating pains in patients with mild or moderate hepatic impairment, and the claims emphasized the similar effects that the hydrocodone-only formulation had on patients with and without hepatic impairment.

The relevant claims of the two patents fell into two categories. The “non-adjustment” claims recited the lack of need to adjust the dosage for patients with mild or moderate hepatic impairment relative to patients without hepatic impairment. Meanwhile, the “pharmacokinetic” claims recited certain pharmacokinetic (PK) parameters that highlighted the similarity in the results of administering the claimed formulation to patients with and without hepatic impairment.

Claim 1 of the 760 patent is representative of the “non-adjustment” claims:

1. A method of treating pain in a patient having mild or moderate hepatic impairment, the method comprising:

administering to the patient having mild or moderate hepatic impairment a starting dose of an oral dosage unit having hydrocodone bitartrate as the only active ingredient, wherein the dosage unit comprises an extended release formulation of hydrocodone bitartrate, and wherein the starting dose is not adjusted relative to a patient without hepatic impairment.

Claim 12 of the 760 patent is representative of the “pharmacokinetic” claims:

12. A method of treating pain in a patient having mild or moderate hepatic impairment, the method comprising:

administering to the patient having mild or moderate hepatic impairment an oral dosage unit having hydrocodone bitartrate as the only active ingredient, wherein the dosage unit comprises an extended release formulation of hydrocodone bitartrate,

wherein the dosage unit provides a release profile of hydrocodone that:

(1) does not increase average hydrocodone AUC_0-inf in subjects suffering from mild hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 14%;

(2) does not increase average hydrocodone AUC_0-inf in subjects suffering from moderate hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 30%;

(3) does not increase average hydrocodone C_max in subjects suffering from mild hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 9%; and

(4) does not increase average hydrocodone C_max in subjects suffering from moderate hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 14%.

When Alvogen Malta Operations, Ltd. (“Alvogen”) filed an Abbreviated New Drug Application (ANDA) seeking to market a generic version of Zohydro ER, Persion sued Alvogen for infringing the 760 and 499 patents.

Naturally, Alvogen sought to invalidate those patents.

The prior art at issue were Devane (US2006/0240105), Jain (US2010/0010030), Vicodin label, and Lortab label.

Devane disclosed the same formulation as Zohydro ER, and disclosed an in vivo study in which the formulation was administered to treat post-operative pains in patients following their bunionectomy surgery. Devane did not disclose patients with mild or moderate hepatic impairment.

Jain disclosed a hepatic impairment PK study on Vicodin CR, a hydrocodone-acetaminophen combination formulation. Jain reported that the PK parameters (C_max and AUC values) for hydrocodone in Vicodin CR were similar in normal and hepatically impaired subjects.

The Vicodin and Lortab labels disclosed the dosing instructions for those drugs. Vicodin contains hydrocodone and acetaminophen. Lortab contains hydrocodone and ibruprofen. The labels did not provide any precautions or dosing restrictions for individuals with mild or moderate hepatic impairment.

The district court found that the claims were obvious over the cited prior art.

As to the “non-adjustment” claims, the district court found that a person of ordinary skill in the art would have been motivated to administer Devane’s formulation to patients with mild or moderate hepatic impairment, because Jain taught that the hydrocodone exhibited similar PK parameters in normal and hepatically impaired patients, while the Vicodin and Lortab labels did not require different dosages for patients with mild or moderate hepatic impairment.

As to the “pharmacokinetic” claims, the district court found that the claimed PK values were “inherent in any obviousness combination that contains the Devane formulation”, because Devane disclosed what was essentially Zohydro ER, i.e., the claimed formulation, and the claimed values were “necessarily present” in Zohydro ER.

On appeal, the Federal Circuit honed in on Persion’s challenge of the district court’s “inherency” determination. Persion argued that Devane did not teach administering its formulation to hepatically impaired patients, so that “the natural result flowing from the operation as taught” in Devane could not be the claimed pharmacokinetic properties.

The Federal Circuit disagreed, distinguishing between the applications of “inherency” in the obviousness and anticipation contexts:

To the extent Persion contends that inherency can only satisfy a claim limitation when all other limitations are taught in a single reference, that position is contrary to our prior recognition that “inherency may supply a missing claim limitation in an obviousness analysis” where the limitation at issue is “the natural result of the combination of prior art elements.”

As the Federal Circuit noted, the longstanding rule is that “an obvious formulation cannot become nonobvious simply by administering it to a patient and claiming the resulting serum concentrations.”

Notably, there was no dispute that if administered under the same conditions, Devane’s formulation, which was identical to Zohydro ER, would necessarily exhibit the claimed PK values.

Related was Persion’s argument that the person skilled in the art would not have combined the cited prior art as the district court had. In particular, Persion argued that the district court should not have relied on the combination formulations disclosed in Jain and the Vicodin and Lortab labels.

Here also, the Federal Circuit disagreed. The Federal Circuit focused primarily on Jain’s teachings that its hydrocodone-acetaminophen combination formulation produced similar PK results for normal and hepatically impaired patients. That is, if Jain disclosed that its combination formulation was safe for patients with hepatic impairment, then it would be reasonable to expect the acetaminophen-free, hydrocodone-only formulation to be even safer. Further, considering Jain’s reported similarity in PK results for both hepatically impaired and unimpaired patients, it would have been obvious to the person skilled in the art to forgo dose adjustments when administering the same hydrocodone formulation to patients with hepatic impairment.

Where a claim defines some property of the claimed invention, it is not uncommon to find Examiners relying on inherency for those properties to complete their obviousness analyses. Reliance may be especially prevalent in chemical arts, as it has long been established that a chemical composition and its properties are inseparable. The Persion decision seems to reinforce the idea of inherency as a powerful argument that allows a missing limitation to be supplied based on some hypothetical combination of the prior art. That said, I suspect that the reach of the Persion decision will limited, as the fact that Persion’s claimed hydrocodone formulation already existed may have made it easier for the Federal Circuit to accept the finding of inherency.

Takeaway

• If the claim is directed to a new use of a known compound, then the claim should be more specific than a single, generic step of “applying the compound”. Consider defining the specific population or subpopulation that is helped by the compound, the specific conditions under which the compound is applied, and/or combination of the compound with other ingredients.
• If one can help it, avoid reciting intended results, which continue to be a complicated strategy. Not only could such a recitation force the issue of inherency, it could also raise the question of whether the recitation is even entitled to patentable weight, which is often a difficult argument to win with Examiners.

GENERAL KNOWLEDGE OF A SKILLED ARTISAN COULD BE USED TO SUPPLY A MISSING CLAIM LIMITATION FROM THE PRIOR ART WITH EXPERT EVIDENCE IN THE OBVIOUSNESS ANALYSIS

| February 5, 2020

Koninklijke Philips N.V. v. Google LLC, Microsoft Corporation, Microsoft Mobile Inc.

January 30, 2020

Summary:

The Federal Circuit affirmed the PTAB’s final decision that claims of Philips’ ‘806 patent are unpatentable as obvious.  The Federal Circuit held that the PTAB did not err in relying on general knowledge to supply a missing claim limitation in the IPR if the PTAB relied on expert evidence corroborated by a cited reference.  The Federal Circuit also held that the PTAB did not have discretion to institute the IPR on the grounds not advanced in the petition.

Details:

The ‘806 Patent

            Philips’ ‘806 patent is directed to solving a conventional problem where the user cannot play back the digital content until after the entire file has finished downloading.  Also, the ‘806 patent states that streaming requires “two-way intelligence” and “a high level of integration between client and server software,” thereby excluding third parties from developing software and applications.

            The ‘806 patent offers a solution that reduces delay by allowing the media player download the next portion of a media presentation concurrently with playback of the previous portion.

            Representative claim 1 of the ‘806 patent:

1.  A method of, at a client device, forming a media presentation from multiple related files, including a control information file, stored on one or more server computers within a computer network, the method comprising acts of:

downloading the control information file to the client device;

the client device parsing the control information file; and based on parsing of the control information file, the client device:

identifying multiple alternative flies corresponding to a given segment of the media presentation,

determining which files of the multiple alternative files to retrieve based on system restraints;

retrieving the determined file of the multiple alternative files to begin a media presentation,

wherein if the determined file is one of a plurality of files required for the media presentation, the method further comprises acts of:

concurrent with the media presentation, retrieving a next file; and

using content of the next file to continue the media presentation.

PTAB

            Google filed a petition for IPR with two grounds of unpatentability.  First, claims of the ‘806 patent are anticipated by SMIL 1.0 (Synchronized Multimedia Integration Language Specification 1.0).  Second, claims of the ‘806 patent would have been obvious in view of SMIL 1.0 in view of the general knowledge of the skilled artisan regarding distributed multimedia presentation systems as of the priority date.  Google cited Hua (2PSM: An Efficient Framework for Searching Video Information in a Limited-Bandwidth Environment, 7 Multimedia Systems 396 (1999)) and an expert declaration to argue that pipelining was a well-known design technique, and that a skilled artisan would have been motivated to use pipelining with SMIL.

            The PTAB instituted review on three grounds (including two grounds raised by Google and additional ground).  In other words, the PTAB exercised its discretion and instituted an IPR on the additional ground that claims would have been obvious over SMIL 1.0 and Hua based on the arguments and evidence presented in the petition.

            In the final decision, the PTAB concluded that while Google had not demonstrated that claims were anticipated, Google had demonstrated that claims would have been obvious in view of SMIL 1.0 and that they would have been obvious in view of SMIL 1.0 in view of Hua as well.

CAFC

            First, the CAFC held that the PTAB erred by instituting IPR reviews based on a combination of prior art references not presented in Google’s petition.  Citing 35 U.S.C. § 314(b) (“[t]he Director shall determine whether to institute an inter partes review . . . pursuant to a petition”), the CAFC held that it is the petition, not the Board’s discretion, that defines the metes and bounds of an IPR. 

            Second, the CAFC held that while the prior references that can be considered in IPR are limited patents and printed publications only, it does not mean that the skilled artisan’s knowledge should be ignored in the obviousness inquiry.  Distinguishing this case from Arendi (where the CAFC held that the PTAB erred in relying on common sense because such reliance was based merely upon conclusory statements and unspecific expert testimony), the CAFC held that the PTAB correctly relied on expert evidence corroborated by Hua in concluding that pipelining is within the general knowledge of a skilled artisan.

            Third, with regard to Philips’ arguments that the PTAB’s combination fails because the basis for the combination rests on the patentee’s own disclosure, the CAFC held that the PTAB’s reliance on the specification was proper and that it is appropriate to rely on admissions in the specification for the obviousness inquiry.  The CAFC held that the PTAB supported its findings with citations to an expert declaration and the Hua reference.  Therefore, the CAFC found that the PTAB’s factual findings underlying its obviousness determination are supported by substantial evidence.

            Accordingly, the CAFC affirmed the PTAB’s final decision that claims of the ‘806 patent are unpatentable as obvious.        

Takeaway:

• In the obviousness analysis, the general knowledge of a skilled artisan could be used to supply a missing claim limitation from the prior art with expert evidence.

• Patentee’s own disclosure and admission in the specification could be used in the obviousness inquiry.  Patent drafters should be careful about what to write in the specification including background session.

• Patent owners should check whether the PTAB instituted IPR on the grounds not advanced in the IPR petition because the PTAB does not discretion to institute IPR based on grounds not advanced in the petition.

A Claimed Range May be Anticipated and/or Obviousness When the Lower Limit of the Range of the Reference Abuts the Upper limit of the Disputed Claim Range

| January 31, 2020

Genentech, Inc., v. Hospira, Inc.

Prost, Newman and Chen.  Opinion by Chen; Dissenting opinion by Newman.

Summary

At an inter partes review (IPR) proceeding, the Board held that a reference that discloses a range where the lower limit of said range abuts the upper limit of the disputed claim range was sufficient to render the disputed patent invalid for anticipation and obviousness. The Majority Opinion of the CAFC affirmed the holding of anticipation and obviousness. The Dissenting Opinion held that there was insufficient evidence to establish anticipation, the wrong reasoning was used to establish obviousness and the findings of Board and the Majority Opinion were based on hindsight.

Details

Background

Protein A affinity chromatography is a purification method, wherein “a composition comprising a mixture of the target antibody and undesired impurities often present in harvested cell culture fluid (HCCF) is placed into the chromatography column….  The target antibody binds to protein A, which is covalently bound to the chromatography column resin, while the impurities and rest of the composition pass through the column…. Next, the antibody of interest is removed from the chromatography column….”  Id. at 3.  A known problem of protein A affinity chromatography is leaching, wherein protein A detaches from the column and contaminates the purified antibody solution.  Thus, further purification steps of the antibody solution retrieved from the column are necessary.  Patent 7,807,799 (hereinafter “‘799”), owned by Genentech, addresses the known problem of protein A leaching, with regards to antibodies and other proteins that comprises a CH2/CH3 region.  By reducing the temperature of the composition that is subjected to chromatography, leaching can be prevented and/or minimized to an acceptable level of impurity for commercial purposes.  Claim 1, herein presented below, is the representative claim. 

A method of purifying a protein which comprises C_H2/C_H3 region, comprising subjecting a composition comprising said protein to protein A affinity chromatography at a temperature in the range from about 10°C to about 18°C.

See Patent ‘799, Col. 35, Lines 44-47.  

IPR

Hospira sought an inter partes review (IPR) of claims 1-3 and 5-11 of Patent ‘799.  The Board instituted a trial of unpatentability and held that WO95/22389 (hereinafter “WO ‘389) anticipated and WO ‘389, both solely and in combination with secondary references, rendered obvious all of the challenged claims. 

WO ‘389 discloses a method for purifying similar antibodies by a protein A affinity chromatography step and then a washing step, comprising washing with at least three column volumes of buffer.  WO ‘389 discloses that “[a]ll steps are carried out at room temperature (18-25^oC).”  Id. at 6.

The Board held that WO ‘389 overlaps the claimed range of “about 10^oC to about 18^oC”, regardless of the claim construction of “about 18^oC”.  Further, the Board held that Genentech failed to establish the criticality of the claimed range to the operability of the claimed invention and thus did not overcome the prima facie case of anticipation.  Also, the Board held that the claimed temperature range was in reference to the temperature of the composition both prior to and/or during chromatography.  The Board held that the disclosed temperature range (18-25^oC) of WO ‘389 applied to all components of the purification process and that the temperature of the HCCF composition both prior to and during chromatography were within said range. 

Genentech appealed the Board’s holding of unpatentable due to anticipation and obviousness over WO ‘389.  Of note, in the Appeal, Genentech did not challenge the Board’s holding that criticality of the claimed temperature range was not established. 

CAFC

Anticipation

Genentech argued that the meaning of “all steps are carried out at room temperature (18-25^oC)” is applicable only to the temperature of the laboratory and is not applicable to the temperature of the HCCF composition.  Genentech asserted that 1) WO ‘389 discloses “steps” where the HCCF composition was cold or frozen, 2) Genentech’s expert and Hospira’s expert testified that typically HCCF coming from a bioreactor, are at a temperature of 37^oC, 3) both experts testified WO ‘389 is silent regarding how long HCCF was held prior to chromatography and 4) Genentech’s expert testified that a skilled artisan in industrial processing would perform chromatography of the HCCF as soon as possible, i.e. without waiting for the HCCF to cool to room temperature, unless there were explicit instructions to do so.  Id. at 8.  Hospira argued that the explicit disclosure of “room temperature (18-25^oC)” is with regards to the temperature of performing chromatography and all the components of said purification process, including the HCCF composition.  Hospira noted that WO ‘389 disclosed specific temperatures for when the composition was not at room temperature.  Further, Hospira’s expert testified that a skilled artisan would perform experiments at “ambient temperature with all materials equilibrated in order to obtain robust scientific data.”  Id. at 9.  The CAFC affirmed the Board and held that there was substantial evidence that the HCCF composition was within the claimed temperature of “about 10^oC to about 18^oC.” The CAFC agreed with the Board’s findings that 1) the statement “[a]ll steps are carried out at room temperature (18-25^oC)” was a blanket statement and thus, specifying the temperature of HCCF during chromatography is redundant, 2) it disagreed with Genentech’s expert because said opinion was based upon large-scale industrially standards, and 3) it agreed with Hospira’s expert that a skilled artisan would not use HCCF at 37^oC in a chromatography column and then report that all steps were performed at room temperature because the warm HCCF would raise the temperature of the entire system.  Id. at 10. Lastly, the CAFC disagreed with Genentech’s argument that there was no anticipation because there was a missing limitation in WO ‘389 and agreed with the Board’s finding that WO ‘389 discloses a composition that is at the claimed temperature of “about 10^oC to about 18^oC” either prior to or during chromatography. (Nidec Motor Corp. v. Zhongshan Board Ocean Motor Co., cited by Genentech, holds that a reference missing a limitation cannot anticipate even if a skilled artisan would ‘at once envisage’ the missing limitation. 851 F.3d 1270, 1274–75 (Fed. Cir. 2017).” Id. at 10.)  

Obviousness

The Board, citing the secondary references, determined that the temperature at which chromatography is performed is a result-effective variable and that when temperature is lowered, leaching is reduced. Thus, a skilled artisan would have been motivated to optimize temperature.  Genentech argued that there was no reason or motivation to optimize the temperature because “the desire to reduce protein A leaching applies only to the large-scale, industrial purification of therapeutic antibodies for clinical applications…[and] that chilling HCCF for largescale, industrial processes would have been inconvenient, costly, and impractical.” Id. at 13.  Hospira argued that a skilled artisan in non‑clinical applications would have been motivated to reduce leaching because leaching damages chromatography columns.  The CAFC held that the Board was correct in holding that neither the ‘799 patent nor WO ‘389 are limited to large-scale industrial applications.  The CAFC affirmed the Boards’ finding that temperature is a “result-effective variable” and that it would have been routine experimentation for a skilled artisan to optimize the temperature to reduce protein A leaching. 

Dissent

Newman dissented and asserted that affirming the holding of invalidity for anticipation and obviousness was an error because none of the prior art shows or suggest the claimed method.  Id. at 9.  According to Newman, the determination by the Board and the CAFC is based on hindsight.  Newman noted that the “retrospective simplicity of the solution apparently led the Board to find it obvious to them, despite the undisputed testimony that no reference suggests this solution to the contamination problem here encountered, as the experts for both sides acknowledged.”  Id. at 3.  Newman noted that the ‘799 patent disclosed in detail the complexities with regards to obtaining and purifying antibodies, the many factors to consider when performing chromatography, the problems associated with the leaching of protein A, and explained their discovery of the cause of said leaching and their solution to said problem.  At the Board, Genentech argued the advantages of their claimed method, i.e. prevent leaching of protein A in protein A affinity chromatography, in contrast to the need to perform additional purification chromatography to remove protein A, as in WO ‘389.  Both experts agreed that the reference to room temperature (18-25^oC) was in reference to the ambient temperature and was not in reference to the chilled material in the column.  “Nonetheless, the PTAB and now my colleagues hold that this ‘room temperature’ range anticipates the ‘799 patent’s chilled range of 10^oC-18^oC, ignoring the significantly different results in the recited ranges.” Id. at 6. 

According to Newman, mere abutment of the 18^oC is not anticipation. “Anticipation requires that the same invention, including all claim limitations, was previously described. Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 851 F.3d 1270, 1274– 75 (Fed. Cir. 2017). The “anticipating reference must describe the entirety of the claimed subject matter.”  Id. at 7. Newman holds that the affirmation of anticipation fails to consider the “absence of identify of these ranges” (18-25^oC vs. about 10^oC-about 18^oC), fails to consider “the different results at the lower range” and fails to consider “the significance of the purity of the eluted antibody.”  Id. at 8 Regarding obviousness, Newman holds that there is no evidence that it was known or suggested that cooling the HCCF composition either prior to or during chromatography would minimize or prevent leaching of the protein A in the purified antibody solution.  According to Newman, “the question is not whether it would have been easy to cool the material to the 10ºC–18ºC range; the question is whether it would have been obvious to do so. Contrary to the Board’s and the court’s view, this is not a matter of optimizing a known procedure to obtain a known result; for it was not known that cooling the material for chromatography would avoid contamination of the purified antibody with leached protein A.” Id. at 9.  That is, even if it is possible to modify the temperature, Newman asserts that there is no reason or motivation to optimize the temperature to prevent leaching of protein A.

Takeaway

• If possible, establish the criticality of a claimed range.  One is encouraged to rebut a prima facie case of anticipation or obviousness by establishing that the claimed range is critical to the operability of the claimed invention.
• If there is an overlap of a disputed claim range and the range disclosed in the prior art, but the results are different, this may be evidence of the criticality of the range.

One correct way of reciting a Markush group in the claim

| January 24, 2020

Amgen Inc. v. Amneal Pharmaceuticals LLC

January 7, 2020

Lourie (Opinion author), Newman, and Taranto

Summary

The Federal Circuit reversed the district court’s claim construction of the Markush groups as being closed to unrecited elements because the claim recites “comprising” as the transitional phrase and “at least one” in front of each of the Markush groups. Furthermore, the Federal Circuit affirmed the district court’s holding of noninfringement under the doctrine of equivalents by one of the Defendants’ products due to prosecution history estoppel.

Details

Amneal, Piramal, and Zydus each filed an Abbreviated New Drug Application (ANDA), seeking approval of a generic version of Sensipar®, a formulation of cinacalcet hydrochloride used to treat secondary hyperparathyroidism in adult patients with chronic kidney disease who are on dialysis and to treat hypercalcemia in patients with parathyroid cancer and primary and secondary hyperparathyroidism. Amgen holds the approved New Drug Application for Sensipar®, and sued them for infringing U.S. Patent No. 9,375,405 (the ‘405 patent).

The ‘405 patent is directed to a rapid dissolution formulation of cinacalcet. Claim 1 of the ‘405 patent is as follows:

A pharmaceutical composition comprising:

(a) from about 10% to about 40% by weight of cinacalcet HCl in an amount of from about 20 mg to about 100 mg;

(b) from about 45% to about 85% by weight of a diluent selected from the group consisting of microcrystalline cellulose, starch, dicalcium phosphate, lactose, sorbitol, mannitol, sucrose, methyl dextrins, and mixtures thereof,

(c) from about 1% to about 5% by weight of at least one binder selected from the group consisting of povidone, hydroxypropyl methylcellulose, hydroxypropyl cellulose, sodium carboxymethylcellulose, and mixtures thereof; and

(d) from about 1% to 10% by weight of at least one disintegrant selected from the group consisting of crospovid[o]ne, sodium starch glycolate, croscarmellose sodium, and mixtures thereof,

wherein the percentage by weight is relative to the total weight of the composition, and wherein the composition is for the treatment of at least one of hyperparathyroidism, hyperphosphonia, hypercalcemia, and elevated calcium phosphorus product.

The ‘405 patent issued from U.S. Patent Application 12/942,646 (the ‘646 application). The original ‘646 application contained only one claim, which recited a “pharmaceutical composition comprising an effective dosage amount of a calcium receptor-active compound and at least one pharmaceutically acceptable excipient, wherein” the composition achieved a specific dissolution profile. Later, Amgen filed a Preliminary Amendment, which cancelled claim 1 and added new claims 2-24. The newly filed claim 2, which ultimately issued as claim 1, is as follows:

A pharmaceutical composition comprising:

(a) from about 10% to about 40% by weight of cinacalcet HCl;

(b) from about 45% to about 85% by weight of a diluent selected from the group consisting of microcrystalline cellulose, starch, dicalcium phosphate, lactose, sorbitol, mannitol, sucrose, methyl dextrins, and mixtures thereof,

(c) from about 1% to about 5% by weight of at least one binder; and

(d) from about 1% to 10% by weight of at least one disintegrant,

wherein the percentage by weight is relative to the total weight of the composition.

The Examiner rejected the new claims. Then, Amgen filed an amendment of the independent claim 2, reciting “from about 10% to about 40% by weight of cinacalcet HCl in an amount of from about 20 mg to about 100mg.” Then, Amgen conducted a phone interview with the Examiner. During the interview, the Examiner proposed an Examiner’s Amendment of the independent claim 2, and Amgen accepted the Examiner’s Amendment. Specifically, the Examiner’s Amendment revised the binder and the disintegrant limitations into their current, Markush group format. Then, the claims are allowed. After the Notice of Allowance was issued, Amgen filed a number of RCE Requests with new IDS submission. In one of the RCE Requests, with regard to the previous Examiner’s Amendments, Amgen remarked that “[t]hese amendments have not been made in response to a prior art rejection but rather to place the claims in proper format and to better define the claimed subject matter, including equivalents.” The Examiner issued a Notice of Allowance after each RCE Request.

In the district court proceeding, one key issue is the construction of the binder and disintegrant Markush groups. The district court held that the Markush groups for the binder and disintegrant elements are closed to unrecited binders and disintegrants, relying on Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corp., 831 F.3d 1350 (Fed. Cir. 2016). Furthermore, the district court held that Amneal does not infringe the ‘405 patent because Amneal uses Opadry Clear YS-1-7006 as the binder, a product that contains PEG 400 and PEG 8000 in addition to hydroxypropyl methylcellulose, which is a listed binder in claim 2. Furthermore, the district court held that Piramal does not infringe the ‘405 patent under the doctrine of equivalents because prosecution history estoppel barred Amgen’s argument that the cold-water soluble fraction of the preglatinized starch used by Piramal is equivalent to providone, a listed binder in claim 2.

On appeal, first, the Federal Circuit reversed the district court’s claim construction regarding the binder and disintegrant Markush groups. Specifically, contrary to the district court’s interpretation, because claim 1 uses “comprising” as the transitional phrase and “at least one” in front of each Markush group, the binder and disintegrant Markush groups do not preclude other binders and disintegrants in the claimed composition. Without more, such language is satisfied when an accused product contains a component that is from the Markush group and that meets the limitation’s other requirements such as concentration requirement for the component. Furthermore, the Federal Circuit held that Opadry used as a binder by Amneal contains HPMC, which is a listed binder in claim 1. Thus, irrespective of whether other components such as PEG are present, provided that Amneal’s formulation contains from about 1 to about 5% HPMC, the formulation literally infringes. Accordingly, the Federal Circuit vacates and remands those findings by the district court.

Next, the Federal Circuit held that Amgen’s doctrine of equivalents argument is barred by prosecution history estoppel. During the prosecution, Amgen accepted the Examiner’s Amendment that revised the claim’s disintegrant and binder limitations to be in Markush group format. Such an amendment narrows the scope of the claim, and Amgen failed to carry its burden to demonstrate that the Examiner’s Amendment was made for a reason unrelated to patentability. The Amgen’s statement in the later RCE Request was made over eight months after the Examiner’s Amendment was accepted, and accordingly does not provide any insight on the reasons for the Examiner’s Amendment. Furthermore, the tangential exception to prosecution history estoppel does not apply here because the use of pregelatinized starch as a binder is taught in the cited prior art. An amendment made to avoid prior art that contains the equivalent in question is not tangential.

Accordingly, the Federal Circuit vacated and remanded the district court’s judgment that Amneal does not infringe the ‘405 patent, and affirmed the district court’s judgment that Piramal does not infringe the ‘405 patent.

Take away

1. The claims should recite “comprising” as the transitional phrase and “at least one” in front of the Markush groups to avoid being constructed to be closed to unrecited elements in the Markush groups.
2. The original specification should contain a complete set of claims instead of one claim because later amendments may inevitably invoke prosecution history estoppel, which would bar most of the doctrine of equivalents arguments.
3. The patent drafter should be mindful of an independent claim with an overly broad scope. Any later amendments during the patent prosecution may invoke prosecution history estoppel. Accordingly, the applicants have the risk of losing any protection afforded by patent infringement under the doctrine of equivalents.

Post-filing examples, even if made by different method than prior art, may be relied upon to show inherency, particularly if patent owner fails to show that inherent feature is absent in prior art

| January 21, 2020

Hospira, Inc. v. Fresenius Kabi USA, LLC

January 9, 2020

Lourie, Dyk, Moore.  Opinion by Lourie.

Summary

            The CAFC upheld the obviousness of claims based on an inherency theory.  In particular, the CAFC saw no fault in the conclusion that the combination of prior art possessed an inherent property even though the data demonstrating the inherent property was from post-filing examples made by a different method than the combination of cited art.  This is because the patent owner failed to demonstrate any situation where the inherent property was not present.

Details

Background

Hospira is the owner of U.S. Patent No. 8,648,106.  Fresenius filed an Abbreviated New Drug Application (ANDA) stipulating to infringement of claim 6 of the ‘106 patent, but arguing that this claim is invalid.  Claim 6 (which depends on claim 1) recites as follows:

6. [A ready to use liquid pharmaceutical composition for parenteral administration to a subject, comprising dexmedetomidine or a pharmaceutically acceptable salt thereof disposed within a sealed glass container, wherein the liquid pharmaceutical composition when stored in the glass container for at least five months exhibits no more than about 2% decrease in the concentration of dexmedetomidine,]

[] wherein the dexmedetomidine or pharmaceutically acceptable salt thereof is at a concentration of about 4 μg/mL.

Dexmedetomidine is a sedative that was originally patented in the 1980’s. In 1989, safety studies were performed using a 20 µg/mL dosage in humans, but were eventually abandoned due to adverse side effects. 

In 1994, FDA approval was granted to market a 100 µg/mL dose of dexmedetomidine under the name “Precedex Concentrate.”  Precedex Concentrate was provided in 2 mL sealed glass vials/ampoules with coated rubber stoppers.  Precedex Concentrate was sold with instructions for diluting to a concentration of 4 µg/mL prior to use.

Additionally, in 2002, a 500 µg/mL “ready to use” formulation of dexmedetomidine was granted approval for veterinary use in Europe.  This product was called Dexdomitor, and was stored in 10 mL glass vials sealed with a coated rubber stopper.  Dexdomitor has a 2 year shelf life.

The ‘106 patent explained that the prior art dexmedetomidine was problematic due to the requirement for dilution, and disclosed a premixed, “ready to use” formulation, which can be administered without dilution.  The ‘106 patent stated that the invention was based in part on the discovery that the premixed dexmedetomidine “remains stable and active after prolonged storage.”  The specification included studies of dexmedetomidine potency over time under different storage conditions, such as the material of the container.  Further, the specification disclosed a manufacturing method that provided nitrogen gas into the headspace of the bottle.

District Court

The district court concluded that claim 6 was obvious in view of (a) the combination of Precedex Concentrate (100 µg/mL requiring dilution) and the knowledge of a person skilled in the art, and (b) the combination of Precedex Concentrate (100 µg/mL requiring dilution) and Dexdomitor (500 µg/mL not requiring dilution).  In particular, the district court focused on the “4 µg/mL preferred embodiment”:  a glass container made of glass and a rubber-coated stopper with ready to use 4 µg/mL dexmedetomidine.   The main issue related to the “about 2%” limitation.

The district court concluded that the “about 2%” limitation was inherent in the prior art’s
“4 µg/mL preferred embodiment.”  To reach this conclusion, the district court relied on evidence of 20+ tested samples, all of which met the “about 2%” limitation.  The court also relied on expert testimony that the concentration of dexmedetomidine does not impact its stability. Further, the court relied on the fact that neither the label of Precedex Concentrate nor the label of Dexdomitor mentions chemical stabilizers.  Importantly, the district court found insufficient evidence that it would have been expected that a lower concentration of dexmedetomidine would reduce stability, or that oxidation would occur in the absence of a nitrogen gas environment.  The district court concluded that dexmedetomidine is a “rock stable molecule” and that claim 6 is therefore invalid as obvious in view of the prior art.

CAFC

At the CAFC, the main issue raised was whether the inherency conclusion of the district court was improper because it relied on non-prior art embodiments, rather than the alleged obvious combination of prior art.  In particular, the data relied upon by the district court was entirely from Hospira’s NDA for Precedex Premix and Fresenius’s ANDA product.  Both of these are after the filing date of the application.  Both were made using the nitrogen gas environment method as described in the specification.  As such, Hospira argued that it cannot be said that the data demonstrate the inherency of a preferred embodiment which may or may not be made using this manufacturing process.

However, the CAFC agreed with Fresenius that it was not an error to point to post-filing data in support of an inherency conclusion.  Although the later evidence is not prior art, it can nonetheless be used to demonstrate the properties of the prior art.  The NDA and ANDA data merely served as evidence to show whether there was the decrease in concentration over time of the 4 µg/mL preferred embodiment.

Additionally, the CAFC noted that claim 6 is not a method claim or a product-by-process claim.  Since claim 6 includes no limitations relating to a nitrogen gas environment in the glass container, such limitations should not be read into the claim.  Thus, the district court properly ignored the process by which the samples were prepared when considering inherency.

The CAFC then highlighted that the record included evidence that concentration does not affect the stability of dexmedetomidine, and also criticized Hospira for failing to present any examples of the 4 µg/mL preferred embodiment which did not satisfy the “about 2%” limitation.  Furthermore, Hospira failed to demonstrate that the reason why the 20+ examples satisfied the “about 2%” limitation was because of the nitrogen gas in the glass container, and likewise that samples made by a different method would fail to satisfy the “about 2%” limitation.

Additionally, Hospira argued that the district court applied the wrong standard to inherency by applying a “reasonable expectation of success” standard.   Although the CAFC agreed that the district court conflated two issues, they found that the district court’s “unnecessary analysis” was a harmless error and does not impact the outcome of the case.  In other words, if a property is inherently present, there is no further question of whether one has a reason expectation of success in obtaining this property.

Returning to the merits, the CAFC concluded that claim 6 is obvious.  Since there are no other relevant limitations recited in claim 6, the mere recitation of the inherent “about 2% limitation” cannot render the claim nonobvious.   Rather, the patent was merely based on a discovery that dexmedetomidine is stable after long-term storage, but does not require any additional manufacturing limitations or the like.

Takeaway

-Applicants and patent owners should be aware that post-filing data can demonstrate inherency of prior art in some situations.

-When facing an issue of inherency, the Applicant or patent owner should focus on providing evidence to demonstrate the lack of an allegedly inherent feature in some situations, rather than criticizing the experimental design of the data alleged to show inherency.

-Applicants and patent owners should take care that non-inherency arguments are commensurate in scope with the claims. Here, the patent owner should have presented evidence relating to differences between drug potency in a nitrogen gas environment (as in the data relied upon by the court) as compared to a normal air environment (as in the combination of prior art).  Although the claims do not require any particular environment, such data could have shown that even if the nitrogen gas environment (not prior art) satisfied the “about 2% limitation,” the non-nitrogen gas environment (prior art) did not necessarily satisfy the “about 2% limitation.”

-Applicants should be sure to claim all disclosed important features. In this case, positively reciting the nitrogen gas environment and the container at a minimum level of detail may have been sufficient to save the claims from obviousness.

Disavowal – Construing an element in a patent claim to require what is not recited in the claim but is described in an embodiment of the specification

| January 14, 2020

Techtronic Industries Co. Ltd. v. International Trade Commission

December 12, 2019

Lourie, Dyk, and Wallach, Circuit Judges. Court opinion by Lourie.

Summary

            The Federal Circuit reversed the Commission’s claim construction order reversing the ALJ’s construction of the term “wall console” in each of claims in the patent in suit, holding that the ALJ properly construed the term “wall console” as “wall-mounted control unit including a passive infrared detector” because each section of the specification evinces that the patent disavowed coverage of wall consoles lacking a passive infrared detector. Consequently, the Court reversed the Commission’s determination of infringement as well because the parties agreed that the appellants do not infringe the patent under the ALJ’s claim construction.

Details

I. background

1. The Patent in Suit – U.S. Patent 7,161,319 (the “‘319 patent”)

            Intervenor Chamberlain Group Inc. (“Chamberlain”) owns the ‘319 patent, which discloses improved “movable barrier operators,” such as garage door openers. Claim 1, a representative claim, reads as follows:

            1. An improved garage door opener comprising

            a motor drive unit for opening and closing a garage door, said motor drive unit having a microcontroller

            and a wall console, said wall console having a microcontroller,

            said microcontroller of said motor drive unit being connected to the microcontroller of the wall console by means of a digital data bus.

2. Prior Proceedings

            In July 2016, Chamberlain filed a complaint at the Commission, alleging that Techtronic Industries Co. Ltd. and others (collectively, “Appellants”) violated Section 337(a)(1)(B) of the Tariff Act of 1930 by the “importation into the United States, the sale for importation, and the sale within the United States after importation” of Ryobi Garage Door Opener models that infringe the ‘319 patent.

            The only disputed term of the ‘319 patent was “wall console.” The ALJ concluded that Chamberlain had disavowed wall consoles lacking a passive infrared detector because the ‘319 patent sets forth its invention as a passive infrared detector superior to those of the prior art by virtue of its location in the wall console, rather than in the head unit, and that the only embodiment in the ‘319 patent places the passive infrared detector in the wall console as well.

            The Commission reviewed the ALJ’s order and issued a decision reversing the ALJ’s construction of “wall console” and vacating his initial determination of non-infringement.  The Commission presented following reasons for the reversal: (i) while “the [‘319] specification describes the ‘principal aspect of the present invention’ as providing an improved [passive infrared detector] for a garage door operator,” the specification discloses other aspects of the invention, and a patentee is not required to recite in each claim all features described as important in the written description; (ii) the claims of U.S. Patent 6,737,968, which issued from a parent application, expressly located the passive infrared detector in the wall console, “demonstrat[ing] the patentee’s intent to claim wall control units with and without [passive infrared detectors];” and (iii) the prosecution history of the ‘319 patent lacked “the clear prosecution history disclaimer.”

            Under the Commission’s construction, the ALJ found that Appellants infringed the ‘319 patent. Accordingly, the Commission entered the Remedial Orders against the Appellants.

            The appeal followed.

II. The Federal Circuit

            The Federal Circuit unanimously sided with the Appellants, concluding that Chamberlain disavowed coverage of wall consoles without a passive infrared detector because “the specification, in each of its sections, discloses as the invention a garage door opener improved by moving the passive infrared detector from the head unit to the wall console.”

            The court opinion authored by Judge Lourie started scrutiny of the ‘319 specification with the background section. The court opinion found that the background section discloses that the prior art taught the use of passive infrared detectors in the head unit of the garage door opener to control the garage’s lighting, but that locating the detector in the head unit was expensive, complicated, and unreliable (emphases added). The court opinion moved on to state,  [t]he ‘319 patent therefore sets out to solve the need for “a passive infrared detector for controlling illumination from a garage door operator which could be quickly and easily retrofitted to existing garage door operators with a minimum of trouble and without voiding the warranty.”

            The court opinion further stated, “[t]he remaining sections of the patent—even the abstract—disclose a straightforward solution: moving the detector to the wall console” (emphasis added).

            The court opinion dismissed the Commission’s argument that “[n]owhere does the ‘319 patent state that it is impossible or even infeasible to locate a passive infrared detector at some other location” by  pointing out, “the entire specification focuses on enabling placement of the passive infra-red detector in the wall console, which is both responsive to the prior art deficiency the ’319 patent identifies and repeatedly set forth as the objective of the invention.”

            As for the “other aspects of the invention” partially relied on by the Commission, the court opinion stated, “[t]he suggestion that the patent recites another invention—related to programming the microcontroller—in no way undermines the conclusion that the infrared detector must be on the wall unit .” More specifically, in response to Chamberlain’s and the Commission’s argument that portions of the description, particularly col. 4 l. 60–col. 7 l. 26, concern an exemplary method of programming the microcontroller to interact with the head unit by means of certain digital signaling techniques, matters not strictly related to the detector, the court opinion stated, “the entire purpose of this part of the description is to enable placement of the detector in the wall console, and it never discusses programming the microcontroller or applying digital signaling techniques for any purpose other than transmitting lighting commands from the wall console.”

            Finally, the court opinion rejected the contention of Chamberlain and the Commission that the ‘319 patent’s prosecution history is inconsistent with disavowal, by stating, “there is [n]o requirement that the prosecution history reiterate the specification’s disavowal.”

            In view of the above, the Court concluded that the ‘319 patent disavows wall consoles lacking a passive infrared detector. Accordingly, the Court reversed the Commission’s claim construction order and the determination of infringement.

Takeaway

· Disavowal, whether explicit or implicit, may cause a claim term to be construed narrower than an ordinary meaning of the term.

· Disavowal may be found with reference to an entire portion of the specification including an abstract and background section.

The United States Patent and Trademark Office cannot recover salaries of its lawyers and paralegals in civil actions brought under 35 U.S.C. §145

| December 26, 2019

Peter v. Nantkwest, Inc.

December 11, 2019

Opinion by Justice Sotomayor (unanimous decision)

Summary

The “American Rule” is the principle that parties are responsible for their own attorney’s fees.  While the Patent Act requires applicants who choose to pursue civil action under 35 U.S.C. §145 to pay the expenses of the proceedings, the Supreme Court found that the American Rule’s presumption applies to §145, and the “expenses” does not include salaries of its lawyers and paralegals.

Details

            There are two possible ways in which a dissatisfied applicant may appeal the final decision of the Patent Trial and Appeal Board.  One option is to appeal to the United States Court of Appeals for the Federal Circuit under 35 U.S.C. §141.  In choosing this avenue, the applicant will not be able to offer new evidence that was not presented before the USPTO.  The other option is to seek remedy in filing a civil action against the Director of the USPTO in federal district court under 35 U.S.C. §145.  Unlike under 35 U.S.C. §141, the applicant may introduce new evidence, and the district court would make de novo determinations based on the new evidence and the administrative record before the USPTO.  Because 35 U.S.C. §145 allows for an applicant to introduce new evidence, the litigation can be lengthy and expensive.  For this reason, the Patent Act requires applicants who choose to file a civil action under 35 U.S.C. §145 to pay “[a]l the expenses of the proceedings.”  35 U.S.C. §145.

            In this case, the USPTO denied NantKwest, Inc’s patent application, which was directed to a method for treating cancer.  NantKwest Inc. then filed a complaint against the Director of the USPTO in the Eastern District of Virginia under 35 U.S.C. §145.  The District Court granted summary judgment to the USPTO, which the Federal Circuit affirmed.  The USPTO moved for reimbursement of expenses, including the pro rata salaries of the USPTO attorneys and paralegals who worked on the case.  The Supreme Court noted in its opinion that this was “the first time in the 170-year history of §145” that the reimbursement of such salaries were requested as a part of expenses.  The District Court denied the USPTO’s motion.  NantKwest, Inc. v. Lee, 162 F. Supp. 3d 540 (E.D. Va. 2016).  Then a divided Federal Circuit panel reversed.  NantKwest, Inc. v. Matal, 860 F. 3d 1352 (2017).  The en banc Federal Circuit voted sua sponte to rehear the case, and reversed the panel over a dissent, holding that the “American Rule” (the principle that parties are responsible for their own attorney’s fees) applied to §145, after examining the plain text, statutory history, the judicial and congressional understanding of similar language, and policy considerations.  NantKwest, Inc. v. Iancu, 898 F. 3d 1177 (2018).  The Supreme Court granted certiorari. 

            The Supreme Court first notes as the “basic point of reference” the principle of the “American Rule” which is that “[e]ach litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.”  While the USPTO did not dispute this principle, it argued that the presumption applies only to prevailing-party statutes, and as §145 requires one party to pay all expenses, regardless of outcome, it is therefore not subject to the presumption.  However, the Supreme Court stated that Sebelius v. Cloer, 569 U.S. 369 (2013) confirm that the presumption against fee shifting applies to all statutes, including statute like §145 that do not explicitly award attorney’s fees to “prevailing parties.”

            The Supreme Court then analyzed whether Congress intended to depart from the American Rule presumption.  The Supreme Court first looked at the plain text, reading the term alongside neighboring words in the statute, and concluded that the plain text does not overcome the American Rule’s presumption against fee shifting.  The Supreme Court also looked at statutory usage, and found that “expenses” and “attorney’s fees” appear in tandem across various statutes shifting litigation costs, indicating “that Congress understands the two terms to be distinct and not inclusive of each other.”  While some other statutes refer to attorney’s fees as a subset of expenses, the Supreme Court stated that they show only that attorney’s fees can be included in “expenses” when defined as such.

            Based on the foregoing, the Supreme Court concluded that the USPTO cannot recover salaries of its lawyers and paralegals in civil actions brought under 35 U.S.C. §145.

Takeaway

The USPTO has recovered attorney costs under a similar trademark law, 15 U.S.C. 1071, in the 2015 Fourth Circuit decision of Shammas v. Focarino, 114 USPQ2d 1489 (4th Cir. 2015).  While the Supreme Court does not mention the applicability of the interpretation of “expenses” under 35 U.S.C. §145 to the interpretation of “expenses” in 15 U.S.C. 1071(b)(3), we would expect the Supreme Court to interpret “expenses” the same way in both of these statutes.

Heightened “original patent” written description standard applies for reissue patents

| December 20, 2019

Forum US Inc., v. Flow Valve, LLC.

June 17, 2019

Before Reyna, Schall, and Hughes. Opinion by Reyna.

Summary

The CAFC affirmed a district court decision holding that Flow Valve’s Reissue Patent No. RE 45,878 (“the Reissue patent”) is invalid because of insufficiently supported broadening claims. The original patent “must clearly and unequivocally disclose the newly claimed invention as a separate invention,” otherwise the claims in the reissue patent do not comply with the original patent requirement of 35 USC 251.

Details

Flow Valve’s original Patent No. 8,215,213 (“the original patent), entitled “Workpiece Supporting Assembly” relates to machined pipe fittings typically used in the oil and gas industry. The written description and drawings disclose only embodiments with arbors.

Figs. 4 and 5 from the original patent with arbors circled in red:

Claim 1 of the original patent also expressly claimed the arbors (emphasis added):

A workpiece machining implement comprising:

a body member having an internal workpiece channel, the body member having a plurality of body openings communicating with the internal workpiece channel;

means supported by the body member for positioning a workpiece in the internal work piece in the internal workpiece channel so that extending workpiece portions of the workpiece extend from selected ones of the body openings;

a plurality of arbors supported by the body member, each arbor having an axis coincident with a datum axis of one of the extending workpiece portions; and

means for rotating the workpiece supporting assembly about the axis of a selected one of the arbors.

When Flow Valve filed the reissue patent application, the patentees broadened the claims by adding seven new claims, where the arbor limitations were replaced by a “pivotable” limitation. Claim 14 is representative of the reissue patent:

Claim 14 of the reissue patent:

A workpiece supporting assembly for securing an elbow during a machining process that is performed on the elbow by operation of a workpiece machining implement, the workpiece supporting assembly comprising:

a body having an internal surface defining a channel, the internal surface sized to receive a medial portion of the elbow when the elbow is operably disposed in the channel; and

a support that is selectively positionable to secure the elbow in the workpiece supporting assembly, the body pivotable to a first pivoted position, the body sized so that a first end of the elbow extends from the channel and beyond the body so the first end of the elbow is presentable to the workpiece machining implement for performing the machining process, the body pivotable to a second position and sized so that a second end of the elbow extends from the channel beyond the body so the second end of the elbow is presentable to the workpiece machining implement for performing the machining process.

Forum US, Inc. sued Flow Valve for a declaratory judgment of invalidity of the reissue patent, arguing that the added reissue claims were invalid because they did not comply with the original patent requirement under 35 USC 251.

In particular, Forum argued that the claims broadened the original patent claims by omitting the arbor limitations, which is a violation of the original patent requirement of Reissue patent because the original patent did not disclose an invention without arbors.

In response, Flows Valve supplied an expert declaration asserting that a person of ordinary skill in the art would have understood from the specification that not every embodiment requires “a plurality of arbors” and that the arbors are an optional feature.

The district court granted Forum’s summary judgement, holding that “no matter what a person of ordinary skill would recognize, the specification of the original patent must clearly and unequivocally disclose the newly claimed invention in order to satisfy the original patent rule.”

Flows Valve appealed but the CAFC affirmed the district court’s decision.

In affirming the district court’s decision, the CAFC relied on two cases U.S. Indus. Chems., Inc. v. Carbide & Carbon Chems. Corp., 315 U.S. 668 (1942), and Antares Pharma, Inc. v. Medac Pharma Inc., 771 F.3d 1354 (Fed. Cir 2014), to the effect that, for broadening reissue claims, “it is not enough that an invention might have been claimed in the original patent because it was suggested or indicated in the specification”, instead, the original patent “must clearly and unequivocally disclose the newly claimed invention as a separate invention.”

Like the District Court, the Appeals Court discounted the expert declaration, commenting that “when a person of ordinary skill in the art would understand ‘does not aid the court in understanding what the’ patent actually say.”

Take away

• Heightened “original patent” written description standard applies for reissue patents.
• Expert testimony on the understanding of a person of skill in the art as evidence is insufficient.
• If it is likely in the foreseeable future to have the needs to broaden the claims, use a continuation application so that applicant does not have to meet the additional “clear and unequivocal disclosure as separate invention” requirement of a broadening reissue.

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