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Executive Summary

2019 was another important year in intellectual property law that resulted in hundreds of decisions by the courts and Patent Trial and Appeal Board (PTAB) that may affect your company’s litigation, patent prosecution or business strategy. This special report on patents discusses some of the most important cases from 2019 from the US Supreme Court, the US Court of Appeal for the Federal Circuit and the PTAB.

On January 22, 2019, the Supreme Court addressed in Helsinn Healthcare S.A. v Teva Pharmaceuticals, USA, Inc. the question of whether, under the America Invents Act (AIA), an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention. In a unanimous decision authored by Justice Clarence Thomas, the Supreme Court concluded that such a sale qualifies as prior art.

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Executive Summary

The last year of the 2010s has been prolific in terms of important new pieces of legislation and case law within the European Union, and in France and Germany in particular. Indeed, the European Parliament and the EU Council adopted in April 17, 2019, a controversial directive (Directive 2019/790 on copyright and related rights in the Digital Single Market) imposing on online content-sharing service providers—such as YouTube—a new liability system, based on popularity, time and turnover criteria. This directive was created to encourage these service providers to make greater efforts in fighting copyright counterfeiting on their platforms. In France, the PACTE law, which went into force on May 22, 2019, introduced new material changes—namely the strengthening of the French patent office granting procedure (extension of examination scope) and the introduction of patent opposition proceedings before the French patent office. These two legislations greatly influenced EU and French IP law across the year.

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In an appeal from the Patent Trial and Appeal Board (PTAB), the US Court of Appeals for the Federal Circuit held that although the PTAB erred by instituting review based on a ground not advanced in the petition, the PTAB correctly found the patent at issue was invalid and affirmed the final written decision. Koninklijke Philips N.V. v. Google LLC, Case No. 19-1177 (Fed. Cir., Jan. 30, 2020) (Prost, C.J.).
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The US Court of Appeals for the Federal Circuit imposed limits on what the Patent Trial and Appeal Board (PTAB) is authorized to do by statute when dealing with challenged claims in an inter partes review (IPR) that it finds to be too indefinite to apply prior art. Samsung Elecs. Am., Inc. v. Prisua Eng’g Corp., Case Nos. 19-1169, -1260 (Fed. Cir. Feb. 4, 2020) (Bryson, J).
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On 14 January 2020, the German Federal Ministry of Justice published a draft act to modernize German patent law. Among other things, the draft addresses the fact that patent infringement trials proceed much quicker than parallel invalidity proceeding (which, under German law, are conducted separately). Hence, an injunction may be issued in first instance infringement proceedings before a decision on the validity of the patent in suit can be obtained; the resulting time gap between infringement and invalidity decision is called the “injunction gap” in German patent litigation. The draft modernization act seeks to improve the coordination between infringement and invalidity proceedings by having the Federal Patent Court provide a preliminary assessment of patent validity quickly. In view of such preliminary assessment, an infringement court may then stay infringement proceedings until a decision in the parallel invalidity proceedings.
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Addressing the issue of obviousness, the US Court of Appeals for the Federal Circuit affirmed the district court’s finding that a patent was invalid based on inherency because the claim limitation was necessarily present in the prior art. Hospira, Inc. v. Fresenius Kabi USA, LLC, Case Nos. 19-1329, -1367 (Fed. Cir. Jan. 9, 2020) (Lourie, J).

The patent at-issue is directed to premixed pharmaceutical compositions of dexmedetomidine that do not require reconstitution or dilution prior to administration and remains stable and active after prolonged storage. Hospira makes and sells dexmedetomidine products, including a ready-to-use product called Precedex Premix covered by the patent at-issue. Fresenius filed an Abbreviated New Drug Application (ANDA) seeking approval by the Food and Drug Administration (FDA) to market a generic ready-to-use dexmedetomidine product. Hospira brought suit alleging infringement under the Hatch-Waxman Act.

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Addressing the propriety of the trial court’s jury instruction regarding willful infringement, the US Court of Appeals for the Federal Circuit found that descriptors such as “egregious behavior” and whether an infringer is “worthy of punishment” are inappropriate for a jury instruction on willful patent infringement, but ultimately found that the instruction was not legally erroneous. Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc., Case Nos. 2018-2215, 2018-2254 (Fed. Cir. Jan. 13, 2020) (Dyk, J.) (Reyna, J. concurring-in-part, dissenting-in-part).

Eko Brands asserted a claim of patent infringement against Adrian Rivera Maynez Enterprises (ARM). Based on the district court’s claim construction, ARM stipulated to infringement, and the case went to trial on the issue of damages.

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In a divided panel decision, the US Court of Appeals for the Federal Circuit concluded that a merger clause in the parties’ settlement agreement did not extinguish a prior covenant not to sue. Molon Motor & Coil Corp. v. Nidec Motor Corp., Case No. 19-1071 (Fed. Cir. Jan. 10, 2020) (Lourie, J) (Reyna, J, dissenting).

In 2004, Molon sued Nidec’s predecessor, Merkle-Korff, for infringement of Molon’s patent. In response, Merkle-Korff filed declaratory judgment counterclaims against two other Molon patents, seeking declarations of invalidity and non-infringement. Molon subsequently offered Merkle-Korff a covenant not to sue (2006 covenant) on the counterclaim patents. The covenant provided a unilateral non-exclusive license covering products existing at the time with no limits to specific markets.

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