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Patent Owner’s Disavowal of Appeal from District Court’s Noninfringement Judgment Moots IPR Appeal

by Sarah P. Hogarth | Jan 14, 2021 | Patents

Addressing the standard for mootness in inter partes review (IPR) proceedings following a district court noninfringement judgment, the US Court of Appeals for the Federal Circuit held that a petitioner’s IPR appeal was moot after the patent owner decided not to appeal the final judgment of noninfringement. ABS Global, Inc. v. Cytonome/ST, LLC, Case No. 19-2051 (Fed. Cir., Jan. 6, 2021) (Stoll, J.) (Prost, C.J., dissenting in part).

In June 2017, Cytonome/ST filed a complaint against ABS asserting infringement of six patents, including the patent of interest in this case. ABS filed a petition for IPR of all claims of the patent. In April 2019, the Patent Trial and Appeal Board (PTAB, the Board) issued its final written decision invalidating certain claims of the patent. Two weeks later, the district court granted ABS partial summary judgment, holding that the accused products did not infringe any of the asserted patent’s claims. In June 2019, ABS appealed the PTAB’s final written decision. In a briefing before the Federal Circuit, Cytonome/ST’s counsel filed an affidavit stating that Cytonome/ST “has elected not to pursue an appeal of the district court’s finding of non-infringement as to the patent and hereby disclaims such an appeal.” In June 2020, the district court entered final judgment, including as to non-infringement of the patent.

The Federal Circuit dismissed ABS’ appeal of the PTAB’s final written decision on the ground that the appeal was moot in view of the district court’s non-infringement judgment. The Court characterized the question as one under the voluntary-cessation doctrine. In the context of intellectual property infringement cases, the voluntary-cessation doctrine requires the property owner claiming mootness to prove that the “allegedly wrongful behavior could not reasonably be expected to recur,” i.e., that it will not assert the intellectual property right against the same accused products again. If it does, the burden shifts to the accused infringer to show that it “engages in or has sufficiently concrete plans to engage in activities” that would not be covered by the property owner’s non-assertion decision.

Applying the doctrine, the Federal Circuit concluded that Cytonome/ST could not reasonably be expected to assert infringement of the patent against ABS because ABS had already secured a district court judgment that the accused products do not infringe and Cytonome/ST disclaimed any appeal of the non-infringement judgment. In effect, ABS was insulated from liability for infringement, including for future infringement for products that are “essentially the same” as ABS’ currently accused products pursuant to the Kessler doctrine. Further, the Court found that ABS had not demonstrated it could reasonably expect Cytonome/ST to sue it for infringement of the patent in the future as ABS had not shown it had current or concrete future plans to engage in activities not covered by Cytonome/ST’s disavowal: “Cytonome’s disavowal of its right to appeal the summary judgment of noninfringement ‘estops Cytonome from asserting liability against ABS for infringement of the…patent claims in connection with the accused products, thereby allowing ABS to make, use, and sell those products [...]

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ITC Shines Light on DI: Complainant Can’t Aggregate Investments Across Patents, Prongs

by Alexander P. Ott | Apr 11, 2024 | Patents

Addressing a determination by its chief administrative law judge (CALJ) finding a violation of § 337, the US International Trade Commission reversed and held that the complainant had not satisfied the economic prong of the domestic industry (DI) requirement by aggregating its investment across multiple asserted patents. Certain Replacement Automotive Lamps (II), Case No. 337-TA-1292 (USITC Mar. 22, 2024).

In late 2021, Hyundai filed a complaint seeking an investigation under 19 U.S.C. § 337 based on alleged infringement of 21 design patents, each covering a different automotive headlamp or taillamp. In response, two of the proposed respondents filed a request seeking early disposition of the economic prong of the domestic industry under the Commission’s 100-day program. Hyundai filed a response opposing the 100-day program request based on the complexity of the issues. The Commission instituted the investigation and denied the 100-day program request, but when setting the procedural schedule, the CALJ scheduled an early evidentiary hearing on the economic prong of the domestic industry pursuant to the Commission’s pilot program for interim initial determinations. Following that initial hearing, the CALJ issued an interim initial determination finding that Hyundai had satisfied the economic prong of the domestic industry requirement. After the full evidentiary hearing, the CALJ issued a final initial determination finding a violation of § 337 by the respondents based on infringement of all asserted patents. The Commission decided to review both the initial and final determinations.

On review, the Commission reversed the finding that the complainant had satisfied the economic prong of the domestic industry requirement. As the Commission explained, where DI products do not have overlapping protection across common asserted patents, a complainant must treat each product as requiring a separate DI showing. The Commission cannot aggregate investments in articles covered by one patent with investments in articles only covered by a different patent. Here, because each DI product practiced only one of the asserted design patents, to satisfy the economic prong Hyundai was required to demonstrate that the investments in each product were independently significant. The Commission also held that investments in plant and equipment (§ 1337(a)(3)(A)) cannot be combined with employment of labor or capital (§ 1337(a)(3)(B)) and concluded that Hyundai had mistakenly aggregated its investments from both prongs.

Commissioner Schmidtlein filed an opinion concurring with the outcome but declining to join the majority opinion based on her view that it went beyond what was necessary to dispose of the investigation.

Patenting Web Advertising? Ask Alice, I Think She’ll Know

by Daniel Sternberg | Mar 14, 2024 | Patents

In a wide-ranging opinion, the US Court of Appeals for the Federal Circuit affirmed the district court’s grant of summary judgment of invalidity for lack of patent eligible subject matter under 35 U.S.C. § 101 with respect to claims directed to web-based advertising. Chewy, Inc. v. International Business Machines, Corp., Case No. 22-1756 (Fed. Cir. March 5, 2024) (Moore, Stoll, Cunningham, JJ.)

Chewy filed suit against International Business Machines (IBM) seeking a declaration that Chewy’s website did not infringe multiple patents related to web-based advertising. IBM responded by filing infringement counterclaims. After claim construction and discovery, the district court granted Chewy’s motions for summary judgment of invalidity for lack of patent eligible subject matter with regard to the asserted claims of one patent and noninfringement of the asserted claims of a second patent.

The claims of the first patent relate to providing a targeted advertisement from an “information repository” to a user based on the user’s internet search. In affirming the district court, the Federal Circuit first determined that, under Alice step 1, “[t]he claims broadly recite correlating advertisements with search results using a generic process.” The Court noted that the claims “merely recite the concept of identifying advertisements based on search results, without any specificity as to how this is accomplished,” and are directed to “the abstract idea of identifying advertisements based on search results.”

Turning to Alice step 2, the Federal Circuit found that the claims used a generic database and conventional processing steps, and “claimed use of a conventional repository for storing advertisements and associated search results in a well-known way.” Because “the claims recite the generic process for obtaining search results from a search query and using the search results to identify advertisements,” they failed under Alice step 2 and did not claim patent eligible subject matter under § 101.

Regarding the second asserted patent, the district court construed the claim term “selectively storing advertising objects at a store established at the reception system” as requiring the “advertising objects” to be “pre-fetched” and retrieved before the user requested a page on a website. Because it was undisputed that “Chewy retrieves advertisements in response to a user requesting a page” and not before, the district court ruled that Chewy’s website did not meet this claim limitation. Looking to the intrinsic claim construction evidence, the Federal Circuit held that the district court’s claim construction was amply supported by the specification and prosecution history and affirmed the district court’s grant of summary judgment of noninfringement. Of note, the Court explained that the specification made multiple references to pre-fetching as being part “of the present invention” and therefore limited the scope of the claims.

With respect to one asserted claim of the second patent, which did not include the limitation at issue, the district court found that Chewy’s website did not practice the limitation of “establishing characterizations for respective users based on the compiled data” because “the record undisputedly showed they deliver advertisements based on the page the user is currently viewing, [...]

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Still Exceptional: Fee-Shift Appropriate in View of Noninfringement Stipulation

by Connor M. Larson | Nov 16, 2023 | Patents

In a split decision, the US Court of Appeals for the Federal Circuit affirmed a district court’s award of more than $5 million in attorneys’ fees, finding that the district court did not abuse its discretion in finding the underlying case “exceptional” under 35 U.S.C. § 285 or in calculating the total fees awarded. In re PersonalWeb Tech., Case No. 21-1858 (Fed. Cir. Nov. 3, 2023) (Reyna, Lourie, JJ.) (Dyk, J., dissenting).

Under 35 U.S.C. § 285, a “court in exceptional cases may award reasonable attorney fees to the prevailing party.” In Octane Fitness (2014), the Supreme Court of the United States held that an exceptional case is “simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated,” and the court considers the totality of the circumstances in making this determination.

PersonalWeb’s litigation positions at issue date back to 2011, when PersonalWeb first asserted five patents against an e-commerce company. After an unfavorable claim construction ruling, PersonalWeb stipulated to dismiss the action, and the district court entered the dismissal with prejudice.

In 2018, PersonalWeb asserted the patents against customers of the e-commerce company. The e-commerce company intervened and filed a new action against PersonalWeb seeking a declaratory judgment to bar the infringement actions against the customers based on the 2011 dismissal. Some of the cases proceeded while others were stayed. The district court granted summary judgment against PersonalWeb on claims directed to two allegedly infringing products for two separate reasons: because of the Kessler doctrine and claim preclusion, and because PersonalWeb conceded that it could not prevail after an unfavorable claim construction order.

The district court also entered an award of attorneys’ fees and costs against PersonalWeb, finding the case to be “exceptional” for the following reasons:

The infringement claims were “objectively baseless and not reasonable when brought because they were barred due to a final judgment in the [2011 action].”
PersonalWeb frequently changed its infringement positions to overcome the hurdle of the day.
PersonalWeb unnecessarily prolonged this litigation after claim construction foreclosed its infringement theories.
PersonalWeb’s conduct and positions regarding the customer cases were unreasonable.
PersonalWeb submitted declarations that it should have known were inaccurate.

The district court calculated the attorneys’ fees to be more than $5 million and costs to be more than $200,000. PersonalWeb appealed.

PersonalWeb argued that the district court erred in awarding fees and, even if fees were warranted, the court erred in assessing almost $2 million of the $5 million award. The Federal Circuit found that the district court did not abuse its discretion in any of its findings related to the fee grant, agreeing with the district court’s application of the Kessler doctrine. In Kessler, the Supreme Court ruled that after a final judgment of noninfringement, follow-up suits by the same patentee over the same non-infringing product against customers of the party [...]

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Chilly Adventures: Design Patent Prior Art Comparison Applies to Article of Manufacture

by Amol Parikh | Sep 28, 2023 | Patents

Addressing a matter of first impression concerning the scope of prior art relevant to a design patent infringement analysis, the US Court of Appeals for the Federal Circuit concluded that “to qualify as comparison prior art, the prior-art design must be applied to the article of manufacture identified in the claim.” Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc., Case Nos. 21-2299; -2338 (Fed. Cir. Sept. 15, 2023) (Prost, Reyna, Hughes, JJ.)

Columbia owns a design patent that covers an ornamental design of a heat reflective material. Seirus markets and sells products (e.g., gloves) made with material that it calls HeatWave. An image of Columbia’s patented design and Seirus’s HeatWave material appear below:

Columbia Patented Design

Seirus HeatWave

Columbia sued Seirus for infringement. After the district court granted summary judgment of infringement, Seirus appealed to the Federal Circuit. The Court issued its decision in Columbia I, concluding that the district court improperly declined to consider the effect of Seirus’s logo in its infringement analysis and resolved certain issues that should have been left to the jury. The Court therefore vacated summary judgment and remanded for further proceedings.

On remand, the district court held a trial. Before trial, the district court limited admissible comparison prior art to “wave patterns of fabric,” declined to instruct the jury that “prior art” referred to prior designs of the claimed article of manufacture, and declined to instruct the jury that it did not need to find that any purchasers were deceived or that there was any actual or likelihood of confusion among consumers in the marketplace. Seirus was permitted to admit three prior art references that disclosed fabric, and Columbia was precluded from distinguishing the references by arguing that they did not disclose heat reflective material. The jury returned a verdict of noninfringement. Columbia appealed.

Among other things, Columbia challenged the exclusion of evidence and jury instructions concerning comparison prior art, and the jury instructions implicating Seirus’s logo.

The Federal Circuit began by discussing the appropriate prior art comparison in the context of design patent infringement. Citing its 2008 en banc decision in Egyptian Goddess v. Swisa, the Court explained that under the ordinary-observer test governing design patent infringement, prior art can help highlight distinctions and similarities between the claims and the accused design. For instance, when a claimed design is close to a prior art design, small differences between the accused design and the claim design are likely to be important. Conversely, if an accused design copied a particular feature of the claimed design that departs from the prior art, the accused design is likely to be regarded as deceptively similar to the claimed design, and thus infringing.

The question of first impression before the Federal Circuit was the proper scope of comparison prior art that may be [...]

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The End Is Not So Near: Patent Term Adjustments Count in Obviousness-Type Double Patenting Determinations

by Jake B. Vallen | Sep 7, 2023 | Patents

Addressing for the first time how patent term adjustments (PTAs) interact with obviousness-type double patenting (ODP), the US Court of Appeals for the Federal Circuit concluded that when members of a patent family have different expiration dates due to PTAs, the earlier expiring family members can be used as a basis for an ODP invalidity challenge against the later expiring family members. In re Cellect, LLC, Case Nos. 2022-1293; -1294; -1295; -1296 (Fed. Cir. Aug. 28, 2023) (Lourie, Dyk, Reyna, JJ.)

Cellect owns several patents directed to devices with image sensors, such as personal digital assistant devices and phones. Each patent claims priority from a single application. None of the patents were subject to a terminal disclaimer, and each was granted PTA under 35 U.S.C. § 154(b) because of PTO delay during prosecution. Had the patents not been granted PTA, each one would have expired on the same date as the original application.

After Cellect sued for infringement, the defendant requested ex parte reexaminations and asserted that the patents were unpatentable based on ODP. During the reexaminations, the Examiner “determin[ed] that the challenged claims were obvious variants of Cellect’s prior-expiring reference patent claims” because “although the ODP invalidating reference patents form a network across the four ex parte reexamination proceedings, all invalidated claims can be traced back to the single family member [now expired] patent that did not receive a grant of PTA.” The Patent Trial & Appeal Board affirmed the Examiner’s finding. Cellect appealed.

The Federal Circuit began with the inquiry for determining unpatentability based on ODP and whether, in that context, a patent’s expiration date includes a duly granted PTA under 35 U.S.C. § 154. While the Court recognized that the relevant expiration date for an ODP analysis where a patent received a patent term extension (PTE) is the pre-PTE expiration date, the Court concluded that, in the context of patents that have received PTAs, the relevant expiration date for analyzing ODP is the expiration date accounting for the PTA regardless of whether a terminal disclaimer has been filed. The Court reasoned that when determining whether claims are unpatentable for ODP, PTA and PTE, they “should be treated differently” because each is governed by different statutes that were designed to address different circumstances. While both PTAs and PTEs were intended to recover lost patent terms, PTAs were designed to extend patent terms because of administrative delays in patent processing and preclude the extension of a patent term past a terminal disclaimer. PTEs were designed to extend a patent term because of regulatory delays in product approval and are not foreclosed by a terminal disclaimer. As such, the Court reasoned that not contemplating a PTA when analyzing ODP would “frustrate the clear intent of Congress” because “when a terminal disclaimer has been entered in a patent subject to PTA, no patent (or claim) may be extended beyond the disclaimed expiration date.”

The Federal Circuit next considered whether examiners are required to consider “equitable concerns” such as good faith when [...]

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Disgorgement of Profits Appropriate Remedy for Breach of Contract, Trademark Infringement

by Kathleen Lynch | Aug 24, 2023 | Trademarks

In a trademark infringement and breach of contract case involving real estate companies with a shared name, the US Court of Appeals for the Fourth Circuit affirmed summary judgment in favor of the trademark owner, including almost $43 million in profit disgorgement. Dewberry Engineers v. Dewberry Group, Case Nos. 22-1622; -1845 (4th Cir. Aug. 9, 2023) (Gregory, Thacker, JJ.) (Quattlebaum, J., dissenting).

Dewberry Engineers and Dewberry Group (formerly Dewberry Capital) operate in the same states, and both provide commercial real estate services. Dewberry Engineers started in the mid-1950s as a civil engineering and surveying firm in northern Virginia. Over time, its business expanded to include real estate development services such as architecture and site development. Dewberry Group similarly provides real estate development services through its affiliates, including the Dewberry Hotel in Charleston, South Carolina.

In 2006, Dewberry Group sent Dewberry Engineers a cease-and-desist letter, asserting that Dewberry Group had “senior common law rights” to use “Dewberry” in real estate. In response, Dewberry Engineers sued Dewberry Group for infringing its federally registered DEWBERRY trademark. That litigation ended in 2007 when the parties entered a confidential settlement agreement (CSA). Among other things, the CSA stated that Dewberry Group:

Would not challenge Dewberry Engineers’ trademark registrations
Could use its “Dewberry Capital” name except in enumerated geographical areas where it instead must use “DCC”
Would use no logo other than its “column” logo.

In 2017, Dewberry Group rebranded and attempted to register DEWBERRY GROUP and other marks, which the US Patent & Trademark Office (PTO) repeatedly rejected.

In 2020, Dewberry Engineers filed suit claiming breach of contract and trademark infringement under the Lanham Act and Virginia common law. The district court granted summary judgment to Dewberry Engineers on the contract claim, finding that Dewberry Group had violated the unambiguous CSA by changing its logo, among other offenses. The district court also granted summary judgment to Dewberry Engineers on its trademark infringement claim, finding that Dewberry Engineers’ mark was not only valid, it was incontestable since it had been in continuous use for more than five years. The district court also found that the likelihood-of-confusion factors favored infringement. The district court entered a permanent injunction against Dewberry Group’s use of “Dewberry” and granted Dewberry Engineers its attorneys’ fees and profit disgorgement. Because the court believed the tax information Dewberry Group provided did not show the true “economic reality” of the close relationship between Dewberry Group and its affiliates, the disgorgement calculation also included some of Dewberry Group’s affiliated companies’ profits. Dewberry Group appealed, challenging the summary judgment grant, the permanent injunction and the monetary awards.

The Fourth Circuit began by noting that there was “uncontroverted evidence” that Dewberry Group used the DEWBERRY trademark, used a logo other than its column logo and failed to use “DCC” in restricted areas, all in breach of the undisputedly valid CSA. The Court therefore affirmed the district court’s finding that Dewberry Group breached the CSA.

The Fourth Circuit next addressed the trademark infringement claim. The Court rejected [...]

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Not on the Merits: Claim Preclusion Doesn’t Bar Inducement Claims After Direct Infringement Case

by Hannah Cohen | Jul 13, 2023 | Patents

Applying Seventh Circuit law to determine whether the dismissal of patent infringement claims should be upheld on the basis of claim preclusion, the US Court of Appeals for the Federal Circuit reversed a district court ruling that the claims were precluded by res judicata. Inguran, LLC v. ABS Global, Inc., Case No. 22-1385 (Fed. Cir. July 5, 2023) (Lourie, Bryson, Reyna, JJ.)

At the district court, ABS argued that a previous infringement suit brought by Inguran precluded it from bringing the instant suit. At issue was whether the previous suit asserting direct infringement of Inguran’s “GSS technology” used to create “single-sexed semen straws” barred the current suit, which alleged that ABS induced third parties to infringe upon the same technology by entering into licensing agreements with these third parties. The district court agreed with ABS. Inguran appealed.

To successfully assert claim preclusion under Seventh Circuit law, a party must meet the following three-factor test:

An identity of the parties or their privies in the first and second lawsuits
An identity of the cause of action
A final judgment on the merits in the first suit.

The Federal Circuit’s analysis focused on the second requirement. In determining whether there was an identity of the cause of action, the Court examined whether the second claim was based on the same set of transactional facts as the earlier litigation between the parties. In patent infringement cases, the general rule is that res judicata does not bar the assertion of new rights acquired during the previous action, which could have been litigated but were not (i.e., claims that arose while the litigation was ongoing but after the original complaint was filed).

The Federal Circuit determined that the transactional facts between the present case and the previous litigation were different because the cases respectively centered around theories of induced infringement by third parties and direct infringement. As the Court noted, “The evidence needed to support these two claims (induced infringement vs direct infringement) is different.” To allege and prove induced infringement, Inguran needed to establish additional facts beyond what it asserted in the previous case to show direct infringement. As the Court noted, an “induced infringement claim rests on evidence and elements beyond those required by direct infringement.” Although minimal evidence regarding the activities of the third parties was part of the record in the previous litigation, the parties ultimately stipulated that direct infringement occurred. The issue of induced infringement, however, was never presented to the jury.

The Federal Circuit held that although both cases implicated similar facts, including extensive discussions of the “GSS technology,” the direct infringement allegations could not reasonably serve to bar later allegations regarding the actions of third-party licensees. The Court accepted Inguran’s argument that any induced patent infringement claim it might have brought at the time of the earlier case would have been based on speculation: “[w]e agree with ST that it could not have asserted an inducement claim during ABS I.” The Court therefore rejected the district [...]

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DC Circuit to Disputes Ancillary to Patent Matters: “You Can’t Sit with Us”

by Jake B. Vallen | Mar 2, 2023 | Patents

For the first time, the US Court of Appeals for the District of Columbia Circuit addressed whether appeals of discovery orders ancillary to a patent suit are within the exclusive jurisdiction of the US Court of Appeals for the Federal Circuit. The DC Circuit joined its sister circuits and held in the affirmative. Fraunhofer-Gesellschaft Zur Förderung Der Angewandten Forschung E.V. v. Sirius XM Radio Inc., Case No. 22-7001 (DC Cir. Feb. 17, 2023) (Srinivasan, Henderson, JJ., Edwards, Sr. J.)

In February 2017, Fraunhofer-Gesellschaft Zur Förderung commenced a civil action for patent infringement against Sirius XM Radio in the District of Delaware. During discovery, Fraunhofer subpoenaed for deposition Sirius XM’s former Chief of Marketing Officer, My-Chau Nguyen, a resident of Washington, DC.

After Nguyen failed to appear for her deposition, she filed a motion in the US District Court for the District of Columbia to quash the subpoena. Fraunhofer responded with a cross-motion to compel Nguyen’s deposition and a motion for sanctions. The DC district court denied Nguyen’s motion to quash, ordered her to sit for deposition, found her in contempt for failing to appear for deposition in the first instance, and expressed an intent to award sanctions upon Fraunhofer’s submission of documentation reflecting fees and costs. Fraunhofer appealed to the DC Circuit.

The DC Circuit first addressed whether it had jurisdiction to consider Nguyen’s challenge to the district court’s order compelling her deposition in light of the fact that Nguyen’s deposition had already been taken at the time of appeal. The Court held that Nguyen’s challenge was moot because “[n]umerous courts have held that an appeal from enforcement of a subpoena becomes moot once the party has complied with the subpoena.” Therefore, the Court reasoned that it lacked jurisdiction to consider Nguyen’s subpoena challenge because she had already complied with the subpoena at the time of the appeal.

Next, the Court addressed whether it had jurisdiction to assess the merits of Nguyen’s challenge to the district court’s finding of contempt and intent to award sanctions. The Court determined that it did not have subject matter jurisdiction to consider these issues. The Court explained that because “the underlying litigation between Fraunhofer and Sirius XM in the District of Delaware arises under an Act of Congress relating to patents[,]” Nguyen’s discovery dispute in the DC district court was “ancillary to a patent suit.” The DC Circuit reasoned that only the Federal Circuit is vested with jurisdiction over appeals “arising under . . . any Act of Congress related to patents[.]” (28 U.S.C. § 1295(a)(1).) Holding similarly to other circuits, the Court concluded that because Nguyen’s discovery dispute was ancillary to a patent matter, the ability to decide the merits of her appeal was solely within the province of the Federal Circuit.

The DC Circuit found that it did not have the authority to transfer Nguyen’s challenges to the Federal Circuit, however. The DC Circuit concluded that it was forced to dismiss rather than transfer because “this appeal could not have been brought [...]

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Patenting a Nice Cool Glass of Nicotinamide Riboside? Claims Covering Milk Invalid under § 101

by Alexander Piala, PhD | Feb 23, 2023 | Patents

The US Court of Appeals for the Federal Circuit found that claims covering a naturally occurring composition were not patent eligible under 35 U.S.C. § 101 merely because one component of the composition had been “isolated.” ChromaDex, Inc. v. Elysium Health, Inc., Case No. 2022-1116 (Fed. Cir. Feb. 13, 2023) (Chen, Prost, Stoll, JJ.)

ChromaDex sued Elysium (a former ChromaDex customer) for infringement of its patent directed to dietary supplements containing nicotinamide riboside (NR). Elysium moved for summary judgment, arguing that the asserted claims were invalid under the § 101 prohibition against patenting natural phenomena. After the district court granted summary judgment, ChromaDex appealed.

The asserted claims were directed to a composition comprising:

Isolated NR
One or more of tryptophan, nicotinic acid or nicotinamide
One of 22 carriers
Increased NAD+ biosynthesis after eating.

Both parties conceded that milk satisfies every element of the asserted claims with the exception that its NR is not “isolated.” Both parties also conceded that milk is a naturally occurring material and thus not patent eligible under § 101.

On these facts, the issue presented was whether the claim limitation that the NR must be “isolated” (which does not occur in nature) was sufficient to make the claims patent eligible. The Federal Circuit responded “no.”

The Federal Circuit analyzed the asserted claims under two tests: the “markedly different characteristics” test set out in Chakrabarty, and the Alice two-step test (unsure whether Chakrabarty remains controlling precedent).

Under the Chakrabarty test, a claimed composition is not a natural phenomenon if it has “markedly different characteristics” from what occurs in nature. The Federal Circuit found that ChromaDex’s claimed composition had no markedly different characteristics from natural milk. While ChromaDex argued that isolation potentially allowed for unnaturally high concentrations of NR, the claims did not require such concentrations. The claims included compositions structurally and functionally identical to milk and therefore failed the “markedly different characteristics” Chakrabarty test.

Proceeding to the two-part Alice test, under step 1 the Federal Circuit found that the claims were directed to a product of nature because there were no structural differences between the claimed composition and natural milk. Under step two, the Court found that there was no “inventive step” because the claims were merely directed to increasing NAD+ biosynthesis, which was a natural principle that resulted from drinking milk.

Practice Note: During claim drafting, care should be taken to avoid claims that encompass all structural and functional components of a naturally occurring material.

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