IP UPDATE

What Use Does § 271(e)(1) Safe Harbor “Solely” Protect?

by Christopher M. Bruno | Apr 4, 2024 | Patents

The US Court of Appeals for the Federal Circuit affirmed that the 35 U.S.C. § 271(e)(1) safe harbor protecting certain infringing acts undertaken for regulatory approval applied to an alleged infringer’s importation of transcatheter heart systems while attending a trade conference, finding the importation reasonably related to submitting information to the US Food & Drug Administration (FDA) for medical device approval. Edwards Lifesciences Corp. v. Meril Life Sciences Pvt. Ltd., Case No. 22-1877 (Fed. Cir. Mar. 25, 2024) (Stoll, Cunningham, JJ.) (Lourie, J., dissenting).

The fact pattern in this case is unusual. Meril, a manufacturer of a transcatheter heart system approved for sale in Europe but not in the United States, brought two demonstration samples to San Francisco with lawyer-generated instructions that the samples could not be used, sold or offered for sale in the US. Meril presented at a trade booth during a cardiovascular medical device conference. It was undisputed that the samples never left a bag that was first kept at a hotel and later brought to the conference and placed in a storage room.

Edwards Lifesciences nevertheless sued for infringement based on importation. The district court found that Meril’s importation was reasonably related to its attempts to secure regulatory approval because they were for the purposes of recruiting investigators for a clinical trial Meril had made initial efforts to commence (as required to market this type of device in the US). Accordingly, the district court granted summary judgment of noninfringement on grounds that the safe harbor under § 271(e)(1) applied. Edwards appealed.

Edwards argued that the district court erred by not finding a genuine material dispute of fact relating to Meril’s subjective intent (i.e., whether, notwithstanding some evidence, Meril actually intended the importation to relate to FDA approval). Edwards also challenged whether the importation was solely related to FDA approval and argued that the non-use of the devices to recruit investigators rendered the safe harbor inapplicable.

The Federal Circuit rejected all three challenges. Canvassing the Federal Circuit’s decades of prior case law, the Court concluded that a putative infringer’s intent is irrelevant when determining whether the safe harbor applies. Thus, even if Edwards were correct in challenging Meril’s intent, there would still be no material factual dispute. On the issue of whether the importation activity was solely related to FDA approval, the Court, discussing the use of “solely” in terms of the safe harbor provision, reiterated prior cases’ determination that the uses need not be solely related to FDA approval, but rather, that the only uses that would be protected were those within the safe harbor. Finally, the Court again deemed the non-use of the devices irrelevant, as nothing in the statute required actual use.

Judge Lourie dissented, not because he necessarily viewed the district court’s or the majority’s application as squarely incorrect under existing precedent, but because he believed that existing precedent did not expressly give proper weight to the statute’s use of the word “solely.” Applying a plain text analysis, Judge Lourie argued that the safe harbor [...]

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Mandamus Denied but Jurisdictional Door Left Open a Crack

by Thomas DaMario | Apr 4, 2024 | Patents

The US Court of Appeals for the Federal Circuit denied a patent owner’s writ of mandamus seeking to prevent a defendant from amending its answer to add an affirmative licensing defense, but also noted that the defense was added only after the district court found that there were no remaining claims. In re VLSI Technology LLC, Case No. 24-116 (Fed. Cir. Mar. 18, 2024) (Moore, Taranto, Chen, JJ.)

VLSI asserted four patents against Intel in the Northern District of California. In December 2023, the district court granted summary judgment that two of the patents were not infringed and denied summary judgment of noninfringement on the remaining two patents. The parties additionally submitted cross motions for summary judgment on a licensing defense that turned on a forum selection clause, but the court denied both motions. To deprive the court of jurisdiction, VLSI granted Intel a covenant not to sue for infringement of the remaining two patents in the case. Two days later, Intel moved to amend its answer to add a counterclaim for a declaratory judgment that Intel was licensed to VLSI’s entire patent portfolio. The district court granted Intel’s motion, and VLSI filed a mandamus petition to block Intel’s amendment.

The Federal Circuit denied VLSI’s petition for two primary reasons. First, the Court determined that VLSI had not shown that it had no other available means of obtaining relief. The district court expressly invited the parties to brief issues pertaining to Intel’s licensing defense in subsequent briefing, and VLSI had since filed a motion to dismiss pertaining to this very issue. The Court also noted that VLSI could raise this issue on appeal after a final judgment. Second, the Court determined that VLSI failed to show that the district court abused its discretion in allowing Intel to amend its answer, finding that Intel acted diligently in seeking to amend its answer and that VLSI had long since known about the potential defense.

With respect to the substantive issue of whether the district court had subject matter jurisdiction, the Federal Circuit declined to offer an opinion at this stage. Nevertheless, in an apparent message to the court below, the final sentence of the Court’s opinion reads, “[w]e only note that Intel’s motion to amend its answer was filed after the court determined there were no remaining claims, such that no case or controversy remained before the court.”

Is Evidence of All Claimed Elements in Prior Art Enough? Not Without Motivation to Combine

by Sydney E. McDermott | Apr 4, 2024 | Patents

The US Court of Appeals for the Federal Circuit reversed a Patent Trial & Appeal Board obviousness decision, finding that disclosure in the prior art of all recited claim elements across multiple references, without more, does not establish obviousness unless there is evidence of a motivation to combine. Virtek Vision Int’l ULC v. Assembly Guidance Systems, Inc., Case No. 22-1998 (Fed. Cir. Mar. 27, 2024) (Moore, C.J.; Hughes, Stark, JJ.)

Virtek holds a patent that discloses “an improved method for aligning a laser projector with respect to a work surface.” Lasers are used to “project a template image onto a work surface to direct manufacturing processes.” The patent discloses a two-step process that improves efficiency over the prior art.

Aligned Vision petitioned for inter partes review (IPR), challenging all of the patent’s claims. Aligned Vision asserted four combinations of prior art references over which it contended the claims were obvious. In its Final Written Decision, the Board found that some of the claims were unpatentable as obvious, but others were not.

The Board determined that certain claims, which depended from the independent claim, would have been obvious over two combinations of references: Keitler and Briggs, and Briggs and Bridges. In pertinent part, the independent claim recites “identifying a pattern of the reflective targets on the work surface in a three dimensional coordinate system.” Save for the 3D claim element, all the other claim elements were disclosed in Bridges and Keitler. The Board found that a skilled artisan would have been motivated to use the 3D coordinate system disclosed in Briggs instead of the angular direction systems in Keitler or Bridges. The Board reasoned that this combination would have been obvious to try because Briggs disclosed both 3D coordinates and angular directions.

With respect to the direct appeal, the Federal Circuit found that the Board erred as a matter of law regarding motivation to combine. “It does not suffice to meet the motivation to combine requirement to recognize that two alternative arrangements such as an angular direction system using a single camera and a 3D coordinate system using two cameras were both known in the art.” Rather, the patent challenger must show that a skilled artisan would swap the element in one reference for an element in another reference. “The mere fact that these possible arrangements existed in the prior art does not provide a reason that a skilled artisan would have substituted the one-camera angular direction system in Keitler and Bridges with the two-camera 3D coordinate system disclosed in Briggs.”

Here, the patent challenger presented no argument in the IPR petition regarding why a skilled artisan would make this substitution, other than that the two different coordinate systems were “known to be used.” Specifically, Briggs made no mention of any benefits the 3D system might provide over the angular system. Aligned Vision’s expert testified multiple times that he could not provide a reason to combine the references, and Aligned Vision presented no evidence that “there are a finite number of [...]

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Same Product in Different Packaging May Constitute Separate Market for Antitrust Purposes

by Sydney E. McDermott | Mar 28, 2024 | Antitrust, Patents

Addressing an issue of first impression, the US Court of Appeals for the Second Circuit concluded that two medications that contain the same ingredients but are packaged in different forms constitute separate markets for purposes of assessing antitrust violations. Regeneron Pharm., Inc. v. Novartis Pharma AG, Case No. 22-0427 (2d Cir. Mar. 18, 2024) (Parker, Lee, Merriam, JJ.)

Regeneron sued Novartis in the US District Court for the Southern District of New York alleging antitrust violations under the Sherman Act and New York state law claims. The specific products at issue were prescription medications used to treat the overproduction of vascular endothelial growth factor (VEGF). VEGF is a naturally occurring protein but, if overproduced, can lead to eye disorders, including permanent blindness. Both Regeneron and Novartis produce medication to combat overproduction of VEGF. The first form of anti-VEGF medications developed was packaged into vials and administered in a two-step process where a physician draws the product into a syringe then injects the product into the patient’s eye. However, a newer version of anti-VEGF drugs come in a prefilled syringe (PFS) designed to be administered in one step. The PFS packaging carries a significantly lower risk of complications and infections. PFSs have become the “preferred way [to] administer [] anti-VEGF medications.” Novartis moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(6). After the district court granted the motion, Regeneron appealed.

The district court reasoned that original and newer products competed in the same market because they were the exact same medication, just sold in different forms. The Second Circuit disagreed. PFSs reduce the likelihood of complications and have become the preferred form of administration for treatment of VEGF overproduction over vials. The Second Circuit concluded that the district court improperly focused its analysis on whether the two products were “functional substitutes” and not on whether they were “economic substitutes.” The Second Circuit concluded that the district court had applied the improper standard for the relevant market and should instead consider whether the two drugs are economic substitutes. That is to say, the district court should look to whether the different packaging for the VEGF treatments are reasonably interchangeable by consumers. Regeneron alleged they are not due to PFSs’ preferred status among physicians (although PFSs are more costly than vials).

As to the state law claims, the district court dismissed Regeneron’s tortious interference claims as untimely. On appeal, Regeneron argued that Novartis should be equitably estopped from invoking the statute of limitation because the defendants “took steps to prevent Regeneron from learning of Novartis’s tortious interference until after the statute of limitation period had expired.” The Second Circuit found that Novartis concealed a co-inventor’s role in the procurement of a patent, which Regeneron only found out about during subsequent patent litigation, and that such concealment was in violation of a contract. Thus, the Court “conclude[d] that [Regeneron’s] allegations were sufficient to permit Regeneron to invoke equitable estoppel.” Additionally, the complaint “plausibly alleged a claim for tortious interference with contract.”

All That Glitters: Use of Registered Mark To Describe Watch Color Was Fair Use

by Karen Gover | Mar 28, 2024 | Trademarks

The US Court of Appeals for the Second Circuit affirmed a district court’s grant of summary judgement to a luxury-watchmaker defendant, holding that its use of a registered and incontestable trademarked term was fair use because it was used descriptively and in good faith. Solid 21, Inc. v. Breitling U.S.A., Inc., Case No. 22-366 (2d Cir. Mar. 14, 2024) (Wesley, Sullivan, JJ.) (Park, J., dissenting). The case is notable for its analysis of the fair use defense’s good faith prong, which, as the Second Circuit majority notes, “is not litigated frequently.” This was also the element that provoked Judge Park’s dissent, who argued that the majority’s analysis attempts to resolve factual disputes about Breitling’s intentions that should, instead, go to a jury.

“Red gold” and “rose gold” are terms used to describe a gold-copper alloy that causes gold to have a pinkish hue. Sellers of men’s watches sometimes prefer the term “red gold” because “rose gold” sounds effeminate. Solid 21 is a luxury watch and jewelry business that sells a collection of jewelry and watches under the RED GOLD mark, which was registered in 2003 and now has incontestable status. Breitling is a Swiss company that makes and sells luxury watches, some of which it advertises as available in “red gold,” among other color choices. Solid 21 filed a trademark infringement suit against Breitling, alleging that its use of the term “red gold” was “likely to cause confusion, reverse confusion, mistake, and/or deception as to the source” of Breitling’s watches. Breitling moved for summary judgment on the grounds that the term “red gold” was generic, and the trademark registration was invalid, or alternatively, that its use of the term fell under the Lanham Act’s fair use defense, which allows use of a protected mark to describe one’s goods so long as the use is in good faith and not used as a mark.

Initially, the district court denied Breitling’s motion for summary judgment, finding that Breitling could have used terms like “rose gold” to describe its products and thus did not satisfy the descriptive use requirement. However, on reconsideration, the district court decided that the mere existence of alternative terms for the alloy did not preclude summary judgment, and that Breitling’s materials showed clearly that it was using the term “red gold” descriptively to indicate hue. The district court also found that Breitling satisfied the good faith element, even if Breitling was aware of Solid 21’s RED GOLD mark. Solid 21 appealed.

The Second Circuit affirmed, finding that Breitling’s advertising materials clearly showed that it used the term “red gold” as a descriptor for color and not as a mark. The Court rejected the argument that this conclusion as to descriptive use was undermined by the availability of the term “rose gold” as an alternative descriptor and pointed out that Solid 21 bears the risk of some consumer confusion in choosing to trademark a descriptive term that describes a color of metal. Finally, the Court found that Breitling’s use of [...]

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