IP UPDATE
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Exploring the latest in intellectual property law
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Federal Circuit to WD Tex.: Denial of Transfer Motion was Clear Error, Abuse of Discretion

by | Oct 7, 2021 |

For the third time in as many months, the US Court of Appeals for the Federal Circuit found clear error in the US District Court for the Western District of Texas’s denial of a defendant’s motion to transfer venue. In re Juniper Networks, Inc., Case No. 21-160 (Fed. Cir. Sept. 24, 2021) (per curiam).

WSOU Investments d/b/a Brazos Licensing filed seven complaints against Juniper Networks in the Western District of Texas for infringement of seven different patents. Juniper, a Delaware corporation headquartered in Sunnyvale, California, moved the district court to transfer the case to the Northern District of California pursuant to 28 U.S.C. § 1404(a). Juniper pointed out that Brazos is a self-described patent assertion entity that does not conduct any business other than asserting patents and argued that “whatever ties Brazos has to this District appear to have been created for the purpose of its patent litigation activities in this District.” Additionally, two of Brazos’s officers, its CEO and its president, reside in California. Juniper argued that the Northern District of California was a clearly more convenient forum, noting that potential key witnesses were located in the Northern District of California. Juniper also asserted that the accused products were designed, developed, marketed and sold primarily from its Sunnyvale headquarters. While acknowledging that six of the actions could have been brought in the Northern District of California, the district court denied Juniper’s motion to transfer based on its analysis of the four private interest and four public interest factors. Juniper petitioned the Federal Circuit for writ of mandamus directing the district court to transfer the six cases.

Applying Fifth Circuit law, the Federal Circuit noted that a motion to transfer under § 1404(a) should be granted if “the movant demonstrates that the transferee venue is clearly more convenient.” The Court noted that district courts enjoy broad discretion in transfer determinations, but that it has routinely issued mandamus when a district court’s denial of a motion to transfer amounts to clear abuse of discretion.

The Federal Circuit explained that the “single most important factor” in transfer analysis is the relative convenience and cost of attendance for witnesses. Juniper identified 11 potential witnesses, all of whom were located in the Northern District of California, while Brazos only identified one Texas-based employee as a potential witness. The district court found that this only weighed slightly in favor of transfer, assigning “little weight” to both party and prior art witnesses and concluding that many of the witnesses were “unlikely to testify.” The Court disagreed, holding that the district court clearly erred in not giving sufficient weight to this factor in light of the “striking imbalance” in the parties’ 11-to-one listing of potential witnesses. The Court noted that it previously rejected both of the arguments used by the district court to discount the weight applied to Juniper’s witnesses. In August 2021, the Court held in In re Hulu, LLC that the district court’s discounting of party and prior art witnesses was “untethered [...]

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Only One More Ratification Needed: European UPC Might Be Ready to Launch

by | Oct 7, 2021 | ,

The German parliament recently passed the Approval Act (the Act) regarding the planned European Unified Patent Court (UPC) and the protocol on a UPC on provisional application (PPA). The Act was passed after Germany’s Federal Constitutional Court rejected applications for a preliminary injunction directed against the Act. The instrument of Germany’s ratification of the PPA (not of the UPC Agreement (UPCA)) has been deposited with the European Council. The UPC Preparatory Committee published a report calling Germany’s ratification “a decisive step on the establishment of the Unified Patent Court after the work has been on hold for several years during the examination of the Agreement by the German Federal Constitutional Court.”

The PPA will only come into effect after at least 13 EU Member States (which must include Germany, Italy and France, i.e., the three Member States in which the most European Patents were in effect in 2012) ratify the PPA and deposit their respective instrument with the European Council. The PPA must also ratify the UPCA (or at least have parliament’s approval to do so) and deposit this second instrument with the European Council. In this complex scheme, the German ratification was previously the main legal hurdle.

Now, after publication of Slovenia’s Approval Act in its National Law Gazette and the expected deposit of its PPA and UPCA instruments, only one more national ratification and instrument deposit is needed to reach the required 13 ratifications. According to a note published by the Presidency of the Council of the European Union on September 24, 2021, Austria is likely to move next, whereupon the project will reach the minimum number of ratifying Member States. The Austrian Government submitted a draft for an approval act to its parliament in July 2021 and expects approval.

Upon the complete ratification of the UPCA and PPA, the UPC will form on a provisional basis and commence its existence as a legal entity. The UPC Preparatory Committee (Committee) can then formally start its work. Although there is no timeline set for the initial provisional application stage, the Committee expects that stage to continue for approximately six to 10 months following ratification. As stated in the note by the Presidency of the Council, this stage includes the adoption of the secondary legislation of the UPC, including procedures, establishment of a budget, recruitment of judges and administrative stuff, election of a president, the final configuration and testing of the file management system and ensuring that all IT infrastructure is properly set up and secured. In addition, a working agreement with the European Patent Office (EPO) on patent application and patent validation remains to be completed. Many observers regard the timeline to complete preparations as challenging, noting that several of the above points will likely require significant discussion. With these issues in mind, the Competitive Council (Council) met on September 29, 2021, to discuss further actions regarding the preparations and to invite ministers to inform the Council of recent or upcoming developments in [...]

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TTAB Cancellation Proceedings Not Preclusive in District Court, Even Between Same Parties

by | Sep 30, 2021 |

Addressing the preclusive effect of judgments by tribunals with limited jurisdiction, the US Court of Appeals for the Third Circuit held that trademark cancellation proceedings before the Trademark Trial & Appeal Board (TTAB) do not have preclusive effect against trademark infringement lawsuits in federal district courts. Beasley v. Howard, Case No. 20-1119 (3d Cir. Sept. 17, 2021) (Chagares, J.)

In 1969, Beasley started a band named The Ebonys. In the mid-1990s, Howard joined the band, and in 1997, Beasley obtained a New Jersey state service mark for “The Ebonys.” Several years later, Beasley and Howard parted ways. In 2012, Howard registered “The Ebonys” as a federal trademark with the US Patent & Trademark Office (PTO).

In 2013, Beasley filed a petition with the TTAB to cancel Howard’s mark, arguing that Howard had defrauded the PTO. The TTAB rejected Beasley’s 2013 petition. In 2017, Beasley filed a second petition with the TTAB, again arguing that Howard had defrauded the PTO and for the first time arguing that Howard’s mark could be confused with Beasley’s separate “The Ebonys” mark. The TTAB rejected Beasley’s 2017 petition, this time on claim preclusion grounds, finding that Beasley should have asserted his likelihood-of-confusion claim in his 2013 petition. Beasley did not appeal either dismissal.

In 2019, Beasley initiated a lawsuit in federal district court, requesting that the court vacate Howard’s mark, award Beasley monetary damages and permit Beasley to register his own “The Ebonys” mark with the PTO. The district court dismissed Beasley’s complaint, finding that claim preclusion applied because the complaint turned on the same factual and legal arguments litigated in the 2017 petition, even though Beasley did not seek damages in the 2017 petition. Beasley appealed.

The Third Circuit reversed the dismissal, concluding that the TTAB’ s cancellation proceedings did not preclude Beasley from bringing his § 43(a) infringement claim in the district court. The Court noted that the TTAB has limited jurisdiction to determine the right to register a trademark and does not have authority to consider questions of infringement, unfair competition, injunctions or damages. It reasoned that because the TTAB does not have jurisdiction to award any remedy beyond cancellation of the mark, a broader § 43(a) cause of action for deceptive use in commerce, as alleged by Beasley, could not have been brought in a TTAB cancellation proceeding.

The Third Circuit also rejected Howard’s argument that Beasley should have brought trademark cancellation claims in the district court in the first instance, noting that even though a federal district court has authority to order a cancellation, a TTAB petition is the primary means of securing a cancellation, and that forcing Beasley to litigate in the district court in the first instance would “encourage[] litigants to sit on their claims and undermine[] the Lanham Act’s adjudicative mechanisms.”

Practice Note: In the Third Circuit, plaintiffs are encouraged to bring their trademark cancellation claims before the TTAB in the first instance, rather than waiting to bring their trademark cancellation and trademark infringement claims together before [...]

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Fifth Circuit Affirms Jury Verdict on Willing Licensee FRAND Commitment

by and | Sep 30, 2021 |

The US Court of Appeals for the Fifth Circuit affirmed a jury verdict finding that a standard essential patent (SEP) owner did not breach its commitment to license its SEPs on fair, reasonable and non-discriminatory (FRAND) terms. The ruling establishes not only that willing licensee disputes can be subject to jury adjudication, but also that in willing licensee disputes, traditional patent damages factors such as apportionment are not required, since willing licensee disputes are based in contract law rather than patent law. HTC Corp. et al. v. Telefonaktiebolaget LM Ericsson et al., Case No. 19-40566 (5th Cir. Aug. 31, 2021) (Elrod, J.) The panel concluded that the district court properly instructed the jury on the meaning of FRAND and did not err in granting a post-trial declaratory judgment in the SEP owner’s favor.

Ericsson holds patents that are essential to the 2G, 3G, 4G and WLAN wireless communication standards and made a commitment to the European Telecommunications Standards Institute (ETSI) to license those SEPs on FRAND terms. In order to minimize the risk of anticompetitive behavior, standards setting organizations such as ETSI may exclude patented technology from their standards if an SEP holder does not commit to license the patent on FRAND terms.

HTC makes smartphones that implement Ericsson’s SEPs. In 2016, Ericsson and HTC were engaged in negotiations to renew their third licensing agreement. Negotiations broke down, and HTC filed a lawsuit alleging that Ericsson breached its commitment to provide a license on FRAND terms. HTC argued that Ericsson’s royalty rate should be based on the smallest salable patent-practicing unit (SSPPU) of HTC’s smartphones—specifically, the baseband processor component—rather than the net sales price of the entire end-user device. Ericsson counterclaimed for a declaration that it had complied with its FRAND obligation. Ericsson argued that its offer to HTC was fair and reasonable because its licenses to other similarly situated device makers were also based on the value of the end-user product, not just the smallest salable unit. After an earlier Fifth Circuit decision (applying French law) determined that the ETSI intellectual property rights policy contained no express language requiring SEP holders to base royalties on the SSPPU. The Court also noted that the prevailing industry standard has been to base FRAND licenses on the end-user device. Thus, a “reasonable person” would not interpret Ericsson’s FRAND commitment to mean that it must base its SEP royalties on the SSPPU.

The case proceeded to trial, and a Texas jury found that Ericsson did not breach its FRAND commitment. The district court also granted a declaratory judgment in Ericsson’s favor following trial, concluding that Ericsson’s offers were FRAND. HTC appealed to the Fifth Circuit, challenging the district court’s exclusion of several of its proposed jury instructions and the declaratory judgment in Ericsson’s favor. At trial, the district court had instructed the jury that whether a license is FRAND “will depend on the totality of the particular facts and circumstances,” and that “there is no fixed or required methodology for setting or calculating [...]

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Discretion to Authorize Hague Alternative Service on Foreign Defendant—it’s All About Time and Cost

by | Sep 23, 2021 |

The US Court of Appeals for the Federal Circuit denied a petition for a writ of mandamus, directing the US District Court for the Western District of Texas to dismiss multiple infringement actions for insufficient service of process and lack of personal jurisdiction where the plaintiff used alternative methods to effect service of process on a foreign defendant instead of the more conventional Hague Convention. Although the Court expressed reservations about the district court’s authorization of alternative service methods solely because of the Hague Convention’s slower and more expensive procedures, it found the decision to be within the district court’s discretion. In re: OnePlus Tech. (Shenzhen) Co., Ltd., Case No. 21-165 (Fed. Cir. Sept. 10, 2021) (non-precedential) (per curiam).

OnePlus is a Chinese consumer electronics manufacturing company. WSOU Investments d/b/a Brazos Licensing and Development is a non-practicing entity headquartered in Texas. Brazos filed five patent infringement actions against OnePlus and alleged that OnePlus had no place of business or employees in the United States. Although the People’s Republic of China is a signatory to the Hague Convention, Brazos decided not to attempt service on OnePlus by invoking the Hague Convention because of the burdens involved. Instead, Brazos requested that the district court grant leave under Fed. R. of Civ. Pro. 4(f)(3) to use alternative methods to effect service. Brazos made no showing that service under the Hague Convention had been tried and failed, would have been unlikely to succeed or was otherwise impracticable. The district court regarded the Hague Convention procedure as slow and expensive and granted the motion. Brazos served the complaint and summons on lawyers who represented OnePlus in the past and on OnePlus’s authorized agent for service in California.

OnePlus made a special appearance to challenge the sufficiency of the service and the district court’s jurisdiction over OnePlus. The district court rejected the challenge on the basis that Rule 4(f)(3) gave it discretion to order service on a foreign defendant by means other than those prescribed by the Hague Convention, and that the service was effective to grant the district court personal jurisdiction over OnePlus. OnePlus sought mandamus.

OnePlus’s mandamus petition requested that the Federal Circuit compel the district court to vacate its order authorizing alternative service and require that Brazos effect service pursuant to Hague Convention procedures. OnePlus argued that:

  • Brazos’s service was ineffective because it did not satisfy Texas state law.
  • As a result of the ineffective service, the district court lacked personal jurisdiction over OnePlus.
  • It was an abuse of discretion for the district court to authorize alternative service absent showing of a need to forego Hague Convention procedures.

OnePlus argued that the district court had jurisdiction over it only if OnePlus was subject to jurisdiction in Texas under the Texas long-arm statute. Because valid service under Texas law required the transmittal of documents abroad and triggered the Hague Convention (which Brazos did not use), OnePlus contended that there was no valid service and the district court therefore lacked personal jurisdiction over [...]

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TTAB Judicial Appointments are Determined Constitutionally Sound

by | Sep 16, 2021 |

Addressing for the first time whether the Supreme Court of the United States’ recent decision in United States v. Arthrex, Inc. also applied to the Trademark Trial and Appeal Board (TTAB), the US Court of Appeals for the Federal Circuit held that it did not, upholding the constitutionality of TTAB judicial appointments and affirming the TTAB’s cancellation of the SCHIEDMAYER trademark. Piano Factory Group, Inc. v Schiedmayer Celesta GMBH, Case No. 20-1196 (Fed. Cir. Sept. 1, 2021) (Bryson, J.)

Schiedmayer Celesta is the remaining corporate entity from a centuries-old line of German keyboard instrument manufacturers that uses the SCHIEDMAYER trademark in connection with the sale of its products. Sweet 16 Musical Properties and Piano Factory Group (collectively, Piano Factory) operated Hollywood Piano retail outlets where it sold “no-name” pianos purchased from China that were affixed with “Schiedmayer” labels. The owner of Piano Factory, believing the SCHIEDMAYER mark had been abandoned, applied to register the SCHIEDMAYER mark, and the registration issued in 2007.

In 2015, Schiedmayer filed a petition to cancel Piano Factory’s registration, alleging that it falsely suggested a connection with Schiedmayer and, thus, violated Section 2(a) of the Lanham Act. After the TTAB granted the petition to cancel, Piano Factory appealed.

Between the time that the parties filed their appeal briefs and the Federal Circuit issued its decision, the Supreme Court issued its decision in United States v. Arthrex, holding that the appointment of Patent Trial & Appeal Board (PTAB) administrative judges violated the Appointments Clause of Article II of the Constitution. On appeal, Piano Factory argued that the appointment of TTAB administrative judges (specifically, the administrative judges who issued the decision Piano Factory was appealing) was likewise unconstitutional. However, the Court disagreed, citing language from the Arthrex decision that “effectively confirmed that . . . the statutory scheme governing TTAB decision-making is not subject to the Appointments Clause problem the Court identified with regard to the PTAB.”

Additionally, Piano Factory cited the Trademark Modernization Act of 2020 (TMA)—which explicitly addressed this issue—for support. Piano Factory argued that since the TMA was not enacted until after the TTAB’s decision to cancel the SCHIEDMAYER registration, its enactment indicated that the TTAB was previously flawed. Again, the Federal Circuit disagreed, stating “the 2020 legislation itself makes clear that it merely confirmed, and did not alter” the framework that was in place prior to the TMA.

Piano Factory also challenged the merits of the TTAB’s decision, including its application of the four-factor test for false association, which considers:

  1. Whether the challenged mark is identical or nearly identical to a name previously used by another person;
  2. Whether the mark would be understood as a unique and unmistakable reference to that person;
  3. Whether the person referenced by the challenged mark was connected with the applicant’s activities and
  4. Whether the earlier user’s name has sufficient fame such that a connection with applicant would be presumed when the contested mark was used to identify the applicant’s goods.

Piano Factory disputed the [...]

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Federal Circuit: Contractual Arbitration Agreements Don’t Bind PTAB Institution Decisions

by | Sep 16, 2021 |

The US Court of Appeals for the Federal Circuit issued an order declining to intervene in inter partes review (IPR) institution decisions by the Patent Trial & Appeal Board (PTAB) and further denied a writ of mandamus to stay the PTAB’s IPR institution pending contractually required arbitration of the dispute between MaxPower and ROHM Japan. In re: MAXPOWER SEMICONDUCTOR, INC., Case No. 21-146 (Fed. Cir. Sept. 8, 2021) (Reyna, J.) (O’Malley, J., concurring in part and dissenting in part).

MaxPower owned patents directed to silicon transistor technology and licensed the patents to ROHM Japan. The license agreement contained an arbitration clause that applied to any disputes arising from or related to it—including patent validity. A dispute arose between the parties as to whether the patents covered certain silicon carbide transistor ROHM products. After MaxPower notified ROHM that it was initiating arbitration under the terms of their license agreement, ROHM challenged the validity of four MaxPower patents at the PTAB, which granted ROHM’s petitions to institute IPRs for the four challenged patents.

MaxPower appealed the PTAB’s institution decision to the Federal Circuit and sought a writ of mandamus to stay or terminate the IPR proceedings without prejudice to later institution if an arbitrator decided that IPR proceedings were appropriate.

The Federal Circuit held that the PTAB’s decision to institute IPR is non-appealable under 35 U.S.C. §314(d), which plainly “confirms the unavailability of jurisdiction” for the Court to hear direct appeals. The Court also found that MaxPower failed to meet the criteria necessary to invoke the collateral order doctrine, which allows appeals from interlocutory rulings if they decide an issue “separate from the merits of the case” that would not be reviewable after final judgment. The Court noted that MaxPower could still raise its arbitration-related challenges after the PTAB issued its final written decisions in these cases.

The Federal Circuit also rejected arguments that the appeals were authorized under 9 U.S.C. § 16(a)(1) and that MaxPower failed to show that its mandamus petition was not “merely a ‘means of avoiding the statutory prohibition on appellate review of agency institution decisions,’” citing the Court’s 2018 decision in In re Power Integrations.

Since the PTAB is not bound by private contracts enforcing arbitration agreements between parties, the Federal Circuit ruled that MaxPower had failed to show that the PTAB’s institution decisions in this case “clearly and indisputably exceeded its authority,” also stating that 35 U.S.C. § 294 does not authorize the PTAB to enforce private arbitration agreements.

In a partial dissent, Judge Kathleen O’Malley argued that the majority decision casts “a shadow over all agreements to arbitrate patent validity” and goes against strong federal policy in favor of enforcing arbitration agreements. While concurring with the majority that the PTAB’s IPR institution decisions are not appealable, Judge O’Malley stated that the case “provides exactly the sort of extraordinary circumstances under which mandamus review is appropriate” in what she called an important issue of first impression. The Supreme Court of the United States has held that [...]

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Material Information Submitted to FDA but Withheld from PTO Gives Rise to Inequitable Conduct

by | Sep 16, 2021 |

The US Court of Appeals for the Federal Circuit found prior art submitted to the US Food and Drug Administration (FDA), yet withheld from the US Patent & Trademark Office (PTO) during prosecution of an asserted patent, sufficient evidence for a finding of inequitable conduct. Belcher Pharmaceuticals, LLC v. Hospira, Inc., Case No. 20-1799 (Fed. Cir. Sept. 1, 2021) (Reyna, J.)

The patent in issue relates to injectable formulations of l-epinephrine. Epinephrine is a hormone that has been on the market since approximately 1938 and is used for a variety of medical purposes. It is also known that l-epinephrine degrades into a more potent isomer known as d-epinephrine. L-epinephrine also degrades into an impurity known as adrenalone through a process called oxidation.

In 2012, Belcher first submitted a New Drug Application (NDA) for a 1 mg/mL injectable l-epinephrine formulation. The NDA was literature-based, meaning that Belcher did not perform any clinical or non-clinical studies on its epinephrine formulation to support its application. Among the materials submitted to the FDA was an article by Stepensky et al to support its statement that “racemization of the enantiomerically pure L-Epinephrine isomer in injectable formulations of epinephrine is a well-known process.” It also submitted data from Swiss pharmaceutical company Sintetica SA’s formulation that had a pH range of 3.1 – 3.3 and undetectable levels of adrenalone. Ultimately, Belcher pursued a formulation with a similar pH range of 2.8 – 3.3.

In 2014, Belcher filed a patent application that was ultimately issued as the asserted patent. The patent taught that increasing the in-process pH to 2.8 – 3.3 unexpectedly reduced the racemization of l-epinephrine to d-epinephrine at release by approximately two thirds. The asserted claims covered pharmaceutical epinephrine formulations having a pH between 2.8 – 3.3 and certain concentrations of l-epinephrine, d-epinephrine and adrenalone at the time of release and 12 months later.

The prosecution of the application involved a single office action in which the pending claims were rejected in view of Helenek. The examiner explained that Helenek taught 1 mg/ml of epinephrine injection that, among other things, had a pH range of 2.2 – 5.0. Belcher overcame this rejection by arguing that Helenek did not render obvious the claimed range of 2.8 – 3.3 because the claimed range was unexpectedly found to be critical to reduce racemization of l-epinephrine.

Hospiria also submitted an NDA seeking approval of an injectable l-epinephrine formulation, which included a certification under 21 U.S.C. § 355(b)(2)(A)(iv)(Paragraph IV) that the asserted patent’s claims were invalid, unenforceable and/or not infringed by Hospira’s NDA product. Belcher subsequently sued Hospira for patent infringement.

During trial, Darren Rubin, Belcher’s Chief Science Officer, testified that in his role at Belcher, he was involved in the drafting and development of the NDA and in the prosecution of the asserted patent—including drafting the claims and specification and responding to the examiner’s office action. Darren admitted he knew of Stepensky before the application was filed and that he possessed a label for a 1 mg/mL epinephrine product marked [...]

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Damage Expert Testimony Excluded for Failure to Disclose Evidence and to Apportion

by | Sep 9, 2021 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s decision to preclude a damage expert from characterizing license agreements and opining on a reasonable royalty rate where the sponsoring party failed to produce key documents and to apportion for non-patented features. MLC Intellectual Property, LLC v. Micron Technology, Inc., Case No. 20-1413 (Fed. Cir. Aug. 26, 2021) (Stoll, J.)

MLC sued Micron for infringing claims of a patent relating to programing multi-level memory cells. In his expert report, MLC’s damage expert, Michael Milani, attempted to reconstruct the hypothetical negotiation. Milani opined on two separate approaches to determining the royalty base: A comparable license and the smallest saleable patent practicing unit.

Milani considered each of the Georgia-Pacific factors to determine a reasonable royalty rate. He determined that a Hynix Semiconductor license agreement was relevant, notwithstanding that it required a lump sum payment for a non-exclusive license to a patent portfolio containing the asserted patent rather than a royalty rate. Milani relied on a most favored customer provision that contemplated Hynix paying less for the patents if the licensor granted a license at a royalty rate of less than 0.25% to any new licensee to arrive at his royalty rate. Milani applied this rate to another lump sum agreement MLC had with Toshiba Corporation. To support his opinion, Milani relied on extrinsic evidence, including summaries of negotiations involving the asserted patent and another alleged infringer and letters and memorandums with other licensees—all contemplating a 0.25% royalty rate. Micron moved to exclude Milani’s testimony.

Micron filed a motion in limine to preclude Milani from mischaracterizing the license agreements as reflecting a 0.25% royalty rate. Micron moved to strike portions of Milani’s expert report under Fed. R. Civ. Pro. 37 as based on facts, evidence and theories that MLC disclosed for the first time in its damage expert report. Micron further filed a Daubert motion, seeking to exclude Milani’s reasonable royalty opinion for failure to apportion out the value of non-patented features. The district court granted all three motions.

The district court rejected Milani’s reliance on the most favored customer provision in the Hynix agreement for the 0.25% royalty rate, finding that the provision did not apply the rate to the lump sum nor did it provide any insight into how the lump sum was calculated. The district court also determined that Milani did not base his testimony on sufficient facts or data, and his opinion was not the product of reliable principles and methods. Finally, the district court found that MLC did not disclose the extrinsic evidence relied on by Milani to reflect the 0.25% rate, and therefore MLC could not rely on that evidence. Lastly, the district court determined that there was no evidence supporting Milani’s opinion that the 0.25% rate apportioned non-patented features of the accused products. MLC filed an interlocutory appeal.

The Federal Circuit found that Milani’s testimony relating to the 0.25% royalty rate rested on an inference from the most favored customer clause that went [...]

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Another Genus Claim Bites the Dust for Lack of Written Description

by | Sep 9, 2021 |

Addressing the issue of written description in the context of antibody-related genus claims, the US Court of Appeals for the Federal Circuit reversed a $1.2 billion jury verdict and found genus claims using functional language invalid for lack of written description. Juno Therapeutics, Inc. v. Kite Pharma, Inc., Case No. 20-1758 (Fed. Cir. Aug. 26, 2021) (Moore, J.)

Kite’s YESCARTA® is a therapy in which a patient’s T cells are engineered to express a chimeric antigen receptor (CAR) to target the antigen CD19. Juno sued Kite, alleging infringement of a patent relating to a nucleic acid polymer encoding a three-part CAR for a T cell. The three-part CAR comprises:

  1. An intracellular domain of the CD3 ζ (zeta) chain, a signaling domain that is activated to create an initial immune response
  2. A costimulatory region comprising of a specific amino acid sequence (here, a specific CD28 sequence) that, when activated, directs the T cells to multiply
  3. A binding element that determines what target molecule or antigen the CAR can bind to, such as a single-chain antibody variable fragment (scFV).

Juno’s patent disclosed two scFVs (one that binds CD19 and another that binds PSMA) but did not disclose the amino acid sequence of either scFV.

After a two-week trial, the jury reached a verdict in Juno’s favor, finding in relevant part that Kite failed to prove that any of the asserted claims were invalid for lack of written description or enablement. The jury awarded damages amounting to a $585 million upfront payment and an almost 28% running royalty. The district court denied Kite’s motions for judgment as a matter of law and enhanced the total award to approximately $1.2 billion in addition to the 28% running royalty. Kite appealed.

The Federal Circuit reversed, concluding that no reasonable jury could find adequate written description because the patent disclosed neither representative species nor common structural features of the claimed scFV genus to identify which of the millions of billions of scFVs would function as claimed. Turning first to lack of representative species, the Court explained that the broadest asserted claims cover any scFV that binds to any target of clinical interest but fails to provide a representative sample of species within, or defining characteristics for, that expansive genus. The Court also disagreed that the two working embodiments in the patent were representative of the entire genus of vast number of possible scFVs that bind to an undetermined number of targets without more in the disclosure (such as the characteristics of the exemplary scFVs that allow them to bind to particular targets or nucleotide sequences). The Court stated that even if such scFVs were known as Juno argued, the specification provided no means of distinguishing which scFVs would bind to which targets.

Turning next to lack of structural features common to the claimed genus, the Federal Circuit held that general assertions that scFVs generally have a common structure in the context of the technology in this case were insufficient because an scFV with the [...]

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