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The Skinny Label That Wasn’t—Federal Circuit Reinstates Induced Infringement Verdict

by | Aug 12, 2021 |

The US Court of Appeals for the Federal Circuit vacated the district court’s grant of judgment as a matter of law (JMOL) of non-infringement where substantial evidence supported the jury’s verdict of induced infringement by an attempted “skinny label” that nonetheless encouraged doctors to engage in a patented use. GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., Case Nos. 18-1876, -2023 (Fed. Cir. Aug. 5, 2021) (Moore, C.J.) (Prost, J., dissenting).

GlaxoSmithKline LLC (GSK) sells a drug called carvedilol (brand name Coreg®), which is approved for three indications: Hypertension, congestive heart failure (CHF) and left ventricular dysfunction following a myocardial infarction (post-MI LVD). In 2002, Teva filed an abbreviated new drug application (ANDA) for US Food and Drug Administration (FDA) approval of its generic carvedilol for all three indications. At that time, GSK’s patent on the carvedilol compound was still in force; Teva certified that it would not launch its product until the patent expired in 2007. GSK also had a second patent on a method of treating CHF using carvedilol and a second agent. In 2002, Teva sent GSK a Paragraph IV notice contending that the claims of that patent were invalid over prior art. Rather than sue Teva, GSK applied for reissue of the patent. In 2004, Teva received FDA “tentative approval” for its ANDA “for the treatment of heart failure and hypertension,” which was to become effective at the expiry of the compound patent in 2007.

In January 2008, the method-of-use patent reissued with claims directed to a method of decreasing mortality caused by CHF by administering carvedilol with at least one other therapeutic agent. Just before its launch in 2007, Teva certified to the FDA that its label would not include the indication listed in the Orange Book as covered by the original method-of-use patent (i.e., “decreasing mortality caused by congestive heart failure”), and thus included only the hypertension and post-MI LVD indications. Teva’s press releases stated that its generic carvedilol was “indicated for treatment of heart failure and hypertension.” In 2011, the FDA asked Teva to revise its labeling to be identical with GSK’s. Teva obliged (listing again the CHF indication) and took the position that it did not need to provide certification for the reissued patent because it received final approval of its ANDA before the patent reissued. GSK sued.

GSK won a jury verdict that the challenged patents had not been shown to be invalid and that Teva was liable for induced infringement. At trial, GSK contended—and the jury heard evidence—that post-MI LVD is a form (and fell within the Court’s construction) of CHF such that Teva’s attempted skinny label nonetheless encouraged doctors to engage in a patented use. After trial, however, the district court granted JMOL of non-infringement because the CHF and post-MI LVD indications were different. On appeal, the Federal Circuit found that substantial evidence supported the implied jury, finding that post-MI LVD is a form of CHF such that the label with the post-MI LVD indication induced infringement of the reissued [...]

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As Due Process Recognizes, it’s Hard to Shoot at a Moving Claim Construction Target

by | Aug 5, 2021 |

The US Court of Appeals for the Federal Circuit vacated several Patent Trial & Appeal Board (PTAB) decisions as violating due process and the Administrative Procedure Act (APA), referencing the parties’ inability to respond to the PTAB’s sua sponte construction of a term on which the parties had previously agreed. Qualcomm Inc. v. Intel Corp., Case Nos. 20-1589; -1594 (Fed. Cir. July 27, 2021) (Moore, C.J.)

After Qualcomm sued Intel over a patent directed to techniques for generating a power tracking supply voltage for a circuit that processes multiple radio frequency signals simultaneously, Intel filed six inter partes review (IPR) petitions challenging the validity of Qualcomm’s patents. In each petition, Intel proposed that the claim term “a plurality of carrier aggregated transmit signals” meant “signals for transmission on multiple carriers at the same time to increase the bandwidth for a user.” Qualcomm proposed a different construction: “signals from a single terminal utilizing multiple component carriers which provide extended transmission bandwidth for a user transmission from the single terminal.” Neither party disputed that the signals were required to increase user bandwidth, either at the PTAB or in a parallel proceeding before the US International Trade Commission (USITC) where the USITC adopted a construction—including the increased bandwidth requirement.

However, during the oral hearing, one of the administrative patent judges (APJs) asked Intel counsel about the inclusion of the bandwidth limitation in the claim construction. No other APJ raised, or asked Qualcomm, any questions about the increased bandwidth requirement in the claim construction. The day after the hearing, the PTAB sua sponte ordered additional briefing on the meaning of other claim terms that had been extensively discussed at the hearing.

The PTAB ultimately issued six final written decisions concluding that all challenged claims were unpatentable. In doing so, the PTAB omitted any requirement that the signals increase or extend bandwidth in construing the term “a plurality of carrier aggregated transmit signals” to mean “signals for transmission on multiple carriers.” The PTAB also held that “means for determining a single power tracking signal” (power tracker limitation) was a means-plus-function limitation and that an integrated circuit (IC) board, the “power tracker 582,” was the corresponding structure.

Qualcomm timely appealed, arguing that 1) it was not afforded notice of, or an adequate opportunity to respond to, the PTAB’s construction of “a plurality of carrier aggregated transmit signals” and 2) that the PTAB’s construction of the power tracker limitation was erroneous for failing to include an algorithm in the corresponding structure.

NOTICE AND OPPORTUNITY TO RESPOND TO THE PTAB’S CONSTRUCTION

The Federal Circuit has discussed the administrative and notice requirements provided by the APA and due process in IPR proceedings: “[a] patent owner in [an IPR] is undoubtedly entitled to notice of and a fair opportunity to meet the grounds of rejection” (Belden v. Berk-Tek). The Court observed that for IPRs, the PTAB must “timely inform” the patent owner of “the matters of fact and law asserted” and, in terms of notice, “must provide ‘all interested [...]

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Even Judges Have a Boss: PTAB Must Sufficiently Articulate its Obviousness Reasoning

by | Jul 29, 2021 |

Addressing the sufficiency of the Patent Trial & Appeal Board’s (PTAB) justification of its inter partes review (IPR) determination, the US Court of Appeals for the Federal Circuit reversed the PTAB’s obviousness determinations, concluding that the PTAB’s findings regarding motivation to combine were not supported by substantial evidence. Chemours Company FC, LLC v. Daikin Industries, Ltd., Daikin America, Inc., Case No. 20-1289, -1290 (Fed. Cir., July 21, 2021) (Reyna, J.) (Dyk, J., concurring in part and dissenting in part).

Chemours, owner of the challenged patents, appealed the PTAB’s final written decisions in two IPRs initiated by Daikin. The challenged claims relate to a unique polymer for insulating communication cables formed by pulling wires through melted polymer to coat and insulate the wires, a process known as “extrusion.” The challenged claims of the patents recite that the polymer has a specific melt flow range of about 30+/- g/10 mins. The polymer’s melt flow range correlates with how fast the melted polymer can flow under pressure during extrusion. A higher melt flow rate means a faster coating of the polymer onto a wire. During the IPRs, the PTAB found all challenged claims unpatentable as obvious.

The Federal Circuit reviews the PTAB’s legal determinations de novo and its factual findings for substantial evidence, which “requires more than a ‘mere scintilla’ and must be enough such that a reasonable mind could accept the evidence as adequate to support the conclusion.” Obviousness is a question of law necessarily made on underlying findings of fact, and in making factual findings, the PTAB “must have both an adequate evidentiary basis for its findings and articulate a satisfactory explanation for those findings.”

In this instance, the Federal Circuit found that the PTAB’s obviousness findings were not supported by substantial evidence. According to the Court, while the PTAB may rely on prior art other than the references being applied or combined to inform itself of the state of the art at the time of the invention, the scope of the relevant prior art encompasses only that which is “’reasonably pertinent to the particular problem with which the inventor was involved.”’ Here, the Court explained that the only prior art reference relied on was not appropriate because it expressly taught away from the claimed invention and relied on teachings from other references that were not concerned with the particular problems the prior art sought to solve. As the Court noted, the PTAB “did not adequately grapple with why a skilled artisan would find it obvious to increase [the reference’s] melt flow rate to [the] claimed range while retaining its critical ‘very narrow molecular-weight distribution.’” To support its obviousness conclusion, the PTAB needed “competent proof showing a skilled artisan would have been motivated to, and reasonably expected to be able to, increase the melt flow rate of [the reference’s] polymer to the claimed range when all known methods for doing so would go against [the reference’s] invention by broadening molecular weight distribution.” By failing to provide its reasoning, the PTAB relied [...]

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PTO Updates Arthrex Guidance

by | Jul 29, 2021 |

The US Patent & Trademark Office (PTO) updated its June 29, 2021, interim procedure to implement the Supreme Court of the United States’ decision in U.S. v. Arthrex, Inc., and specifically updated the Arthrex Q&As section. The PTO’s July 20, 2021, updates address the effect of Arthrex on Patent Trial & Appeal Board (PTAB) proceedings generally and ongoing proceedings in particular. In Arthrex, the Supreme Court held that appointment of PTAB administrative patent judges violated the Appointments Clause of the Constitution, and that the proper remedy was to vest the PTO director with discretion to overturn the PTAB’s decisions.

In section A of the Q&As, pertaining to the effect of Arthrex on PTAB proceedings, the PTO explained that the director has the option to sua sponte initiate director review of any final written decision at any point before the filing of a notice of appeal or before the time for filing such a notice has expired. The updated Q&As further explain that a request for director review is not an opportunity for a party to make new arguments or submit new evidence and imposes a 15-page limit on any request. The updated Q&As also clarify the mechanism to request review by the director. The update clarifies that a party cannot request both director review and a panel rehearing after the issuance of a final written decision, and if a party requests both it will be treated as a request for director review. However, if a panel rehearing is granted, a party can request director review of the rehearing panel decision.

In section B of the update, pertaining to the effect of Arthrex on ongoing PTAB proceedings, the PTO clarified the deadline for requesting a rehearing by the director and the circumstances under which the director will consider granting extensions of the rehearing deadlines.

In addition, the PTO added a new section, section D, pertaining to the interim internal process for director review. In section D, the Q&As address:

  1. What happens to a director review request when it is received by the PTO?
  2. What criteria does the advisory committee use when evaluating director review requests?
  3. How will the director identify decisions for sua sponte director review?

Regarding 1), the Q&As explain that requests for director review will be evaluated by an advisory committee established by the director. Regarding 2), the Q&As explain there is no exclusive list of criteria, but list criteria the advisory committee may consider. Regarding 3), the Q&As explain that the PTAB internal management review team will alert the director to decisions that may warrant director review.



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Unified at Last? Germany’s Constitutional Court Removes UPC Hurdle

by and | Jul 22, 2021 | ,

On July 9, 2021, Germany’s Federal Constitutional Court rejected a pair of applications for a preliminary injunction directed against the German Approval Act on the Agreement on a Unified Patent Court (UPC) (decision of June 23, 2021, 2 BvR 2216/20). Thus, German ratification of the Agreement now only requires a presidential signature of the Approval Act and the subsequent deposition of the ratification.

The Constitutional Court’s press release can be found here (in English and German). The text of the decision itself is available here (in German only).

BACKGROUND

So far, 15 EU Member States have ratified the 2013 Agreement on a UPC. In recent years, the ratification process has faced several unexpected hurdles and proved to be cumbersome. Last year, post-Brexit, the United Kingdom formally revoked its ratification (as of July 20, 2020). Since then, of the ratifications required for entry into force, only Germany’s remained pending.

Germany’s Federal Constitutional Court annulled a first national ratification Approval Act on February 13, 2020, after a successful constitutional complaint. Now, following an apparently unsuccessful second round of constitutional complaints, nothing remains to prevent the second Approval Act, which was redrafted and approved by the German legislator in fall 2020, from being formally signed by the German president.

GROUNDS FOR THE CONSTITUTIONAL COURT’S DECISION

The Constitutional Court stated that the constitutional complaints were inadmissible on the merits because the complainants had not sufficiently substantiated the possibility of a violation of their fundamental rights.

Under German constitutional law, national legal acts may only transfer sovereign rights to the European Union or EU-related institutions under certain conditions. In particular, in order for a national act to be deemed unconstitutional, it must be established that the transfer of rights would undermine the German constitution or, in the words of German constitutional law, would affect the integral core or identity of the German constitution. In its 2020 decision, the Federal Constitutional Court recognized that the first Approval Act lacked the two-thirds majority in parliament required for such a significant transfer of sovereign rights. The first Approval Act was adopted unanimously, but only 35 of the approximately 600 German members of parliament were present for the vote, which was found to be too few for such a far-reaching piece of legislation.

In principle, the hurdles for a successful constitutional complaint are high. The Approval Act represents a democratically legitimized majority decision by a constitutional body. Now 570 members of parliament have voted in favor of the second Approval Act. Therefore, in the present decision, the Federal Constitutional Court (for the first time) considered the merits of the law rather than the formalities of passage.

In the present case, the complainants argued that Articles 6 et seq. of the UPC Agreement violated the independence of judges established in the German constitution and the constitutionally guaranteed principle of the rule of law due to the appointment of the judges of the UPC for six years, their possible reappointment and the [...]

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Venue Manipulation Obviates Geographically Bounded Claims in Venue Analysis

by | Jul 8, 2021 |

The US Court of Appeals for the Federal Circuit issued a rare grant of two mandamus petitions directing the US District Court for the Western District of Texas to transfer the underlying patent infringement actions to the US District Court for the Northern District of California pursuant to 28 U.S.C. § 1404(a). In re: Samsung Elecs. Co., Ltd., Case Nos. 21-139, -140 (Fed. Cir. June 30, 2021) (Dyk, J.)

Ikorongo Technology owned four patents directed to functionalities allegedly performed by applications run on the accused mobile products sold by Samsung and LG. Ikorongo Technology assigned to Ikorongo Texas—an entity formed only weeks before—exclusive rights to sue for infringement of those patents within specified parts of the state of Texas, including certain counties in the Western District of Texas, while retaining the rights to the patents in the rest of the United States.

Ten days later, Ikorongo Texas sued Samsung and LG in the Western District of Texas. Although Ikorongo Texas claimed to be unrelated to Ikorongo Technology, the operative complaints indicated that the same five individuals owned both Ikorongo Texas and Ikorongo Technology, and that both entities shared office space in North Carolina.

The day after filing the initial complaints, Ikorongo Texas and Ikorongo Technology filed first amended complaints, this time naming both Ikorongo Technology and Ikorongo Texas as co-plaintiffs, noting that together Ikorongo Texas and Ikorongo Technology owned the entire right, title and interest in the asserted patents, including the right to sue for past, present and future damages throughout the United States and the world.

Samsung and LG separately moved under 28 U.S.C. § 1404(a) to transfer the suits to the Northern District of California, arguing that “three of the five accused third-party applications were developed in Northern California, where those third parties conduct significant business activities and no application was developed or researched in Western Texas.” Samsung and LG also argued that potential witnesses and sources of proof were located in the Northern District of California.

The district court first concluded that Samsung and LG failed to establish § 1404(a)’s threshold requirement that the complaints “might have been brought” in the Northern District of California. Because Ikorongo Texas’s rights under the asserted patents were limited to the state of Texas and could not have been infringed in the Northern District of California, the district court held that venue over the entirety of the actions was improper under § 1400(b), which governs venue in patent infringement cases. Alternatively, the district court analyzed the traditional public- and private-interest factors, finding that defendants had not met their burden to show cause for transfer. Samsung filed for mandamus to the Federal Circuit.

The Federal Circuit found that the district court erroneously disregarded Ikorongo Technology and Ikorongo Texas’s attempts to manipulate venue when analyzing venue under § 1404(b). While no act of infringement of Ikorongo Texas’s geographically bounded rights took place in the Northern District of California, the Federal Circuit determined that “the presence of Ikorongo Texas is plainly recent, ephemeral, and [...]

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Unsigned, Sealed, Delivered: PTO Eliminates Handwritten Signatures for Certain OED Correspondence and Credit Card Payments

by | Jul 8, 2021 |

The US Patent & Trademark Office (PTO) eliminated the requirement for original handwritten signatures on certain correspondence with the Office of Enrollment and Discipline (OED) and on certain payments made to the PTO by credit card. The handwritten signature requirements of 37 CFR § 1.4(e) were deleted effective July 2, 2021.

37 CFR § 1.4(e)(1) previously required correspondence related to registration to practice before the PTO in patent cases, enrollment and disciplinary investigations, and disciplinary proceedings to be submitted with an original handwritten signature personally signed in permanent dark ink or its equivalent. 37 CFR § 1.4(e)(2) required the same for payments by credit cards where the payment was not made via the electronic filing system. Elimination of the entirety of § 1.4(e) allows the use of facsimile transmissions and S-signatures in enrollment and disciplinary matters before the OED, and for payments by credit card.



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Don’t Let Prophetic Examples Work Against You

by | Jul 8, 2021 |

On July 1, 2021, the US Patent & Trademark Office (PTO) issued a notice reminding patent applicants that when their applications contain both prophetic and working examples, they must make a clear distinction between the two.

Prophetic examples illustrate reasonably expected results or anticipated results. They stem from experiments that have not been actually performed and are instead hypothetical simulations. In contrast, working examples result from experiments that were actually performed. In order to aid in distinguishing between the two example types within a patent application, prophetic examples should be written only in the future or present tense—not in the past tense. Prophetic examples cannot be used to meet the written description and enablement requirements for a patent application.

The PTO’s recent notice underscores the importance of the applicant’s duty to clearly distinguish between prophetic and working examples: “[k]nowingly asserting in a patent application that a certain result ‘was run’ or an experiment ‘was conducted’ when, in fact, the experiment was not conducted or the result was not obtained is fraud.”



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Federal Circuit Lacks Appellate Jurisdiction over Standalone Walker Process Claims

by and | Jun 24, 2021 | ,

The US Court of Appeals for the Federal Circuit ordered the transfer of a case asserting standalone Walker Process antitrust claims involving an unenforceable patent to the regional circuit, in this case the US Court of Appeals for the Fifth Circuit. Chandler v. Phoenix Services LLC, Case No. 20-1848 (Fed Cir. June 10, 2021) (Hughes, J.) The case originated in the US District Court for the Northern District of Texas, over which the Fifth Circuit has appellate jurisdiction. The decision to transfer was based on a subject matter jurisdiction analysis for Walker Process claims. The Federal Circuit reiterated that its precedent does not mandate exclusive Federal Circuit jurisdiction over all Walker Process cases.

In 2006, Phoenix Services and Mark Fisher (collectively, Phoenix) acquired a company called Heat On-The-Fly and its patent to protect a purported proprietary fracking process. Heat-On-The-Fly, and later Phoenix, sought to enforce the patent against numerous parties. During the patent application process, however, Heat On-The-Fly had failed to disclose numerous public uses of the fracking process prior to the application filing. In 2018, in an unrelated case, Energy Heating, LLC v. Heat On-The-Fly, the Federal Circuit, held that “failure to disclose prior uses of the fracking process rendered the . . . patent unenforceable due to inequitable conduct.” The plaintiffs in the case at hand, Ronald Chandler, Chandler MFG., Newco Enterprises and Supertherm Heating Services (collectively, Chandler), alleged that Phoenix’s continued enforcement of the patent violated Walker Process pursuant to § 2 of the Sherman Act.

Walker Process monopolization claims originate from a 1965 Supreme Court decision that recognized an antitrust cause of action under the Sherman and Clayton Acts when a party fraudulently obtains a patent for the purpose of attempted monopolization. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp. To succeed on a Walker Process claim, a plaintiff must satisfy two elements:

  • The plaintiff must show that the defendant obtained the patent through knowing and willful fraud on the US Patent & Trademark Office and enforced that patent with knowledge of its fraudulent procurement.
  • The plaintiff must be able to satisfy all other elements for a Sherman Act monopolization claim.

Pursuant to 28 U.S.C. § 1295(a)(1), the Federal Circuit retains jurisdiction over any civil case arising under any act of Congress relating to patents. In this instance, the Federal Circuit stated that Walker Process antitrust claims may relate to patents “in the colloquial use of the term,” but under 1988 Supreme Court precedent, Christianson v. Colt Indus., the Federal Circuit’s jurisdiction only extends to cases where the cause of action is created under federal patent law, or where the plaintiff’s right to relief “necessarily depends on resolution of a substantial question of federal patent law.”

Here, the Federal Circuit relied on its own 2018 precedent where it analyzed subject matter jurisdiction for Walker Process claims. Xitronix Corp v. KLA-Tencor Corp. (Xitronix I). Xitronix I involved alleged fraud by the defendants to obtain a patent. The Court acknowledged [...]

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10th Circuit Falls into Line on Exceptionality Doctrine in Lanham Act Cases

by | Jun 17, 2021 |

Addressing whether the term “exceptional case” in the Patent Act differs in meaning from the same term used in the Lanham Act, the US Court of Appeals for the 10th Circuit upheld an award of attorneys’ fees granted under a motion filed under 15 U.S.C. 1117(a) and clarified that the exceptional case standard in the Lanham Act parallels the standard in the Patent Act. Derma Pen, LLC v. 4EverYoung Limited, et al., Case No. 19-4114 (10th Cir. June 8, 2021) (Lucero, J.)

In 2013, Derma Pen sued several companies for infringement of the “DERMAPEN” mark. Four years later, Derma Pen was granted a permanent injunction prohibiting the companies and “their officers, agents, servants, employees, attorneys, licensees, and anyone in active concert or participation with, aiding, assisting, or enabling Defendants” from using the mark. A few months later, Derma Pen filed for an order of contempt against one of the defendants, Stene Marshall, alleging that Marshall, with the help of other actors (related parties), had been violating the earlier-issued injunction. During the subsequent proceedings, despite being the plaintiff, Derma Pen routinely failed to meet its discovery obligations, causing the related parties to file as many as six discovery motions and resulting in the imposition of sanctions on Derma Pen.

Following an evidentiary hearing, the district court found Marshall in contempt of the injunction, but concluded that the related parties took no part in Marshall’s violation. Subsequently, the related parties moved for attorneys’ fees incurred in the contempt proceeding under the Lanham Act, 15 U.S.C. 1117(a). The district court granted the motion and awarded more than $190,000 in fees based on application of the “exceptional case” standard set forth in the Supreme Court of the United States’ 2014 decision in Octane Fitness v. Icon Health & Fitness. Specifically, the district court decided that the case was “exceptional” because:

  • Derma Pen produced “no evidence of damages.”
  • “[T]he evidence showed [Derma Pen] had no right to enforce the injunction.”
  • “[T]he evidence showed that [the] trademark was abandoned.”
  • “[M]onetary sanctions were imposed on” Derma Pen for misconduct and delay during discovery.
  • Derma Pen was “entitled to no relief against the [related parties].”

Derma Pen appealed.

The 10th Circuit affirmed the district court’s holding and fees award for the related parties, noting Derma Pen’s misconduct and delay during discovery. In so doing, the Court adopted the Octane Fitness standard as applicable to cases brought under the Lanham Act.

Practice Note: The 10th Circuit noted that it was acting consistently with other circuits that have considered application of the Octane standard to fee disputes under the Lanham Act, citing LHO Chicago River, L.L.C. v. Perillo (7th Cir. 2019) (collecting cases); Xereas v. Heiss (DC Cir. 2021); and Safeway Transit LLC v. Disc. Party Bus, Inc. (8th Cir. 2020).



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