Fresh From the Bench: Recent Patent Cases From the Federal Circuit
Promega – The panel reverses summary judgment, holding that most of the patents in suit are invalid for lack of enablement. Also reversing the grant of JMOL regarding the so-called Tautz patent, the panel finds substantial support for the jury's infringement verdict of direct infringement and induced infringement under 35 U.S.C. § 271(f)(1). This ruling should enable Promega to collect at least some of the $52 million in damages awarded by the jury.
Myriad - Immediately after the Supreme Court's 2013 ruling that Myriad could not patent human genes, Ambry introduced a competing breast cancer test. Myriad sued, and its motion for preliminary injunction was denied because the district court felt Myriad's patents did not recite patentable subject matter. The Circuit affirms, ruling that neither naturally-occurring compositions of matter, nor synthetically created compositions that are structurally identical, are patent eligible.
Stryker Corp. – The panel affirms the jury's finding that the patents in suit are valid and infringed and its award of damages, but reverses the district court's judgment that the infringement was willful. The Circuit therefore vacates an award of treble damages and remands the case.
Promega Corp., et al.v. Life Technologies Corp., et al. , Fed. Cir. Case No. 2013-1011, 1029, 1376 (December 15, 2014)
Promega entered into limited licenses with Life Technologies under several patents directed to systems to compare DNA samples in paternity tests, to monitor bone marrow transplants, and for cancer testing. Promega later sued LifeTech, alleging that LifeTech was selling its kits for uses that fell outside of the terms of the license, thereby infringing Promega's patents. The district court determined that the Promega patents were not invalid for lack of enablement. The lower court also held that LifeTech could only be liable for infringement if more than one component of its kits came from the U.S., given the statutory language that "a substantial portion" of the components be American-made. Finally, the district court determined that the license was not so broad as to cover all the uses for which LifeTech was selling its kits.
1. Enablement of the Promega patents
The district court held that the patents need not enable unrecited elements covered by open-ended "comprising" claims. However, the panel disagrees. In this field of technology, introducing even a single STR locus to an existing loci multiplex significantly alters the chemistry of, and has an unpredictable effect on, whether the resulting multiplex will successfully co-amplify.
Promega repeatedly argued to the PTO that its then-pending claims were patentable because the prior art did not disclose "methods for selecting, coamplifying, and evaluating the specific sets of short tandem repeat loci" recited in the claims. According to Promega, this lack of disclosure was critical, as the state of the art in this technology area "did not disclose or suggest that any arbitrary combination of loci can be co-amplified without undue experimentation."
But when describing the scope of its claims for purposes of infringement, Promega sings a different tune. Despite the overwhelming evidence that the addition of a single locus to an existing loci combination can fundamentally transform the character of the resulting multiplex reaction, Promega argues that LifeTech's STR kits infringe its claims because any and all co-amplifying loci combinations that include the STR loci recited in the claims are encompassed by the claims. Promega has chosen broad claim language "at the peril of losing any claim that cannot be enabled across its full scope of coverage." Even if this testing process for any one compound would have been routine to a skilled artisan, if practicing the full scope of the claims required "more than routine experimentation," claims are invalid for lack of enablement. Since the Promega patents do not enable a skilled artisan to practice the full breadth of the claim scope without undue experimentation, the challenged claims of the Promega patents are invalid for lack of enablement.
2. Infringement of the Tautz patent
Since the four Promega patents are invalid for lack of enablement, the panel needs only to address the district court's grant of LifeTech's motion for JMOL of noninfringement of the Tautz patent. LifeTech's accused genetic testing kits include a primer mix, a PCR reaction mix, a buffer solution, control DNA, and a polymerase ( Taq), which is necessary for the PCR amplification. LifeTech manufactures this Taq polymerase component in the U.S. LifeTech then ships this component to its facility in the U.K. for incorporation into its accused genetic testing kits, which are sold worldwide, including in the U.S.
LifeTech admits that sales of these accused kits in the U.S. infringe the Tautz patent under 35 U.S.C. § 271(a). At trial, the jury also awarded lost profits to Promega based on worldwide sales of LifeTech's accused STR kits under 35 U.S.C. § 271(f)(1). The district court, however, granted LifeTech's motion for JMOL that Promega failed to prove infringement under § 271(f)(1), holding that (1) § 271(f)(1) requires the involvement of another, unrelated party to "actively induce the combination of components," and (2) a "substantial portion of the components" requires at least two components to be supplied from the U.S. The majority disagrees with the district court's reading of § 271(f)(1).
a. "Actively induce the combination"
The majority first holds that "to actively induce the combination" does not require involvement of a third party, and it is adequate simply to exhibit the specific intent to cause the combination of the components of a patented invention outside the United States.
To begin, the majority acknowledges that the word "induce" can suggest that one is influencing or persuading "another." However, "induce" also encompasses the more broad concept of "to bring about, to cause." Had Congress wanted to limit "induce" to actions completed by two separate parties, it could easily have done so by assigning liability only where one party actively induced another "to combine the patented components."
Congress enacted § 271(f) in response to a loophole brought to its attention by Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972). In Deepsouth, the Fifth Circuit affirmed an injunction barring use of an infringing shrimp deveining machine within the U.S. The infringer subsequently began making the parts of its enjoined shrimp deveining machine in the U.S., then exported those parts to its foreign buyers, who would ultimately assemble and use the completed machines abroad. The Supreme Court found that the unassembled export of the elements of the infringing shrimp deveining machine did not infringe the patent, which required the completed combination of those elements.
Congress responded to Deepsouth by enacting § 271(f), which closed the Deepsouth "loophole" by expanding the reach of the patent statute to capture certain domestic precursors to extraterritorial activity not previously considered as infringing. In terms of its policy goals, § 271(f)(1) sought to "prevent copiers from avoiding U.S. patents by supplying components of a patented product in this country so that the assembly of the components may be completed abroad."
b. "Substantial portion of the components of a patented invention"
The panel next addresses whether infringement under § 271(f)(1) requires at least two components to be supplied from the U.S. Section 271(f)(1) assigns infringement to anyone who supplies or causes to be supplied " all or a substantial portion of the components of a patented invention." The majority holds that there are circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the U.S. And, based on the facts of this case, the majority concludes that substantial evidence supports the jury's verdict that LifeTech is liable for infringement under § 271(f)(1) for shipping the Taq polymerase component of its accused genetic testing kits to its U.K. facility.
3. Infringement under 35 U.S.C. § 271(a)
At trial, LifeTech admitted that some of the sales of its accused genetic testing kits in the U.S. were "technically an infringement" of Promega's patents. Based on LifeTech's own admissions, which are supported in the record, LifeTech's kits made, used, or sold in the U.S. infringe the Tautz patent under 35 U.S.C. § 271(a). Therefore, because substantial evidence supports the jury's finding that LifeTech's accused kits infringe the Tautz patent under both § 271(a) and § 271(f)(1), the panel reverses the grant of LifeTech's motion for JMOL of noninfringement of the Tautz patent.
4. 2006 Cross License
The 2006 Cross License is a limited field-of-use license for "forensics and human identity applications." The district court ruled that the scope of the 2006 Cross License was limited to sales of LifeTech's STR kits used during "live" forensic investigations conducted by law enforcement agencies, and did not cover sales of the STR kits used for forensic research, education, and training at universities and other non-law enforcement bodies. The panel affirms this ruling.
Chief Judge Prost dissents from the majority's ruling on third party inducement, contending that the Supreme Court precedent does not allow a party to induce itself, and the loophole that was closed by Congress following the DeepSouth case should not be read to close all loopholes for territorial liability.
University of Utah Research Foundation, Myriad Genetics, Inc., et al. v. Ambry Genetics Corporation , Fed. Cir. Case No. 2014-1361, 1366 (December 17, 2014)
The Supreme Court addressed some of the patents at issue here in its June 13, 2013, opinion in Association for Molecular Pathology v. Myriad, 133 S. Ct. 2107 (2013), as did the Federal Circuit in Association for Molecular Pathology v. USPTO, 653 F.3d 1329 (Fed. Cir. 2011), vacated, 132 S. Ct. 1794 (2012), and Association for Molecular Pathology v. Myriad, 689 F.3d 1303 (Fed. Cir. 2012), aff'd in part, rev'd in part, 133 S. Ct. 2107 (2013). This case involves claims of those patents not previously considered by the Supreme Court or by the Circuit.
In the 1990s, Myriad and its partners discovered the precise locations and sequences of the BRCA1 and BRCA2 genes, mutations of which are linked to hereditary breast and ovarian cancers. By discovering the particular locations and sequences of the genes, Myriad was able to determine the typical sequences of the genes most often found in humans (i.e., the "wild-type" sequence for each), as well as mutations, which depart from the two wild-type sequences. Some mutations are harmless, but other mutations are correlated with an increased likelihood of developing particular cancers. By testing for the presence of these mutations, doctors can determine whether the patient is particularly prone to developing breast or ovarian cancer.
The Supreme Court, in its Myriad decision, held that claims directed to isolated DNA were drawn to patent-ineligible subject matter because the isolated DNA strands, which are naturally occurring and separated from the rest of the human genome, were natural phenomena. Immediately thereafter, generic competitors, including Ambry, entered the market for medical kits designed to test for susceptibility to particular kinds of cancer. Myriad sued Ambry and moved for preliminary injunction. The district court denied Myriad's motion, holding that the claims were likely drawn to ineligible subject matter.
Composition of matter claims
The four composition of matter claims are directed to primers, which are "short, synthetic, single-stranded DNA molecules that bind specifically to . . . intended target nucleotide sequences." In its 2013 Myriad decision, the Supreme Court held ineligible the isolated DNA claims, explaining: "Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes. The location and order of the nucleotides existed in nature before Myriad found them." Even if Myriad made a "groundbreaking, innovative, or even brilliant discovery," that is not enough. With respect to the isolated DNA, "Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention." The Court held that "genes and the information they encode are not patent eligible under § 101 simply because they have been isolated from the surrounding genetic material."
The cDNA claims, however, were held to be patent eligible under § 101. cDNA is an exon-only sequence, with no introns, that does not occur in nature, "except insofar as very short series of DNA may have no intervening introns to remove when creating cDNA." To the extent that the exon-only sequence does not exist in nature, the lab technician "unquestionably creates something new when cDNA is made."
The primers before us are not distinguishable from the isolated DNA found patent-ineligible in Myriad and are not similar to the cDNA found to be patent-eligible. Primers necessarily contain the identical sequence of the BRCA sequence directly opposite to the strand to which they are designed to bind. They are structurally identical to the ends of DNA strands found in nature. Contrary to Myriad's argument, it makes no difference that the identified gene sequences are synthetically replicated.
Claim 7, revised to include the language of claim 1, from which it depends, provides:
A method for screening germline of a human subject for an alteration of a BRCA1 gene which comprises comparing germline sequence of a BRCA1 gene or BRCA1 RNA from a tissue sample from said subject or a sequence of BRCA1 cDNA made from mRNA from said sample with germline sequences of wild-type BRCA1 gene, wild-type BRCA1 RNA or wild-type BRCA1 cDNA, wherein a difference in the sequence of the BRCA1 gene, BRCA1 RNA or BRCA1 cDNA of the subject from wild-type indicates an alteration in the BRCA1 gene in said subject[,]
wherein a germline nucleic acid sequence is compared by hybridizing a BRCA1 gene probe which specifically hybridizes to a BRCA1 allele to genomic DNA isolated from said sample and detecting the presence of a hybridization product wherein a presence of said product indicates the presence of said allele in the subject.
Ambry argues that Mayo is directly on point because the method claims here, as there, simply identify a law of nature, and apply conventional techniques. We need not decide if Mayo is directly on point here because the method claims before us suffer from a separate infirmity: they recite abstract ideas.
Laws of nature are not the only implicit exception to patentable subject matter identified by 35 U.S.C. § 101. Natural phenomena and abstract ideas are also not patentable. See Alice Corp. v. CLS Bank Int'l, 134 S. Ct. 2347, 2354 (2014). In Alice the Supreme Court reiterated its two-step test to determine patent eligibility for any claims that allegedly encompass abstract ideas. First, "we determine whether the claims at issue are directed to a patent-ineligible concept. If so, we then ask, 'what else is there in the claims before us?'" That is, we next ask whether the remaining elements, either in isolation or combination with the other non-patent-ineligible elements, are sufficient to "'transform the nature of the claim' into a patent-eligible application." Put another way, there must be a further "inventive concept" to take the claim into the realm of patent eligibility.
Here, we treat separately the first paragraphs of claims 7 and 8, which describe the comparison of wild-type genetic sequences with the subject's genetic sequence and correspond to the first step of Alice, and the second paragraphs, which describe the techniques to be used in making the comparisons and correspond to the second step of Alice.
We have already addressed the first paragraphs—the comparison step—in our own 2012 Myriad decision. Claims 7 and 8 at issue here depend from claim 1. Claim 1, which is the first paragraph of claims 7 and 8, is the comparison step. In our 2012 decision, we held that claim 1 was patent ineligible because it claimed an abstract mental process of 'comparing' and 'analyzing' two gene sequences.
Having determined that the comparison steps of claims 7 and 8 are abstract ideas, we move to the second step of Alice and ask whether the particular mechanism for the comparisons added by claims 7 or 8 renders the claims patent-eligible. For this step, Alice dictates that we ask whether the remaining elements, either in isolation or combination with the other non-patent-ineligible elements, are sufficient to "'transform the nature of the claim' into a patent-eligible application." There must be a further inventive concept to take the claim into the realm of patent-eligibility. The second paragraph of claim 7 describes the way in which the sequences are compared: they are compared by 1) hybridizing a BRCA gene probe and 2) detecting the presence of a hybridization product. Similarly, claim 8 requires 1) amplification of the BRCA1 gene and 2) sequencing of the amplified nucleic acids.
The non-patent-ineligible elements of claims 7 and 8 do not add "enough" to make the claims as a whole patent-eligible. The district court found, and Myriad does not challenge, that the elements of the second paragraphs of claims 7 and 8 "set forth well-understood, routine and conventional activity engaged in by scientists at the time of Myriad's patent applications." Nothing is added by identifying the techniques to be used in making the comparison because those comparison techniques were the well-understood, routine, and conventional techniques that a scientist would have thought of when instructed to compare two gene sequences.
Stryker Corporation v. Zimmer, Inc., Fed. Cir. Case No. 2013-1668 (December 19, 2014)
The patents at issue concern pulsed lavage devices. Pulsed lavage devices deliver pressurized irrigation for certain medical therapies, including orthopedic procedures and cleaning wounds. The particular devices at issue in this case are portable, battery powered, and handheld. They include both suction and discharge tubes, so they both spray fluid from an external source and also suction off fluid and debris. These devices represent an improvement over older pulsed lavage systems that required a central power source and external mechanical pumps, which meant they needed to be wheeled around the hospital.
The panel affirms the district court's claim construction, the judgment of infringement, and the finding that the patents in suit are not invalid. However, the panel concludes that Zimmer's claim construction and non-infringement arguments were not unreasonable. Because the Circuit reverses the finding of willful infringement and the award of attorney fees, this summary will focus on those parts of the opinion.
The '329 Patent
The only asserted claim of the '329 patent describes features of a "pulsed irrigation surgical handpiece." According to this claim, the handpiece comprises a "hollow housing," which includes a "handle," and, in relevant part in this case, "an electric motor spaced between the top and bottom of said handle and located in said handle" adjacent to an irrigation tube within the housing. Zimmer contends that this limitation is critical for the purposes of infringement because, as indicated by the arrows below, the motor in its accused Pulsavac Plus device is not located in the handle—rather, it is located in the "nub" of the handpiece, the protrusion behind the barrel.
To establish willful infringement, the patentee has the burden of showing "by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc). "The state of mind of the accused infringer is not relevant to this objective inquiry." Only if the patentee establishes this "threshold objective standard" does the inquiry then move on to whether "this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer." We have held that objective recklessness, even though "predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review." Bard Peripheral Vascular, Inc. v. WL. Gore & Assocs., Inc., 682 F.3d 1003, 1007 (Fed. Cir. 2012). Objective recklessness will not be found where the accused infringer's "position is susceptible to a reasonable conclusion of no infringement." Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1310 (Fed. Cir. 2011).
According to the panel, the district court failed to undertake an objective assessment of Zimmer's specific defenses to Stryker's claims. Instead, the court's analysis of objective reasonableness summarily asserted that "the jury heard testimony" that Zimmer "all but instructed its design team to copy Stryker's products." The district court further concluded that the "pioneering" nature of Stryker's inventions and the secondary considerations of non-obviousness "made it dramatically less likely that Zimmer's invalidity arguments were reasonable."
First, with respect to the '329 patent, the motor in Zimmer's Pulsavac Plus is located in the nub at the rear of the barrel of its pistol-shaped device. Stryker's infringement case relied on first persuading the district court to broadly construe the claim term "handle" to include the barrel of a pistol-shaped device—even though the patent specification only describes the handle and barrel separately. Then, Stryker had to persuade the jury that the barrel nub was a part of the device "designed to be held by hand," even in light of prosecution history in which Stryker distinguished between the location of the motor in the handle as opposed to the barrel. Though Stryker ultimately prevailed, Zimmer's arguments were not unreasonably founded on the plain meaning of "handle" in the context of a pistol-shaped device, the specification's exclusive disclosure of pistol-shaped devices, and the prosecution history—all on which it could have relied to provide notice of what the patent claims covered.
Second, with respect to the '807 patent, the specification only disclosed female nozzles on the front end of the device and male nozzles on the removable tip, which would be consistent with the claim requiring that the front end "receive" the tip. Zimmer's devices had the exact opposite configuration: tapered male nozzles on the front end and female nozzles on the tip. Furthermore, the prior art Var-A-Pulse devices included all of the asserted claims' limitations except one. In light of the district court's claim construction, Stryker's defense to Zimmer's argument relied on persuading the jury that even though the tip's nozzles could fit into the handpiece and be held in place through friction with internal housing grooves, that did not mean they were "secured or fastened." Again, though Stryker prevailed, Zimmer's defenses were not unreasonable.
Third, with respect to the '383 patent, Zimmer's obviousness argument relied on a combination of references that was also raised by a PTO examiner during Stryker's prosecution of a related patent application—in an office action that occurred during discovery in this litigation. Zimmer's reliance on this combination was not without reason, in particular since the references related to pressured water irrigation systems used in hospitals and clinics. Therefore, even if Zimmer's defenses failed at trial, it still made a reasonable case that the '383 patent's asserted claims were obvious and thus invalid.
In sum, we find that Zimmer's defenses to the infringement of each patent claim that Stryker asserted were not objectively unreasonable, and, therefore, it did not act recklessly.
As the panel reverses the district court's determination of willful infringement, and the district court's award of attorneys' fees was based on that determination, the panel vacates the district court's grant of attorneys' fees. However, because there exist further allegations of litigation misconduct in this case and because the standard for finding an exceptional case has changed since the district court issued its finding regarding attorneys' fees, the Circuit remands this issue for further consideration.