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Fresh From the Bench: Precedential Patent Cases From the Federal Circuit

March 6, 2017

Overview

Eli Lilly is not likely to think of the Circuit’s handling of its successful IPR as an “intimate ‎moment,” given that the Circuit reversed a finding of invalidity of all of the claims of a patent ‎directed against its Cialis ED product. In the Technology v. Huawei case, the panel ruled that ‎even though the patentee might have prevailed in distinguishing the prior art by making the ‎narrower patentability argument it presented on appeal, it made a different argument during ‎prosecution of the patent so that is the argument to be considered in construing the claim. In Icon ‎v. Strava, the Circuit sent another case back to the Board to explain in a more detailed fashion ‎the reasoning behind its invalidation of some of the claims.‎

While not a precedential ruling, the Circuit also overturned a $533 million jury verdict in favor of ‎Smartflash over Apple’s iTunes software. ‎

Thanks to my colleague Micah Stolowitz for his help with this week’s report.‎

Pete

Los Angeles Biomedical Research Institute v. Eli Lilly -  In a split decision, the Circuit vacates and remands a determination by the PTAB that all of the ‎claims of a patent asserted against Lilly’s Cialis erectile dysfunction product are invalid as ‎obvious. In dissent, Judge Newman says she would affirm the decision but because the majority ‎disagrees, it should simply reverse the Board rather than remand the case since the record is fully ‎developed, and a time-consuming remand will defeat the AIA’s goal of a prompt determination ‎of validity issues. ‎

The majority first determines that the patent is not entitled to the earlier filing date of a ‎provisional patent application. For a patent to be entitled to an earlier priority date, each previous ‎application in the chain must comply with the written description requirement of § 112(a). It is ‎not enough that a disclosure in a parent application merely renders the later-claimed invention ‎obvious; the disclosure must describe the claimed invention with all its limitations. The ‎provisional application does not explicitly disclose a dosage of “up to 1.5 mg/kg/day,” so it does ‎not provide an effective filing date.‎

Claim 1, the only independent claim, recites: A method comprising:‎

a) administering a cyclic guanosine 3’, 5’-monophosphate (cGMP) type 5 phos-‎phodiesterase (PDE5) inhibitor according to a continuous long-term regimen to an individual ‎with at least one of a penile tunical fibrosis and corporal tissue fibrosis; and

b) arresting or regressing the at least one of the penile tunical fibrosis and corporal tissue ‎fibrosis, wherein the PDE-5 inhibitor is administered at a dosage up to 1.5 mg/kg/day for not less ‎than 45 days.‎

The panel rules that the broadest reasonable interpretation of the phrase “an individual with at ‎least one of penile tunical fibrosis and corporal tissue fibrosis” is its plain meaning. The Board’s ‎construction (“an individual having symptoms that may be associated with penile fibrosis, such as ‎erectile dysfunction, but not that the patient be specifically diagnosed as having penile tunical ‎fibrosis or corporal tissue fibrosis”) reads that limitation out of the claim. Because erectile ‎dysfunction is merely a symptom that may be, but is not necessarily, associated with penile ‎fibrosis, erectile dysfunction cannot be equated with tunical fibrosis and corporal tissue fibrosis. ‎In addition to plain meaning, there is no support in either the specification, the prosecution ‎history or the expert witness testimony for the Board’s construction. ‎

The panel also disagrees with the Board’s conclusion that the phrase “arresting or regressing the ‎at least one of a penile tunical fibrosis and corporal tissue fibrosis” should have no limiting role, ‎but merely stating the intended result of administering a PDE5 inhibitor at a dosage of up to 1.5 ‎mg/kg/day for at least 45 days. While not dispositive, it is significant that the phrase “arresting or ‎regressing the penile fibrosis” is drafted as part of a separate step of the method, not as the ‎preamble or introduction to a process carried out by the administration of the drug. The wherein ‎clause sets forth the minimum duration supported by the disclosure (45 days) for the arrest or ‎regression of fibrosis at a high dosage of the PDE-5 inhibitor. But the reference to a minimum ‎duration period of 45 days says nothing about the efficacy of the method if a lower dosage of ‎PDE5 inhibitor is administered. The majority therefore concludes that “arresting or regressing” ‎the fibrosis adds an efficacy requirement that is not otherwise found in the claim.‎

The majority agrees with LAB that the Board’s findings are insufficient to establish obviousness ‎under the correct construction of the phrases at issue. The Board held that the references ‎rendered obvious the treatment of erectile dysfunction via the claimed method, but it did not ‎determine whether those references showed that it would have been obvious to use long-term ‎continuous treatment with a PDE5 inhibitor to treat individuals with penile fibrosis and to ‎achieve the arrest or regression of that condition. Specifically, the Board found that Montorsi ‎and Whitaker taught the treatment of erectile dysfunction, and that the combination of Montorsi, ‎Whitaker, and Porst gave rise to a reasonable expectation of success in treating erectile ‎dysfunction. What the Board did not do, however, was to find that those references taught ‎treating a patient with penile tunical fibrosis or corporal tissue fibrosis. Nor did the Board find ‎that those references provided the basis for a reasonable expectation of success in treating those ‎conditions. As indicated above, the correct construction of the pertinent claim language requires ‎more than simply treating erectile dysfunction.‎

In a separate opinion, the Circuit affirms the Board’s determination that there is no anticipation. ‎According to the opinion: To anticipate, a reference must do more than “suggest” the claimed ‎subject matter. Thus, the panel holds that substantial evidence supports the Board’s finding that ‎the reference does not disclose the claimed treatment regimen with sufficient clarity to satisfy ‎‎“the demanding standard for anticipation.”‎

Read the full opinion (obviousness)
Read the full opinion (anticipation)

Technology Properties Ltd. LLC v. Huawei Technologies Co - TPL sued a number of device manufacturers, contending that products manufactured by ‎Nintendo, Samsung and LG infringed its patent, which claims ways for processors to adjust their ‎speeds for maximum performance. The panel vacates the construction of “entire oscillator,” ‎describing a clock (oscillator) in a microprocessor, and remands the case. Two disclaimers derived ‎from the prosecution history were held to limit the “entire oscillator” term. In one case, the ‎corresponding limitation was affirmed even though it was broader than necessary to overcome ‎the rejection. In the other, the panel reverses and remands because the district court’s ‎construction applied the disclaimer too broadly in view of the context of applicant’s remarks.‎

The claim at issue requires, among other things, “an entire oscillator disposed upon said ‎integrated circuit substrate,” which refers to the variable-frequency CPU clock. The district court ‎construed the term to mean “an oscillator located entirely on the same semiconductor substrate as ‎the central processing unit that does not require a control signal and whose frequency is not fixed ‎by any external crystal.” Defendants contend the second half of the construction is proper ‎because the patentee disclaimed certain claim scope during prosecution to overcome rejections ‎based on patents to Magar and Sheets. ‎

Magar discloses a microprocessor having a clock generator circuit that relies on an external ‎crystal. TPL argues the district court erred by limiting the “entire oscillator” to one “whose ‎frequency is not fixed by any external crystal.” It distinguishes Magar by arguing (1) Magar ‎requires an off-chip crystal oscillator, while the claim generates the CPU clock signal on-chip; (2) ‎Magar’s only oscillator is the off-chip crystal that is input to CLOCK GEN, which is located on ‎the same silicon substrate as the CPU; and (3) CLOCK GEN itself is not an oscillator because it ‎simply takes the output of the off-chip crystal and modifies it to produce four derivative signals. ‎

The panel holds that the argument TPL raises on appeal may have been sufficient to ‎traverse the Magar rejection, but this is not the argument TPL presented during prosecution. Had ‎those same arguments been made to the Patent Office, our construction may have been different ‎because TPL likely disclaimed more than was necessary to overcome the rejection. When this ‎happens, we hold patentees to the actual arguments made, not the arguments that could have ‎been made.‎

While the Circuit describes this change in construction as “minor,” and “likely does not ‎affect the outcome in this case,” because the parties stipulated to non-infringement under the ‎district court’s construction, the proper course of action is for the panel to vacate and remand. ‎

Read the full opinion

Icon Health and Fitness v. Strava, Inc. - The Circuit affirms the PTAB’s IPR determination of obviousness as to most of the claims of a ‎patent directed to a portable system for retrieving exercise programs used in an exercise machine, ‎but reverses that determination as to a few of the claims.‎

In its opinion, the panel considers Icon’s argument that the Examiner and the PTAB simply ‎adopted the factual and legal conclusions reached by Strava’s technical expert, and failed to ‎provide their own detailed analysis of the reasoning behind their conclusions. The panel reviews ‎the patent claims in groups, noting first that it needed to look first to see if there was substantial ‎evidence to support factual findings. In some instances, even though the expert rendered an ‎opinion on the ultimate issue of obviousness, the panel explains that that does not constitute ‎reversible error as long as other aspects of the expert declaration contain statements relating to ‎factual findings. The opinion then proceeds to review the findings of the Board on the merits, ‎evaluating whether the PTAB made factual findings with the requisite evidentiary basis and ‎adequately explained its findings.‎

As to some of the claims, the panel concludes that neither the PTAB nor the Examiner made the ‎requisite factual findings or provided adequate explanation. Specifically, the PTAB rejected ‎some of Icon’s arguments by asserting only that Icon “merely restates previous arguments ‎regarding contacts of the cradle as discussed above.” But the PTAB had never actually ‎addressed those arguments above. The PTAB’s opinion thus contains no substantive discussion ‎of the limitations at issue for those claims. Because the PTAB failed to comport with what these ‎principles demand, the PTAB’s rejection of these claims must be vacated and the case remanded ‎for additional PTAB findings and explanation.‎

The panel distinguishes the handling of other claims because the Examiner made his own factual ‎findings. The PTAB did incorporate sections of the Examiner’s Right of Appeal Notice, but the ‎Examiner’s factual findings have an adequate evidentiary basis. As to the adequacy of the ‎Board’s explanation, the panel notes that it would be preferable for the PTAB to provide its own ‎reasoned explanation, but the PTAB did incorporate the Examiner’s findings, which provide an ‎adequate basis for the mere “combination of familiar elements.” This is sufficient, if minimally, to ‎explain the connection between the Examiner’s factual findings and legal conclusion.‎

As to other claims, the PTAB merely stated that it was “not persuaded” by Icon’s arguments and ‎that “the Examiner’s rejection was sufficiently supported by the record.” However, the PTAB ‎made only vague references to the prior art when summarizing Icon’s arguments. At no point did ‎the PTAB make explicit findings as to these elements or specify what aspects of the expert ‎declarations it found persuasive. As with other claims, the PTAB never made factual findings ‎with a basis in the record or provided the requisite explanation to support its findings for these ‎claims. It merely summarized Icon’s arguments and stated that the “Examiner’s rejection was ‎sufficiently supported by the record.” Citing the recent NuVasive case, the panel notes that the ‎PTAB cannot satisfactorily make a factual finding and explain itself by merely “summarizing and ‎rejecting arguments without explaining why it accepts the prevailing argument.” ‎

Judge O’Malley concurs in part and dissents in part, writing separately because she believes that ‎‎“remand is not the appropriate remedy in examination appeals in which the PTO has not carried ‎its burden of establishing unpatentability.” Rather than simply vacate the PTAB’s findings with ‎which the panel disagrees, she would reverse those findings. ‎

Read the full opinion

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