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

April 7, 2017

Overview

The Circuit grants a rehearing and revises its decision in Asetek to vacate the ‎overly broad portion of an injunction. ‎In Wasica, the Circuit refuses to permit a party to present new arguments of ‎obviousness that were different from the “conclusory and sweeping” obviousness ‎allegations in its original IPR petition. In Novartis, the panel affirms a ‎determination of obviousness of IPR decisions even though the patents were ‎previously found by the district court not to be invalid. Medicines v. Mylan focuses ‎its claim constructions on examples provided in the specification, except where ‎language in the specification was found not to be “definitional” in that it lacked ‎the clear expression of intent necessary for a patentee to act as its own ‎lexicographer.‎ 

Thanks to my colleague Yuke Wang for his help with this week’s report.‎

Pete ‎ 

Asetek Danmark A/S v. CMI USA Inc., Fed. Cir. Case 2016-1026, -1183 (April 3, 2017)‎

In an unusual, but well-justified, revision of a December, 2016 decision, the panel ‎rehears the issue of the breadth of an injunction granted by the district court. In ‎the original opinion, written by Judge Taranto, the panel determined that the ‎injunction was over-broad but, over the vehement dissent of Chief Judge Prost, ‎the majority refused to vacate even the erroneous part of the injunction. ‎

Specifically, the entire panel originally agreed that the injunction was over-broad ‎in that it covered Cooler Master, a Taiwanese company who was not a party to the ‎case at the time of the district court decision. Despite this, in its original decision ‎the majority was reluctant to disturb the status quo, which had existed for a year. ‎Therefore, the injunction was kept in place, although the case was remanded for ‎the district court to reconsider this part of the injunction. In dissent, Judge Prost ‎wondered how an admittedly inappropriate injunction was not vacated or at least ‎revised.‎

On rehearing, the entire panel revises the ruling to vacate the injunction as it ‎applies to Cooler Master, and remands the case for further consideration as to ‎whether an injunction against Cooler Master is appropriate. The earlier decision, ‎discussed in my December 9 report, remains in effect in other respects. ‎

Read the full opinion

Wasica Finance v. Continental Automotive, Fed. Cir. Case 2015-2078, -2079, -‎‎2093 and -2096 (April 4, 2017)‎

In a consolidated appeal of IPR proceedings involving two Wasica patents, the ‎panel affirms all of the invalidity determinations and affirms all but one of the ‎validity rulings. The patents are directed to systems for monitoring tire pressure, ‎with each tire including a pressure measuring device and a transmitter that sends ‎pressure data to a corresponding receiver. ‎

The panel affirms the claim constructions by the Board. This doomed Wasica, ‎because it did not contest the invalidity rulings if the constructions were affirmed. ‎Because the patents had expired, the claims were construed under Phillips and ‎not based on the broadest reasonable interpretation. The panel first rejects ‎Wasica’s argument that the claimed signals must contain numerical values ‎of pressure, since claim 1 recites displaying data “as numbers or symbols.” ‎Second, the panel disagrees with Wasica’s argument that “emittance of a ‎predetermined switching signal” should include both wired and wireless ‎transmissions. The plain and ordinary meaning of “emit” is simply “to send ‎out,” and electrical signals can be “sent out” over wired connections. Moreover, ‎the specification is rife with examples where the switching signal propagates in ‎both wireless and wired form, and claims are normally not construed to exclude ‎disclosed embodiments. ‎

The panel rejects Schrader’s argument that Oselin’s prior art ‎transmitters must use a constant frequency. The Board found, based on expert ‎testimony, that one of ordinary skill would not have read Oselin to disclose what ‎Schrader’s counsel urges. The decision also rejects Schrader’s argument that ‎claim 6 is not anticipated since Oselin is at best “unclear” as to its teaching that ‎allegedly anticipates. The panel holds that ambiguous references do not ‎anticipate a claim. ‎

The panel finds that substantial evidence supports the Board’s ruling that ‎Oselin’s broad invocation of “any modulation scheme” (a genus) ‎does not disclose the constant-frequency modulation scheme of claim 6 (a ‎species). Therefore, the Board’s determination that claim 6 is not anticipated is ‎affirmed. ‎

The panel rejects Continental’s attempts to cure its IPR petition that offered only ‎‎“conclusory and sweeping” obviousness allegations, noting that petitioners in IPR ‎proceedings must adhere to the requirement that the initial petition identify with ‎particularity the evidence that supports the grounds for the challenge to each ‎claim. Unlike district court litigation—where parties have greater freedom to revise ‎and develop their arguments over time—the expedited nature of IPRs bring with it ‎an obligation for petitioners to make their case in their initial petition. After Wasica ‎pointed out the flaws in Continental’s petition, rather than explaining how the ‎original petition was correct Continental effectively abandoned its petition in favor ‎of a new argument. The panel sees no error in the Board declining to engage this ‎new theory of prima facie obviousness. ‎

Claim 9 requires the transmitter to send data to the receiver through “at least a 4-‎bit sequence” having four smaller “bit sequences” of information. Under the ‎Board’s construction, the transmitted signal must include at least eight bits—two ‎for each component bit sequence. Not only does this approach rewrite “at least ‎‎4” to mean “at least 8,” it also excludes signals comprising four, five, six, or ‎seven bits that are expressly covered by the claim. Moreover, the context of the ‎words surrounding “bit sequence” and the disclosure of a single-bit embodiment ‎requires that the claim encompasses single-bit sequences. Therefore, claim 9 is ‎invalid. ‎

Read the full opinion

Novartis v. Noven, Fed. Cir. Case 2016-1678, -1679 (April 4, 2017) ‎

The panel affirms a determination of obviousness in IPR decisions relating to two ‎Novartis patents directed to a pharmaceutical used in the treatment of ‎Alzheimer’s, even though the patents were previously found by the District of ‎Delaware not to be invalid. This was based on there being additional evidence of ‎obviousness submitted during the IPRs, and the fact that the preponderance of ‎evidence burden of proof in the PTO is not nearly as exacting as the clear and ‎convincing evidence standard in court. ‎

In contending that the PTO erred in reaching a decision that is contrary to that ‎reached by the Delaware District Court and the Federal Circuit, Novartis relies on ‎a single sentence from the Circuit’s 2012 Baxter International decision. There, the ‎Circuit stated that the PTO “ideally should not arrive at a different conclusion” if it ‎faces the same evidence and argument as a district court. Novartis treats “ideally” ‎in that passage as a mandate. However, the context in which that passage ‎appears demonstrates that the Circuit used “ideally” to connote aspiration and, in ‎fact, recognized that Congress has provided a separate review mechanism before ‎the PTO with its own standards. The panel refuses to “imbue Baxterwith a ‎meaning that the decision itself does not support.”‎

Moreover, the record here differed from that in the prior litigation, because Noven ‎has presented additional prior art and declaratory evidence that was not before ‎the Delaware court. Nevertheless, even if the record were the same, Novartis’s ‎argument would fail as a matter of law because a petitioner in an IPR proves ‎unpatentability by a preponderance of the evidence (see 35 U.S.C. § 316(e)) ‎rather than by clear and convincing evidence as in district court litigation. This ‎means that the PTAB properly may reach a different conclusion based on the ‎same evidence. That position comports with the 2016 case of Cuozzo Speed ‎Techs v. Lee, in which the Supreme Court held that a district court may find a ‎patent claim to be valid, and the PTO may later cancel that claim in its own review. ‎The opinion concludes its analysis by finding that substantial evidence supports ‎the Board’s determination of the teachings of the prior art and a motivation to ‎combine.‎ Novartis asks the panel to reweigh the evidence and give greater weight to its expert ‎testimony, but the Circuit refuses to reweigh evidence presented to the PTO. ‎

Comment: Note that the panel did not get into a discussion as to the finality of the ‎district court decision as it did in Fresenius USA, Inc. v. Baxter Int'l, Inc., 721 F.3d 1330 ‎‎(Fed. Cir. 2013) and ePlus, Inc.v. Lawson Software, 760 F.3d 1350 (Fed. Cir. 2014). The ‎panel must have felt that the intervening Cuozzo decision rendered that discussion ‎unnecessary.‎

Read the full opinion

The Medicines Company v. Mylan, Fed. Cir. Case 2015-1113, -1151, and -‎‎1181 (April 6, 2017)‎

The panel reverses a ruling that two Medicines patents directed to its ANGIOMAX® ‎anti-clotting drug were infringed by a product proposed in Mylan’s ANDA filing.‎

Medicines sued Mylan for patent infringement based on Mylan’s seeking to market a ‎generic version of ANGIOMAX. After construing the claims, the district court held on ‎summary judgment that Mylan did not infringe the ’343 patent because Mylan’s ‎process is more inefficient than the “inefficient mixing process” of Example 4. With ‎respect to the ’727 patent, however, the court held that “efficiently mixing” was not a ‎claim limitation, so this precluded summary judgment. After a bench trial, the court held ‎that Mylan’s ANDA filing infringed the ’727 patent. ‎

On appeal, the panel agrees with Mylan that “efficient mixing” is required by the ‎‎“batches” limitation and is therefore a limitation of both the ’727 and ’343 patents. ‎Adopting Medicines’ interpretation of the “batches” limitation would yield an ‎unworkable claim construction. Under Medicines’ interpretation, proof of infringement ‎would necessitate forward-looking assessments of whether an accused infringer’s ‎production of future or “potential” batches would meet the claimed purity levels. If a ‎defendant using the same process produced fifty batches, each reaching that purity ‎level, each of those fifty batches would infringe. But the defendant would not know ‎whether any of the batches infringed until all fifty batches had been produced. For an ‎ongoing commercial compounding process, under Nautilus, this approach cannot ‎provide “reasonable certainty” regarding the scope of the asserted claims. ‎

As to the construction of “efficient mixing,” Medicines extracts a verbatim statement ‎from the specification that purports to define the term. However, according to the panel, ‎this statement is not “definitional” because it does not accord with the linguistic formula ‎used by the patentee to signal the designation of other defined terms. In defining ‎terms, the patentee always used a similar format: the defined term in quotation marks, ‎followed by the terms “refers to” or “as defined herein.” Because the quoted language ‎departs from this format, the statement Medicines relies on lacks the clear expression ‎of intent necessary for a patentee to act as its own lexicographer. ‎

Moreover, Medicines’ construction of “efficient mixing” attempts to cover all methods of ‎meeting this purity level, without describing the entire range of processes. The panel ‎rejects this argument, noting that the compounding must be defined in terms of the ‎particular processes identified in the specification, so Medicines’ construction is not ‎correct. ‎

In the panel’s view, Examples 4 and 5 in the specification clearly state what efficient ‎mixing is and is not. Based on this, the panel construes the “efficient mixing” required ‎by the patents in suit to require using the efficient mixing conditions of Example 5. ‎Under this claim construction, Mylan’s ANDA does not infringe the asserted claims ‎since Mylan does not use the process required by Example 5. ‎

Comment: Readers may recall that in an earlier appeal, a panel of the Circuit found ‎these patents invalid because of a sale to Medicines from its supplier Ben Venue. An ‎en bancCircuit disagreed, holding that Medicines’ relationship with Ben Venue was ‎such that Medicines was only purchasing services, and since title to the product never ‎passed between the two entities, this was not a barring “sale.” See Medicines v. ‎Hospira,‎ 827 F.3d 1363 (Fed. Cir. 2016)‎

Read the full opinion

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