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

June 26, 2017

Overview

In EmeraChem v Volkswagen the Circuit reverses a determination of obviousness because the ‎Board did not provide the patentee with an adequate opportunity to address a prior art reference ‎that formed a principal basis for its obviousness ruling. The Circuit affirms the invalidation of ‎three Cleveland Clinic patents in Cleveland Clinic Foundation v. ‎True Health, ruling that claims ‎directed to diagnostic tests merely recite laws of nature.‎ In Outdry v. Geox, the Circuit affirms a ‎Board holding that claims of Outdry’s patent directed to methods for ‎waterproofing leather ‎would have been obvious.‎

Thanks to my colleagues Ian Griswold, Martin Garthwaite and Jeff Marlink for helping with this ‎report.‎

Pete

EmeraChem v. Volkswagen, Fed. Cir. Case 2016-1984 (June 15, 2017)‎

In affirming in part and reversing in part, the Circuit rules that the Administrative Procedure Act ‎requires that the patentee be given an opportunity to respond to arguments the Board makes in ‎cancelling claims directed to exhaust treatment catalysts used in diesel engines. ‎

EmeraChem presented two arguments on appeal. First, EmeraChem argued that one of the cited ‎references (Campbell) did not qualify as prior art under 35 U.S.C. § 102(e) because it was not ‎invented “by another.” Of the four inventors listed in the Campbell reference, two of the ‎inventors (including Campbell) were also listed as inventors in the patent in question. ‎EmeraChem’s argument relies on a declaration of Campbell stating that the two common ‎inventors are the sole inventors of the portions of the Campbell reference used for the ‎obviousness rejection of the claims.‎

The Circuit notes that, for a prior art reference to be disqualified under ‎§‎ 102(e), an ‎uncorroborated declaration by an interested party is insufficient to show that portions of the ‎reference relied on as prior art and the claims in question represent the work of a common ‎inventive entity. For example, EmeraChem did not call on the non-common inventors to testify ‎as to the credibility of the declaration, and the declaration was made at least twenty years after ‎the time of conception.

Regarding EmeraChem’s second argument, as to sufficient notice, EmeraChem asserts that ‎adequate notice was not provided for one of the references (Stiles) being used to challenge ‎claims 3, 16, and 20 for obviousness. In particular, EmeraChem asserts that Volkswagen’s ‎pleading did not indicate that Stiles was being used to challenge the obviousness for those claims ‎and, therefore, EmeraChem did not have an opportunity to respond to the grounds of the ‎obviousness challenge.‎

While Volkswagen’s pleading included a general statement that all the claims were challenged ‎over a list of references including Stiles, Volkswagen’s claim chart detailing the rejections of ‎each of the claims did not indicate that Stiles was being used to challenge claims 3, 16, and 20. ‎Further, the Circuit notes that the Board’s Institution Decision included a claim-by-claim listing ‎of the specific prior art references for which it was instituting review, and Stiles was not listed as ‎being used for the review of those claims. Based on these reasons, the Circuit finds that ‎EmeraChem was not provided with sufficient notice and the opportunity to respond. ‎

Read the full opinion

The Cleveland Clinic Foundation v. True Health Diagnostics LLC, Fed. Cir. Case 2016-1766 ‎‎(June 16, ‎‎2017)‎

The Circuit affirms the invalidation of three Cleveland Clinic Foundation patents directed to ‎diagnostic tests to detect the presence of an ‎enzyme the body releases when there is arterial ‎‎damage, ruling that the claims merely recite laws of nature. The panel also upholds the lower ‎court’s dismissal of claims of contributory or induced infringement as to a fourth patent for a ‎treatment method involving administration of a lipid-lowering agent.‎

In keeping with its recent cases, the Circuit finds that the claims recite the relationship between ‎MPO levels in the bloodstream and the risk of having or developing cardiovascular disease ‎without anything more that would render the claims patent-eligible. The “determining” steps in ‎the claims call for determining the MPO mass or activity level from the blood sample by ‎whatever method the user chooses, and well known techniques existed for these “determining” ‎steps. The process steps merely inform those “interested in the subject about the correlations that ‎the researchers discovered.” ‎

Citing its Ariosa Diagnostics v. Sequenom case, the Circuit emphasizes the difference between ‎inventions that cover diagnosing or observing natural phenomena, which aren’t patentable, and ‎patents on new techniques that harness those observations. The opinion distinguishes the claims ‎at issue from those in Rapid Litigation Management v. CellzDirect, where the patent didn’t cover ‎just observations about the ability of liver cells to survive freeze-thaw cycles, but instead ‎disclosed new and useful laboratory techniques for preserving the cells. This leaves open a very ‎narrow door for the patentability of diagnostics patents.‎

The fourth patent in suit builds upon the three diagnostic patents but requires “administering a ‎lipid lowering agent to the selected human patient.” The panel agrees with the lower court that ‎the Foundation fails to state a claim for contributory infringement because it did not identify any ‎‎“material or apparatus” sold by True Health. Moreover, the manner in which defendant reports ‎the results of the service it provides does not constitute a “material or apparatus” for purposes of ‎a contributory infringement claim. With respect to induced infringement claim, the Foundation ‎alleges no facts that suggest any connection between True Health and doctors that may prescribe ‎lipid lowering drugs, and thus falls short of showing “specific intent and action” to induce ‎infringement. ‎

Read the full opinion

Outdry v. Geox, Fed. Cir. Case 2016-1769 (June 16, 2017)‎

The Circuit affirms a Board holding that claims of Outdry’s patent directed to methods for ‎waterproofing leather would have been obvious, ruling that the Board sufficiently articulated ‎why a person of ordinary skill in waterproofing leather would be motivated to combine the prior ‎art. Also, the motivation supported by the record and found by the Board need not, according to ‎the opinion, be the same ‎motivation articulated in the patent for making the claimed combination. ‎Finally, the panel agrees with the Board as to the broadest reasonable interpretation of “directly ‎pressing,” and holds that the preamble clause “process for waterproofing leather” is not a separate ‎limitation.‎

Regarding claim construction of the term “directly pressing,” the Circuit agrees with Geox that ‎the specification does not suggest that the process must form a uniform, sealed sheet of ‎waterproof leather because the specification does not disclose a required degree of contact ‎between the membrane and the leather in the regions that are between dots of adhesive. ‎

As to the preamble phrase “process for waterproofing leather,” the panel rules that this is not a ‎separate limitation that must be disclosed in the prior art in order to support the Board’s ‎obviousness determination. According to the opinion, satisfaction of the claimed steps in the ‎body of the claim necessarily results in satisfying a “process for waterproofing leather.”‎

Comment: In its opinion the panel attempted to distinguish many other Circuit decisions in the ‎past year that the Circuit has remanded based on the Board failing to follow KSR’s admonition ‎that the basis for the motivation to combine must be explained. See In re Van Os, 844 F.3d 1359 ‎‎(Fed. Cir. 2017)‎; Rovalma v. Bohler-Edelstahl, Fed. Cir. Case 2016-2233 (May 11, 2017)‎; ‎PersonalWeb Tech. v. Apple, 848 F.3d 987 (Fed. Cir. 2017); Icon Health & Fitness v. Strava, 849 ‎F.3d 1034 (Fed. Cir. 2017); ‎In re NuVasive, 842 F.3d 1376 (Fed. Cir. 2016); Apple v. Samsung, ‎‎839 F.3d 1034 (Fed. Cir. 2016) (en banc).and In re Warsaw ‎Orthopedic, 832 F.3d 1327 (Fed. ‎Cir. 2016).

Read the full opinion

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