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.
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.
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.
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)
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