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

October 16, 2017

Overview

The Circuit affirms the decision in Secured Mail v. Universal to dismiss an infringement case under Rule 12(b)(6), holding that all of the asserted claims of the seven patents are directed to patent-ineligible subject matter. In Amgen v. Sanofi, the Circuit reverses the grant of a permanent injunction because the district court wrongly excluded post-priority-date evidence that was pertinent to the issues of written description and enablement as to whether an adequate number of species was disclosed. Once the panel applied the broadest reasonable interpretation to the phrase at issue in Owens Corning v. Fast Felt, the claims were rendered obvious. In Organik Kimya v. Rohm and Haas, the panel affirms an IPR decision sustaining the patentability of the claims of two Rohm and Haas patents, relying on the patents’ specifications and unrebutted experimental evidence offered by Rohm and Haas.

Thanks to my colleagues Steve Blair and Jason Wrubleski for their help with this week’s report.

Pete Heuser

Secured Mail Solutions LLC v. Universal Wilde, Inc., Fed. Cir. Case 2016-1728 (October 16, 2017)

The Circuit affirms the dismissal of an infringement case asserting seven patents under § 101 because the claims of the asserted patents are directed to an abstract idea and the claims contain no additional elements that transform the nature of the claims into a patent-eligible application of the abstract idea.

The patents in suit are directed to methods in which a sender affixes an identifier on the outer surface of an envelope or package before the mail object is sent. Computers and networks are used to communicate the information about the mail object’s contents and its sender after the mail object is delivered. The district court dismissed the case under Rule 12(b)(6), finding that all seven patents were directed to patent-ineligible subject matter.

In analyzing the claims under Alice’s step one, the panel notes that the Circuit looks to whether the claims focus on a specific means or method, or are instead directed to a result or effect that itself is the abstract idea and merely invokes generic processes and machinery. On appeal, Secured Mail argues that its claims are patent-eligible under Enfish, which was issued after the district court’s decision. Here, despite the district court’s statement that “a reasonably high level of generality” should be used, the district court’s analysis correctly found that Secured Mail’s claims are directed to an abstract idea.

The court in Enfish held the claims relating to a computer database implementation to be patent-eligible under Alice step one because the claims focused on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity. In contrast, the claims of Secured Mail’s patents are not directed to an improvement in computer functionality. For example, the claims are not directed to a new barcode format, an improved method of generating or scanning barcodes, or similar improvements in computer functionality. Secured Mail argues that the claims are specifically directed to a sender-generated unique identifier, which improved on the existing process both by reliably identifying the sender of the mail object and by permitting the sender to create a bi-directional communication channel between the sender and recipient of the mail object. The fact that an identifier can be used to make a process more efficient, however, does not necessarily render an abstract idea less abstract.

Because the claims are directed to an abstract idea, the opinion then turns to the second step of the Alice inquiry, looking at whether the elements of the claims transform the nature of the claim into a patent-eligible application of the abstract idea. Secured Mail argues that the district court misunderstood the step two analysis, and instead of searching for an inventive concept, it only asked whether the “underlying” technology was conventional. The panel disagrees. The district court decision has pages analyzing the individual claim elements concluding that the claims are “replete” with routine steps, including “affixing mail identification data,” such as a barcode, to a mail object or “submitting a mail object to a mail carrier for delivery.” The district court focused on the sender-generated barcode because Secured Mail argued that the sender-generated barcode was the inventive concept. However, the claim language does not provide any specific showing of what is inventive about the identifier or about the technology used to generate and process it. The claims merely provide that an identifier is affixed to a mail object that is used by the recipient to request and display electronic information. The use of barcodes was commonplace and conventional in 2001.

Secured Mail argued that because the district court’s conclusions address questions of fact, it was inappropriate for the district court to dismiss the case via Rule 12(b)(6). However, the panel notes that the Circuit has determined claims to be patent-ineligible at the motion to dismiss stage based on intrinsic evidence from the specification without need for extraneous fact finding outside the record.

Read the full opinion

Amgen Inc. v. Sanofi Aventisub LLC, Fed. Cir. Case 2017-1480 (October 5, 2017)

Sanofi and Regeneron Pharmaceuticals convince the Circuit to reverse and remand a permanent injunction that would have barred sales of Praluent, a cholesterol drug that competes with Amgen’s blockbuster drug Repatha. Repatha provides an alternative for patients who have not been successfully treated using Pfizer’s Lipitor. The Circuit rules that the district court erred when it excluded post-priority-date evidence of written description and enablement, and gave improper jury instructions on written description.

The panel rules that post-priority-date evidence could be evidence of a failure of written description and enablement if it is determined that the patents fail to disclose “a representative number of species falling within the scope of the genus or structural features common to the members of the genus.” We know that post-priority-date evidence may not be used to show the state of the art, but the panel rules that such evidence may be used to show that the patents failed to disclose a representative number of species. Similarly, such evidence may be used to show lack of enablement through undue experimentation.

The Circuit also rules that the lower court improperly instructed the jury on written description when it included the statement: “correlation between structure and function may also be satisfied by the disclosure of a newly characterized antigen.” The Circuit reasons that a newly characterized antigen is insufficient to meet the written description, which requires “a precise definition, such as by structure, formula … of species falling within the genus sufficient to distinguish the genus from other materials.” The instruction incorrectly allowed jurors to determine the patent meets the written description requirement because it describes an antigen, which is not the invention. Furthermore, the Circuit holds that JMOL of no written description and no enablement was not proper here because of an incomplete record on the issues and therefore a legally insufficient evidentiary basis for JMOL.

However, the district court’s JMOL of non-obviousness was proper. At trial, two PCT application publications were introduced that fail to predate the patents, but claim priority to provisional applications that do. At trial, the defendants were not able to demonstrate that the provisional applications provided written description support for the claims of the PCT applications. As a result, the priority date of the provisional applications may not be used and the two PCT publications post-dated the patents and were not admissible to determine obviousness.

One of the more interesting issues on appeal was whether a permanent injunction was appropriate. The district court had ruled that the injunction would disserve the public interest because the injunction would reduce the choice of drugs. Despite this determination, the court granted the injunction motion. In dictum, the panel notes that this is a clear violation of the Supreme Court’s 2006 decision in eBay, which ruled that the public interest is one of four factors that must be satisfied to warrant a permanent injunction. However, the ruling that the public would be disserved because of a reduction in choice is itself legally wrong because if that was the case, virtually every injunction taking a drug off the market would disserve the public interest and, therefore, rarely would any injunction be appropriate.

Comments: The case is significant to the parties because annual sales of Repatha and Praluent both exceed $100 million and are expected to grow dramatically in the next few years. But the case is significant beyond the parties since it will limit a patentee’s ability to broadly claim a drug treatment, while providing only a few examples in the specification.

The panel’s discussion requiring the presence of all four of the eBay factors is consistent with its ruling in Nichia v. Everlight, 2017 U.S. App. LEXIS 7527 (April 28, 2017), where the Circuit ruled that if the moving party had not demonstrated that it would suffer irreparable harm, the other eBay factors did not even have to be considered.

Read the full opinion

Owens Corning v. Fast Felt Corp., Fed. Cir. Case 2016-2613 ‎‎(October 11, 2017) ‎

The Circuit rules in an IPR that the Board failed to apply the ‎broadest reasonable interpretation (“BRI”) to the phrase “roofing or ‎building cover material.” Owens Corning ‎challenged the validity of a Fast Felt patent directed to methods ‎for printing nail tabs or reinforcement strips on roofing or building cover material. Given its correct, broader interpretation, the claim is found to be obvious in view of ‎prior art. ‎

The patent addresses applying polymer “nail tabs” on ‎‎“roofing and building cover material.” The specification explains that nail tabs have been used to reinforce specific locations on roofing or building cover material ‎at which nails will be driven through the material to attach it to ‎a wood roof deck or a building stud wall. Commonly, separate washers or tabs are applied with every nail ‎to provide reinforcement, but that practice is expensive, ‎inefficient, and dangerous. ‎

All of the challenged claims contain the claim term ‎‎“roofing or building cover material.”‎ The Board construed this phrase to mean “base substrate materials such as dry felt, ‎fiberglass mat, and/or polyester mat, before coating or saturation ‎with asphalt or asphalt mix, and asphalt coated or saturated ‎substrates such as tar paper and saturated felt.” The Board’s construction required materials that ‎would eventually be coated with asphalt even if they had not ‎already been coated before printing. ‎

The panel first notes that the Board did not address roofing or building cover ‎materials that would never be coated in asphalt.‎ The exclusion of such materials from the scope of the claims is ‎mistaken. According to the panel, it is not reasonable to read the claims as limited to ‎materials that either have been or are to be coated or saturated ‎with asphalt or asphalt mix.‎

It is true that the preferred embodiments ‎focus on roofing materials that are or will be coated or ‎saturated with asphalt or asphalt mix, but that is not enough to ‎narrow the claim scope in the IPR. The claims are plainly not so limited. Indeed, they are not even limited to “roofing ‎materials,” as they all expressly include “building cover material” ‎as well as roofing material.  Moreover, even the specification, when ‎not discussing preferred embodiments, is not limited to roofing ‎materials: it speaks of “roofing materials or other building materials ‎normally employed as cover materials over a wood roof deck or ‎stud wall.” And Fast Felt has not disputed, or pointed to any ‎evidence disputing, that some building cover materials (like the ‎common Tyvek wrap referred to in the Board oral argument) are ‎commonly installed without ever being coated or saturated with ‎asphalt or asphalt mix.‎

In these circumstances, the broadest reasonable construction ‎of “roofing or building cover material” would include materials ‎that neither have been nor are to be coated or saturated with ‎asphalt or asphalt mix. Therefore, the panel concludes that the Board erred in ‎effectively construing the claims to exclude such materials.‎

In this case, it is not necessary or appropriate to remand for ‎the Board to reassess the evidence in light of the correct claim ‎construction.  There is only one possible evidence-supported finding: the ‎Board’s rejection of Owens Corning’s challenge, when the correct ‎construction is employed, is not supported by substantial evidence.

Read the full opinion‎

Organik Kimya AS v. Rohm and Haas Co., Fed. Cir. Cases 2015-1983, -2001 (October 11, 2017)

The panel affirms an IPR decision of the Board, sustaining the validity of two Rohm and Haas patents. The panel’s decision is supported in part by a limiting interpretation of the phrase “include, are those which…” in the patents’ specification, and also by unrebutted experimental evidence offered by Rohm and Haas.

The patents are directed to processes for preparing certain emulsion polymers having improved opacity, for use in opaque coatings such as paints, inks, and other products. The patented processes rely on the presence in an emulsion of a “swelling agent,” which the Board construed as “expressing a structural element, i.e., ‘an aqueous or gaseous, volatile or fixed base, or combinations thereof,’ in functional terms, i.e., ‘capable of permeating the shell and swelling the [acid] core [of a polymer particle], in the presence of the multistage polymer and monomer, under the conditions of the specific process for which the agent is to be used.’”

Organik objects to the Board’s construction of the term, arguing that the “under the conditions…” element of the construction improperly limits the term in violation of the BRI standard. Organik argues that the specification provides an open-ended definition of “swelling agent,” pointing to the language: “Suitable swelling agents include, are those which, in the presence of the multistage emulsion polymer and monomer, are capable of permeating the shell and swelling the core.”

The panel affirms the Board’s construction, agreeing with its determination that the modification of the word “include” by the phrase “are those which” suggests that suitable swelling agents include only those which exhibit the functional characteristics thereafter described, and that a “swelling agent” must permeate the base and swell the core under the reaction conditions described in the specification. The Board relied on unrebutted experimental evidence offered by Rohm and Haas’s expert to find that the asserted prior art references thus did not disclose a “swelling agent.” The panel affirms the Board’s finding as supported by substantial evidence, and its determinations that the patents are not anticipated and not obvious.

Read the full opinion

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