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Latest Federal Circuit Court Cases, 9/17/18

September 17, 2018

Overview

PATENT CASE OF THE WEEK

Acorda Therapeutics, Inc. v. Roxane Laboratories, Inc., Appeal Nos. 2017-2078, -2134 (Fed. Cir. Sept. 10, 2018)

The Federal Circuit affirmed the district court’s ruling following a bench trial, that asserted claims of four pharmaceutical patents were invalid.  The case is a major decision reconciling the effect of blocking patents on an analysis of objective indicia of nonobviousness.

Defendants, all ANDA applicants preparing to market generic versions of the claimed treatment, stipulated to infringement of all five patents.  Defendants’ cross-appeal was dismissed as moot because a fifth patent expired before issuance of the Court’s opinion, and with it the injunction entered against Defendants.

The four patents at issue claimed methods of administering 4-aminopyridien (“4-AP,” marketed by plaintiffs as “Ampyra”) to improve walking in patients with multiple sclerosis (“MS”).  The district court had found that, as of the patents’ priority date of 2004, a skilled artisan would have been motivated to administer the claimed stable dose of 4-AP twice daily, and would have had a reasonable expectation of success in the objective of improving the walking ability of multiple sclerosis patients.  In its analysis, the district court discounted certain evidence of objective indicia of non-obviousness, relying on the fact that plaintiff held an exclusive license to a blocking patent that would have prohibited others from marketing the claimed treatment.

Plaintiff appealed the district court’s obviousness ruling, arguing in relevant part that the district court erred in applying a categorical rule that the blocking patent negated any findings in favor of plaintiff on the objective indicia of commercial success, failure of others, and long felt but unmet need.

The Federal Circuit disagreed with plaintiff’s characterization of the district court’s ruling as having applied a categorical rule that a blocking patent negates objective indicia, instead viewing the district court’s ruling as having drawn specific conclusions based on the effect of the blocking patent in this case.

Reviewing Federal Circuit precedent on the effect of a blocking patent or statutory bars as barriers to entry by competitors, the Court emphasized that a blocking patent may or may not reduce the weight of evidence of commercial success to varying degrees, depending on such considerations as who it is that owns or exclusively licenses the blocking patent; whether a potential innovator has a reasonable expectation of challenging the blocking patent; the possibility of a potential innovator licensing the blocking patent; the cost of the innovator’s research; the risk of research failure; the nature of aimed-at improvements and whether they will be entirely covered by the blocking patent; the size of anticipated market opportunities; and the presence of other competitors aiming at the same improvements; all evaluated in the light of other investment opportunities.  The Court concluded that when all other variables are held constant, a blocking patent would diminish possible rewards from innovation, and can therefore be evidence discounting the significance of evidence that nobody else but the blocking patent’s owner or licensee has developed a given claimed invention.

However, the magnitude of that diminution in incentive remains a fact-specific inquiry.  In this case, the Court agreed with the district court’s assessment that on the facts presented, the existence of the blocking patent exclusively licensed to plaintiff operated as significant deterrent to innovation by others, and that the evidence of commercial success and long-felt need was discounted accordingly.

Judge Newman dissented, characterizing Ampyra as having been achieved only “after decades of failed research” (i.e., the prior art), notwithstanding that it represented a small pharmacological difference from previously-attempted formulations. 

Judge Newman disagreed that the evidence of commercial success should be discounted because no one other than patentees could have developed the invention, observing that “[c]ommercial success is measured against the products available for the same purpose, not against infringing copies of the patented product.”  She also opined that the majority misapplied the concept of a blocking patent, as it would not have stopped others from innovating within the safe harbor provided by 35 U.S.C. § 271(e)(1), or otherwise diminished the right to conduct research on patented subject matter.

Finally, Judge Newman noted that the Patent Trial and Appeal Board had sustained the validity of the asserted patents in a parallel inter partes review, and faulted the majority for not exploring consequent issues of privity, estoppel, or finality.

Opinion can be found here.

ALSO THIS WEEK

Nobel Biocare Services AG, v. Instradent USA, Inc., Appeal No. 2017-2256 (Fed. Cir. Sept. 13, 2018)

In an appeal from an inter partes review, the Federal Circuit addressed whether a catalog was a printed publication under pre-AIA 35 U.S.C. Sec. 102(b).  The PTAB held that it was.  In a prior case concerning the same patent, the ITC had held that there was insufficient evidence to find pre-critical date public accessibility, as required to satisfy the standard for printed publications.  The Federal Circuit had affirmed that opinion.  But the burden of proof is different in IPRs than ITC opinions, and the PTAB found a preponderance of evidence that the catalog was a printed publication.  The Federal Circuit affirmed.

Opinion can be found here.

ParkerVision, Inc. v. Qualcomm Inc., Appeal Nos. 2017-2012, -2013, -2014, -2074 (Fed. Cir. Sept. 13, 2018)

In an appeal and cross-appeal from three decisions of the Patent Trial and Appeal Board (PTAB) invalidating certain claims from a ParkerVision, Inc. patent while maintaining others, the Federal circuit affirmed the PTAB findings.  The Federal Circuit reviewed the PTAB legal decisions de novo and its underlying factual determinations for substantial evidence.  The Federal Circuit concluded that the Board’s findings were correct because a prior art reference may anticipate or render obvious an apparatus claim—depending on the claim language—if the reference discloses an apparatus that is reasonably capable of operating so as to meet the claim limitations, even if it does not meet the claim limitations in all modes of operation.  The Federal Circuit states that the language used in the claims is critical to deciding on which side of this line the claims fall.  Here, the Federal Circuit affirmed the Board’s determination that the apparatus claims are unpatentable because Qualcomm was only required to identify a prior art reference that disclosed an apparatus “capable of “ performing the recited functions to prove that apparatus claims would have been obvious.  However, in contrast to the apparatus claims, the method claims required more—a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so—as the Board found and the Federal Circuit affirmed.

Opinion can be found here.

University of California v. Broad Institute, Inc., Appeal No. 2017-1907 (Fed. Cir. Sept. 10, 2018)

In an appeal from a decision of the Patent Trial and Appeal Board determining there was no interference-in-fact between two patent applications, the Federal Circuit affirmed.  The Board determined no interference-in-fact because UC’s claims to the use of a system for the targeted cutting of DNA molecules and Broad’s claims to using such a system in a eukaryotic cell were patentably distinct.  The Federal Circuit used a standard of review that mirrored the standard of review in an obviousness review because the question of interference-in-fact turned on whether one set of claims renders obvious the subject matter of another set of claims.  As such, the Federal Circuit reviewed the Board’s ultimate conclusion of non-obvious de novo, and the underlying factual findings for substantial evidence.  The Federal Circuit concluded that the Board used the correct test for obviousness, and as such affirmed the Board’s judgement of no interference-in-fact.

Opinion can be found here.

IXI IP, LLC v. Samsung Electronics Co., Appeal No. 2017-1665 (Fed. Cir. Sept. 10, 2018)

In an appeal from an IPR, the Federal Circuit affirmed the Board’s decision that claims related to wireless networking technology are invalid under 35 U.S.C. § 103. The Federal Circuit determined that prior art implicitly disclosing the claims was sufficient to lead a person skilled in the art to conclude that the reference teaches the claims.  Thus, the Board’s obviousness finding was supported by substantial evidence.

Opinion can be found here.

Orexo AB v. Actavis Elizabeth LLC, Appeal No. 2017-1333 (Fed. Cir. Sept. 10, 2018)

In an appeal from the Delaware District Court, the Federal Circuit reversed the District Court’s decision invalidating the asserted claims of Orexo’s patent covering the brand name product Zubsolv® for opioid dependence on the ground of obviousness.  The Federal Circuit found that obviousness was not proved by clear and convincing evidence.  Specifically, it disagreed with the Court’s conclusion that the prior art would lead a person skilled in the art along the path to the invention of the patent in suit.  The Federal Circuit emphasized that “[t]he question is not whether the various references separately taught components of the [patent in suit’s] formulation, but whether the prior art suggested the selection and combination achieved by the [patent in suit’s] inventors.”  Finally, the Federal Circuit reiterated its previous comments “that objective indicia is part of the whole analysis and not just an afterthought.”  Here, the Federal Circuit found that the objective evidence guided the obviousness analysis and that the Court had erred in discounting Orexo’s evidence of unexpected and beneficial results.

Opinion can be found here.

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