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Latest Federal Court Cases, 5/20/19

May 20, 2019



AVX Corporation v. Presidio Components, Inc., Appeal No. 2018-1106 (Fed. Cir. May 13, 2019)

Following an inter partes review upholding the patentability of certain challenged claims, the Court dismissed Petitioner AVX Corporation’s appeal, finding that AVX lacked Article III standing to appeal the Patent Trial and Appeal Board’s decision. (Prior Federal Circuit precedent has established that the statutory right to initiate a USPTO proceeding does not guarantee Article III standing to appeal the result.) In this case, AVX submitted evidence of vigorous competition between itself and Patent Owner Presidio Components in the electronic capacitor market, including four district court actions over patents owned by one party or another in the preceding decade. However, at the time of the appeal, Presidio had not alleged that AVX infringed the patent that was the subject of the IPR, and the Court found that AVX was not engaged in any conduct “even arguably” covered by the upheld claims.

On this record, the Court rejected two arguments presented by AVX for Article III standing to appeal. First, AVX argued that it was injured in fact by the Board’s decision because the estoppel provisions of 35 U.S.C. § 315(e) would prevent it from asserting the same challenges—the merits of which would not have been reviewed by an Article III court—in the event that Presidio asserted the upheld claims against AVX in the future. The Court rejected this argument, relying on its own precedent in Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168 (Fed. Cir. 2017) and JTEKT Corp. v. GKN Automotive Ltd., 898 F.3d 1217 (Fed. Cir. 2018), holding that § 315(e) does not constitute an “injury in fact” where the appellant is not engaged in any activity that would give rise to an infringement suit.

The Court also noted that it had not yet decided whether § 315(e) would have the effect argued by AVX, i.e., whether it would have any estoppel effect at all where an IPR petitioner lacked Article III standing to appeal the Board’s decision. The Court declined to determine this question, which had not been briefed. However, the Court noted that it would require consideration of the relationship between § 315(e) and § 319’s right of appeal for any “party dissatisfied with the final written decision” of the Board, as well as related questions of claim and issue preclusion where an appeal is unavailable. As such, the Court expressly held open the possibility that where a Petitioner lacks Article III standing to appeal, the estoppel provisions of § 315(e) may not apply.

Second, AVX asserted “competitor standing,” arguing that the Board’s decision upholding challenged claims reduced AVX’s ability to compete. The Court recounted prior cases finding that parties had standing to challenge government actions that impacted their ability to compete, such as the distribution of duties to certain market participants, or the cancellation of tax benefits affecting a prospective purchase. However, the Court found that the rationale underlying such decisions did not apply in the instant case. While prior “competitor standing” cases had involved government action that “alter[ed] competitive conditions” and resulted in concrete, nonspeculative economic harms, the Court found that the Board’s decision upholding challenged claims “does not, by the operation of ordinary economic forces, naturally harm a firm just because it is a competitor in the same market as the beneficiary of the government action.” Because AVX had not submitted evidence of any nonspeculative plans to engage in conduct covered by the upheld patent claims, the Court found that jurisdiction failed for lack of Article III standing, and dismissed the appeal.

The opinion can be found here.

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Nuvo Pharmaceuticals (Ireland) Designated Activity Company v. Dr. Reddy’s Laboratories Inc., Appeal Nos. 2017-2473, -2481, -2484, -2486, et al. (Fed. Cir. May 15, 2019)

In this appeal from an ANDA litigation in the U.S. District Court for the District of New Jersey, the Federal Circuit reversed the district court’s finding of validity on the ground of written description under 35 U.S.C. § 112, ¶ 1. On appeal, the generic pharmaceutical company defendants argued that the district court erred in holding that the specification of the patents-in-suit, which cover a combination pain medication containing an NSAID and acid inhibitor, adequately described amounts of uncoated acid inhibitor effective to raise gastric pH to 3.5 to allow for release of the NSAID to treat pain. The Court found that because the patents expressly claim a specific result, i.e., effectiveness of uncoated acid inhibitor, and because the prior art taught away from the concept of effective uncoated acid inhibitor, the specification should have done more than simply calling generally for effective amounts of uncoated acid inhibitor. Rather, the specification must have shown that the inventor was actually in possession of and invented what he claimed by including either supporting experimental data or some reason, theory, or alternative explanation as to why the claimed invention is possessed by the inventor.

The opinion can be found here.

BTG International Limited v. Amneal Pharmaceuticals LLC, Appeal Nos. 2019-1147, -1148, -1323, -1324, -1325 (Fed. Cir. May 14, 2019)

In a combined appeal from a district court opinion and three PTAB decisions, all of which found the asserted claims obvious, the Federal Circuit affirmed one of the PTAB decisions and held the remainder to be moot. The claims relate to a pharmaceutical for treating prostate cancer. At issue was the construction of the term “treatment.” The patent owners alleged that the term should require an anti-cancer effect as opposed to simply a reduction in side effects. Relying on the specification and the claims, the Federal Circuit agreed with the PTAB that, at least as used in this patent, “treating” cancer can involve, in essence, treating side effects as opposed to the cancer itself. The Court then analyzed the obviousness determination made by the PTAB, finding it to be supported by substantial evidence.

The opinion can be found here.

Novartis Pharm. Corp. v. West-Ward Pharm. Int’l Ltd., Appeal No. 2018-1434 (Fed. Cir. May 13, 2019)

In this ANDA case, the Federal Circuit affirmed the Delaware district court’s ruling that generic drug maker West-Ward had failed to establish the obviousness of Novartis’s patent claims over a combination of prior art references. Novartis’s patent was directed to a method of using an active ingredient, everolimus, to inhibit the growth of advanced renal cell carcinoma (RCC) tumors. The district court ruled that West-Ward had failed to (i) demonstrate a motivation to combine the prior art references; and to (ii) show that the skilled artisan would have had a reasonable expectation of success in combining the prior art to arrive at the claimed method. On appeal, the Federal Circuit first rejected the Delaware court’s finding that a motivation to combine was lacking, finding that the court had applied too strict a standard by requiring the defendant to show that the skilled artisan would have selected everolimus to treat advanced RCC. Instead, the district court’s finding that the prior art would have led the ordinarily skilled artisan to pursue everolimus was sufficient to establish motivation to combine. However, the Federal Circuit agreed with the district court that West-Ward had failed to show a reasonable expectation of success in combining the references to arrive at the claimed treatment method. Among other things, West-Ward’s reliance on successful Phase I clinical results was unpersuasive given that Phase I trials are directed to safety rather than efficacy. The Federal Circuit also noted the high rate at which cancer-fighting drugs fail in subsequent Phase II and Phase III clinical trials, which are directed to efficacy. The Federal Circuit also pointed to statements in the prior art references that the mechanisms of RCC tumor inhibition were poorly understood at the relevant time.

The opinion can be found here.

Bradium Technologies LLC v. Iancu, Appeal Nos. 2017-2579, 2017-2580 (Fed. Cir. May 13, 2019)

In an appeal from two IPR decisions finding patents obvious, the Federal Circuit upheld the Board’s claim construction and affirmed the obviousness determinations. The patents concerned communications of large scale images over networks and displaying those images on devices with limited processing power. In a detailed, 32 page opinion, the Federal Circuit upheld the board’s claim construction of “limited bandwidth communications channel” as “a communications channel whose bandwidth is limited,” finding the plain and ordinary meaning correct. Bradium had wanted a narrower construction aligned with wireless or narrow-band communications. The Federal Circuit also held that it was appropriate to rely on inventor testimony in support of the claim construction in the limited circumstances for which the inventor’s testimony was relied upon here. Following analysis of the claim construction, the Court affirmed the obviousness determination by the PTAB for each of the asserted claims, holding that the PTAB’s findings were supported by substantial evidence. The Court also found that Bradium had waived certain arguments by failing to raise them to the PTAB.

The opinion can be found here.

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