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Latest Federal Court Cases, 8/12/19

August 12, 2019



Genetic Veterinary Sciences, Inc. v. LABOKLIN GMBH & Co. KG, Appeal No. 2018-2056 (Fed. Cir. Aug. 9, 2019)

Our case of the week features a foreign University sued for declaratory judgment of patent invalidity and the questions that follow concerning sovereign immunity, in addition to the underlying merits of the invalidity defense. 

The patent at issue is owned by the University of Bern, an instrumentality of the Swiss government. It licensed the patent to a German company, LABOKLIN, J.A., which had the right to enforce it, with the consent of the University. LABOKLIN sent a cease and desist letter to a U.S. company, PPG, which filed a declaratory judgment action seeking judgment of invalidity under Section 101. 

The district court found that it had jurisdiction over both LABOKLIN and the University under Rule 4(k)(2), the federal long arm statute, which looks to a defendant’s contacts with the United States, generally, as opposed to its contacts with any particular state. With respect to LABOKLIN, the Federal Circuit agreed that it had minimum contacts with the United States. LABOKLIN sent a cease and desist letter to a U.S. company threatening its U.S. business. That, in combination with the fact that it had licensed two U.S. companies to practice the patent, was sufficient to find personal jurisdiction over the German licensee of the patent. The Court found this to be “reasonable and fair” because LABOKLIN had purposefully availed itself of the protections of U.S. patent laws. The Court rejected an argument, based on prior case law, that cease and desist letters alone are insufficient to confer personal jurisdiction on a defendant. The Court held that, given the facts of this case, personal jurisdiction over LABOKLIN was proper. 

With respect to the University, the Court analyzed the facts as applied to the Foreign Sovereign Immunities Act (FSIA), which provides the sole basis for asserting jurisdiction over a foreign sovereign. 

Under the FSIA, “a foreign state is presumptively immune from the jurisdiction of United States courts.” An exception applies “if a foreign state engages in commercial activity … in the United States.” The Federal Circuit has previously held that obtaining and then enforcing a U.S. patent is sufficient commercial activity to overcome the presumption of no jurisdiction under the FSIA. 

In this case, the Court held that there was jurisdiction over the University because it obtained a patent and then participated in enforcing that patent. Specifically, the University consented to LABOKLIN sending the cease and desist letter to PPG. And those efforts were in furtherance of an attempt to commercialize the patents in the United States. 

For these reasons, the Federal Circuit affirmed the district court’s conclusion that it had jurisdiction over the defendants. 

With respect to the merits, the Court found the claims invalid under Section 101 as claiming a natural phenomenon. The claims recite a method for determining whether a Labrador retriever has a genetic predisposition to a particular canine disease. The Courts analysis followed the logic of Mayo v. Prometheus and its progeny, generally finding claims to medical diagnoses unpatentable.

The opinion can be found here.


Eli Lilly and Co. v. Hospira, Inc., Appeal Nos. 2018-2126, -2127, -2128 (Fed. Cir. Aug. 9, 2019)

In this Hatch-Waxman case, the Federal Circuit affirmed a lower court decision finding infringement by two generic companies that filed ANDA applications relating to Eli Lilly’s cancer medication, Alimta. This is the fourth appeal concerning Alimta to reach the Federal Circuit, and the third concerning this particular patent in suit. During prosecution, Eli Lilly has narrowed the claims from reciting “antifolate” to instead reciting “pemetrexed disodium.” One set of defendants sought to use “pemetrexed ditromethanine.” Eli Lilly asserted the doctrine of equivalents, to which the defendants responded that prosecution history estoppel barred its application, as did the disclosure-dedication doctrine. 

Following a lengthy discussion and analysis, the Court held that prosecution history estoppel did not bar application of the doctrine of equivalents, because the amendment in question bore only a tangential relation to the prior art it was meant to overcome.

It is suggested to the practitioner that this case may serve as a textbook-worthy discussion of these two doctrines.

The opinion can be found here.

Ajinomoto Co., Inc. v. Int’l. Trade Comm’n., Appeal No. 2018-1590, -1629 (Fed. Cir. Aug. 6, 2019)

In this second case in one week, the Court addressed the “tangential relation” exception to the doctrine of equivalents, providing a case study into the doctrine—an approach rejected to some extent in the Eli Lilly case discussed immediately above. In addition to affirming the district court’s application of that doctrine in this case involving biochemical patents relating to animal feed, the Court also engaged in an extensive claim construction analysis concerning the prosecution history of the patent. The Court also held the claims not invalid for lack of written description. Finally, the Court affirmed the infringement holdings by the ITC.

The opinion can be found here.

ATEN Int’l Co., Ltd. v. Uniclass Tech. Co., Ltd., Appeal No. 2018-1606 (Fed. Cir. Aug. 6, 2019)

Following a jury trial finding invalidity and noninfringement, the plaintiff appealed. The Federal Circuit reversed a jury finding of anticipation. The first of two references had firmware that could be dated to 2006, but could not be dated any more precisely than that. Given that the critical date for invalidity purposes was in the middle of 2006, the Federal Circuit found insufficient evidence that the reference predated the critical date. The Court also found insufficient evidence that the second reference disclosed all claim limitations. Thus, the Court reversed the finding of invalidity. 

Regarding infringement, ATEN argued that defendant’s expert testified about claim construction issues in front of the jury, and that this affected the jury’s verdict. However, ATEN failed to object to the improper testimony at trial. On that basis, the Court affirmed the jury verdict of noninfringement. 

The opinion can be found here.

ATEN Int’l Co., Ltd. v. Uniclass Tech. Co., Ltd., Appeal No. 2018-1922 (Fed. Cir. Aug. 6, 2019)

In a companion case to the one immediately above, the Federal Circuit affirmed a decision declining to find the case exceptional under 35 U.S.C. 285. The defendants had argued that the case was exceptional because the litigation costs far exceeded the amount of damages sought. For example, ATEN spent over $700,000 in expert witness fees, though that exceeded its total damages claim. The Federal Circuit, like the Court below, held that there is “no per se rule that a case is exceptional if litigation costs exceed the potential damages.” Citing a Delaware district court case as persuasive, the Court held that a plaintiff is not required to drop a case when the legal costs exceed the claimed damages, noting that, particularly in competitor cases, there can be other legitimate reasons to maintain suit, and that in some cases there are no damages, such as cases in the ITC or many Hatch-Waxman cases. In this case, an injunction was sought: “This alone undermines Appellants’ argument.” The Court also found the additional reasons raised by Appellants insufficient to warrant reversing the Court’s discretion denying attorney fees.

The opinion can be found here.

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