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Latest Federal Court Cases, 4/27/20

April 27, 2020

Overview

PATENT CASE OF THE WEEK

Hologic, Inc. v. Minerva Surgical, Inc., Appeal No. 2019-2054, et al. (Fed. Cir. Apr. 22, 2020)

This week’s Case of the Week features a new precedential decision dealing with the doctrine of assignor estoppel. This included a novel question concerning the assignor’s reliance on a PTAB finding of invalidity. The Court affirmed the district court’s decisions on that issue and a number of other issues appealed by the parties.

The patents at issue are both method and apparatus patents concerning medical devices. A named inventor is Csaba Truckai, who assigned his patents to his employer, NovaCept. The patents were later acquired by Hologic. Truckai left Hologic and formed Minerva, serving as its President, its CEO, and a member of its Board of Directors.

In 2015, Hologic sued Minerva for infringement. Minerva asserted invalidity defenses, and also filed IPR petitions against both patents. The PTAB initiated review of the method patent, but not the apparatus patent. Shortly after the district court issued its Markman decision, the PTAB issued a final written decision holding the method patent claims invalid. Minerva moved that the district court dismiss the asserted claims from those patents as moot. The district court denied the request because the claims had not yet been canceled and were still subject to appeal.

Hologic moved for summary judgment that the doctrine of assignor estoppel barred Minerva from challenging the validity of either patent. The district court granted that motion, finding that Minerva and Truckai were in a relationship of privity. The district court also granted summary judgment of infringement, resulting in a jury trial limited to issues of damages and willful infringement, along with state law counterclaims. The jury awarded damages of approximately $5 million, and though Minerva requested it, the jury was not asked to apportion the damages between the two patents.

After the trial, the Federal Circuit affirmed the PTAB’s final written decision concerning the unpatentability of the method patent claims. The district court refused to alter the damages award, finding that invalidity of the method claims had no bearing on the apparatus claims, and the damages award could be fully supported by only the apparatus claims. The district court also refused to grant an injunction concerning the method claims, given the Federal Circuit’s opinion.

On appeal, various issues concerning assignor estoppel were raised. Assignor estoppel is a judicially created doctrine that “prevents one who has assigned the rights to a patent (or patent application) from later contending that what was assigned is a nullity.” It also applies to privies of the assignor. A recent Federal Circuit opinion holds that assignor estoppel does not apply to the PTAB. Arista Networks, Inc. v. Cisco Sys., Inc., 908 F.3d 792, 804 (Fed. Cir. 2018). But the doctrine applies to the district courts.

In this case, Hologic challenged whether Minerva was entitled to rely on the PTAB decision (and the Federal Circuit’s affirmance thereto) to argue that the method claims were void ab initio, such that no damages should be allowed due to that patent. The Federal Circuit disagreed with Hologic. The Court relied on its opinion in Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed. Cir. 2013), which holds that, when a patent claim is held invalid, “any pending litigation in which the claims are asserted becomes moot.” Because the method claims were held invalid before final judgment was entered, the property right ceased to exist, and the pending litigation concerning those claims became moot. The Federal Circuit held that “Hologic is collaterally estopped from asserting infringement of these claims.”

Second, the Court addressed Minerva’s assertion that assignor estoppel did not preclude Minerva from challenging the validity of claim 1 of the apparatus patent. Minerva argued that the Court should abandon assignor estoppel altogether, in light of the Supreme Court’s opinion in Lear, Inc. v. Adkins, 395 U.S. 653, 666 (1969). But the Federal Circuit had already distinguished Lear in affirming the defense of assignor estoppel. Thus, that argument was rejected. Minerva also asserted that assignor estoppel should not apply because Hologic prosecuted the patent at issue, not Truckai. Minerva asserted that Hologic broadened the claims during prosecution, creating invalidity “by its own overreach[.]” The Court rejected that argument. The Court held that it would have been proper for Minerva to bring prior art into the case for purposes of narrowing the scope of the claim, but not to invalidate it.

The Court also affirmed the damages award, even though it was not apportioned by the jury, and one of the patents was later affirmed to be invalid. The Court recognized the general rule that, where a jury awards a single dollar amount for multiple patents, and one is later found invalid, a new trial is required. But the Court recognized an exception to that rule, allowing the damages award to stand where “undisputed evidence demonstrated that the sustained patent claim was necessarily infringed by all of the accused activity on which the damages award was based.” In this case, an expert opined that the same royalty rate would be applicable regardless of which patent was infringed. Minerva did not provide any contrary evidence. Thus, the Court found that the exception applied.

The Court also addressed various other issues in the case, including claim construction and damages issues, as well as the date for delineating pre- and post-judgment interest.

Judge Stoll filed “additional views,” urging the Court to consider en banc its precedent concerning assignor estoppel. Judge Stoll suggested that there is an illogical and untenable disconnect where the law estops a party from challenging the validity of a patent in district court, but allows that party to challenge the validity of the patent through an IPR proceeding—the natural result of the Court’s prior ruling in Arista.

The opinion can be found here.

ALSO THIS WEEK

In re: Christopher John Rudy, Appeal No. 2019-2301 (Fed. Cir. Apr. 24, 2020)‎

In an appeal from the PTAB, the Court affirmed the § 101 refusal of several of the ‎applicant’s claims related to fishing hook selection as abstract ideas. First, the applicant argued ‎that the PTAB “misapplied or refused to apply … case law” by applying the Office ‎Guidance instead. The Court reaffirmed that “[t]o the extent the Office Guidance contradicts or does ‎not fully accord with [] case law, it is [] case law … that must control.” Then, the Court applied ‎the Alice/Mayo test to the claims at issue, finding that under step one, “‘collecting information’ ‎and ‘analyzing’ that information are within the realm of abstract ideas.” The claims also ‎‎“fail[ed] to recite an inventive concept” under step two of Alice/Mayo. Thus, the claims at issue were ‎not patent eligible under § 101 and the Court affirmed the PTAB. ‎

The opinion can be found here.

Argentum Pharms. LLC v. Novartis Pharms. Corp., Appeal No. 2018-2273 (Fed. Cir. Apr. 23, 2020)

In an appeal from inter partes review decisions upholding pharmaceutical claims as patentable, the Federal Circuit dismissed the appeal for lack of Article III standing. Appellant Argentum was among a group of entities to have joined in IPRs filed by another company, and all petitioners except for Argentum settled with the patent owner early in the appeal process. The Federal Circuit found that Argentum failed to demonstrate a concrete and particularized injury sufficient to sustain the appeal, rejecting its argument that it was in the process of filing an abbreviated new drug application for a generic version of the patented product. The Court noted any ANDA would be filed by Argentum’s manufacturing and marketing partner—subjecting that partner, and not appellant, to the risk of an infringement suit—and that Argentum’s only evidence of its own activities broadly pertained to multiple generic drugs being jointly developed, and not specifically to the patented product at issue. The Federal Circuit also rejected appellant’s argument that it would be injured through the estoppel provisions of 35 U.S.C. § 315(e), citing its own precedent that Section 315(e) does not comprise an injury-in-fact where appellant is not engaged in activity that would give rise to a possible infringement suit.

The opinion can be found here.

Biogen Int’l GmbH v. Banner Life Sciences LLC, Appeal No. 2020-1373 (Fed. Cir. Apr. 21, 2020)

In an appeal from a judgment of the United States District Court for the District of Delaware, the Federal Circuit held that the scope of a patent term extension under the patent term restoration provisions of the Hatch-Waxman Act (35 USC § 156) only includes the active ingredient of an approved product, or an ester or salt of that active ingredient. The monomethyl ester, covered by the claim of the asserted patent, a double ester, is not covered by the extension provided by 35 USC § 156. The Court affirmed the decision of non-infringement, given the unavailability of patent term extension.

The opinion can be found here.

Dragon Intellectual Property v. Dish Network, Appeal Nos. 2019-1283, -1284 (Fed. Cir. Apr. 21, 2020).

In this appeal from the U.S. District Court for the District of Delaware, the Federal Circuit addresses issues relating to attorneys’ fees under 35 U.S.C. § 285. The lower court entered an order of non-infringement in favor of Dish Network (“Dish”) after the parties stipulated to same, but later vacated that order as moot following the Patent Trial and Appeal Board (“PTAB”) finding during a parallel inter partes review that the asserted claims were unpatentable. The lower court also denied Dish’s motion for attorneys’ fees, holding that Dish was not a prevailing party because, while Dish achieved a victory, it was not granted “actual relief on the merits.” On appeal, the Court vacated and remanded the lower court’s order denying attorneys’ fees, explaining that because Dish succeeded in invalidating the asserted claims before the PTAB, and because the lower court then vacated the judgment of non-infringement as moot, Dish “successfully rebuffed” the attempt by Dragon IP to “alter the parties’ legal relationship in an infringement suit.”

The opinion can be found here.

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